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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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PRE-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
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Senior Subordinated Contingent Notes $18,319,035 Annual Maximum
Due 2009 Contingent Payment Amount (1)
Approximate date of proposed 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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(1) 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.
<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 voluntary
petitions for relief under Chapter 11 of the Bankruptcy Code to facilitate
efforts to reorganize HJC. On or about February 26, 1997 the Debtors filed
the Third Amended Joint Plan of Reorganization (the "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 (the "Plan of Reorganization") 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. 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.
Accordingly, if certain other conditions precedent are satisfied or waived as
set forth in the Plan of Reorganization, the Effective Date (as defined
below) may occur, and the Notes (as defined below) may be issued, on or about
October 30, 1998.
Under the Plan of Reorganization, the assets and business of HJC will
vest in the Company on the date that the Plan of Reorganization is
consummated (the "Effective Date"). On the Effective Date, the holders (the
"Bondholders") of the 14 1/4% First Mortgage Notes due 2001 with Contingent
Payments of HJC and Finance Corp. issued under a previously qualified
indenture, will receive, pursuant to the Plan of Reorganization, among other
things, a PRO RATA share of (i) $187.5 million in aggregate principal amount
of Senior Subordinated Notes due 2009 with Contingent Payments of the Company
(for which a separate application on Form T-3 has been filed concurrently
herewith) and 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 (the "Notes"),
to be issued under the indenture to be qualified, and guarantees (the
"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. All
payments in respect of the Notes will be contingent payments and will be
limited to 75% of Consolidated EBITDA (as defined in the Indenture (as
defined below)) of the Company over $85 million and under $109,425,380
calculated on an annual basis. Accordingly, the aggregate maximum contingent
payment amount for any year is $18,319.035.
<PAGE>
The issuance of the Notes will not be registered under the Securities Act
of 1933, as amended (the "Securities Act"), pursuant to the exemption from the
registration requirements of the Securities Act provided by Section 1145 of the
Bankruptcy Code. Generally, section 1145 of the Bankruptcy Code exempts the
offer or sale of securities under a plan of reorganization from registration
under the Securities Act and under equivalent state securities and "blue sky"
laws if the following requirements are satisfied: (i) the securities are issued
by the debtor or its successor under a plan of reorganization; (ii) the
recipients of the securities hold a claim against the debtor, an interest in the
debtor or a claim for an administrative expense against the debtor; and (iii)
the securities are issued entirely in exchange for the recipient's claim against
or interest in the debtor or are issued "principally" in such exchange and
"partly" for cash or property. The Company believes that the issuance of the
Notes under the Plan of Reorganization will satisfy such requirements
of section 1145 of the Bankruptcy Code and, therefore, such issuance is exempt
from the registration requirements referred to above.
AFFILIATIONS
3. AFFILIATES. Furnish a list or diagram of all affiliates of the applicant
and indicate the respective percentages of voting securities or other bases of
control.
As of October 19, 1998:
100% of the membership interests in the Company are owned by JCC
Holding.
100% of the membership interests in JCC Development Company, L.L.C. are
owned by JCC Holding.
100% of the membership interests in FP Development, L.L.C. are owned by
JCC Holding.
100% of the membership interests in CP Development, L.L.C. are owned by
JCC Holding.
As of the Effective Date:
100% of the membership interests in the Company will be owned by JCC
Holding; and
100% of the membership interests in JCC Development will be owned by JCC
Holding.
100% of the membership interests in FP Development will be owned by JCC
Holding.
100% of the membership interests in CP Development will be owned by JCC
Holding.
As a result of certain transactions to be consummated on the Effective
Date pursuant to the Plan of Reorganization, Harrah's Entertainment, Inc., a
Delaware corporation ("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. On the Effective Date of the
Plan of Reorganization, JCC Holding will issue 10 million shares of Common
Stock. JCC Holding expects that at the time of issuance approximately
5,560,000 of such shares will be shares of Class A Common Stock and
approximately 4,440,000 of such shares will be shares of Class B Common Stock.
<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. ......... -- -- 4,440,000(1) 100%(1)
</TABLE>
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(1) Upon the Effective Date of the Plan of Reorganization, HET, by and
through its wholly-owned subsidiary, Harrah's Crescent City Investment
Company, a Nevada Corporation ("HCCIC"), will own beneficially more than
5% of the outstanding shares of Class B Common Stock. The exact number
of shares owned by HET upon the Effective Date, however, will depend
upon whether certain entities exercise options with respect to an
aggregate of 450,000 shares of Class B Common Stock from 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 October 19, 1998:
None. The Company is a member managed, single member, limited liability
company formed under the Lousiana Limited Company Law, La. R.S. 12:1301 ET
SEQ., and as such the Company does not have directors. 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
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5. PRINCIPAL OWNERS OF VOTING SECURITIES. Furnish the following information
as to each person owning 10 percent or more of the voting securities of the
applicant.
As of October 19, 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, and is expected to own on the
Effective Date, all of the membership interests in the Company.
As of the Effective Date the Company expects the above list of principal
owners of voting securities will remain unchanged.
6. UNDERWRITERS. Give the name and complete mailing address of (a) each
person who, within three years prior to the date of filing the application,
acted as an underwriter of any securities of the obligor which were outstanding
on the date of filing the application, and (b) each proposed principal
underwriter of the securities proposed to be offered. As to each person
specified in (a), give the title of each class of securities underwritten.
(a) Within three years prior to the date of the filing of this application
on Form T-3 (the "Application"), no person acted as an underwriter of any
securities of the Company which are currently outstanding.
(b) None.
CAPITAL SECURITIES
7. CAPITALIZATION. (a) Furnish the following information as to each
authorized class of securities of the applicant.
As of October 19, 1998:
<TABLE>
<CAPTION>
Amount Amount
Title of Class Authorized Outstanding
-------------- ----------- -----------
<S> <C> <C>
Membership Interest N/A* N/A*
As of the Effective Date:
Amount Amount
Title of Class Authorized Outstanding
-------------- ----------- -----------
Membership Interest N/A* N/A*
Senior Subordinated Notes Due 2009 With Contingent Payments $187,500,000(1) $187,500,000
Senior Subordinated Contingent Notes Due 2009 (2) (2)
8% Convertible Junior Subordinated Debentures Due 2010 $ 26,637,000(3) $ 26,637,000(3)
</TABLE>
* The Company is a single member limited liability company formed under the
Louisiana Limited Liability Company Law, La. R.S. 12:1301 ET SEQ. The sole
member, JCC Holding, presently owns, and is expected to own on the
Effective Date, all of the membership interests in the Company.
(1) Plus additional Senior Subordinated Notes due 2009 with Contingent Payments
issued in lieu of cash interest payments in accordance with the terms of
the indenture for such securities.
(2) All payments in respect of the Notes will be contingent payments, and
such contingent payments will be limited to an annual aggregate maximum
amount of $18,319,035.
(3) Plus Additional Convertible Junior Subordinated Debentures due 2010 issued
(i) in lieu of cash interest payments in accordance with the terms of the
the indenture for such securities or (ii) pursuant to the Plan of
Reorganization.
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(b) Give a brief outline of the voting rights of each class of voting
securities referred to in paragraph (a) above.
Because the Company is a member managed, single member, limited
liability company, all decisions relating to the business affairs and
properties of the Company shall be made by JCC Holding as the sole member of
the Company.
Holders of the Notes, the Senior Subordinated Contingent Notes Due 2009 and
the 8% Convertible Junior Subordinated Debentures Due 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 Develepment 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 8% Notes or any Contingent Payments on the Notes as and
when due and payable and the continuance of any such failure for 30 days;
(2) except as provided paragraph (1) 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, which failure
continues for 30 days;
(3) the failure by the Company or any Guarantor to observe or
perform any other covenant or agreement contained in the Notes or the
Indenture and, in certain instances, the continuance of such failure for
a period of 30 days, and in other instances, the continuance of such
failure for a period of 30 days after written notice is given to the
Company by the Trustee, or to the Company and the Trustee by the Holders
of at least 25% in aggregate Notational Amount of the Notes then
outstanding;
(4) certain events of bankruptcy, insolvency or restructuring
in respect of either the Company or a Significant Subsidiary;
(5) a default in the payment of principal, premium or interest
when due at final maturity or an acceleration for any other reason of the
maturity of any Indebtedness (other than Non-recourse Indebtedness) of the
Company or any Significant Subsidiary with an aggregate principal amount in
excess of $15,000,000, including, without limitation, the Bank Credit
Facilities at such times as the aggregate principal amount of Indebtedness
thereunder exceeds $15,000,000; provided that an Event of Default shall
not be deemed to occur with respect to the failure to make such payment
at final maturity or the acceleration of the maturity of Indebtedness of
the Company or any Significant Subsidiary if the event that caused such
acceleration shall be cured, or such acceleration shall be rescinded,
or the Indebtedness shall be repaid in full in each such case within 10
days;
(6) final unsatisfied judgments not covered by insurance (other
than with respect to Non-recourse Indebtedness) aggregating in excess of
$15,000,000, at any one time rendered against the Company or any
Significant Subsidiary of the Company and not stayed, bonded or discharged
within 60 days;
(7) the loss of the legal right of the Company to operate slot
machines at the Casino for gaming activities and such loss continuing for
more than 90 days;
(8) 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 Notational Amount of the Notes outstanding, provided that
if such event of default or failure to comply, as the case may be,
materially and adversely affects (a) the Collateral, (b) the priority or
perfection of the security interests purported to be created with
respect to any material portion of the Collateral or (c) the rights and
remedies of the Collateral Agent, the Trustee or the respective secured
creditors in respect of any material portion of the Collateral, then
failure to comply need only continue after the applicable cure period
specified in the applicable Collateral Document;
(9) any Collateral Document fails to become or ceases to be
in full force and effect (other than in accordance with its terms or the
terms of the Indenture) or ceases (once effective) to create in favor of
the 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) to be covered
thereby (unless a prior or exclusive Lien is specifically permitted by
the Indenture);
(10) the failure of the Casino Completion Date to have occurred
by 30 days following the date on which an event of default entitling the
City to terminate the Ground Lease has occurred under the Ground Lease as a
result of the failure to complete the Casino;
(11) an "Event of Default" (as defined in the Ground Lease) has
occurred; and
(12) an "Event of Default" (as defined in the 8% Notes
Indenture) has occurred.
If an Event of Default (other than an Event of Default specified in
clause (4) above with respect to the Company) occurs and is continuing, then,
and in every such case, either the Trustee or the Holders of not less then
25% in aggregate Notational Amount of then outstanding Notes, by a notice in
writing to the Company and the Guarantors (and to the Trustee if given by
Holders) (an "Event of Default Notice"), may declare the Make-Whole Amount to
be due and payable immediately (in which event the Make-Whole Amount shall be
due and payable immediately, in which case no further Contingent Payments shall
be due or payable with respect to future periods). If an Event of Default
specified in clause (4) above occurs with respect to the Company 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 (in which event the Make-Whole Amount shall be due and payable
immediately, in which case no further Contingent Payments shall be due or
payable with respect to future periods); provided, however, that the
Make-Whole Amount shall be subordinated in right of payment 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 Make-Whole Amount shall be subordinate to all Senior
Debt and all Senior Subordinated Debt on the terms 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 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 Notational
Amount in respect of then outstanding Notes generally are authorized to
rescind such acceleration if all existing Events of Default, other than the
non-payment of amounts which have become due solely by such acceleration,
have been cured or waived.
If a Default or an Event of Default occurs and is continuing and if it
is known to the Trustee, the Trustee shall mail to each Holder notice of the
uncured Default or Event of Default within 90 days after such Default or
Event of Default occurs. Except in the case of a Default or an Event of
Default in payment of Contingent Payments on any Note (including the payment
of the Redemption Price on the Redemption Date), the Trustee may withhold
the notice if and so long as a Trust Officer in good faith determines that
withholding the notice is in the interest of the Holders.
(B) AUTHENTICATION AND DELIVERY; APPLICATION OF PROCEEDS.
The Notes shall be executed on behalf of the Company by its President or
one of its Vice Presidents, under the corporate seal of the Company,
reproduced thereon, and attested by its Secretary or Assistant Secretary. To
evidence its Guaranty, each Guarantor agrees that a notation of such Guaranty
as described in the Indenture shall be endorsed on each Note authenticated
and delivered by the Trustee and that the Indenture shall be executed on
behalf of such Guarantor by an Authorized Representative of such Guarantor
under a facsimile of that Guarantor's corporate seal reproduced thereon and
attested to by an Authorized Representative of such Guarantor other than the
Authorized Representative executing the Indenture. To evidence Parent
Guaranty, the Parent Guarantor agrees that a notation of such Parent Guaranty
as described in the Indenture shall be endorsed on each Note authenticated
and delivered by the Trustee and that the Indenture shall be executed on
behalf of the Parent Guarantor by an Authorized Representative of the Parent
Guarantor, under a facsimile of such Parent Guarantor's corporate seal
reproduced thereon and attested to by Authorized Representative of the Parent
Guarantor other than the Authorized Representative executing the Indenture.
The signature of any of these officers or Authorized Representatives, as the
case may be, on the Notes may be manual or facsimile. A Note shall not be
valid until an authorized signatory of the Trustee manually signs the
certificate of authentication on the Note, but such signature shall be
conclusive evidence that the Note has been authenticated pursuant to the
terms of the Indenture. There will be no proceeds from the issuance of the
Notes because such securities (together with other securities of the Company
and JCC Holding) will be issued or distributed pursuant to the Plan of
Reorganization in exchange for the satisfaction and discharge of certain
claims arising from the ownership of certain securities of or claims against
the Debtors in the bankruptcy case. Accordingly, no provisions are contained
in the Indenture with respect to the use by the Company of proceeds of the
issuance of the Notes.
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(C) RELEASE AND SUBSTITUTION OF PROPERTY SUBJECT TO THE LIEN OF THE
INDENTURE.
The Company may, without requesting the release or the consent of the
Trustee or the Collateral Agent, (i) dispose of and replace any worn out or
obsolete machinery or equipment, (ii) in the ordinary course of business, (A)
sell inventory held for resale, (B) collect, liquidate, sell, factor, or
otherwise dispose of accounts receivable or notes receivable, or (C) make
Cash payments from Cash that is part of the Collateral, (iii) sell or
otherwise dispose of personal property that is no longer necessary in the
conduct of the Company's business, (iv) sell or otherwise dispose of property
in accordance with the covenant regarding asset sales set forth in the
Indenture, and (v) sell or otherwise dispose of certain parcels of, and
interests in, real property.
Subject to applicable law, the release of any Collateral from Liens
created by the Collateral Documents or the release of, in whole or in part,
the Liens created by the Collateral Documents, will not be deemed to impair
the Collateral Documents in contravention of the provisions of the Indenture
if and to the extent the Collateral or Liens are released pursuant to, and in
accordance with, the applicable Collateral Documents or pursuant to, and in
accordance with, the terms of the Indenture. To the extent applicable,
without limitation (except as provided in the last sentence of this
paragraph), the Company, the 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 this Indenture to deliver to the Trustee
any certificates or opinions required to be delivered pursuant to Section
314(d) of the TIA in connection with releases of Collateral in accordance
with clause (ii) of the preceding paragraph, unless TIA Section 314(d) would
require such certificate or opinion to be made by an independent person.
(D) SATISFACTION AND DISCHARGE.
The obligation of the Company under the Notes and the Indenture will
terminate (except for certain obligations of the Company to indemnify the
Trustee under certain circumstances and certain obligations with respect to
unclaimed funds) when all outstanding Notes theretofore authenticated and
issued have been delivered to the Trustee for cancellation and the Company
has paid all sums payable by it.
In addition, the Company may, at its option and at any time, elect to
have its obligations discharged with respect to the outstanding Notes ("Legal
Defeasance"). Such Legal Defeasance means that the Company shall be deemed
to have paid and discharged the entire Indebtedness represented by the
outstanding Notes, and the Indenture shall cease to be of further effect as
to all outstanding Notes except as to the following obligations which will
survive unless otherwise terminated or discharged under the Indenture: (a) the
rights of Holders of outstanding Notes to receive from the trust fund
described below, payments in respect of the Contingent Payments on such Notes
when such payments are due; (b) the Company's obligations with respect to the
Notes concerning, among other things, issuing temporary Notes, registration
of Notes, mutilated, destroyed, lost or stolen Notes, and the maintenance of
an office or agency for payment and money for security payments held in
trust; (c) the rights, powers, trusts, duties, and immunities of the Trustee,
and the Company's obligations in connection therewith; and (d) the Legal
Defeasance provisions of the Indenture. The Company may cause Legal
Defeasance to occur at any time. In addition, the Company may, at its option
and at any time, elect to have its obligations released with respect to
certain covenants that are described in the Indenture ("Covenant Defeasance")
and thereafter any omission to comply with such obligations shall not
constitute a Default or Event of Default with respect to the Notes.
In order to exercise either Legal Defeasance or Covenant Defeasance: (a)
(i) the Company must irrevocably deposit with the Trustee, in trust, for the
benefit of the Holders of the Notes, U.S. Legal Tender, non-callable
Government Notes or a combination thereof, in such amounts as will be
sufficient to pay and discharge the Maximum Contingent Payments for the
current and all future Contingent Payment Periods on the outstanding Notes on
the Interest Payment Dates in respect of such Contingent Payment Periods,
and (ii) the Holders must have a valid and perfected exclusive security
interest in such trust; (b) in the case of Legal Defeasance, the Company
shall have delivered to the Trustee an Opinion of Counsel reasonably
satisfactory to the Trustee confirming that (i) the Company has received
from, or there has been published by, the Internal Revenue Service a ruling
or (ii) since the Issue Date, there has been a change in the applicable
Federal income tax law, in either case to the effect that, and based thereon
such opinion shall confirm that, the Holders of the outstanding Notes will
not recognize income, gain or loss for Federal income tax purposes as a
result of such Legal Defeasance and will be subject to Federal income tax on
the same amounts, in the same manner and at the same times as would have been
the case if such Legal Defeasance has not occurred; (c) in the case of
Covenant Defeasance, the Company shall have delivered to the Trustee an
Opinion of Counsel to the effect that the Holders of the outstanding Notes
will not recognize income, gain or loss for Federal income tax purposes as a
result of such Covenant Defeasance and will be subject to Federal income tax
on the same amounts, in the same manner and at the same times as would have
been the case if such Covenant Defeasance had not occurred; (d) no Default or
Event of Default with respect to the Notes shall have occurred and be
continuing on the date of such deposit or, in so far as Events of Default
from bankruptcy or insolvency events are concerned, at any time in the period
ending on the 91st day after the date of such deposit; (e) such Legal
Defeasance or Covenant Defeasance shall not result in a breach or violation
of, or constitute a default under, the Indenture or any
7
<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 each of its fiscal year, an Officers' Certificate complying (whether or
not required) with Section 314(a)(4) of the TIA and stating that a review of its
activities and the activities of its Subsidiaries during the preceding fiscal
year has been made under the supervision of the signing Officers with a view to
determining whether the Company has kept, observed, performed and fulfilled its
obligations under the Indenture and the Collateral Documents and further
stating, as to each such Officer signing such certificate, whether or not the
signer knows of any failure by the Company, any Guarantor or any Subsidiary of
the Company or any Guarantor to comply with any conditions or covenants in the
Indenture and, if such signer does know of such a failure to comply, the
certificate shall describe such failure with particularity.
