SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 18, 1995
RIO HOTEL & CASINO, INC.
(Exact name of Registrant as specified in charter)
NEVADA
(State or other jurisdiction of incorporation)
0-13760 95-3671082
(Commission File (IRS Employee
Number) Identification No.)
3700 WEST FLAMINGO ROAD, LAS VEGAS, NEVADA 89103
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (702) 252-7733
NOT APPLICABLE
(Former name or former address, if changed since last report)
THIS DOCUMENT CONSISTS OF 189 PAGES. THE EXHIBIT INDEX IS ON PAGE 6.
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Item 5. OTHER EVENTS.
On July 18, 1995 Rio Hotel & Casino, Inc. (the "Company")
entered into an agreement with Salomon Brothers Inc and
Montgomery Securities (the "Initial Purchasers") for the
sale by the Company of $100 million in principal amount of
the Company's 10-5/8% Senior Subordinated Notes Due 2005
(the "Notes"). The Notes were purchased by the Initial
Purchasers for resale to qualified institutional
investors. The net proceeds from the sale of the Notes
(estimated to be approximately $96.8 million after the
deduction of a 2.75% discount to the Initial Purchasers
and estimated offering expenses of $450,000), borrowings
under the Company's bank credit line, cash on hand and
cash from operations will be used to finance the Company's
approximately $185 million Phase V Expansion. Pending
such use, the net proceeds will be used to reduce amounts
outstanding under its bank credit line.
The Notes were issued under an indenture (the "Indenture")
dated July 21, 1995 among the Company, Rio Properties,
Inc. and IBJ Schroder Bank & Trust Company, as trustee.
The following summary of certain provisions of the
Indenture does not purport to be complete and is subject
to the provisions of the Indenture and the Notes.
Capitalized terms not otherwise defined have the same
meanings assigned to them in the Indenture.
Notes $100 million in aggregate principal
amount of 10-5/8% Senior Subordinated
Notes Due 2005.
Maturity Date July 15, 2005.
Interest Payment January 15 and July 15, commencing
Dates January 15, 1996.
Rio Guarantee The Notes are unconditionally
guaranteed (the "Rio Guarantee") on a
senior subordinated basis by Rio
Properties, Inc. (the "Guarantor"),
the Company's principal operating
subsidiary.
Subordination of The Notes are subordinated in right
Notes of payment to all existing and future
Senior Indebtedness of the Company
and are structurally subordinated to
all existing and future indebtedness
and other liabilities (including
trade payable) of the Company's
subsidiaries.
Subordination of The Rio Guarantee is subordinated in
Rio Guarantee right of payment to all existing and
future Senior Indebtedness of
Guarantor and is structurally
subordinated to all existing and
future indebtedness and other
liabilities (including trade
payables) of the Guarantor's
subsidiaries.
Optional The Notes may be redeemed at the
Redemption option of the Company, in whole or in
part, at any time on or after
July 15, 2000, at the redemption
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prices set forth in the Indenture,
plus accrued and unpaid interest, if
any, through the redemption date.
Regulatory If any holder or beneficial owner of
Redemption Notes is required to be found
suitable and is not found suitable by
the Nevada Gaming Commission (the
"Nevada Commission"), (i) the holder
shall, upon request of the Company,
dispose of such holder's Notes within
30 days or within the time prescribed
by the Nevada Commission, whichever
is earlier, or (ii) the Company may,
at its option, redeem the holder's
Notes at the lessor of (x) the
principal amount thereof, (y) the
Current Market Price, or (z) the
price at which the Notes were
acquired by the holder, without, in
any case, accrued and unpaid interest
to the date of the finding of
unsuitability by the Nevada
Commission, unless payment of such
interest is permitted by the Nevada
Commission.
Change of Control Upon a Change of Control, each holder
of Notes will have the right to
require the Company to repurchase all
or part of such holder's Notes at a
price equal to 101% of the aggregate
principal amount thereof, plus
accrued and unpaid interest, if any,
to the date of repurchase. The
Company's obligation to repurchase
the Notes is guaranteed on a senior
subordinated basis by the Guarantor.
Principal Covenants The Indenture contains certain
covenants that, among other things,
limit the ability of the Company and
its Restricted Subsidiaries to incur
additional indebtedness, pay
dividends or make other
distributions, make investments,
repurchase subordinated obligations
or capital stock, create certain
liens (except, among others, liens
securing Senior Indebtedness), enter
into certain transactions with
affiliates, sell assets of the
Company or its subsidiaries, issue or
sell subsidiary stock, create or
permit to exist restrictions on
distributions from subsidiaries, or
enter into certain mergers and
consolidations.