The Company is also required to furnish the Trustee within 120 days
after the end of each fiscal year a written report of a firm of independent
certified public accountants stating that in conducting their audit for such
fiscal year, nothing has come to their attention that caused them to believe
that the Company or any Subsidiary of the Company was not in compliance with
the provisions set forth in certain sections of the Indenture. The Company
is also required to furnish the Trustee, immediately upon becoming aware of
any Default or Event of Default under the Indenture or the Bank Credit
Facilities, an Officers' Certificate specifying such Default or Event of
Default and what action the Company is taking or proposes to take with
respect thereto.
The Indenture provides that upon any application or request by the
Company to the Trustee to take any action under a provision of the Indenture,
the Company must furnish to the Trustee an Officers' Certificate or an
Opinion of Counsel, each stating that all conditions precedent, if any,
provided for in the Indenture relating to the proposed action have been
complied with. Any such certificate or opinion must comply with the
requirements of the TIA and the Indenture.
9. OTHER OBLIGORS. Give the name and complete mailing address of any
person, other than the applicant, who is an obligor upon the indenture
securities.
JCC Holding Company, 1023 Cherry Road, Memphis, Tennessee 38110, is a
guarantor of the Notes.
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.
(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. (5)
Exhibit T3B Not applicable.
Exhibit T3C Form of Indenture to be qualified for the
Senior Subordinated Contingent Notes due 2009.
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. (5)
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, 1990. (5)
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. (5)
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, 1990. (5)
Exhibit T3E.22 Debtors' Third Amended Joint Plan of
Reorganization as Modified through September
3, 1998, dated September 3, 1998, and
exhibits thereto. (5)
Exhibit T3E.23 Summary of Debtors' Sixth Amended Joint
Disclosure Statement dated September 3,
1998. (5)
Exhibit T3E.24 Modified Voting Procedures. (5)
Exhibit T3E.25 Debtors' Sixth Amended Joint Disclosure
Statement dated September 3, 1998, and
exhibits thereto. (5)
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.
(5)
Exhibit T3F See Exhibit T3C for cross reference sheet
showing the location in the Indenture of the
provisions inserted therein pursuant to
Section 310 through 318(a), inclusive, of the
TIA.
- ------------------
(1) Pursuant to Rule 309(a) of Regulation S-T, requirements as to
sequential numbering shall not apply to this electronic format
document.
(2) Incorporated by reference to the Company's Form T-3 with respect to
the Senior Subordinated Notes due 2009 with Contingent Payments, filed
with the Securities and Exchange Commission on December 16, 1997.
(3) Incorporated by reference to HJC's Annual Report on Form 10-K for the
year ended December 31, 1996 filed with the Securities and Exchange
Commission on March 28, 1997, Registration No. 33-73370.
9
<PAGE>
(4) Incorporated by reference to Harrah's Jazz Company Quarterly Report
on Form 10-Q for the quarter ended June 30, 1997, filed with the
Securities and Exchange Commission on August 14, 1997, Registration
No. 33-73370.
(5) Incorporated by reference to the Company's Pre-Effective Amendment
No. 1 to Form T-3 with respect to the Senior Subordianted Notes due
2009 with Contingent Payments, filed with the Securities and
Exchange Commission on October 19, 1998.
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 19th day of October, 1998.
JAZZ CASINO COMPANY, L.L.C.
By: JCC HOLDING COMPANY
Its: Sole Member
By: /s/ FREDERICK W. BURFORD
------------------------------
Name: Frederick W. Burford
------------------------------
Title: President
------------------------------
Attest: /s/ TRECCIA HANEY
---------------------------
Name: Treccia Haney
----------------------
11
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
-----------------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2)
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
(Exact name of trustee as specified in its charter)
A U.S. National Banking Association 41-1592157
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U.S. national Identification No.)
bank)
Sixth Street and Marquette Avenue
Minneapolis, Minnesota 55479
(Address of principal executive offices) (Zip code)
Stanley S. Stroup, General Counsel
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
Sixth Street and Marquette Avenue
Minneapolis, Minnesota 55479
(612) 667-1234
(Agent for Service)
-----------------------------
JAZZ CASINO COMPANY, L.L.C.
(Exact name of obligor as specified in its charter)
Louisiana (Application in Process)
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
512 South Peters Street
New Orleans, LA 70130
(Address of principal executive offices) (Zip code)
-----------------------------
Senior Subordinated Contingent Notes due 2009
(Title of the indenture securities)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
Item 1. General Information. Furnish the following information as to the
-------------------
trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Comptroller of the Currency
Treasury Department
Washington, D.C.
Federal Deposit Insurance Corporation
Washington, D.C.
The Board of Governors of the Federal Reserve System
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations with Obligor. If the obligor is an affiliate of the
-------------------------
trustee, describe each such affiliation.
None with respect to the trustee.
No responses are included for Items 3-14 of this Form T-1 because the obligor is
not in default as provided under Item 13.
Item 15. Foreign Trustee. Not applicable.
---------------
Item 16. List of Exhibits. List below all exhibits filed as a part of this
---------------- Statement of Eligibility.
Norwest Bank incorporates by reference into
this Form T-1 the exhibits attached hereto.
Exhibit 1. a. A copy of the Articles of Association of the
trustee now in effect.*
Exhibit 2. a. A copy of the certificate of authority of the
trustee to commence business issued June 28,
1872, by the Comptroller of the Currency to The
Northwestern National Bank of Minneapolis.*
b. A copy of the certificate of the Comptroller
of the Currency dated January 2, 1934,
approving the consolidation of The
Northwestern National Bank of Minneapolis
and The Minnesota Loan and Trust Company of
Minneapolis, with the surviving entity being
titled Northwestern National Bank and Trust
Company of Minneapolis.*
c. A copy of the certificate of the Acting
Comptroller of the Currency dated January
12, 1943, as to change of corporate title of
Northwestern National Bank and Trust Company
of Minneapolis to Northwestern National Bank
of Minneapolis.*
<PAGE>
d. A copy of the letter dated May 12, 1983 from
the Regional Counsel, Comptroller of the
Currency, acknowledging receipt of notice of
name change effective May 1, 1983 from
Northwestern National Bank of Minneapolis to
Norwest Bank Minneapolis, National
Association.*
e. A copy of the letter dated January 4, 1988
from the Administrator of National Banks for
the Comptroller of the Currency certifying
approval of consolidation and merger
effective January 1, 1988 of Norwest Bank
Minneapolis, National Association with
various other banks under the title of
"Norwest Bank Minnesota, National
Association."*
Exhibit 3. A copy of the authorization of the trustee to
exercise corporate trust powers issued January 2,
1934, by the Federal Reserve Board.*
Exhibit 4. Copy of By-laws of the trustee as now in effect.*
Exhibit 5. Not applicable.
Exhibit 6. The consent of the trustee required by Section
321(b) of the Act.
Exhibit 7. A copy of the latest report of condition of the
trustee published pursuant to law or the
requirements of its supervising or examining
authority.**
Exhibit 8. Not applicable.
Exhibit 9. Not applicable.
- ----------
* Incorporated by reference to exhibit number 25 filed with registration
statement number 33-66026.
** Incorporated by reference to exhibit number 25 filed with registration
statement number 333-62999.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the
trustee, Norwest Bank Minnesota, National Association, a national banking
association organized and existing under the laws of the United States of
America, has duly caused this statement of eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of
Minneapolis and State of Minnesota on the 14th day of October, 1998.
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
/s/ Gavin S. Wilkinson
----------------------------
Gavin S. Wilkinson
Vice President
<PAGE>
EXHIBIT 6
October 14, 1998
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In accordance with Section 321(b) of the Trust Indenture Act of 1939, as
amended, the undersigned hereby consents that reports of examination of the
undersigned made by Federal, State, Territorial, or District authorities
authorized to make such examination may be furnished by such authorities to the
Securities and Exchange Commission upon its request therefor.
Very truly yours,
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
/s/ Gavin S. Wilkinson
----------------------------
Gavin S. Wilkinson
Vice President
<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 ___________, 1998
--------------
Senior Subordinated Contingent Notes due 2009
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<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;
</TABLE>
i
<PAGE>
<TABLE>
<S> <C> <C>
8.6;
15.2
(c)................................................... 8.1(a)
(d)................................................... 2.8;
7.11;
8.1(c)
(e)................................................... 7.13
316 (a)(last sentence).................................... 2.9
(a)(1)(A)............................................. 7.11
(a)(1)(B)............................................. 7.12
(a)(2)................................................ N.A.
(b)................................................... 7.7
317 (a)(1)................................................ 7.3
(a)(2)................................................ 7.4
(b)................................................... 2.4
318 (a)................................................... 15.1
</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> <C> <C>
ARTICLE I. DEFINITIONS AND INCORPORATION BY REFERENCE..................................................1
SECTION 1.1. Definitions........................................................................1
SECTION 1.2. Incorporation by Reference of TIA.................................................32
SECTION 1.3. Rules of Construction.............................................................32
ARTICLE II. THE SECURITIES.............................................................................33
SECTION 2.1. Form and Dating...................................................................33
SECTION 2.2. Execution and Authentication......................................................33
SECTION 2.3. Registrar and Paying Agent........................................................34
SECTION 2.4. Paying Agent to Hold Assets in Trust..............................................35
SECTION 2.5. Securityholder Lists..............................................................35
SECTION 2.6. Transfer and Exchange.............................................................35
SECTION 2.7. Replacement Securities............................................................36
SECTION 2.8. Outstanding Securities............................................................36
SECTION 2.9. Treasury Securities...............................................................37
SECTION 2.10. Temporary Securities..............................................................37
SECTION 2.11. Cancellation......................................................................37
SECTION 2.12. Defaulted Interest................................................................37
ARTICLE III. REDEMPTION.................................................................................39
SECTION 3.1. Right of Redemption...............................................................39
SECTION 3.2. Redemption Pursuant to Applicable Laws............................................39
SECTION 3.3. Notices to Trustee................................................................39
SECTION 3.4. Notice of Redemption..............................................................39
SECTION 3.5. Effect of Notice of Redemption....................................................40
SECTION 3.6. Deposit of Redemption Price.......................................................40
SECTION 3.7. Securities Redeemed in Part.......................................................40
ARTICLE IV. SECURITY...................................................................................41
SECTION 4.1. Security Interest.................................................................41
SECTION 4.2. Recording; Opinions of Counsel....................................................41
SECTION 4.3. Disposition of Certain Collateral.................................................42
SECTION 4.4. Net Cash Proceeds Account.........................................................44
SECTION 4.5. Certain Releases of Collateral....................................................44
SECTION 4.6. Lien Subordination................................................................45
SECTION 4.7. Payment of Expenses...............................................................45
SECTION 4.8. Suits to Protect the Collateral...................................................45
SECTION 4.9. Trustee's Duties..................................................................46
SECTION 4.10. Collateral Documents..............................................................46
</TABLE>
iii
<PAGE>
<TABLE>
<S> <C> <C> <C>
ARTICLE V. COVENANTS..................................................................................47
SECTION 5.1. Payment of Securities.............................................................47
SECTION 5.2. Maintenance of Office or Agency...................................................48
SECTION 5.3. Limitation on Restricted Payments.................................................48
SECTION 5.4. Existence.........................................................................50
SECTION 5.5. Payment of Taxes and Other Claims.................................................50
SECTION 5.6. Maintenance of Insurance..........................................................50
SECTION 5.7. Compliance Certificate; Notice of Default.........................................51
SECTION 5.8. Reports...........................................................................51
SECTION 5.9. Waiver of Stay, Extension or Usury Laws...........................................52
SECTION 5.10. Limitation on Transactions with Affiliates........................................52
SECTION 5.11. Limitation on Incurrence of Additional Indebtedness and
Disqualified Capital Stock........................................................53
SECTION 5.12. Limitation on Dividends and Other Payment Restrictions Affecting
Subsidiaries......................................................................56
SECTION 5.13. Limitation on Liens...............................................................57
SECTION 5.14. Limitation on Sales of Assets and Subsidiary Stock; Event
of Loss...........................................................................57
SECTION 5.15. Construction......................................................................59
SECTION 5.16. Limitation on Use of Certain Funds................................................59
SECTION 5.17. Limitation on Status as Investment Company........................................59
SECTION 5.18. Restrictions on Sale and Issuance of Subsidiary Stock.............................60
SECTION 5.19. Limitation on Payment of Management Fees..........................................60
SECTION 5.20. Listing of Securities.............................................................62
SECTION 5.21. Compliance with Environmental Laws................................................62
SECTION 5.22. Limitation on Layering Debt.......................................................63
SECTION 5.23. Certain Deferrals.................................................................63
ARTICLE VI. SUCCESSORS.................................................................................63
SECTION 6.1. Limitation on Merger, Sale or Consolidation.......................................63
SECTION 6.2. Successor Substituted.............................................................64
ARTICLE VII. EVENTS OF DEFAULT AND REMEDIES.............................................................65
SECTION 7.1. Events of Default.................................................................65
SECTION 7.2. Declaration of Event of Default, Rescission and Annulment.........................67
SECTION 7.3. Collection of Indebtedness and Suits for Enforcement by Trustee...................68
SECTION 7.4. Trustee May File Proofs of Claim..................................................69
SECTION 7.5. Trustee May Enforce Claims Without Possession of Securities.......................69
SECTION 7.6. Priorities........................................................................70
SECTION 7.7. Limitation on Suits...............................................................70
SECTION 7.8. Unconditional Right of Holders to Receive Principal and Interest..................71
</TABLE>
iv
<PAGE>
<TABLE>
<S> <C> <C> <C>
SECTION 7.9. Rights and Remedies Cumulative....................................................71
SECTION 7.10. Delay or Omission Not Waiver......................................................71
SECTION 7.11. Control by Holders................................................................71
SECTION 7.12. Waiver of Past Default............................................................72
SECTION 7.13. Undertaking for Costs.............................................................72
SECTION 7.14. Restoration of Rights and Remedies................................................72
ARTICLE VIII. TRUSTEE....................................................................................73
SECTION 8.1. Duties of Trustee.................................................................73
SECTION 8.2. Rights of Trustee.................................................................74
SECTION 8.3. Individual Rights of Trustee......................................................75
SECTION 8.4. Trustee's Disclaimer..............................................................75
SECTION 8.5. Notice of Default.................................................................76
SECTION 8.6. Reports by Trustee to Holders.....................................................76
SECTION 8.7. Compensation and Indemnity........................................................76
SECTION 8.8. Replacement of Trustee............................................................77
SECTION 8.9. Successor Trustee by Merger, Etc..................................................78
SECTION 8.10. Eligibility; Disqualification.....................................................78
SECTION 8.11. Preferential Collection of Claims against Company.................................79
ARTICLE IX. LEGAL DEFEASANCE AND COVENANT DEFEASANCE...................................................79
SECTION 9.1. Option to Effect Legal Defeasance or Covenant Defeasance..........................79
SECTION 9.2. Legal Defeasance and Discharge....................................................79
SECTION 9.3. Covenant Defeasance...............................................................79
SECTION 9.4. Conditions to Legal or Covenant Defeasance........................................80
SECTION 9.5. Deposited U.S. Legal Tender and U.S. Government Obligations to
Be Held in Trust; Other Miscellaneous Provisions..................................81
SECTION 9.6. Repayment to Company..............................................................82
SECTION 9.7. Reinstatement.....................................................................82
ARTICLE X. AMENDMENTS, SUPPLEMENTS AND WAIVERS........................................................83
SECTION 10.1. Supplemental Indentures Without Consent of Holders................................83
SECTION 10.2. Amendments, Supplemental Indentures and Waivers with Consent of
Holders...........................................................................83
SECTION 10.3. Compliance with TIA...............................................................85
SECTION 10.4. Revocation and Effect of Consents.................................................85
SECTION 10.5. Notation on or Exchange of Securities.............................................86
SECTION 10.6. Trustee to Sign Amendments, Etc...................................................86
SECTION 10.7. Consent to Certain Amendments of the Ground Lease; Trustee's
Actions...........................................................................86
</TABLE>
v
<PAGE>
<TABLE>
<S> <C> <C> <C>
ARTICLE XI. [Intentionally Deleted.]...................................................................87
ARTICLE XII. GUARANTY...................................................................................87
SECTION 12.1. Guaranty..........................................................................88
SECTION 12.2. Parent Guaranty...................................................................88
SECTION 12.3. Execution and Delivery of Guaranty................................................90
SECTION 12.4. Future Subsidiary Guarantors......................................................91
SECTION 12.5. Release of Guarantors.............................................................91
SECTION 12.6. When the Guarantor May Merge, etc.................................................92
SECTION 12.7. Certain Bankruptcy Events.........................................................93
ARTICLE XIII. SUBORDINATION OF SECURITIES................................................................93
SECTION 13.1. Securities Subordinated to Senior Debt............................................93
SECTION 13.2. Securities Subordinated to Prior Payment of All Senior Debt on
Dissolution, Liquidation, Reorganization, etc. of the Company.....................94
SECTION 13.3. Holders of Securities to be Subrogated to Right of Holders of
Senior Debt.......................................................................95
SECTION 13.4. Obligations of the Company Unconditional..........................................95
SECTION 13.5. Company Not to Make Payments With Respect to Securities in
Certain Circumstances.............................................................96
SECTION 13.6. Trustee Entitled to Assume Payments Not Prohibited in Absence of
Notice............................................................................97
SECTION 13.7. Application by Trustee of Monies Deposited With It................................98
SECTION 13.8. Subordination Rights Not Impaired by Acts or Omissions of
Company or Holders of Senior Debt.................................................98
SECTION 13.9. Holders of Securities Authorize Trustee to Effectuate
Subordination of Securities.......................................................99
SECTION 13.10. Right of Trustee to Hold Senior Debt; Preservation of Trustee's
Rights...........................................................................100
SECTION 13.11. Article XIII Not to Prevent Events of Default....................................100
SECTION 13.12. Trustee Not Fiduciary for Holders of Senior Debt.................................100
SECTION 13.13. Trust Monies Not Subordinated....................................................100
ARTICLE XIV. SUBORDINATION OF GUARANTY.................................................................101
SECTION 14.1. Guaranty Subordinated to Guarantor Senior Debt...................................101
SECTION 14.2. Guaranty Subordinated to Prior Payment of All Guarantor Senior
Debt on Dissolution, Liquidation, Reorganization, etc. of the
Guarantor........................................................................101
SECTION 14.3. Holders of Securities to be Subrogated to Right of Holders of
Guarantor Senior Debt............................................................103
SECTION 14.4. Obligations of the Guarantor Unconditional.......................................103
SECTION 14.5. Guarantors Not to Make Payments in Respect of the Guaranties in
Certain Circumstances............................................................104
</TABLE>
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<TABLE>
<S> <C> <C> <C>
SECTION 14.6. Trustee Entitled to Assume Payments Not Prohibited in Absence of
Notice...........................................................................104
SECTION 14.7. Application by Trustee of Monies Deposited With It...............................105
SECTION 14.8. Subordination Rights Not Impaired by Acts or Omissions of a
Guarantor or Holders of Guarantor Senior Debt....................................105
SECTION 14.9. Holders of Securities Authorize Trustee to Effectuate
Subordination of Guaranties......................................................106
SECTION 14.10. Right of Trustee to Hold Guarantor Senior Debt; Preservation of
Trustee's Rights.................................................................107
SECTION 14.11. Article XIV Not to Prevent Events of Default.....................................107
SECTION 14.12. Trustee Not Fiduciary for Holders of Guarantor Senior Debt.......................107
SECTION 14.13. Trust Monies Not Subordinated....................................................107
ARTICLE XV. MISCELLANEOUS.............................................................................108
SECTION 15.1. TIA Controls.....................................................................108
SECTION 15.2. Notices..........................................................................108
SECTION 15.3. Communications by Holders with Other Holders.....................................109
SECTION 15.4. Certificate and Opinion as to Conditions Precedent...............................109
SECTION 15.5. Statements Required in Certificate or Opinion....................................110
SECTION 15.6. Rules by Trustee, Paying Agent, Registrar........................................110
SECTION 15.7. Legal Holidays...................................................................110
SECTION 15.8. Governing Law....................................................................110
SECTION 15.9. No Adverse Interpretation of Other Agreements....................................111
SECTION 15.10. No Recourse Against Others.......................................................111
SECTION 15.11. Successors.......................................................................112
SECTION 15.12. Duplicate Originals..............................................................112
SECTION 15.13. Severability.....................................................................112
SECTION 15.14. Table of Contents, Headings, Etc.................................................112
SECTION 15.15. Gaming Laws......................................................................112
SECTION 15.16. Tax Treatment....................................................................112
SECTION 15.17. Waivers and Releases.............................................................113
</TABLE>
vii
<PAGE>
INDENTURE, dated as of __________, 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 Contingent Notes due 2009.