Exchange Offer; Pursuant to a registration agreement
Registration between the Company and the Initial
Rights Purchasers, the Company will commence
an exchange offer pursuant to an
effective registration statement or
cause the Notes to be registered
under the Securities Act of 1933
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(the "Securities Act") pursuant to a
resale shelf registration statement.
If an exchange offer registration
statement is not (i) filed within 45
days after the date of original
issuance of the Notes or
(ii) declared effective within 120
days after the date of original
issuance of the Notes, special
interest will accrue and be payable
semiannually until such time as an
exchange offer registration statement
is filed or becomes effective, as the
case may be. In addition, if an
exchange offer is not consummated or
a resale shelf registration statement
is not declared effective within 150
days after the date of original
issuance of the Notes, special
interest will accrue and be payable
semiannually until such time as an
exchange offer is consummated or a
resale shelf registration is declared
effective, as the case may be.
Transfer The Notes have not been registered
Restrictions under the Securities Act and are
subject to certain restrictions on
transfer. The Exchange Notes
registered pursuant to an effective
registration statement generally will
be freely transferable.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements of businesses acquired.
Not applicable.
(b) Pro forma financial information.
Not applicable.
(c) Exhibits.
Exhibit
NUMBER DESCRIPTION
4.1 Purchase Agreement dated July 18, 1995 by Rio
Hotel & Casino, Inc. and confirmed and accepted by
Salomon Brothers Inc for itself and on behalf of
Montgomery Securities.
4.2 Registration Agreement dated July 18, 1995 by Rio
Hotel & Casino, Inc. and accepted July 18, 1995 by
Salomon Brothers Inc and Montgomery Securities.
4.3 Indenture dated as of July 21, 1995, among Rio
Hotel & Casino, Inc., Rio Properties, Inc. and IBJ
Schroder Bank & Trust Company.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
RIO HOTEL & CASINO, INC.
(Registrant)
Date: August 2, 1995 By:/s/ Harlan D. Braaten
Harlan D. Braaten
Senior Vice President,
Treasurer and
Chief Financial Officer
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EXHIBIT INDEX
Exhibit Page
NUMBER DESCRIPTION NUMBER
4.1 Purchase Agreement dated July 18, 1995 by 7
Rio Hotel & Casino, Inc. and confirmed and
accepted by Salomon Brothers Inc for itself
and on behalf of Montgomery Securities.
4.2 Registration Agreement dated July 18, 1995 31
by Rio Hotel & Casino, Inc. and accepted
July 18, 1995 by Salomon Brothers Inc and
Montgomery Securities.
4.3 Indenture dated as of July 21, 1995, among 51
Rio Hotel & Casino, Inc., Rio Properties,
Inc. and IBJ Schroder Bank & Trust Company.
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EXHIBIT 4.1
<PAGE>
RIO HOTEL & CASINO, INC.
10 5/8% Senior Subordinated Notes Due July 15, 2005
PURCHASE AGREEMENT
To: SALOMON BROTHERS INC New York, New York
MONTGOMERY SECURITIES July 18, 1995
In care of:
Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Dear Sirs:
Rio Hotel & Casino, Inc., a Nevada corporation (the
"Company"), proposes to issue and sell to you (the "Purchasers")
$100,000,000 principal amount of its 10 5/8% Senior Subordinated
Notes Due July 15, 2005 (the "Securities") to be guaranteed on a
senior subordinated and unsecured basis by Rio Properties, Inc.,
a Nevada corporation (the "Guarantor" or the "Subsidiary"), and
to be issued under an indenture (the "Indenture") to be dated as
of July 21, 1995, between the Company, the Guarantor and IBJ
Schroder Bank and Trust Company, as trustee (the "Trustee").
The sale of the Securities to you will be made without
registration of the Securities under the Securities Act of 1933,
as amended (the "Act"), in reliance upon the exemption from the
registration requirements of the Act provided by Section 4(2)
thereof. You have advised the Company that you will make an
offering of the Securities purchased by you hereunder in
accordance with Section 4 hereof on the terms set forth in the
Final Memorandum (as defined below), as soon as you deem
advisable after this Agreement has been executed and delivered.