ARTICLE I.
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1. Definitions.
"Accumulated Amount" shall have the meaning specified in
Section 5.14.
"Acquired Assets" means assets of any person existing at the
time such person becomes a Subsidiary of the Company or is merged or
consolidated into or with the Company or one of its Subsidiaries.
"Acquired Indebtedness" means Indebtedness of any person
existing at the time such person becomes a Subsidiary of the Company or is
merged or consolidated into or with the Company or one of its Subsidiaries, and
not incurred in connection with or in anticipation of, such merger or
consolidation or of such person becoming a Subsidiary of the Company.
"Acquisition" means the purchase or other acquisition of any
person or substantially all the assets of any person by any other person,
whether by purchase, merger consolidation, or other transfer, and whether or not
for consideration.
"Administrative Services Agreement" means any Administrative
Services Agreement entered into between HOC (or an affiliate of HOC) and JCC
after the date hereof relating to the performance of certain administrative
services.
"Affiliate" means (i) any person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Company or any of the Guarantors, (ii) any spouse, immediate family member, or
other relative who has the same principal residence of any person described in
clause (i) above, and (iii) any trust in which any person described in clause
(i) or (ii) above has a beneficial interest. For purposes of this definition,
the term "control" means (a) the power to direct the management and policies of
a person, directly or through one or more intermediaries, whether through the
ownership of voting securities, by contract, or otherwise, or (b) the beneficial
ownership of 10% or more of any class of voting Capital Stock of a person (on a
fully diluted basis) or of warrants or other rights to acquire such class of
Capital
<PAGE>
Stock (whether or 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 Put Date" shall have the meaning specified in
Section 5.14.
"Authorized Representative" means, (i) with respect to (a) JCC
Holding , (b) any Guarantor that is a corporation, or (c) any Guarantor that has
two or more Officers, any Officer thereof, and (ii) with respect to any
Guarantor 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 Guarantor 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 or any successor or
replacement Administrative Agent (as defined in the Bank Credit Facilities)
under the Bank Credit Facilities.
"Bank Credit Facilities" means the Credit Agreement, dated as
of ___________, 1998 (the "Bank Credit Agreement"), among JCC, JCC Holding, the
Bank Lenders from time to time parties thereto, and Bankers Trust Company, as
administrative agent, together with the related documents thereto (including,
without limitation, any guaranty agreements and security documents), in each
case as such agreements may be amended (including any amendment and restatement
thereof), supplemented or modified from time to time, including any agreement
extending the maturity of, refinancing, replacing or otherwise restructuring
(including by way of adding Subsidiaries of JCC 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.
2
<PAGE>
"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.
"Bank Security Interests" means the Liens on the Collateral
created by the Collateral Documents for the benefit of the Bank Lenders.
"Board of Directors" means, with respect to any person, the
Board of Directors of such person or any committee of the Board of Directors of
such person authorized, with respect to any particular matter, to exercise the
power of the Board of Directors of such person.
"Board Resolution" means, with respect to any person, a duly
adopted resolution of the Board of Directors (or, if such person is a limited
liability company, of the Manager) of such person.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday
and Friday which is not a day on which banking institutions in New York, New
York are authorized or obligated by law or executive order to close.
"Capitalized Lease Obligation" means obligations under a
lease, entered into on or after the Issue Date, that are required to be
capitalized for financial reporting purposes in accordance with GAAP, and the
amount of Indebtedness represented by such obligations shall be the capitalized
amount of such obligations, as determined in accordance with GAAP.
"Capital Stock" means, with respect to any person, any capital
stock of such person and shares, interests, participations or other ownership
interests (however designated) of any person and any rights (other than debt
securities convertible into 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 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
3
<PAGE>
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 Harrah's
Management 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 __________, 1998, as it may be amended or supplemented from time to time.
"City" means the City of New Orleans, Louisiana.
"Collateral" means the Property and assets of the Company 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 pursuant to the requirements of this Indenture, as
the same may be amended from time to time.
"Company" means the party named as such in this Indenture
until a successor replaces it pursuant to this Indenture and thereafter means
such successor.
"Company Request" means a written request of the Company or a
Guarantor, as the case may be, in the form of an Officers' Certificate.
"Completion Guarantees" means (i) the Notes Completion
Guarantee (the "Notes Completion Guarantee"), dated as of _________, 1998, by
HOC and HET in favor of the Trustee, as trustee, as it may be amended or
supplemented from time to time, (ii) the Bank Completion Guarantee, dated as of
_________, 1998, by HOC and HET in favor of the Bank
4
<PAGE>
Agent, as agent, as it may be amended or supplemented from time to time, (iii)
the LGCB Completion Guarantee, dated as of _________, 1998, by HOC and HET in
favor of the 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 _________, 1998, by HOC and HET in favor of the RDC and
the City, as it may be amended or supplemented from time to time.
"Completion Loan Agreement" means the Amended and Restated
Completion Loan Agreement, dated as of __________, 1998, among the Company, HOC
and HET, as it may be amended or supplemented from time to time.
"Consolidated Capital Expenditures" means, with respect to any
person for any period, the capital expenditures of such person and its
Consolidated Subsidiaries (determined in accordance with GAAP) for such period.
"Consolidated Coverage Ratio" of any person on any date of
determination (the "Transaction Date") means, the ratio, on a pro forma basis,
of (a) the aggregate amount of Consolidated EBITDA of such person attributable
to continuing operations and businesses (exclusive of amounts attributable to
operations and businesses permanently discontinued or disposed of for the
Reference Period) to (b) the aggregate Consolidated Fixed Charges of such person
(exclusive of amounts attributable to operations and businesses permanently
discontinued or disposed of, but only to the extent that the obligations giving
rise to such Consolidated Fixed Charges would no longer be obligations
contributing to such person's Consolidated Fixed Charges subsequent to the
Transaction Date) during the Reference Period; provided, that for purposes of
such calculation, (i) Acquisitions which occurred during the Reference Period or
subsequent to the Reference Period and on or prior to the date of the
transaction giving rise to the need to calculate the Consolidated Coverage Ratio
shall be assumed to have occurred on the first day of the Reference Period, (ii)
transactions giving rise to the need to calculate the Consolidated Coverage
Ratio shall be assumed to have occurred on the first day of the Reference
Period, (iii) the incurrence of any Indebtedness or issuance of any Disqualified
Capital Stock during the Reference Period or subsequent to the Reference Period
and on or prior to the Transaction Date (and the application of the proceeds
therefrom to the extent used to refinance or retire other Indebtedness) shall be
assumed to have occurred on the first day of such Reference Period, (iv) the
Consolidated Fixed Charges of such person attributable to interest on any
Indebtedness or dividends on any Disqualified Capital Stock bearing a floating
interest (or dividend) rate shall be computed on a pro forma basis as if the
average rate in effect from the beginning of the Reference Period to the
Transaction Date had been the applicable rate for the entire period, unless such
Person or any of its Subsidiaries is a party to an Interest Rate Agreement
(which shall remain in effect for the 12-month period immediately following the
Transaction Date) that has the effect of fixing the interest rate on the date of
computation, in which case such rate (whether higher or lower) shall be used,
(v) there shall be excluded from Consolidated Fixed Charges any portion of such
Consolidated Fixed Charges related to any amount of Indebtedness that was
outstanding during the Reference Period but is not outstanding on the
Transaction Date, except for Consolidated Fixed Charges actually incurred with
respect to Indebtedness borrowed (as adjusted pursuant to clause (iv)) under a
revolving credit or similar arrangement to the extent the commitment thereunder
remains in effect on the Transaction Date and (vi) the Consolidated
5
<PAGE>
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.
"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
6
<PAGE>
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, surplus and retained earnings of such
person (plus, in the case of a corporation, amounts of equity attributable to
preferred stock) and its Consolidated Subsidiaries, as would be shown on the
consolidated balance sheet of such person prepared in accordance with GAAP,
adjusted to exclude (to the extent included in calculating such equity), (a) the
amount of partners capital (or capital, surplus and accrued but unpaid
dividends, as the case may be), attributable to any Disqualified Capital Stock,
(b) all upward revaluations and other write-ups in the book value of any asset
of such person or a Consolidated Subsidiary of such person subsequent to the
Issue Date, (c) all investments in Subsidiaries that are not Consolidated
Subsidiaries and in persons that are not Subsidiaries, (d) all unamortized debt
discount and expense and unamortized deferred charges and (e) goodwill and other
intangible assets.
"Contingent Payment Accrual" means, at any time, the total
amount of Contingent Payments accrued and unpaid through and as of such time.
"Contingent Payment Date" means the stated due date, specified
in the Security, of Contingent Payments, if any are payable under the terms of
the Securities and this Indenture.
"Contingent Payment Measurement Amount" shall mean an amount
equal to (i) the Consolidated EBITDA of the Company, (ii) plus an amount equal
to the cash distributions, if any, from CP Development and FP Development to JCC
Holding, (iii) after the date on which the second floor of the Casino is open to
customers, (a) if the cash advances (whether in the form of one or more loans or
equity contributions or otherwise), if any, made by
7
<PAGE>
the Company to JCC Development (collectively, the "Cash Advances") are in excess
of the lease payments received by the Company pursuant to the Second Floor
Sublease, less the amount of such excess, or (b) if the lease payments received
by the Company pursuant to the Second Floor Sublease are in excess of the Cash
Advances, plus the amount of such excess. 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 calculated 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."
"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 2009 issued by the Company in
connection with the Plan of Reorganization.
"Convertible Junior Subordinated Debentures Indenture" means
the Indenture, dated as of __________, 1998, among the Company, as obligor, 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 ___________, 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 Obligations) permitted under this Indenture the principal amount
of which is $15,000,000 or more.
8
<PAGE>
"Development Agreement" means that certain Development
Services Agreement, dated as of _____________, 1998, between the Company, CP
Development, FP Development, JCC Development and HOC.
"Development Companies Guaranty" means the Guaranty of each of
the Development Companies.
"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).
"Disqualified Capital Stock" means (a) except as provided in
(b), with respect to any person, Capital Stock of such person that, by its terms
or by the terms of any security into which it is convertible, exercisable or
exchangeable, is, or upon the happening of an event or the passage of time would
be, required to be redeemed or repurchased (including at the option of the
holder thereof) by such person or any of its Subsidiaries, in whole or in part
on or prior to the Stated Maturity of the Notes, and (b) with respect to any
Subsidiary of such person (including any Subsidiary of the Company), any Capital
Stock other than any Capital Stock with no preference, privileges, or redemption
or repayment provisions.
"8% Notes" means the Company's Senior Subordinated Notes due
2009 with Contingent Payments.
"8% Notes Indenture" means the Indenture, dated as of
___________, 1998, among the Company, as obligor, JCC Holding, CP Development,
FP Development and JCC Development, as guarantors, and Norwest Bank Minnesota,
National Association, as trustee, in connection with the 8% Notes.
"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
9
<PAGE>
Hazardous Materials); and any state and local or foreign counterparts or
equivalents, in each case as amended from time to time.
"Event of Default" shall have the meaning specified in Section
7.1.
"Event of Default Notice" shall have the meaning specified in
Section 7.2.
"Event of Loss" means, with respect to any property or asset,
any (i) loss, destruction or damage of such property or asset, or (ii) any
condemnation, seizure or taking, by exercise of the power of eminent domain or
otherwise, of such property or asset, or confiscation or requisition of the use
of such property or asset.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated by the SEC thereunder.
"First Period Contingent Payments" means the amounts payable
in the aggregate to the Holders of the Securities on the Contingent Payment Date
next following a First Semiannual Period (except for the Initial First Period)
in an amount (which may not be less than zero) equal to the product of (i) 37.5%
of the Contingent Payment Measurement Amount for such First Semiannual Period
and the immediately preceding Second Semiannual Period in excess of $85,000,000
and less than $109,425,380, and (ii) a fraction (A) the numerator of which is
the aggregate Notational Amount of the Securities outstanding on the close of
business on the Record Date corresponding to such Contingent Payment Date and
(B) the denominator of which is $18,319,035.
"First Semiannual Period" shall mean each six month period
ending on March 31.
"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
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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.
"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 __________, 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 __________, 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
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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 (1), such non-compliant amounts shall not constitute Guarantor
Senior Debt. It is understood and agreed that if 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.
"Harrah's Management Company" means Harrah's New Orleans
Management Company, a Nevada corporation.
"Hazardous Materials" means (a) any petroleum or petroleum
products, radioactive materials, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation, transformers or other equipment that
contain dielectric fluid containing levels of polychlorinated biphenyls, and
radon gas; (b) any chemicals, materials or substances defined as or included in
the definition of "hazardous substances," "hazardous waste," "hazardous
materials," "extremely hazardous substances," "restricted hazardous waste,"
"toxic substances," "toxic pollutants," "contaminants," or "pollutants," or
words of similar import, under any applicable Environmental Law; and (c) any
other chemical, material or substance, exposure to which is prohibited, limited
or regulated by any governmental authority under Environmental Laws.
"HET" means Harrah's Entertainment, Inc., a Delaware
corporation.
"HET/JCC Agreement" means the HET/JCC Agreement, dated as of
______________, 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 __________, 1998, among HET, HOC and Bankers Trust Company, as administrative
agent.
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"HET Warrant" means the warrants granted to Harrah's Investor
in connection with the Plan of Reorganization pursuant to that certain Warrant
Agreement, dated as of ________, 1998, between JCC Holding and Harrah's
Investor, as it may be amended from time to time.
"HOC" means Harrah's Operating Company, Inc., a Delaware
corporation.
"Holder" or "Securityholder" means the person in whose name a
Security is registered on the Registrar's books.
"Holder of 8% Notes" means the person in whose name an 8% Note
is registered on the books of the registrar with respect to the 8% Notes.
"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
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to exceed (x) the greater of (A) the net assets of the General Partner, and (B)
the amount of such obligations to the extent that there is recourse, by contract
or operation of law, to the property or assets of such person or a Subsidiary of
such person (other than the General Partner) or (y) if less than the amounts
determined pursuant to clause (x) above, the actual amount of such Indebtedness
that is recourse to such person, if the Indebtedness is evidenced by a writing
and is for a determinable amount.
"Indemnity Agreement" means the Amended and Restated
Construction Lien Indemnity Obligation Agreement, dated as of __________, 1998,
between the Company and HOC.
"Indenture" means this Indenture, as amended or supplemented
from time to time in accordance with the terms hereof.
"Indenture Obligations" means the Obligations of the Company
and the Guarantors pursuant to this Indenture and the Securities (and any other
obligor hereunder or under the Securities) now or hereafter existing, to pay
Contingent Payments on the Securities when due and payable, whether on a
Contingent Payment Date, Required Regulatory Redemption, or otherwise, and
interest (to the extent lawful) on due and unpaid Contingent Payments, if any,
and all other amounts due or to become due in connection with this Indenture,
the Securities and the Collateral Documents, including any and all extensions,
renewals or other modifications thereof, in whole or in part, and the
performance of all other obligations of the Company (and any other obligor
hereunder or under the Securities) and the Guarantors, including all costs and
expenses incurred by the Trustee or the Holders in the collection or enforcement
of any such obligations or realization upon the Collateral or the security of
any Collateral Documents.
"Initial First Period Contingent Payments" means the amounts
payable in the aggregate to the Holders of the Securities on the Contingent
Payment Date next following the period ending on March 31, 1999 (the "Initial
First Period") in an amount (which may not be less than zero) equal to the
product of (i) 75% of the Contingent Payment Measurement Amount for such period
in excess of $45,769,000 and less than $58,921,061, and (ii) a fraction (A) the
numerator of which is the aggregate Notational Amount of Securities outstanding
on the close of business on the Record Date corresponding to such Contingent
Payment Date and (B) the denominator of which is $18,319,035.
"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
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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 United States Copyrights, each substantially
in the form annexed to the Security Agreement and executed in favor of the
Collateral Agent.
"Intercreditor Agreement" means the Intercreditor Agreement,
dated as of __________, 1998, among HET and HOC, as initial Minimum Payment
Guarantors, the Bank Agent, the Trustee, the trustee under the 8% Notes
Indenture, the Collateral Agent and the other parties named therein, as it may
be amended or supplemented from time to time.
"Interest" shall have the meaning set forth in Section 5.1.
"Interest Rate Agreement" means the obligations of any person
pursuant to any interest rate swap agreement, interest rate collar agreement or
other similar agreement or arrangement, in each case designed to protect such
person or any of its Subsidiaries against fluctuations in interest rates.
"Investment" by any person in any other person means (without
duplication) (a) the acquisition by such person (whether for cash, property,
services, securities or otherwise) of capital stock, bonds, notes, debentures,
partnership or other ownership interests or other securities, including any
options or warrants, of such other person or any agreement to make any such
acquisition; (b) the making by such person of any deposit with, or advance, loan
or other extension of credit to or on behalf of, such other person (including
the purchase of property from another person subject to an understanding or
agreement, contingent or otherwise, to resell such property to such other
person) or any commitment to make any such advance, loan or extension (but
excluding accounts receivable arising in the ordinary course of business); (c)
other than (i) any guarantees of the Notes, (ii) any guarantees of the 8% Notes,
(iii) any guarantees of the Bank Credit Facilities, (iv) any guarantees of
Interest Rate Agreements, and (v) any guarantees of Indebtedness or other
liabilities of the Company or its Subsidiaries by the Guarantors, including,
without limitation, the Parent Guarantor, the Company or its Subsidiaries, the
entering into by such person of any guarantee of, or other credit support or
contingent obligation with respect to, Indebtedness or other liability of such
other person; (d) the making of any capital contribution by such person to such
other person; or (e) the designation by the 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 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.
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"Issue Date" means the date of first issuance of the Notes
under this Indenture.
"JCC Development" means JCC Development Company, L.L.C., a
Louisiana limited liability company.
"Leaseholds" of any person means all the right, title and
interest of such person as lessee or licensee in, to and under any lease.
"Legal Holiday" shall have the meaning provided in Section
13.7.
"Lien" means any mortgage, lien, pledge, charge, security
interest or encumbrance of any kind, whether or not filed, recorded or otherwise
perfected under applicable law (including, without limitation, any conditional
sale or other title retention agreement, any lease in the nature thereof, any
option or other agreement to sell or give any security interest in and any
filing or other agreement to give any financing statement under the Uniform
Commercial Code (or equivalent statutes) of any jurisdiction).
"Make-Whole Amount" with respect to the Notes means, as of any
date, the greater of (a) zero and (b) the remainder of the present value
(determined using a discount rate equal to the Formula Rate at such time) of the
remaining Maximum Contingent Payments payable in respect of the Notes.
"Management Agreement" means the Second Amended and Restated
Management Agreement between the Company and Harrah's Management Company
relating to the management of the Casino dated as of __________, 1998, as it may
be amended or supplemented from time to time.
"Management Fee" means "Management Fee" as defined by the
Management Agreement.
"Manager" means (i) for so long as 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.
"Maximum Contingent Payments" means, for any Contingent
Payment Period, an amount equal to the product of (i) $18,319,035 and (ii) a
fraction (x) the numerator of which is the aggregate Notational Amount of the
Securities outstanding on the close of business on the Record Date corresponding
to the Contingent Payment Date immediately following such Contingent Payment
Period, and (y) the denominator of which is $18,319,035.
"Minimum Accumulation Date" shall have the meaning specified
in Section 5.14.
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"Minimum Payment Guarantor" means the Initial Minimum Payment
Guarantors and any other successor as 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.
"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 the date hereof, 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 the date hereof 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 the date hereof, 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 the date hereof, 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 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 Minimum Payment Guarantor, the Holders and the Bank
Lenders pursuant to Section 4.4 and the
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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.
"Notational Amount" means, with respect to each Security, the
amount set forth on each Security which designates the maximum amount of
Contingent Payments the holder of such Security may receive in a Contingent
Payment Period in which Maximum Contingent Payments are made.
"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 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 the relevant contract rate
provided in the documentation governing the respective issue of Senior Debt,
regardless of whether such interest is an allowed claim in the relevant
proceeding.
"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.
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"Officers' Certificate" means, with respect to the Company or
any Guarantor, a certificate signed by any Officer of such entity (or, if such
entity does not have any Officers, by an Officer of the Manager 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.
"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 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
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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 Guarantor may incur Indebtedness
solely in respect of bankers' acceptances, letters of credit and payment and
performance bonds (to the extent that such incurrence does not result in the
incurrence of any obligation for the payment of borrowed money of any person
other than the Company or such Subsidiary), all in the ordinary course of
business, in amounts and for the purposes customary in the Company's industry
for gaming operations similar to those of the Company; provided, that the
aggregate principal amount outstanding of such Indebtedness (including any
Indebtedness issued to refinance, refund or replace such Indebtedness) shall at
no time exceed $5,000,000;
(b) the Company may incur Indebtedness to any Subsidiary, and
any Subsidiary may incur Indebtedness to any other Subsidiary or to the Company;
provided, however, that such obligations, in any case, shall be subordinated to
such entity's obligations pursuant to the Notes; provided further that, in the
case of Indebtedness of the Company to any of its Subsidiaries, any disposition,
pledge or transfer of any such Indebtedness by the Subsidiary to a person (other
than a Subsidiary) shall be deemed to be an incurrence of such Indebtedness by
the Company not permitted by this clause (b);
(c) the Company and any of its Subsidiaries may incur
Indebtedness representing the balance deferred and unpaid of the purchase price
of any property or services used in the ordinary course of their business that
would constitute ordinarily a trade payable to trade creditors; and
(d) the Company and any of its Subsidiaries may post a bond or
surety obligation (or incur an indemnity or similar obligation) in order to
prevent the impairment or loss of or to obtain the Casino Operating Contract, to
the extent required by applicable law and consistent in character and amount
with customary industry practice.
"Permitted 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
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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 interfere with the ordinary
conduct of the business of the Company or such Subsidiary; provided, that any
such Liens are not incurred in connection with any borrowing of money or any
commitment to loan any money or to extend any credit;
(d) Liens existing on the Issue Date;
(e) pledges or deposits made in the ordinary course of
business in connection with worker's compensation, unemployment insurance and
other types of social legislation;
(f) Liens created by this Indenture, the 8% Notes Indenture
and the Collateral Documents (which Liens may also secure certain other
indebtedness and certain refinancings thereof on the terms provided in the
Collateral Documents and the Intercreditor Agreement);
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(g) Liens that secure Acquired Indebtedness or Liens on
Acquired Assets, provided, in each case, that such Liens do not secure any other
property or assets and were not put in place in connection with or in
anticipation of such acquisition, merger or consolidation;
(h) any judgment Lien unless it constitutes an Event of
Default;
(i) Liens to secure payment or performance bonds to the extent
permitted under clause (a) under the definition of "Permitted Indebtedness;"
(j) Liens incurred in the ordinary course of business securing
Indebtedness under Interest Rate Agreements;
(k) leases or subleases granted to other persons in the
ordinary course of business not materially interfering with the conduct of the
business of the Company or any of its Subsidiaries or materially detracting from
the value of the relative assets of the Company or such Subsidiary of the
Company; and
(l) Liens arising from precautionary Uniform Commercial Code
financing statement filings regarding operating leases entered into by the
Company or any of its Subsidiaries in the ordinary course of business.
"Permitted Tax Distributions" means (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 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 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.
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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 of Harrah's Jazz Company, Harrah's Jazz Finance Corp., and
Harrah's New Orleans Investment Company (including all exhibits and schedules
annexed thereto), as amended, under Chapter 11 of the United States Bankruptcy
Code.
"Plans" means all drawings, plans and specifications prepared
by or on behalf of the Company or one of its Subsidiaries, as the same may be
amended or supplemented from time to time in good faith, and, if required by
applicable law, submitted to and approved by the building or other relevant
department, which describe and show the Casino, or a Project Expansion, as the
case may be, and the labor and materials necessary for construction thereof.
"Pledge Agreement" means the Pledge Agreement, dated ________,
1998, executed by 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.
"principal" of any Indebtedness (including the Securities)
means the principal of such Indebtedness plus any applicable premium, if any, on
such Indebtedness.
"Principal" shall have the meaning set forth in Section 5.1.
"Project Costs" means, with respect to a Project Expansion,
the aggregate costs required to complete such Project Expansion, through the
Project Expansion Termination of Construction Date with respect to such Project
Expansion in accordance with the Plans therefor and applicable legal
requirements, as set forth in a statement submitted to, and receipted for by,
the Trustee, setting forth in reasonable detail all amounts theretofore expended
and any anticipated costs and expenses estimated to be incurred and reserves to
be established in connection with the construction and development of such
Project Expansion, including direct costs related thereto such as construction
management, architectural engineering and interior design fees, site work,
utility installations and hook-up fees, construction permits, certificates and
bonds, land and lease acquisition costs and the cost of furniture, fixtures,
furnishings, machinery and equipment (including gaming equipment), but excluding
the following: principal or interest payments on any Indebtedness (other than
interest on Indebtedness in respect of such Project Expansion which is required
to be capitalized in accordance with GAAP, which shall be included in
determining Project Costs).
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"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.
"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
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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 a price for such Security established by the Manager of the
Company in good faith, plus 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).
"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
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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 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.
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"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 for the
Notes in favor of the Holders; (iv) Investments by the Company in a person, if
as a result of such Investment (a) such person becomes a wholly owned Subsidiary
of the Company and all of the Capital Stock of such person has been pledged as
Collateral for the Notes in favor of the Holders pursuant to the Pledge
Agreement or (b) such person is merged, consolidated or amalgamated with or
into, or transfers or conveys substantially all of its assets to, or is
liquidated into, the Company or a wholly owned Subsidiary of the Company; (v)
payments of interest in respect of the Subordinated Credit Facility; (vi)
payments of interest in respect of the Completion Loan Agreement; (vii) payments
of interest in respect of the Indemnity Agreement; (viii) Credit Enhancement
Fees, as defined in, and paid pursuant to, the Credit Enhancement Fee Agreement;
(ix) payments to the Minimum Payment Guarantor in respect of the Minimum Payment
Guaranty Obligations, (x) payments in respect of a Slot Machine Lease, and (xi)
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 _________, 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 amounts payable
in the aggregate to the Holders of the Securities on the Contingent Payment Date
next following a Second Semiannual Period in an amount (which may not be less
than zero) equal to (A) the
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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 $85,000,000 and less than $109,425,380, and (ii) a fraction
(x) the numerator of which is the aggregate Notational Amount of the Securities
outstanding on the close of business on the Record Date corresponding to such
Contingent Payment Date and (y) the denominator of which is $18,319,035, less
(B) the aggregate amount, if any, of First Period Contingent Payments or Initial
First Period Contingent Payments, as applicable, whether paid or accrued, in
respect of the immediately preceding First Semiannual Period or Initial First
Period, as the case may be.
"Second Semiannual Period" shall mean each six month period
ending on September 30.
"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
Contingent Notes due 2009, in each case, issued under this Indenture, as the
same may be amended or modified from time to time in accordance with the terms
hereof.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations of the SEC promulgated thereunder.
"Security Agreement" means the Security Agreement, dated as of
__________, 1998, 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 _____________, 1998, executed by the Company in favor
of HET and HOC, as it may be amended from time to time.
"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 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 (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, and (ii) the Minimum Payment Guaranty
Obligations. 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 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 those payments ___________ of such slot machines
that is equal to or less than an appraisal of such slot machines by an appraisal
firm of national reputation.
"Stated Maturity" means ______________, 2009.
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"Subordinated Credit Facility" means the Subordinated Loan
Agreement, dated as of ___________, 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 __________,
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 Loans 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 Notational Amount of the
Notes. For purposes of this definition, "Remaining Dollar-Years" as of any date,
means the amount obtained by multiplying the aggregate Notational 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;
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(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(iii) "or" is not exclusive;
(iv) words in the singular include the plural, and words in
the plural include the singular;
(v) provisions apply to successive events and transactions;
(vi) "herein," "hereof" and other words of similar import
refer to this Indenture as a whole and not to any particular Article,
Section or other subdivision; and
(vii) references to Sections or Articles means reference to
such Section or Article in this Indenture, unless stated otherwise.
ARTICLE II.
THE SECURITIES
SECTION 2.1. Form and Dating.
The Securities and the Trustee's certificate of
authentication, in respect thereof, shall be substantially in the form of
Exhibit A hereto, which is incorporated into and made a part of this Indenture.
The Securities may have notations, legends or endorsements required by law,
stock exchange rule or usage. The Company shall approve the form of the
Securities and any notation, legend or endorsement on them. Any such notations,
legends or endorsements not contained in the form of Security attached as
Exhibit A hereto shall be delivered in writing to the Trustee. Each Security
shall be dated the date of its authentication.
The terms and provisions contained in the form of Securities
shall constitute, and are hereby expressly made, a part of this Indenture and,
to the extent applicable, the Company, the Parent Guarantor and the Trustee, by
their execution and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby.
SECTION 2.2. Execution and Authentication.
(a) The Securities shall be executed on behalf of the Company
by its Chairman of the Board, President or one of its Vice Presidents, under the
corporate seal of the Company, reproduced thereon, and attested by its Secretary
or Assistant Secretaries. The signature of any of these officers on the
Securities may be manual or facsimile.
(b) Securities or Guarantees bearing the manual or facsimile
signatures of individuals who were at any time the proper officers of the
Company or the Guarantors shall bind the Company or the Guarantors, as the case
may be, notwithstanding that such individual or any of them have ceased to hold
such offices prior to the authentication and delivery of such Securities.
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(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.
(d) The Trustee shall authenticate Securities for original
issue with an aggregate Notational Amount of up to $18,319,035 upon a written
order of the Company in the form of an Officers' Certificate. The Officers'
Certificate shall specify the amount of Securities to be authenticated and the
date on which the Securities are to be authenticated. The aggregate Notational
Amount in respect of Securities outstanding at any time may not exceed
$18,319,035, except as provided in Sections 2.7 and 2.8. Upon the written order
of the Company or a Guarantor in the form of an Officers' Certificate, the
Trustee shall authenticate Securities in substitution of Securities originally
issued to reflect any name change of the Company or such Guarantor.
(e) The Company shall pay Contingent Payments, if any are due
and payable pursuant to and in accordance with the terms of the Securities and
this Indenture, at the places, on the dates and in the manner provided in the
Securities and Indenture. The first Contingent Payment Date shall be May 15,
1999 and the final Contingent Payment Date shall be November 15, 2009.
(f) 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.
(g) Securities shall be issuable only in registered form
without coupons in Notational Amounts of $1.00 and any integral multiple
thereof.
SECTION 2.3. Registrar and Paying Agent.
The Company shall maintain an office or agency in the Borough
of Manhattan, The City of New York, where Securities may be presented for
registration of transfer or for exchange ("Registrar") and an office or agency
in the Borough of Manhattan, The City of New York where Securities may be
presented for payment ("Paying Agent") and an office or agency where notices and
demands to or upon the Company in respect of the Securities may be served. The
Company may act as its own Registrar or Paying Agent, except that, for the
purposes of Articles III, IX, XI and Section 5.14, neither the Company nor any
Affiliate of the Company shall act as Paying Agent. The Registrar shall keep a
register of the Securities and of their transfer and exchange. The Company may
have one or more co-Registrars and one or more additional Paying Agents. The
term "Paying Agent" includes any additional Paying Agent. The Company hereby
initially appoints the Trustee as Registrar and Paying Agent, and the Trustee
hereby initially agrees so to act until such time as the Trustee has resigned or
a successor has
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been appointed. The Company may change any Registrar, Paying Agent or
co-Registrar without notice to any Holder.
The Company shall enter into an appropriate written agency
agreement with any Agent not a party to this Indenture, which agreement shall
implement the provisions of this Indenture that relate to such Agent. The
Company shall promptly notify the Trustee in writing of the name and address of
any such Agent. If the Company fails to maintain a Registrar or Paying Agent,
the Trustee shall act as such.
SECTION 2.4. Paying Agent to Hold Assets in Trust.
The Company shall require each Paying Agent other than the
Trustee to agree in writing that each Paying Agent shall hold in trust for the
benefit of Holders or the Trustee all assets held by the Paying Agent for the
payment of Contingent Payments on the Securities, and shall notify the Trustee
in writing of any Default by the Company in making any such payment. If the
Company or a Subsidiary of the Company acts as Paying Agent, it shall segregate
such assets and hold them as a separate trust fund for the benefit of the
Holders or the Trustee. The Company at any time may require a Paying Agent to
distribute all assets held by it to the Trustee and account for any assets
disbursed and the Trustee may at any time during the continuance of any payment
Default, upon written request to a Paying Agent, require such Paying Agent to
distribute all assets held by it to the Trustee and to account for any assets
distributed. Upon distribution to the Trustee of all assets that shall have been
delivered by the Company to the Paying Agent, the Paying Agent (if other than
the Company) shall have no further liability for such assets.
SECTION 2.5. Securityholder Lists.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of Holders. If the Trustee is not the Registrar, the Company shall
furnish to the Trustee on or before the third Business Day preceding each
Contingent 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
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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 and the Guarantors shall
issue and the Trustee shall authenticate a replacement Security if the Trustee's
requirements are met. If required by the Trustee or the Company, such Holder
must provide an indemnity bond or other indemnity, sufficient in the judgment of
both the Company and the Trustee, to protect the Company, the Trustee or any
Agent from any loss which any of them may suffer if a Security is replaced. The
Company may charge such Holder for its reasonable, out-of-pocket expenses in
replacing a Security.
Every replacement Security is an additional obligation of the
Company and the Guarantors.
SECTION 2.8. Outstanding Securities.
Securities outstanding at any time are all the Securities that
have been authenticated by the Trustee, except those cancelled by it, those
delivered to it for cancellation and those described in this Section 2.8 as not
outstanding. A Security does not cease to be outstanding because the Company or
an Affiliate of the Company holds the Security, except as provided in Section
2.9.
If a Security is replaced pursuant to Section 2.7 (other than
a mutilated Security surrendered for replacement), it ceases to be outstanding
unless the Trustee receives proof satisfactory to it that the replaced Security
is held by a bona fide purchaser. A mutilated Security ceases to be outstanding
upon surrender of such Security and replacement thereof pursuant to Section 2.7.
If upon Stated Maturity, (i) Contingent Payments are due and
payable on such date and the Paying Agent (other than the Company or an
Affiliate of the Company) holds U.S. Legal Tender or U.S. Government Obligations
sufficient to pay all of the Contingent Payments due on the Securities payable
on that date, then on and after that date the Securities cease to be outstanding
and holders thereof cease to have any rights to receive Contingent Payments, or
(ii) no Contingent Payments are due and payable on such date, then on and after
such date the Securities cease to be outstanding and holders thereof cease to
have any rights to receive Contingent Payments.
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SECTION 2.9. Treasury Securities.
In determining whether the Holders of the required principal
amount of Securities have concurred in any direction, amendment, supplement,
waiver or consent, Securities owned by the Company, any Guarantor and Affiliates
of the Company, or of any Guarantor shall be disregarded, except that, for the
purposes of determining whether the Trustee shall be protected in relying on any
such direction, amendment, supplement, waiver or consent, only Securities that
the Trustee knows or has reason to know are so owned shall be disregarded.
SECTION 2.10. Temporary Securities.
Until definitive Securities are ready for delivery, the
Company and the Guarantors may execute, and upon a written order of the Company
in the form of an Officer's Certificate, the Trustee shall authenticate
temporary Securities. Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Company reasonably and in
good faith considers appropriate for temporary Securities. Without unreasonable
delay, the Company and the Guarantors 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 Affiliate of the Company), and no one else,
shall cancel and, at the written direction of the Company, shall dispose of all
Securities surrendered for transfer, exchange, payment or cancellation. Subject
to Section 2.7, the Company may not issue new Securities to replace Securities
they have paid or delivered to the Trustee for cancellation. No Securities shall
be authenticated in lieu of or in exchange for any Securities cancelled as
provided in this Section 2.11, except as expressly permitted in the form of
Securities and as permitted by this Indenture. If the Company shall acquire any
of the Securities, such acquisition shall not operate as a redemption or
satisfaction of the obligations represented by such Securities unless and until
surrendered to the Trustee pursuant to this Section 2.11.
SECTION 2.12. Defaulted Interest.
Contingent Payments on any Security which are payable, and are
punctually paid or duly provided for, on any Contingent Payment Date shall be
paid to the person in whose name that Security (or one or more predecessor
Securities) is registered at the close of business on Record Date for such
interest.
Contingent Payments on any Security which are payable, but are
not punctually paid or duly provided for, on any Contingent Payment Date plus,
to the extent lawful, any
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interest payable on the defaulted Contingent Payments (herein called "Defaulted
Interest") shall forthwith cease to be payable to the registered holder on the
relevant Record Date, and such Defaulted Interest may be paid by the Company, at
its election in each case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the persons in whose names the Securities (or their
respective predecessor Securities) are registered at the close of
business on a special record date for the payment of such Defaulted
Interest (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 registered
on such Special Record Date and shall no longer be payable pursuant to
the following clause (2).
(2) The Company may make payment of any Defaulted Interest in
any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon
such notice as may be required by such exchange, if, after notice given
by the Company to the Trustee of the proposed payment pursuant to this
clause, such manner shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each
Security delivered under this Indenture upon transfer of or in exchange for or
in lieu of any other Security shall carry the rights to Contingent Payments
accrued and unpaid, and to accrue, which were carried by such other Security.
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ARTICLE III.
REDEMPTION
SECTION 3.1. Right of Redemption.
Except as provided in Section 3.2 and paragraph 5 of the
Notes, the Notes may not be redeemed prior to maturity.
SECTION 3.2. Redemption Pursuant to Applicable Laws.
Notwithstanding any other provision of this Indenture, the
Notes shall be redeemable in whole or in part, at any time pursuant to, and in
accordance with, a Required Regulatory Redemption. If the Company requires the
redemption of any Security pursuant to this Section 3.2, the Company shall
tender the Redemption Price to the Trustee no less than 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 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 30 days but not more than 60 days before a Redemption
Date, the Company shall mail a notice of redemption by first class mail, postage
prepaid, to each Holder whose Securities are to be redeemed (unless a shorter
notice period shall be required by applicable law). At the Company's request,
the Trustee shall give the notice of redemption in the Company's name and at the
Company'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;
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(4) that Securities called for redemption must be surrendered
to the Paying Agent at the address specified in such notice to collect
the Redemption Price;
(5) if any Security is being redeemed in part, the portion of
such Security to be redeemed and that, after the Redemption Date, and
upon surrender of such Security, a new Security or Securities
representing the unredeemed portion thereof will be issued;
(6) if less than all the Securities are to be redeemed, the
identification of the particular Securities (or portion thereof) to be
redeemed, as well as the Securities to be redeemed and the Securities
to be outstanding after such partial redemption;
(7) the CUSIP number of the Securities to be redeemed;
(8) the circumstances pursuant to which the Required
Regulatory Redemption is being effected; and
(9) that the notice is being sent pursuant to this Section 3.4
and Paragraph 5 of the Securities.
SECTION 3.5. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section
3.4, Securities called for redemption become due and payable on the Redemption
Date and at the Redemption Price. Upon surrender to the Trustee or Paying Agent,
such Securities called for redemption shall be paid at the Redemption Price.
SECTION 3.6. Deposit of Redemption Price.
On or before the Redemption Date, the Company shall deposit
with the Paying Agent U.S. Legal Tender sufficient to pay the Redemption Price
of all Securities to be redeemed on such Redemption Date. The Paying Agent shall
promptly return to the Company any U.S. Legal Tender so deposited which is not
required for that purpose upon the written request of the Company.
Contingent Payments on the Securities to be redeemed will
cease to accrue on the date on which the Trustee receives the Trustee Redemption
Notice, whether or not such Securities are presented for payment.
SECTION 3.7. Securities Redeemed in Part.
Upon surrender of a Security that is to be redeemed in part,
the Company shall execute and the Trustee shall authenticate and deliver to the
Holder, without service charge, a new Security or Securities representing the
unredeemed portion of the Security surrendered.
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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
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
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action, or (ii) no such action is necessary to effect and maintain in full force
and effect the validity and perfection of the security interests under the
Collateral Documents and hereunder.
(c) The Company shall furnish to the Trustee, on or prior to
___________, of each year commencing in 1999, an Opinion(s) of Counsel, dated as
of such date, stating that, in the opinion of such counsel, subject to customary
exclusions and exceptions reasonably acceptable to the Trustee, either (A) all
such action has been taken with respect to the recording, registering, filing,
rerecording and refiling of this Indenture, all supplemental indentures, the
Collateral Documents, financing statements, continuation statements and all
other instruments of further assurance as is necessary to maintain the validity
and perfection of security interests under the Collateral Documents and
hereunder in full force and effect and reciting the details of such action, and
stating that all financing statements and continuation statements have been
executed and filed and such other actions taken that are necessary fully to
preserve and protect the rights of the Holders and the Trustee hereunder and
under the Collateral Documents, or (B) no such action is necessary to maintain
in full force and effect the validity and perfection of the security interests
under the Collateral Documents and hereunder.
SECTION 4.3. Disposition of Certain Collateral.
(a) The Company may, without requesting the release or consent
of the Trustee or the Collateral Agent, but otherwise subject to the
requirements of this Indenture:
(i) sell, assign, transfer, license or otherwise
dispose of, free from the security interests under the Collateral
Documents and hereunder, any machinery, equipment, or other personal
Property constituting Collateral that has become worn out, obsolete, or
unserviceable or is being upgraded, upon replacing the same with or
substituting for the same, machinery, equipment or other Property
constituting Collateral not necessarily of the same character but being
of at least equal fair value and at least equal utility to the Company
as the Property so disposed of, which Property shall without further
action become Collateral subject to the security interests under the
Collateral Documents and hereunder;
(ii) (A) in the ordinary course of the Company's
business and consistent with industry practices, sell, assign,
transfer, license or otherwise dispose of, free from the security
interests under the Collateral Documents and hereunder, inventory held
for resale that is at any time part of the Collateral, (B) in the
ordinary course of the Company's business and consistent with industry
practices, collect, liquidate, sell, factor or otherwise dispose of,
free from the security interests under the Collateral Documents and
hereunder, accounts receivable or notes receivable that are part of the
Collateral or (C) make ordinary course of business Cash payments
(including scheduled repayments of Indebtedness permitted to be
incurred hereby) from Cash that is at any time part of the Collateral;
(iii) abandon, sell, assign, transfer, license or
otherwise dispose of, free from the security interests under the
Collateral Documents and hereunder, any personal property the use of
which is no longer necessary or desirable in the proper conduct of the
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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.
(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.
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(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 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 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
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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 the 8% 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 in 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 security interests in contravention of this Indenture or
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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 Contingent
Payments on the Securities, if any are due and payable pursuant to and in
accordance with the terms of the Securities and this Indenture, at the places,
on the dates and in the manner provided in the Securities and this Indenture. An
installment of Contingent Payments on the Securities shall be considered paid on
the date it is due if the Trustee or Paying Agent (other than the Company or an
Affiliate of the Company) holds for the benefit of the Holders, on or before
10:00 a.m. New York City time on that date, U.S. Legal Tender, deposited and
designated for and sufficient to pay the installment, and has not received
instructions from the Company not to make such payment and is not otherwise
prohibited from paying such Contingent Payments to the Holders pursuant to this
Indenture.
(b) 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 made, if any, and the amount of such Maximum Contingent
Payments with respect to such period will never be accrued or paid.
(c) Contingent Payments, if any, paid or accrued in respect of
the Notes shall be comprised of, in part, a payment of principal ("Principal")
and, in part, a payment of interest ("Interest") thereon at 16% per annum from
the Issue Date (with semi-annual compounding). In accordance with the preceding
sentence, set forth in the table below is, for each Contingent Payment Date, the
percentage of Principal and the percentage of Interest of which Contingent
Payments, if any, paid or accrued on such dates shall be comprised:
<TABLE>
<CAPTION>
Contingent Percentage Percentage
Payment Date of Principal of Interest
- ----------------------------------- --------------------------------- -----------------------------------
<S> <C> <C>
First 92.593% 7.407%
Second 85.734 14.266
Third 79.383 20.617
Fourth 73.503 26.497
Fifth 68.058 31.942
Sixth 63.017 36.983
Seventh 58.349 41.651
Eighth 54.027 45.973
Ninth 50.025 49.975
Tenth 46.319 53.681
Eleventh 42.888 57.112
Twelfth 39.711 60.289
Thirteenth 36.770 63.230
</TABLE>
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<PAGE>
<TABLE>
Contingent Percentage Percentage
Payment Date of Principal of Interest
- ----------------------------------- --------------------------------- -----------------------------------
<S> <C> <C>
Fourteenth 34.046 65.954
Fifteenth 31.524 68.476
Sixteenth 29.189 70.811
Seventeenth 27.027 72.973
Eighteenth 25.025 74.975
Nineteenth 23.171 76.829
Twentieth 21.455 78.545
Twenty-first 19.866 80.134
Twenty-second 18.394 81.606
</TABLE>
(d) The Company shall pay interest (including post-petition
interest in any proceeding under any applicable Bankruptcy Law) on 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 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
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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 8% Notes Indenture) with
respect to the 8% 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
Distribution) by the Company to the Parent Guarantor to the extent necessary to
permit the Parent Guarantor to pay the Parent Guarantor's reasonable
professional fees and expenses in connection with complying with its reporting
obligations (including its obligations set forth in Section 5.8) and obligations
to prepare and distribute business records, financial statements or other
documents to any lender or other persons having business dealings with the
Parent Guarantor or as may be required by law, the Parent Guarantor's costs and
related expenses in connection with the computation of federal, state, local or
foreign taxes and other governmental charges, 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
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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, the Company and its Subsidiaries shall
do or cause to be done all things necessary to preserve and keep in full force
and effect their existence, rights (charter and statutory) and franchises and
the corporate or other existence of each of their Subsidiaries in accordance
with the respective organizational documents of each of them; provided, however,
that neither the Company nor any Guarantor shall be required to preserve, with
respect to itself or any of its Subsidiaries, any right or franchise if (a) the
Manager shall determine reasonably and in good faith that the preservation
thereof is no longer desirable in the conduct of the business of the Company or
Guarantors and (b) the loss thereof is not disadvantageous in any material
respect to the Holders.
SECTION 5.5. Payment of Taxes and Other Claims.
The Company and each of the Guarantors shall, and shall cause
each of its Subsidiaries to, pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (i) all material taxes, assessments and
governmental charges (including withholding taxes and any penalties, interest
and additions to taxes) levied or imposed upon the Company, any Guarantor or any
of their Subsidiaries or upon any of their material properties and assets and
(ii) all material lawful claims, whether for labor, materials, supplies,
services or anything else, which have become due and payable and which by law
have or may become a Lien upon the property and assets of the Company, any
Guarantor or any of their Subsidiaries; provided, however, that neither the
Company nor any Guarantor shall be required to pay or discharge or cause to be
paid or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings and for which adequate reserves have been established in accordance
with GAAP.
SECTION 5.6. Maintenance of Insurance.
On the Issue Date, and at all times thereafter, the Company
and its Subsidiaries shall have in effect customary comprehensive general
liability, property and casualty and business interruption insurance, shall have
completion, payment or performance or similar bonds in place for the Casino and
shall cause the builders of the Casino to maintain builder's risk
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<PAGE>
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 the Bank Credit
Facilities], an Officers' Certificate specifying such Default or Event of
Default and what action the Company is taking or proposes to take with respect
thereto. The Trustee shall not be deemed to have knowledge of a Default or an
Event of Default unless one of its trust officers receives notice of the Default
or Event of Default giving rise thereto from the Company or any of the Holders.
SECTION 5.8. Reports.
Whether or not the Company or any Guarantor is subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company
and JCC Holding shall file (which filing may be on a consolidated basis) with
the SEC (to the extent permitted under the Exchange Act) on or prior to the date
they are or would have been required to file such with the SEC (the "Required
Filing Date"), annual and quarterly consolidated financial statements
substantially equivalent to financial statements that would have been included
in reports filed with the SEC if the Company or JCC Holding, as applicable, were
subject to the requirements of Section 13 or 15(d) of the Exchange Act,
including, with respect to annual information only, a
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<PAGE>
report thereon by such reporting entity's certified independent public
accountants as such would be required in such reports to the SEC and, in each
case, together with a management's discussion and analysis of financial
condition and results of operations which would be so required. The Company and
JCC Holding shall also include in such reports the anticipated completion date
of the Casino and, in the case of quarterly reports, the Contingent Payments
made, the Contingent Payment Accrual amount, 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, 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 Contingent Payments on the Securities as contemplated herein, wherever
enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Indenture; and (to the extent that they may
lawfully do so) the Company and each Guarantor hereby expressly waive all
benefit or advantage of any such law insofar as such law applies to the
Securities, and covenant that they shall not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
SECTION 5.10. Limitation on Transactions with Affiliates.
Neither the Company nor any of its Subsidiaries will enter
into any contract, arrangement, understanding or transaction with an
Affiliate (an "Affiliate Transaction") except for (i) transactions evidenced
by an Officers' Certificate addressed and delivered to the Trustee stating
that such Affiliate Transaction is made in good faith and that the terms of
such Affiliate Transaction are fair and reasonable to the Company or such
Subsidiary, as the case may be, and at least as favorable as the terms which
could be obtained by the Company or such Subsidiary, as the case may be, in a
comparable transaction made on an arm's length basis with persons who are not
Affiliates; provided, however, that any such transaction shall be deemed to
be on terms which are fair and reasonable to the Company or such Subsidiary,
as applicable, and on terms which are at least as favorable as the terms
which could be obtained on an arm's length basis with persons
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<PAGE>
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 Completion Guarantees, the Administrative Services
Agreement, the Development Agreement, 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
HET Warrant, the Second Floor Sublease, 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 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:
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(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 and represented by this Indenture
as specified herein as of the dates hereof and (ii) Indebtedness
evidenced by the 8% Notes (including the issuance of additional 8%
Notes in lieu of cash interest payments in accordance with the terms of
the 8% Notes Indenture) and represented by the 8% Notes Indenture up to
the amounts specified therein as of the date thereof;
(c) the Company and any Subsidiary may incur Permitted FF&E
Financing in an aggregate principal amount of up to $25 million (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 clauses (a) through (e) and (h) and
(i) of this covenant so long as, in the case of
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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 Guarantor 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 accrue Management Fees
and all other amounts owing under the Management Agreement;
(k) the Company and any Subsidiary may incur Subordinated
Indebtedness to any of the stockholders of JCC Holding;
(l) the Company and its Subsidiaries may incur Indebtedness
under Interest Rate Agreements in the ordinary course of business;
(m) the Company and its Subsidiaries may incur Subordinated
Indebtedness pursuant to, or in respect of, the Subordinated Credit
Facility in an aggregate principal amount outstanding at any time not
to exceed $22,500,000;
(n) the Company and its Subsidiaries may incur Subordinated
Indebtedness evidenced by (i) the Convertible Junior Subordinated
Debentures in an aggregate principal amount outstanding at any time not
to exceed $27,000,000, and (ii) additional Convertible Junior
Subordinated Debentures in lieu of cash interest payments in accordance
with the terms of the Convertible Junior Subordinated Debentures
Indenture;
(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 8%
Notes, this Indenture, the 8% 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.
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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 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 such Permitted FF&E
Financing, (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 substitute Property in
consideration of 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
8% Notes and subordinating such Liens to the Liens securing the Notes and the 8%
Notes, and (f) a Lien on the House Bank (as defined in the Management Agreement)
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 utilized in accordance with Section 5.14 of the 8%
Notes Indenture, (2) at least 75% of the consideration for such conveyance,
sale, transfer or other disposition or issuance (treating for this purpose as
U.S. Legal Tender or Cash Equivalents (A) property that promptly after such
Asset Sale is converted into U.S. Legal Tender or Cash Equivalents and (B) any
liabilities that are assumed by the transferee in such Asset Sale) consists of
U.S. Legal Tender or Cash Equivalents, (3) no Default or Event of Default shall
have occurred and be continuing at the time of, or would occur after giving
effect, on a pro forma basis, to, such Asset Sale, (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
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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;
(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 in accordance with Section
5.14 of the 8% Notes Indenture.
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SECTION 5.15. Construction.
The Company shall cause construction of the Casino to be
prosecuted with diligence and continuity in a good and workmanlike manner in
accordance with the Plans, subject to Force Majeure (as defined in the General
Development Agreement).
SECTION 5.16. Limitation on Use of Certain Funds.
The Company will use (i) borrowings under the Tranche A Term
Loans, the Tranche B Term Loans and the Subordinated Credit Facility, (ii)
proceeds from the Convertible Junior Subordinated Debentures, and (iii) any
equity contributions it received in connection with the consummation of the Plan
of Reorganization, (a) to pay all regularly scheduled payments of, interest on,
fees and other amounts (other than principal payments) until the regularly
scheduled date of repayment occurs with respect thereto as provided in the Bank
Credit Facilities due and payable pursuant to the Bank Credit Facilities, (b) to
pay all regularly scheduled payments of Fixed Interest and Contingent Payments
(in this instance only, as defined in the 8% Notes Indenture) due and payable on
the 8% Notes and Contingent Payments due and payable on the Notes, (c) to pay
all 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 Indemnity Agreement, (e) to pay all costs
of construction and development of the Casino (including, without limitation,
the costs set forth in the Pre-Opening Budget attached to the Management
Agreement as Exhibit H, including, without limitation, costs related to
construction management, architectural engineering and interior design, site
work, utility installations and hook-up fees, construction permits, certificates
and bonds, furniture, fixtures, furnishings, machinery and equipment (including
gaming equipment)), (f) to pay all amounts owing under the Ground Lease, the
General Development Agreement, the Casino Operating Contract and any other
agreement entered into in connection with the construction or development of the
Casino, as well as all amounts owing to the City, the State of Louisiana, the
Regulating Authority, the RDC or any other governmental authority, agency,
board, subdivision or special purpose corporation thereof, (g) to pay amounts
due and owing under the Management Agreement, (h) to pay Credit Enhancement Fees
(as defined in the Credit Enhancement Fee Agreement), (i) for the repurchase of
any securities of the Company, any Guarantor or any Subsidiary thereof,
including the Notes, pursuant to a Required Regulatory Redemption, (j) for
repurchases of 8% Notes pursuant to an Offer to Purchase (as defined in the 8%
Notes Indenture), and (k) after the Casino Opening Date, for general corporate
purposes.
SECTION 5.17. Limitation on 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.
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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 preceding First Semiannual Period, Incentive Management Fees
may be paid for such Second Semiannual Period up to an amount equal to (a) 7% of
the aggregated Consolidated EBITDA for such First Semiannual Period and Second
Semiannual Period in excess of $75,000,000, less (b) an amount equal to the
Incentive Management Fees, if any, paid with respect to the immediately
preceding First Semiannual Period. Incentive Management Fees with respect to a
Semiannual Period may be made no earlier than the next Business Day following
the date on which all accrued Contingent Payments have been paid for all periods
through such Semiannual Period; provided further, however, that the Management
Agreement shall provide that Harrah's Management Company shall refund to the
Company any Incentive Management Fees paid by the Company to Harrah's Management
Company in respect of such First Semiannual Period if Consolidated EBITDA of the
Company does not exceed an aggregate of $75,000,000 for such First Semiannual
Period and immediately succeeding Second Semiannual Period. No Base Management
Fees may be paid, and no Incentive Management Fees may be accrued or paid,
during or with respect to any period in which the Company is in default with
respect to Contingent Payments on the Notes; Base Management Fees accrued during
such period may be paid in the event that such default is cured.
(b) Notwithstanding subsection (a) above:
(i) if the Company pays Fixed Interest (as defined in
the 8% Indenture) in Secondary Securities (as defined in the 8%
Indenture) in lieu of paying Fixed Interest in cash on any of the First
Interest Payment Date, the Second Interest Payment Date, the Third
Interest Payment Date, and the Fourth Interest Payment Date, the Fifth
Interest Payment Date and the Sixth Interest Payment Date (each as
defined in the 8% Indenture), 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 Dates (as defined in the 8% Indenture) (excluding
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capital expenditures 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 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 (as defined in the 8% Indenture) and the Sixth
Interest Payment Date (as defined in the 8% Indenture), 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 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 (as defined in the 8%
Indenture), Base Management Fees shall be deferred for the Semiannual
Period corresponding to such Interest Payment Date; the Company shall
cause to the extent Harrah's Management Company received Base
Management Fees for such Semiannual Period, 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.
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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 will comply, and will cause each of its
subsidiaries to comply, in all material respects with all Environmental Laws
applicable to the ownership or use of its Real Property now or hereafter owned
or operated by the Company or any of its subsidiaries, will within a reasonable
time-period pay or cause to be paid all costs and expenses incurred in
connection with such compliance and will keep or cause to be kept all such Real
Property free and clear of any Liens imposed pursuant to such Environmental
Laws, except as could not reasonably be expected to have a material adverse
effect, singly or in the aggregate, on the properties, business, results of
operations, financial condition, business affairs or prospects of the Company (a
"Material Adverse Effect"). Except as could not reasonably be expected to have a
Material Adverse Effect, neither the Company nor any of its subsidiaries will
generate, use, treat, store, release or dispose of, or permit the generation,
use, treatment, storage, release or disposal of Hazardous Materials on any Real
Property now or hereafter owned or operated by the Company or any of its
subsidiaries, or transport or permit the transportation of Hazardous Materials
to or from any such Real Property except for Hazardous Materials used or stored
at any such Real Properties in material compliance with all applicable
Environmental Laws and reasonably required in connection with the operation, use
and maintenance of any such Real Property.
(b) At the written request of the Trustee or the Holders of a
majority in aggregate Notational 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 of its subsidiaries,
prepared by an environmental consulting firm approved by the Trustee, indicating
the presence or absence of Hazardous Materials and the potential cost of any
removal or remedial action in connection with any Hazardous Materials on such
Real Property; provided that such request may be made only if (i) there has
occurred and is continuing an Event of Default, (ii) the Trustee or the Holders
of a majority in aggregate Notational Amount of the Securities at the time
outstanding reasonably believe that the Company or any such subsidiary or any
such Real Property is not in material compliance with any Environmental Law, or
(iii) circumstances exist that reasonably could be expected to form the basis of
a material Environmental Claim against the Company or any such subsidiary or any
such Real Property. If the Company fails to provide the same within 90 days
after such request was made, the Trustee may order the same, and the Company
shall grant and hereby grants to the Trustee and the Holders and their agents
access to such Real Property and specifically grants the Trustee and the Holders
an irrevocable non-exclusive license, subject to the rights of tenants, to
undertake such an assessment, all at the Company's expense.
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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, 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. 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. 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.
ARTICLE VI.
SUCCESSORS
SECTION 6.1. Limitation on Merger, Sale or Consolidation.
The Company shall not consolidate with or merge with or into
another person or, directly or indirectly, sell, lease or convey all or
substantially all of its assets (computed on a consolidated basis, including,
without limitation, as set forth in the last paragraph of this Section 6.1),
whether in a single transaction or a series of related transactions, to another
person or group of affiliated persons, unless:
(i) either (a) the Company is the continuing entity or (b) the
resulting, surviving or transferee entity is a corporation or
partnership organized under the laws of the United States, any state
thereof or the District of Columbia (provided that at all times at
least one obligor with respect to the Securities is such a corporation)
and expressly assumes by supplemental indenture all of the obligations
of the Company in connection with the Securities, this Indenture and
the Collateral Documents;
(ii) no Default or Event of Default shall exist or shall occur
immediately after giving effect on a pro forma basis to such
transaction;
(iii) immediately after giving effect to such transaction on a
pro forma basis, the Consolidated Tangible Net Worth of the
consolidated surviving or transferee entity is at least equal to the
Consolidated Tangible Net Worth of the Company immediately prior to
such transaction;
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(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.
Notwithstanding the foregoing, the Company is permitted to
reorganize as a corporation in accordance with the procedures established in the
Indenture, provided that the Company shall have delivered to the Trustee an
opinion of counsel reasonably acceptable to the Trustee confirming that such
reorganization is not adverse to Holders of the Notes (it being recognized that
such reorganization shall not be deemed adverse to the Holders of the Notes
solely because (i) of the accrual of deferred tax liabilities resulting from
such reorganization or (ii) the successor or surviving corporation (a) is
subject to income tax as a corporate entity or (b) is considered to be an
"includible corporation" of an affiliated group of corporations within the
meaning of the Internal Revenue Code of 1986, as amended, or any similar state
or local law).
SECTION 6.2. Successor Substituted.
Upon any consolidation or merger or any sale, lease,
conveyance or transfer of all or substantially all of the assets of the Company
in accordance with Section 6.1, the successor entity formed by such
consolidation or into which the Company is merged or to which such sale, lease,
conveyance or transfer is made, shall succeed to, and be substituted for, and
may exercise every right and power of, the Company under the Notes, this
Indenture and the Collateral Documents with the same effect as if such successor
corporation had been named therein as the Company, and the Company will be
released from its obligations under this Indenture, the Collateral Documents and
the Notes, except as to any obligations that arise from or as a result of such
transaction.
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ARTICLE VII.
EVENTS OF DEFAULT AND REMEDIES
SECTION 7.1. Events of Default.
"Event of Default," wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be caused voluntarily or involuntarily or effected, without limitation, by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(1) the failure by the Company to pay any installment of
interest on the 8% Notes or any Contingent Payments on the Notes as and
when due and payable and the continuance of any such failure for 30
days;
(2) [Intentionally deleted]
(3) except as provided in clause (1) 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, which
failure continues for 30 days;
(4) except as otherwise provided herein, the failure by the
Company or any Guarantor to observe or perform any other covenant or
agreement contained in the Notes or the Indenture and the continuance
of such failure for a period of 30 days after written notice is given
to the Company by the Trustee or to the Company and the Trustee by the
Holders of at least 25% in aggregate Notational 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
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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, or the
Indebtedness shall be repaid in full, in each such case within 10 days;
(9) final unsatisfied judgments not covered by insurance
(other than with respect to Non-recourse Indebtedness) aggregating in
excess of $15,000,000, at any one time rendered against the Company or
any Significant Subsidiary of the Company and not stayed, bonded or
discharged within 60 days;
(10) the loss of the legal right of the Company to operate
slot machines at the Casino for gaming activities and such loss
continuing for more than 90 days;
(11) 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 Notational 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.]
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(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) to be
covered thereby (unless a prior or exclusive Lien is specifically
permitted by this Indenture);
(14) the failure of the Casino Completion Date to have
occurred by 30 days following the date on which an event of default
entitling the City to terminate the Ground Lease has occurred under the
Ground Lease as a result of the failure to complete the Casino;
(15) an "Event of Default" (as defined in the Ground Lease)
has occurred; and
(16) an "Event of Default" (as defined in the 8% Notes
Indenture) has occurred.
SECTION 7.2. Declaration of Event of Default, Rescission
and Annulment.
If 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, either the Trustee or the Holders
of not less then 25% in aggregate Notational Amount of then outstanding
Securities, by a notice in writing to the Company and the Guarantors (and to the
Trustee if given by Holders) (an "Event of Default Notice"), may declare the
Make-Whole Amount to be due and payable immediately (in which event the
Make-Whole Amount shall be due and payable immediately, in which case no further
Contingent Payments shall be due or payable with respect to future periods). If
an Event of Default specified in Section 7.1(5), (6) or (7) occurs with respect
to the Company, 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 (in which event the Make-Whole Amount shall be due
and payable immediately, in which case no further Contingent Payments shall be
due or payable with respect to future periods); provided, however, that the
Make-Whole Amount shall be subordinated in right of payment 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 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 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 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 Notational 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:
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(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue Contingent Payments on all
Securities,
(B) principal of (and premium, if any, applicable to)
any Securities which would become due otherwise than by such
declaration of acceleration, and interest thereon at the rate
borne by the Securities,
(C) to the extent that payment of such interest is
lawful, interest upon overdue Contingent Payments at the rate
of 8% per annum,
(D) all sums paid or advanced by the Trustee
hereunder and the compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and
(2) all Events of Default, other than the nonpayment of
amounts which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 7.12.
Notwithstanding the previous sentence of this Section 7.2, no rescission,
amendment or waiver shall be effective for any Event of Default or event which
with notice or lapse of time or both would be an Event of Default with respect
to any covenant or provision which cannot be modified or amended without the
consent of the Holder of each outstanding Security, unless all such affected
Holders agree, in writing, to rescind such acceleration or waive such Event of
Default or event. No such waiver shall cure or waive any subsequent default or
impair any right consequent thereon.
SECTION 7.3. Collection of Indebtedness and Suits for
Enforcement by Trustee.
The Company covenants that if an Event of Default in
payment of Contingent Payments specified in Section 7.1(1) occurs and is
continuing, the Company shall, upon demand of the Trustee, pay to it, for the
benefit of the Holders of such Securities, the whole amount then due and
payable on such Securities for Contingent Payments, and, to the extent that
payment of such interest shall be legally enforceable, interest on any
overdue Contingent Payments, at the rate of 8% per annum, and, in addition
thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection, including compensation to, and expenses,
disbursements and advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust in favor
of the Holders, may institute a judicial proceeding for the collection of the
sums so due and unpaid, may prosecute such proceeding to judgment or final
decree and may enforce the same against the Company or any other obligor upon
the Securities and collect the moneys adjudged or decreed to be payable in the
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manner provided by law out of the property of the Company or any other obligor
upon the Securities, wherever situated.
If an Event of Default occurs and is continuing, the Trustee
may in its discretion proceed to protect and enforce its rights and the rights
of the Holders by such appropriate judicial proceedings as the Trustee shall
deem most effective to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this Indenture or in aid of
the exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 7.4. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the Trustee shall have made any
demand on the Company for the payment of overdue Contingent Payments) shall be
entitled and empowered, by intervention in such proceeding or otherwise to take
any and all actions under the TIA, including
(i) to file and prove a claim for the whole amount of
Contingent Payments owing and unpaid in respect of the Securities and
to file such other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agent and counsel) and of the Holders allowed in such
judicial proceeding, and
(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
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Trustee shall be brought in its own name as trustee of an express trust in favor
of the Holders, and any recovery of judgment shall, after provision for the
payment of compensation to, and expenses, disbursements and advances of the
Trustee, its agents and counsel, be for the ratable benefit of the Holders of
the Securities in respect of which such judgment has been recovered.
SECTION 7.6. Priorities.
Subject to the Intercreditor Agreement, Section 4.6, Article
XIII and Article XIV, any money collected by the Trustee pursuant to this
Article VII shall be applied in the following order, at the date or dates fixed
by the Trustee and, in case of the distribution of such money on account of
Contingent Payments, upon presentation of the Securities and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:
FIRST: To the Trustee in payment of all amounts due pursuant
to Section 8.7:
SECOND: To the Holders in payment of the amounts then due and
unpaid for Contingent Payments on the Securities in respect of which or for the
benefit of which such money has been collected, ratably, without preference or
priority of any kind, according to the amounts due and payable on such
Securities for Contingent Payments; and
THIRD: To whomsoever may be lawfully entitled thereto, the
remainder, if any.
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 Notational
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 Notational Amount of
the outstanding Securities;
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it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.
SECTION 7.8. Unconditional Right of Holders to Receive
Principal and Interest.
Notwithstanding any other provision of this Indenture, the
Holder of any Security shall have the right, which is absolute and
unconditional, to receive payment of the Contingent Payments (if Contingent
Payments are due and payable in accordance with the terms of the Securities and
this Indenture) on such Security on the Contingent Payment Dates of such
payments as expressed in such Security (in the case of Required Regulatory
Redemption, the Redemption Price on the applicable Redemption Date) and to
institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.
SECTION 7.9. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities in Section 2.7, no
right or remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 7.10. Delay or Omission Not Waiver.
No delay or omission by the Trustee or by any Holder of any
Security to exercise any right or remedy arising upon any Event of Default shall
impair the exercise of any such right or remedy or constitute a waiver of any
such Event of Default. Every right and remedy given by this Article VII or by
law to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
SECTION 7.11. Control by Holders.
Subject to the terms of the Intercreditor Agreement with
respect to actions taken under the Collateral Documents, the Holder or Holders
of a majority in aggregate Notational 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,
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(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 Notational Amount of the outstanding Securities may, by
written notice to the Trustee on behalf of all Holders, prior to the delivery of
an Event of Default Notice, waive any past default hereunder and its
consequences, except a default
(A) in the payment of Contingent Payments on any
Security as specified in clauses (1) and (2) of Section 7.1,
or
(B) in respect of a covenant or provision hereof
which, under Article X, cannot be modified or amended without
the consent of the Holder of each outstanding Security
affected.
Upon any such waiver, such default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or impair the exercise of any right arising
therefrom.
SECTION 7.13. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any
Security by its acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for any
action taken, suffered or omitted to be taken by it as Trustee, the filing by
any party litigant in such suit of an undertaking to pay the costs of such suit,
and that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit, having due
regard to the merits and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section 7.13 shall not apply to any suit
instituted by the Company, to any suit instituted by the Trustee, to any suit
instituted by any Holder, or group of Holders, holding in the aggregate more
than 10% in aggregate Notational Amount of the outstanding Securities, or to any
suit instituted by any Holder for enforcement of the payment of Contingent
Payments (if Contingent Payments are due and payable in accordance with the
terms of the Securities and this Indenture) on any Security on or after the
applicable Contingent Payment Date.
SECTION 7.14. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any
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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.
(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
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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.
SECTION 8.2. Rights of Trustee.
Subject to Section 8.1:
(a) The Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper person. The Trustee
need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may
consult with counsel and may require an Officers' Certificate or an Opinion of
Counsel, which shall conform to Sections 13.4 and 13.5. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
such certificate or opinion.
(c) The Trustee may act through its attorneys and agents and
shall not be responsible for the misconduct or negligence of any agent appointed
with due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers conferred upon it by this Indenture or the TIA.
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(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 Officer of the Company.
SECTION 8.3. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become
the owner or pledgee of any of the Securities, may make loans to, accept
deposits from, and perform services for the Company or its Affiliates, and may
otherwise deal with the Company, any Guarantor, any of their respective
Subsidiaries, or their respective Affiliates with the same rights it would have
if it were not Trustee provided, however, 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.
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SECTION 8.5. Notice of Default.
If a Default or an Event of Default occurs and is continuing
and if it is known to the Trustee, the Trustee shall mail to each Securityholder
notice of the uncured Default or Event of Default within 90 days after such
Default or Event of Default occurs. Except in the case of a Default or an Event
of Default in payment of Contingent Payments on any Security (including the
payment of the Redemption Price on the Redemption Date), the Trustee may
withhold the notice if and so long as a Trust Officer in good faith determines
that withholding the notice is in the interest of the Securityholders.
SECTION 8.6. Reports by Trustee to Holders.
If required by law, within 60 days after each May 15 beginning
with the May 15 following the date of this Indenture, the Trustee shall mail to
each Securityholder a brief report dated as of such May 15 that complies with
TIA Section 313(a). If required by law, the Trustee also shall comply with TIA
Sections 313(b) and 313(c).
The Company shall promptly notify the Trustee in writing if
the Securities become listed on any stock exchange or automatic quotation
system.
A copy of each report at the time of its mailing to
Securityholders shall be mailed to the Company and filed with the SEC and each
stock exchange, if any, on which the Securities are listed.
SECTION 8.7. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time
reasonable compensation for its services. The Trustee's compensation shall not
be limited by any law on compensation of a trustee of an express trust. The
Company shall reimburse the Trustee upon request for all reasonable
disbursements, expenses and advances incurred or made by it. Such expenses shall
include the reasonable compensation, disbursements and expenses of the Trustee's
agents, accountants, experts and counsel.
The Company shall indemnify the Trustee (in its capacity as
Trustee) and each of its officers, directors, attorneys-in-fact and agents for,
and hold it harmless against, any claim, demand, expense (including but not
limited to reasonable compensation, disbursements and expenses of the Trustee's
agents and counsel), loss or liability incurred by them without negligence, bad
faith or willful misconduct on its part, arising out of or in connection with
(a) the administration of this trust and their rights or duties hereunder
including the reasonable costs and expenses of defending themselves against any
claim or liability in connection with the exercise or performance of any of its
powers or duties hereunder and (b) the actual or alleged presence of Hazardous
Materials in the air, surface water or groundwater or on the surface or
subsurface of any real property owned, leased or at any time operated by the
Company or any of its Subsidiaries, the release, generation, storage,
transportation, handling or disposal of Hazardous Materials at any location,
whether or not owned or operated by the Company or any of its Subsidiaries, the
non-compliance of any real property with foreign, federal, state and local laws,
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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 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 Notational Amount of the outstanding
Securities may remove the Trustee by so notifying the Company and the Trustee in
writing and may appoint a successor trustee with the Company's consent. The
Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 8.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver, Custodian, or other public officer takes
charge of the Trustee or its property; or
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(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 Notational 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 aggregate Notational 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 ss. 310(a)(5). The Trustee shall have a
combined capital and surplus of at least $100,000,000 as set forth in its
most recent published annual report of condition. The Trustee shall comply
with TIA Section 310(b).
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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 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" for all other purposes hereunder. For this
purpose, such
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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(12),
7.1(13), 7.1(14), 7.1(15) and 7.1(16) shall not constitute Events of Default.
SECTION 9.4. Conditions to Legal or Covenant Defeasance.
The following shall be the conditions to the application of
either Section 9.2 or Section 9.3 to the outstanding Securities:
(a) (1) The Company shall irrevocably have deposited or caused
to be deposited with the Trustee (or another trustee satisfying the requirements
of Section 8.10 who shall agree to comply with the provisions of this Article IX
applicable to it) as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, and dedicated solely
to, the benefit of the Holders of such Securities, (i) U.S. Legal Tender in an
amount, or (ii) U.S. Government Obligations which through the scheduled payment
of principal and interest in respect thereof in accordance with their terms will
provide, not later than one day before the due date of any payment, U.S. Legal
Tender in an amount, or (iii) a combination thereof, in such amounts, as will be
sufficient, in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee, to pay and discharge and which shall be applied by the Trustee (or
other qualifying trustee) to pay and discharge the Maximum Contingent Payments
for the current and all future Contingent Payment Periods on the outstanding
Securities on the Contingent Payment Dates in respect of such Contingent Payment
Periods; provided that the Trustee shall have been irrevocably instructed to
apply such U.S. Legal Tender or the proceeds of such U.S. Government Obligations
to said payments with respect to the Securities and (2) the Holders must have a
valid and perfected exclusive security interest in such trust;
(b) In the case of an election under Section 9.2, the Company
shall have delivered to the Trustee an Opinion of Counsel in the United States
reasonably satisfactory to the Trustee confirming that (i) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling or (ii) since the Issue Date, there has been a change in the applicable
Federal income tax law, in either case to the effect that, and based thereon
such opinion shall confirm that, the Holders of the outstanding Securities will
not recognize income, gain or loss for Federal income tax purposes as a result
of such Legal Defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
such Legal Defeasance has not occurred (assuming that the Maximum Contingent
Payments had been made for the current and all future Contingent Payment
Periods);
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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 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
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Obligations deposited pursuant to Section 9.4 or the principal and interest
received in respect thereof other than any such tax, fee or other charge which
by law is for the account of the Holders of the outstanding Securities.
Anything in this Article IX to the contrary notwithstanding,
the Trustee shall deliver or pay to the Company from time to time upon the
request of the Company any U.S. Legal Tender or U.S. Government Obligations held
by it as provided in Section 9.4 which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 9.4(a)), are in excess of the amount thereof which would
then be required to be deposited to effect an equivalent Legal Defeasance or
Covenant Defeasance.
SECTION 9.6. Repayment to Company.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of Contingent Payments on any
Security and remaining unclaimed for two years after such Contingent Payments
have become due and payable shall be paid to the Company on its request; and the
Holder of such Security shall thereafter look only to the Company for payment
thereof, and all liability of the Trustee or such Paying Agent with respect to
such trust money shall thereupon cease; provided, however, that the Trustee or
such Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in the New York Times and The
Wall Street Journal (national edition), notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such notification or publication, any unclaimed balance of such
money then remaining will be repaid to the Company.
SECTION 9.7. Reinstatement.
If the Trustee or Paying Agent is unable to apply any U.S.
Legal Tender or U.S. Government Obligations in accordance with Section 9.2 or
9.3, as the case may be, by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and the
Securities shall be revived and reinstated as though no deposit had occurred
pursuant to Section 9.2 or 9.3 until such time as the Trustee or Paying Agent is
permitted to apply such money in accordance with Section 9.2 and 9.3, as the
case may be; provided, however, that, if the Company makes any payment of
Contingent Payments on any Security following the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Securities to receive such payment from the money held by the Trustee or
Paying Agent.
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ARTICLE X.
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 10.1. Supplemental Indentures Without Consent of
Holders.
Without the consent of any Holder, the Company and any
Guarantor, when authorized by Board Resolutions, and the Trustee, at any time
and from time to time, may enter into one or more indentures supplemental
hereto, or may amend, modify or supplement the Securities, this Indenture, or
any of the Collateral Documents, in form satisfactory to the Trustee and the
Company, for any of the following purposes:
(1) to cure any ambiguity, defect, or inconsistency, or to
make any other provisions with respect to matters or questions arising
under this Indenture which shall not be inconsistent with the
provisions of this Indenture, provided such action pursuant to this
clause (1) shall not adversely affect the interests of any Holder in
any respect;
(2) to add to the covenants of the Company for the benefit of
the Holders, or to surrender any right or power herein conferred upon
the Company or to make any other change that does not adversely affect
the rights of any Holder; provided, that the Company has delivered to
the Trustee an Opinion of Counsel stating that such change does not
adversely affect the rights of any Holder;
(3) to provide for additional collateral for or additional
Guarantors of the Securities;
(4) to provide for uncertificated Securities in addition to or
in place of certificated Securities;
(5) to evidence the succession of another person to the
Company, and the assumption by any such successor of the obligations of
the Company, herein and in the Securities in accordance with Article
VI; or
(6) to comply with the TIA.
SECTION 10.2. Amendments, Supplemental Indentures and
Waivers with Consent of Holders.
Subject to Section 7.8 and the last sentence of this
paragraph, with the consent of the Holders of not less than a majority in
aggregate Notational Amount of then outstanding Securities, by written act of
said Holders delivered to the Company and the Trustee, the Company and any
Guarantor, when authorized by Board Resolutions, and the Trustee may amend or
supplement any of the Collateral Documents, this Indenture or the Securities or
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of any of the Collateral Documents, this Indenture or the Securities
or of modifying in any manner the rights of the
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Holders under any of the Collateral Documents, this Indenture or the Securities.
Subject to Section 7.8 and the last sentence of this paragraph, the Holder or
Holders of a majority in aggregate Notational Amount of then outstanding
Securities may waive compliance by the Company or any Guarantor with any
provision of any of the Collateral Documents, this Indenture or the Securities.
Notwithstanding the foregoing provisions of this Section 10.2, no such
amendment, supplemental indenture or waiver shall, without the consent of the
Holder of each outstanding Security affected thereby:
(1) change the Stated Maturity of any Security;
(2) reduce the Notational Amount of any Security;
(3) reduce or extend the time for payment of Contingent
Payments on any Security;
(4) make the Contingent Payments on any Security payable with
anything or in any manner other than as provided for in this Indenture
and the Securities as in effect on the Issue Date;
(5) make any changes in Section 7.8 or this third sentence of
this Section 10.2 (except, in the case of this third sentence, to add
any additional provision of this Indenture to this sentence);
(6) alter the redemption provisions of Article III or the
Securities in a manner adverse to any Holder;
(7) make any changes in the provisions concerning waivers of
Defaults or Events of Default by Holders of the Securities or change
the percentage of Securities whose Holders must consent to an
amendment, supplement or waiver of any provision of this Indenture or
the Securities (except to increase any required percentage) or make any
changes in the provisions concerning the rights of Holders to recover
Contingent Payments on, or redemption payment with respect to, any
Security; or
(8) make the Securities subordinated in right of payment to
any extent or under any circumstances (except as permitted by this
Indenture) to any other indebtedness.
It shall not be necessary for the consent of the Holders under
this Section to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section
becomes effective, the Company shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such supplemental indenture or
waiver.
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After an amendment, supplement or waiver under this Section
10.2 or 10.4 becomes effective, it shall bind each Holder, subject to the
limitations set forth above.
In connection with any amendment, supplement or waiver under
this Article X, the Company may, but shall not be obligated to, offer to any
Holder who consents to such amendment, supplement or waiver, or to all Holders,
consideration for such Holder's consent to such amendment, supplement or waiver.
SECTION 10.3. Compliance with TIA.
Every amendment, waiver or supplement of this Indenture or the
Securities shall comply with the TIA as then in effect.
SECTION 10.4. Revocation and Effect of Consents.
Until an amendment, waiver or supplement becomes effective, a
consent to it by a Holder is a continuing consent by the Holder and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security, even if notation of the consent is not
made on any Security. However, any such Holder or subsequent Holder may revoke
the consent as to his Security or portion of his Security by written notice to
the Company or the person designated by the Company as the person to whom
consents should be sent if such revocation is received by the Company or such
person before the date on which the Trustee receives an Officers' Certificate
certifying that the Holders of the requisite Securities have consented (and not
theretofore revoked such consent) to the amendment, supplement or waiver.
The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Holders entitled to consent to any
amendment, supplement or waiver, which record date shall be the date so fixed by
the Company notwithstanding the provisions of the TIA. If a record date is
fixed, then notwithstanding the last sentence of the immediately preceding
paragraph, those persons who were Holders at such record date, and only those
persons (or their duly designated proxies), shall be entitled to revoke any
consent previously given, whether or not such persons continue to be Holders
after such record date. No such consent shall be valid or effective for more
than 90 days after such record date.
After an amendment, supplement or waiver becomes effective, it
shall bind every Securityholder, unless it makes a change described in any of
clauses (1) through (9) of Section 10.2, in which case, the amendment,
supplement or waiver shall bind only each Holder of a Security who has consented
to it and every subsequent Holder of a Security or portion of a Security that
evidences the same (or a portion of the same) debt as the consenting Holder's
Security with respect to which a consent was given; provided, that any such
waiver shall not impair or affect the right of any Holder to receive payment of
Contingent Payments on a Security, on or after the respective dates set for such
amounts to become due and payable expressed in such Security, or to bring suit
for the enforcement of any such payment on or after such respective dates.
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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
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lease or the Casino Operating Contract and shall have no responsibility or
liability for failing to give any such consent or approval absent direction from
the Holders.
ARTICLE XI.
[Intentionally Deleted.]
ARTICLE XII.
GUARANTY
SECTION 12.1. Guaranty.
(a) In consideration of good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, and subject to Article
III, 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 Contingent Payments, to the extent due and
payable hereunder, on the Securities will be paid in full when due, by
acceleration, Required Regulatory Redemption, or otherwise; (x) all other
obligations of the Company to the Holders or the Trustee under this Indenture or
the Securities will be promptly paid in full or performed, all in accordance
with the terms of this Indenture and the Securities; and (y) in case of any
extension of time of payment or renewal of any Securities or any of such other
obligations, they will be paid in full when due or performed in accordance with
the terms of the extension or renewal, whether at maturity, by acceleration,
Required Regulatory Redemption, or otherwise. Failing payment when due of any
amount so guaranteed for whatever reason, each Guarantor shall be obligated to
pay the same before failure so to pay becomes an Event of Default.
(b) Each Guarantor hereby agrees that its obligations with
regard to this Guaranty shall be unconditional, irrespective of the validity,
regularity or enforceability of the Securities or this Indenture, the absence of
any action to enforce the same, any delays in obtaining or realizing upon or
failures to obtain or realize upon collateral, the recovery of any judgment
against the Company, any action to enforce the same or any other circumstances
that might otherwise constitute a legal or equitable discharge or defense of a
Guarantor. Each Guarantor hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency or bankruptcy
of the Company, any right to require a proceeding first against the Company or
right to require the prior disposition of the assets of the Company to meet its
obligations, protest, notice and all demands whatsoever 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
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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 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 obligations guaranteed hereby may be declared due and
payable as provided in Section 7.2 for the purposes of this Guaranty,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration as to the Company of the obligations guaranteed hereby, and (ii) in
the event of any declaration as provided in Section 7.2, those obligations will
forthwith become due and payable by each of the Guarantors for the purpose of
this Guaranty.
(d) It is the intention of each Guarantor and the Company that
the obligations of each Guarantor hereunder shall be, but not in excess of, the
maximum amount permitted by applicable law. Accordingly, if the obligations in
respect of the Guaranty would be annulled, avoided or subordinated to the
creditors of the Guarantor by a court of competent jurisdiction in a proceeding
actually pending before such court as a result of a determination both that such
Guaranty was made without fair consideration and, immediately after giving
effect thereto, or at the time that any demand is made thereupon, such Guarantor
was insolvent or unable to pay its debts as they mature or left with an
unreasonably small capital, then the obligations of such Guarantor under such
Guaranty shall be reduced by such an amount, if any, that would result in the
avoidance of such annulment, avoidance or subordination; provided, however, that
any reduction pursuant to this paragraph shall be made in the smallest amount as
is necessary to reach such result. For purposes of this paragraph, "fair
consideration," "insolvency," "unable to pay its debts as they mature,"
"unreasonably small capital" and the effective times of reductions, if any,
required by this paragraph shall be determined in accordance with applicable
law.
(e) Each Guarantor shall be subrogated to all rights of the
Holders against the Company under the Securities, this Indenture or the
Collateral Documents in respect of any amounts paid by such Guarantor pursuant
to the provisions of such Guaranty or this Indenture; provided, however, that
the Guarantor shall not be entitled to enforce or to receive any payments
arising out of, or based upon, such right of subrogation until the Contingent
Payments, to the extent due and payable hereunder, on all Securities issued
hereunder shall have been paid in full.
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 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
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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.
(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
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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 of such Guaranty substantially in the form
annexed hereto as Exhibit B shall be endorsed on each Security authenticated and
delivered by the Trustee and that this Indenture shall be executed on behalf of
such Guarantor by an Authorized Representative, by manual or facsimile
signature, under a facsimile of its seal reproduced thereon and attested to by
an Authorized Representative other than the Authorized Representative executing
the Indenture.
Each Guarantor agrees that its Guaranty set forth in Section
12.1 shall remain in full force and effect and apply to all the Securities
notwithstanding any failure to endorse on each Security a notation of such
Guaranty.
If an Authorized Representative whose signature is on a
Security no longer holds that office at the time the Trustee authenticates the
Security on which a Guaranty is endorsed, the Guaranty shall be valid
nevertheless.
The delivery of any Security by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of the Guaranty
set forth in this Indenture on behalf of each Guarantor.
(b) To evidence the Parent Guaranty set forth in Section 12.2,
the Parent Guarantor agrees that a notation of such Parent Guaranty
substantially in the form annexed hereto as Exhibit C shall be endorsed on each
Security authenticated and delivered by the Trustee and that this Indenture
shall be executed on behalf of the Parent Guarantor by an Authorized
Representative, by manual or facsimile signature, under a facsimile of its seal
reproduced thereon and attested to by another Authorized Representative other
than the Authorized Representative executing the Indenture.
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
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Guaranty notwithstanding any failure to endorse on each Development Company
Guaranty a notation of such Parent Guaranty.
If an Authorized Representative whose signature is on
a Development Company Guaranty no longer holds that office at the time the
Parent Guaranty is endorsed, the Parent Guaranty shall be valid nevertheless.
The delivery of any Development Company Guaranty
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 a Guaranty in the form
of Exhibit B hereto and cause such Subsidiary to execute an Indenture
supplemental hereto for the purpose of adding such Subsidiary as a Guarantor
hereunder.
SECTION 12.5. 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
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(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
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 of 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
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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.
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 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 all Contingent Payments, any
Make-Whole Amount and any interest payable on 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
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acquired Senior Debt in reliance upon the covenants and provisions contained in
this Indenture and the Securities.
SECTION 13.2. Securities Subordinated to Prior Payment
of All Senior Debt on Dissolution, Liquidation, Reorganization, etc. of the
Company.
Upon any payment or distribution of the assets of the Company
of any kind or character, whether in cash, property or securities (including any
Collateral at any time securing the Securities) to creditors upon any
dissolution, winding-up, total or partial liquidation, reorganization, or
recapitalization or readjustment of the Company or its property or securities
(whether voluntary or involuntary, or in bankruptcy, insolvency, reorganization,
liquidation, or receivership proceedings, or upon an assignment for the benefit
of creditors, or any other marshalling of the assets and liabilities of the
Company or otherwise), then in such event,
(i) all holders of Senior Debt shall first be entitled to
receive payment in full, in cash or Cash Equivalents, of all
Obligations in respect of Senior Debt before any payment is made on
account of Obligations, including, without limitation, the Contingent
Payments and any Make-Whole Amount, in respect of the Securities;
(ii) any payment or distribution of assets of the Company, of
any kind or character, whether in cash, property or securities (other
than, to the extent issued in exchange for the Securities, 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
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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 jurisdiction in which such
dissolution, winding-up, liquidation or reorganization proceeding is pending, or
a certificate of the liquidating trustee or agent or other person making any
distribution to the Trustee or to the Holders, for the purpose of ascertaining
the persons entitled to participate in such distribution, the holders of the
Senior Debt and other Debt of the Company, the amount thereof payable thereon,
the amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article XIII.
SECTION 13.3. Holders of Securities to be Subrogated to
Right of Holders of Senior Debt.
Subject to the payment in full of all Obligations in respect
of Senior Debt in cash or Cash Equivalents, the Holders of the Securities shall
be subrogated (equally and 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 any
due and unpaid Contingent Payments shall be paid in full, and for purposes of
such subrogation, no payments or distributions to the holders of Senior Debt of
assets, whether in cash, property or securities, distributable to the holders of
Senior Debt under the provisions hereof to which the Holders would be entitled
except for the provisions of this Article XIII, and no payment over pursuant to
the provisions of this Article XIII to the holders of Senior Debt by the Holders
shall, as between the Company, its creditors (other than the holders of Senior
Debt) and the Holders, be deemed to be a payment by the Company to or on account
of Senior Debt, it being understood that the provisions of this Article XIII
are, and are intended, solely for the purpose of defining the relative rights of
the Holders, on the one hand, and the holders of Senior Debt, on the other hand.
SECTION 13.4. Obligations of the Company Unconditional.
Nothing contained in this Article XIII or elsewhere in this
Indenture or in any Security (but subject to the provisions of Section 3.2) is
intended to or shall impair or affect, as between the Company, its creditors
(other than the holders of Senior Debt) and the Holders, the obligation of the
Company, which is absolute and unconditional, to pay to the Holders Contingent
Payments on the Securities, as and when the same shall become due and payable in
accordance with their terms, or to affect the relative rights of the Holders and
creditors of the
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Company other than the holders of Senior Debt, nor shall anything herein or
therein prevent or limit the Trustee or any Holder from exercising all remedies
otherwise permitted by applicable law upon the happening of an Event of Default
hereunder, subject to the provisions of Article VII hereof and to the rights, if
any, under this Article XIII of the holders of Senior Debt in respect of assets,
whether in cash, property or securities, of the Company received upon the
exercise of any such remedy. Nothing contained in this Article XIII or elsewhere
in this Indenture or in the Securities, shall, except during the pendency of any
dissolution, winding-up, total or partial liquidation, reorganization,
recapitalization or readjustment of the Company or its securities (whether
voluntary or involuntary, or in bankruptcy, insolvency, reorganization,
liquidation or receivership proceedings, or upon an assignment for the benefit
of creditors, or any other marshalling of assets and liabilities of the Company
or otherwise), affect the obligation of the Company to make, or prevent the
Company from making, at any time (except under the circumstances described in
Section 13.5 hereof), payment of Contingent Payments on the Securities.
SECTION 13.5. Company Not to Make Payments With Respect
to Securities in Certain Circumstances.
(a) Upon the maturity of any Senior Debt by lapse of time,
acceleration or otherwise, 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 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 (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 in respect of the Securities (including Contingent
Payments and any Make-Whole Amount) in cash or
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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 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
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Trustee, subject to the provisions of Sections 8.1 and 8.2 hereof, shall be
entitled to assume conclusively that no such facts exist, and shall be fully
protected in making any such payment in any such event.
The Trustee shall be entitled to rely on the delivery to it of
a written notice by a Person representing himself or itself to be a holder of
Senior Debt (or a trustee on behalf of such holder) to establish that such
notice has been given by a holder of Senior Debt or a trustee on behalf of any
such holder. In the event that the Trustee determines in good faith that further
evidence is required with respect to the right of any Person as a holder of
Senior Debt to participate in any payment or distribution pursuant to this
Article XIII, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Debt held by
such Person, the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
Person under this Article XIII, and, if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment.
SECTION 13.7. Application by Trustee of Monies
Deposited With It.
Any deposit of monies by the Company with the Trustee or any
Paying Agent (whether or not in trust) for the payment of Contingent Payments
and any Make-Whole Amount on any Securities shall be subject to the provisions
of Sections 13.1, 13.2, 13.3 and 13.5 hereof, except that, if prior to the
opening of business on the second Business Day next prior to the date on which,
by the terms of this Indenture, any such monies may become payable for any
purpose, the Trustee shall not have received with respect to such monies the
notice provided for in Section 13.6, then the Trustee shall have the full power
and authority to receive such monies and to apply such monies to the purpose for
which they were received, and shall not be affected by any notice to the
contrary which may be received by it on or after such date; without, however,
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
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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:
(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
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liquidation or reorganization under Bankruptcy Law of the Company (whether in
bankruptcy, insolvency or receivership proceedings or otherwise), the timely
filing of a claim for the unpaid balance of its or his Securities in the form
required in such proceedings and the causing of such claim to be approved. If
the Trustee does not file a claim or proof of debt substantially in the form
required in such proceeding at least one day before the expiration of the time
to file such claims or proofs, then any of the holders of Senior Debt have the
right to file such proof of claim or debt on behalf of the Holders, and to take
any action with respect to such proof of claim or debt permitted to be taken by
the holders of Senior Debt pursuant to this Indenture, the Securities or by law;
provided, however, that no such action by holders of Senior Debt shall in any
way limit or affect the rights of the Holders or the Trustee hereunder or under
the Securities or applicable law.
SECTION 13.10. Right of Trustee to Hold Senior Debt;
Preservation of Trustee's Rights.
The Trustee, in its individual capacity, shall be entitled to
all of the rights set forth in this Article Thirteen in respect of any Senior
Debt at any time held by it to the same extent as any other holder of Senior
Debt, and nothing in this Indenture shall be construed to deprive the Trustee of
any of its rights as such holder. Nothing in this Article XIII shall apply to
claims of, or payment to, the Trustee under or pursuant to Section 8.7.
SECTION 13.11. Article XIII Not to Prevent Events of
Default.
The failure to make a payment on account of Contingent
Payments on the Securities by reason by any provision in this Article XIII shall
not be construed as preventing the occurrence of an Event of Default under
Section 7.1 hereof.
SECTION 13.12. Trustee Not Fiduciary for Holders of
Senior Debt.
The provisions of this Indenture are not intended to create,
nor shall they create, any trust or fiduciary relationship between the Trustee
and the holders of Senior Debt, nor shall any implied covenants or obligations
with respect to holders of Senior Debt (other than those expressly set forth
herein) be read into this Indenture against the Trustee. Accordingly,
notwithstanding any provision of this Article XIII to the contrary, the Trustee
shall not be liable to any such holders if it shall, in good faith,
inadvertently pay over or distribute to Holders or the Company or any other
person monies or assets to which any holders of Senior Debt shall be entitled by
virtue of this Article XIII or otherwise.
SECTION 13.13. Trust Monies Not Subordinated.
Notwithstanding anything contained herein to the contrary and
subject to the prior satisfaction of all of the conditions set forth in Article
IX, payments from money held in trust under Article IX by the Trustee for the
payment of Contingent Payments on the Securities shall not be subordinated to
the prior payment of any Senior Debt of the Company or subject to the
restrictions set forth in this Article Thirteen and none of the Holders shall be
obligated to pay over any such amount to the Company or any holder of Senior
Debt of the Company or any other
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creditor of the Company, in each case so long as (and only so long as) at the
time the respective amounts were deposited pursuant to Article IX, such amounts
would have been permitted to be paid directly in respect of Obligations in
respect of the Securities in accordance with the provisions (other than this
Section 13.13) of this Article XIII.
ARTICLE XIV.
SUBORDINATION OF 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 Securities, by his or its
acceptance thereof, likewise covenants and agrees, that payments by such
Guarantor in respect of the Guaranty and/or 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 of 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
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debtor or other person making such payment or distribution, directly to
the holders of the Guarantor Senior Debt or their representative or
representatives, or to the trustee or trustees under any indenture
pursuant to which any instruments evidencing any of such Guarantor
Senior Debt may have been issued, ratably according to the aggregate
amounts remaining unpaid on account of the Guarantor Senior Debt held
or represented by each, for application to payment of all Obligations
in respect of Guarantor Senior Debt remaining unpaid, to the extent
necessary to pay all Obligations in respect of Guarantor Senior Debt in
full, in cash or Cash Equivalents, after giving effect to any
concurrent payment or distribution to the holders of such Guarantor
Senior Debt; and
(iii) in the event that, notwithstanding the foregoing
provisions of this Section 14.2, any payment or distribution of assets
of any Guarantor of any kind or character, whether in cash, property or
securities (other than, to the extent issued in 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.
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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 Obligations in respect of the Securities shall
be paid in full, and for purposes of such subrogation, no payments or
distributions to the holders of Guarantor Senior Debt of assets, whether in
cash, property or securities, distributable to the holders of Guarantor Senior
Debt under the provisions hereof to which the Holders would be entitled except
for the provisions of this Article XIV, and no payment over pursuant to the
provisions of this Article XIV to the holders of Guarantor Senior Debt by the
Holders shall, as between such Guarantor, its creditors (other than the holders
of Guarantor Senior Debt) and the Holders, be deemed to be a payment by such
Guarantor to or on account of Guarantor Senior Debt, it being understood that
the provisions of this Article XIV are, and are intended, solely for the purpose
of defining the relative rights of the Holders, on the one hand, and the holders
of Guarantor Senior Debt, on the other hand.
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.
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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 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
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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 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 Guarantor
Senior Debt to enforce subordination, as herein provided, shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
any Guarantor or by any act or failure to act, in good faith, by any such
holder, or by any non-compliance by such Guarantor with the terms, provisions
and covenants of this Indenture, the Securities, or any other agreement or
instrument regardless of any knowledge thereof any such holder may have or be
otherwise charged with.
Each Holder of any Securities, by his acceptance thereof,
undertakes and agrees for the benefit of each holder of Guarantor Senior Debt to
execute, verify, deliver and file any proofs of claim, consents, assignments or
other instruments that any holder of Guarantor Senior Debt may at any time
require in order to prove and realize upon any rights or claims pertaining to
the Guaranty and to effectuate the full benefit of the subordination contained
in this Article XIV; and upon failure of any Holder of any Security so to do,
any such holder of Guarantor Senior Debt (or a trustee or representative on its
behalf) shall be deemed to be irrevocably appointed the agent and
attorney-in-fact of the Holder of such Security to execute, verify, deliver and
file any such proofs of claim, consents, assignments or other instrument.
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
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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
(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.
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SECTION 14.10. Right of Trustee to Hold Guarantor Senior
Debt; Preservation of Trustee's Rights.
The Trustee, in its individual capacity, shall be entitled to
all of the rights set forth in this Article XIV in respect of any Guarantor
Senior Debt at any time held by it to the same extent as any other holder of
Guarantor Senior Debt, and nothing in this Indenture shall be construed to
deprive the Trustee of any of its rights as such holder. Nothing in this Article
XIV shall apply to claims of, or payment to, the Trustee under or pursuant to
Section 8.7.
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.
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.
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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 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).
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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 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 any action
taken pursuant to Section 7.2 (or otherwise pursuant to this Indenture, any
Collateral Document or the Intercreditor Agreement) and shall give rise to no
liability on the part of the Trustee or any Secured Creditor. 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 precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
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(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 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
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THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE AND THE SECURITIES,
AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS. THE COMPANY AND THE
GUARANTORS IRREVOCABLY WAIVE, TO THE FULLEST EXTENT THEY MAY EFFECTIVELY DO SO
UNDER APPLICABLE LAW, ANY OBJECTION WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH
COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH
COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. NOTHING HEREIN SHALL AFFECT THE
RIGHT OF THE TRUSTEE OR ANY SECURITYHOLDER TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST
THE COMPANY IN ANY OTHER JURISDICTION.
SECTION 15.9. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture,
loan or debt agreement of the Company, the Guarantors or any of their
Subsidiaries. Any such indenture, loan or debt agreement may not be used to
interpret this Indenture.
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
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Documents. Each Securityholder by accepting a Security waives and releases all
such liability. Such waiver and release are part of the consideration for the
issuance of the Securities.
SECTION 15.11. Successors.
All agreements of the Company and the Guarantors in this
Indenture and the Securities shall bind their successors. All agreements of the
Trustee in this Indenture shall bind its successor.
SECTION 15.12. Duplicate Originals.
All parties may sign any number of copies or counterparts of
this Indenture. Each signed copy or counterpart shall be an original, but all of
them together shall represent the same agreement.
SECTION 15.13. Severability.
In case any one or more of the provisions in this Indenture or
in the Securities shall be held invalid, illegal or unenforceable, in any
respect for any reason, the validity, legality and enforceability of any such
provision in every other respect and of the remaining provisions shall not in
any way be affected or impaired thereby, it being intended that all of the
provisions hereof shall be enforceable to the full extent permitted by law.
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
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"contingent" and not as either "remote or incidental" for purposes of Treasury
Regulation Section 1.1275-4(a)(1) and (5); and (iii) treat all Contingent
Payments as consisting of principal and interest such that each payment of
principal is accompanied by a payment of interest at 16% per annum (compounded
semi-annually) such that the test rate for the Securities for purposes of
Treasury Regulation Section 1.1275-4(c)(4)(ii)(A) will be 16% per annum
(compounded semi-annually).
SECTION 15.17. Waivers and Releases.
(a) No Assurances
(i) As a condition to the effectiveness of the
confirmation of the Plan of Reorganization, 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,
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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.
(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:
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(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.
(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.
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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:
-----------------------------------
Name:
Title:
JCC HOLDING COMPANY,
a Delaware corporation
By:
-----------------------------------
Name:
Title:
CP DEVELOPMENT, L.L.C.
a Louisiana limited liability company
By:
-----------------------------------
Name:
Title:
FP DEVELOPMENT, L.L.C.,
a Louisiana limited liability company
By:
-----------------------------------
Name:
Title:
S-1
<PAGE>
JCC DEVELOPMENT COMPANY, L.L.C.,
a Louisiana limited liability company
By:
-----------------------------------
Name:
Title:
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
By:
-----------------------------------
Name:
Title:
S-2
<PAGE>
Exhibit A
[FORM OF NOTE]
JAZZ CASINO COMPANY, L.L.C.
SENIOR SUBORDINATED CONTINGENT NOTES
DUE 2009
No. $
Jazz Casino Company, L.L.C., a Louisiana limited liability company
(hereinafter called the "Company," which term includes any successor entity
under the Indenture hereinafter referred to), for value received, hereby
promises to pay to ____________________________, or registered assigns,
Contingent Payments, consisting of Principal and Interest, as and if required
pursuant to and in accordance with the terms of this Security and the Indenture,
up to an amount not to exceed $__________ Dollars (the "Notational Amount") in
any Contingent Payment Period.
Contingent Payment Dates: May 15 and September 15. The first
Contingent Payment Date is May 15, 1999 and the final Contingent Payment Date is
September 15, 2009.
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:
-----------------------------------
Name:
Title:
A-2
<PAGE>
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Securities described in the within-mentioned
Indenture.
-------------------------------------
Norwest Bank Minnesota,
National Association
By:
----------------------------------
Authorized Signatory
Dated:
A-3
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JAZZ CASINO COMPANY, L.L.C.
Senior Subordinated Contingent Notes due 2009
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. Contingent Payments.
Jazz Casino Company, L.L.C., a Louisiana limited liability company
(the "Company"), promises to pay Contingent Payments, if any are due and payable
pursuant to and in accordance with the terms of this Security and the Indenture,
at the places, on the dates and in the manner provided in this Security and the
Indenture. The first Contingent Payment Date shall be May 15, 1999 and the final
Contingent Payment Date shall be _________ ___, 2009. Contingent Payments, if
any, paid or accrued in respect of this Security shall be comprised of, in part,
a payment of Principal and, in part, a payment of Interest thereon at 16% per
annum from the Issue Date (with semi-annual compounding) in accordance with
Section 5.1 of the Indenture.
Contingent Payments on this Security, if any are due and payable
pursuant to and in accordance with the terms of this Security and the Indenture,
will be payable semiannually on 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 Contingent Payment Date (each, a "Record
Date").
The Company will pay on each Contingent Payment Date to the Holder
of this Security at the close of business on the immediately preceding Record
Date such Holder's pro rata share of the aggregate Contingent Payments paid on
such Contingent Payment Date. Each Holder's pro rata share of the aggregate
Contingent Payments will be determined by dividing (i) the aggregate Notational
Amount of the Securities owned by such Holder on the immediately preceding
Record Date by (ii) the aggregate Notational Amount of all of the Securities
outstanding on such Record Date.
For purposes of determining accrued Contingent Payments due and
payable with respect to a First Semiannual Period or a Second Semiannual Period
prior to the completion of such period, such Contingent Payments due and payable
shall be equal to the Partial Period Contingent Payments. To the extent it is
lawful, the Company promises to pay interest on any Contingent Payment due but
unpaid at a rate of 8% per annum compounded semi-annually.
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<PAGE>
2. Method of Payment.
The Company shall pay Contingent Payments, if any are due and
payable pursuant to and in accordance with the terms of this Security and the
Indenture, on the Securities (except defaulted interest) to the persons who are
the registered Holders at the close of business on the Record Date immediately
preceding the Contingent Payment Date. Except as provided below, the Company
shall pay Contingent Payments in such coin or currency of the United States of
America as at the time of payment shall be legal tender for payment of public
and private debts ("U.S. Legal Tender"). However, the Company may pay Contingent
Payments by wire transfer of Federal funds, or Contingent Payments by its check
payable in such U.S. Legal Tender. The Company may deliver any such Contingent
Payment to the Paying Agent or the Company may mail any such Contingent Payment
to a Holder at the Holder's registered address. Notwithstanding the preceding
two sentences, in the case of Securities of which The Depository Trust Company
or its nominee is the Holder, such Contingent Payments must be made by wire
transfer of Federal funds.
3. Paying Agent and Registrar.
Initially, Norwest Bank Minnesota, National Association (the
"Trustee") will act as Paying Agent and Registrar. The Company may change any
Paying Agent, Registrar or Co-registrar without notice to the Holders. The
Company or any of its Subsidiaries may, subject to certain exceptions, act as
Paying Agent, Registrar or Co-registrar.
4. Indenture.
The Company issued the Securities under an Indenture, dated as of
___________, 1998 (the "Indenture"), 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 Notational Amount to $18,319,035.
5. Redemption.
The Securities may not be redeemed, except that the Securities may
be redeemed at any time pursuant to, and in accordance with, any order of any
Governmental Authority with appropriate jurisdiction and authority relating to a
Gaming License held by the Company or an Affiliate or wholly owned Subsidiary of
the Company, or to the extent necessary in the reasonable, good faith judgment
of the Board of Directors of Harrah's Entertainment, Inc. ("HET"), in the case
of HET or one of its affiliates, or the 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. In
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<PAGE>
such event, the Redemption Price shall be a price for such Security established
by the Board of Directors in good faith, plus any 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).
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 accrue Contingent Payments, if any are then due and
payable, 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
Notational Amounts of $1.00 or any integral multiple thereof. A Holder may
register the transfer of, or exchange Securities in accordance with, the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay any taxes and fees
required by law or permitted by the Indenture. The Registrar need not register
the transfer of or exchange any Securities selected for redemption.
8. Persons Deemed Owners.
The registered Holder of a Security may be treated as the owner of
it for all purposes.
9. Unclaimed Money.
If money for the payment of Contingent Payments remains unclaimed
for two years, the Trustee and the Paying Agent(s) will pay the money back to
the Company at its written request. After that, all liability of the Trustee and
such Paying Agent(s) with respect to such money shall cease.
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 thereof in such amounts as will be sufficient in
the opinion of a nationally recognized firm of
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independent public accountants selected by the Trustee, to pay and discharge the
Maximum Contingent Payments on the Securities for the current and all future
Contingent Payment Periods on the Contingent Payment Dates in respect of such
Contingent Payment Periods and comply with the other provisions of the Indenture
relating thereto, the Company may elect to have the obligations of the Company
and the Guarantors discharged (in which case the Indenture would cease to be of
further effect, except as to certain limited obligations and to the rights of
Holders to receive payments when due) or to be discharged from certain
provisions of the Indenture and the Securities (including the financial
covenants, but excluding the obligation to pay the Contingent Payments on the
Securities).
11. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture or the Securities may
be amended or supplemented with the written consent of the Holders of a majority
in aggregate Notational Amount of the Securities then outstanding, and any
existing Default or Event of Default or compliance with any provision may be
waived with the consent of the Holders of a majority in aggregate principal
amount of the Securities then outstanding. Without notice to or consent of any
Holder, the parties thereto may amend or supplement the Indenture, the
Collateral Documents or the Securities to, among other things, cure any
ambiguity, defect or inconsistency, provide for uncertificated Securities in
addition to or in place of certificated Securities, or make any other change
that does not adversely affect the rights of any Holder of a Security.
12. Restrictive Covenants.
The Indenture imposes certain limitations on the ability of the
Company and its Subsidiaries to, among other things, incur additional
Indebtedness and Disqualified Capital Stock, make payments in respect of its
Capital Stock, enter into transactions with Affiliates, incur Liens, sell
assets, merge or consolidate with any other person and sell, lease, transfer or
otherwise dispose of substantially all of its properties or assets. The
limitations are subject to a number of important qualifications and exceptions.
The Company must annually report to the Trustee on compliance with such
limitations.
13. Security.
In order to secure the obligations under the Indenture, the
Company, the Guarantors and the Trustee or the Collateral Agent have entered
into a security agreement in order to create security interests in certain
assets and properties of the Company. As more fully set forth in the security
agreement and Section 4.6 of the Indenture, the rights of the Holders (and the
Trustee on their behalf) to receive proceeds from the disposition such assets
and properties are subordinated to security interests in such 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.
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14. Sale of Assets.
The Indenture imposes certain limitations on the ability of the
Company and its Subsidiaries to sell assets. In the event the proceeds from a
permitted Asset Sale exceed certain amounts, as specified in the Indenture, the
Company will be required either to reinvest the proceeds of such Asset Sale in
its business or to repay certain 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
the Company's 8% Notes.
15. Gaming Laws.
The rights of the Holder of this Security and any owner of any
beneficial interest in this Security are subject to the gaming laws, regulations
and the jurisdiction and requirements of the Gaming Authorities and the further
limitations and requirements set forth in the Indenture.
16. Successors.
When a successor assumes all the obligations of its predecessor
under the Securities and the Indenture, the predecessor will be released from
those obligations.
17. Defaults and Remedies.
If an Event of Default occurs and is continuing, the Trustee or
the Holders of at least 25% in aggregate Notational 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 Notational Amount of the Securities then outstanding
may direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Holders of Securities notice of any continuing Default or Event of
Default (except a Default in payment of Contingent Payments), if it determines
that withholding notice is in their interest.
18. Trustee Dealings with the Company.
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of any of the Securities, make loans
to, accept deposits from, and perform services for the Company or its
Affiliates, and may otherwise deal with the Company, the Guarantors or their
respective Affiliates with the same rights it would have if it were not the
Trustee.
19. 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
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Investor, Harrah's Management Company, HET and HOC, but excluding the Company
and Guarantors themselves) shall not have any liability for any obligation of
the Company or the Guarantors under the Securities or the Indenture or for any
claim based on, in respect of or by reason of such obligations, subject to
certain exceptions set forth in the Indenture. Each Holder of a Security by
accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Securities.
20. Authentication.
This Security shall not be valid until the Trustee or
authenticating agent signs the certificate of authentication on the other side
of this Security.
21. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a
Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
22. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company will cause CUSIP numbers
to be printed on the Securities as a convenience to the Holders of the
Securities. No representation is made as to the accuracy of such numbers as
printed on the Securities and reliance may be placed only on the other
identification numbers printed hereon.
23. Tax Treatment.
The Company, each Guarantor, and each Holder of a Security by
acceptance of a Security, agree to (i) treat a Security as evidence of
indebtedness for federal, state and local income tax purposes; (ii) treat all
Contingent Payments with respect to the Security as "contingent" and not as
either "remote or incidental" for purposes of Treasury Regulation Section
1.1275-4(a)(1) and (5); and (iii) treat all Contingent Payments as consisting of
principal and interest such that each payment of principal is accompanied by a
payment of interest at 16% per annum (compounded semi-annually) such that the
test rate for the Securities for purposes of Treasury Regulation Section
1.1275-4(c)(4)(ii)(A) will be 16% per annum (compounded semi-annually).
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[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.
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Exhibit B
FORM OF SUBORDINATED GUARANTY
For value received, each of the undersigned entities hereby
unconditionally guarantees (on a subordinated basis as provided in Article XIV
of the Indenture) to the Holder of the Security upon which this Guaranty is
endorsed the due and punctual payment, as set forth in the Indenture pursuant to
which such Security and this Guaranty were issued, of the Contingent Payments on
such Security when and as the same shall become due and payable for any reason
according to the terms of such Security and Article XII of the Indenture. The
Guaranty of the Security upon which this Guaranty is endorsed will not become
effective until the Trustee signs the certificate of authentication on such
Security.
JCC HOLDING COMPANY,
a Delaware corporation
Attest: By:
-------------------------------- ---------------------------------
Name: Name:
Title: Title:
CP DEVELOPMENT, L.L.C.,
a Louisiana limited liability company
Attest: By:
-------------------------------- ---------------------------------
Name: Name:
Title: Title:
FP DEVELOPMENT, L.L.C.,
a Louisiana limited liability company
Attest: By:
-------------------------------- ---------------------------------
Name: Name:
Title: Title:
JCC DEVELOPMENT COMPANY, L.L.C.,
a Louisiana limited liability company
Attest: By:
-------------------------------- ---------------------------------
Name: Name:
Title: Title:
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Exhibit C
FORM OF SUBORDINATED PARENT GUARANTY
For value received, JCC Holding Company, a Delaware corporation,
hereby unconditionally guarantees (on a subordinated basis as provided in
Article XIV of the Indenture) to the Holder of the Guaranty upon which this
Parent Guaranty is endorsed that all obligations of each of CP Development,
L.L.C., FP Development, L.L.C. and JCC Development Company, L.L.C. to the
Holders or the Trustee under the Guaranty, dated as of the date hereof, executed
by, among others, each of them (the "Guaranty") will be promptly paid in full or
performed, all in accordance with the terms of the Guaranty. This Parent
Guaranty of the Guaranty upon which this Parent Guaranty is endorsed will not
become effective until the Trustee signs the certificate of authentication on
the Security upon which the Guaranty is endorsed.
JCC HOLDING COMPANY,
a Delaware corporation
Attest: By:
-------------------------------- ---------------------------------
Name: Name:
Title: Title:
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