In connection with the sale of the Securities, the
Company has prepared a preliminary offering memorandum, dated
June 28, 1995 (the "Preliminary Memorandum"), and a final
offering memorandum, dated July 18, 1995 (the "Final
Memorandum"). Each of the Preliminary Memorandum and the Final
Memorandum sets forth certain information concerning the Company
and the Securities. The Company hereby confirms that it has
authorized the use of the Preliminary Memorandum and the Final
Memorandum in connection with the offering and resale by the
Purchasers of the Securities. Any references herein to the
Preliminary Memorandum or the Final Memorandum shall be deemed to
include all exhibits thereto and all documents incorporated by
reference therein which were filed under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), on or before the
<PAGE>
Execution Time (as defined below); and any reference herein to
the terms "amend", "amendment" or "supplement" with respect to
the Final Memorandum shall be deemed to refer to and include the
filing of any document under the Exchange Act after the Execution
Time which is incorporated by reference therein.
1. REPRESENTATIONS AND WARRANTIES. The Company
represents and warrants to, and agrees with, the Purchasers as
set forth below in this Section 1.
(a) Each of the Preliminary Memorandum and the Final
Memorandum as of its date did not, and the Final Memorandum
(as the same may have been amended or supplemented) as of
the Closing Date will not, contain any untrue statement of a
material fact or omit to state any material fact necessary
to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
PROVIDED, HOWEVER, that the Company makes no
representations or warranties as to the information
contained in or omitted from the Preliminary Memorandum or
the Final Memorandum in reliance upon and in conformity with
information furnished in writing to the Company by the
Purchasers specifically for inclusion in the Preliminary
Memorandum or the Final Memorandum (and any amendment or
supplement thereof or thereto). All documents incorporated
by reference in the Preliminary Memorandum or the Final
Memorandum which were filed under the Exchange Act on or
before the Execution Time complied, and all such documents
which are filed under the Exchange Act after the Execution
Time and on or before the Closing Date will comply, in all
material respects with the applicable requirements of the
Exchange Act and the rules thereunder.
(b) The Company has not taken and will not take,
directly or indirectly, any action prohibited by Rule 10b-6
under the Exchange Act in connection with the offering of
the Securities.
(c) Neither the Company nor any affiliate (as defined
in Rule 501(b) of Regulation D under the Act
("Regulation D")) of the Company has directly, or through
any agent, (i) sold, offered for sale, solicited offers to
buy or otherwise negotiated in respect of, any security (as
defined in the Act) which is or will be integrated with the
sale of the Securities in a manner that would require the
registration of the Securities under the Act or (ii) engaged
in any form of general solicitation or general advertising
(within the meaning of Regulation D) in connection with the
offering of the Securities.
(d) It is not necessary in connection with the offer,
sale and delivery of the Securities in the manner
contemplated by this Agreement and the Final Memorandum to
register the Securities under the Act or to qualify the
Indenture under the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act").
(e) None of the Company, its affiliates or any person
acting on behalf of the Company or its affiliates has
engaged in any directed selling efforts (as that term is
defined in Regulation S under the Act ("Regulation S")) with
respect to the Securities, and the Company and its
affiliates and any person acting on its or their behalf have
complied with the offering restrictions requirement of
Regulation S.
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(f) The Company is subject to the reporting
requirements of Section 13 or Section 15(d) of the Exchange
Act.
(g) The Securities satisfy the requirements set forth
in Rule 144A(d)(3) under the Act. The Company has been
advised by the National Association of Securities Dealers,
Inc. PORTAL Market that the Securities have or will be
designated PORTAL eligible securities in accordance with the
rules and regulations of the National Association of
Securities Dealers, Inc.
(h) The Company has full corporate power and authority
to enter into this Agreement and perform the transactions
contemplated hereby. This Agreement has been duly
authorized, executed and delivered by the Company and
constitutes a valid and binding obligation of the Company
enforceable in accordance with its terms, except as
enforceability may be limited by general equitable
principles, bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights
generally and except as to those provisions relating to
indemnity or contribution for liabilities arising under
federal and state securities laws. The making and
performance of this Agreement by the Company and the
consummation of the transactions contemplated hereby
(i) will not violate any provisions of the Articles of
Incorporation, Bylaws or other organizational documents of
the Company or any of its subsidiaries, and (ii) will not
conflict with, result in a material breach or violation of,
or constitute, either by itself or upon notice or the
passage of time or both, a material default under (A) any
agreement, mortgage, deed of trust, lease, franchise,
license, indenture, permit or other instrument to which the
Company or any of its subsidiaries is a party or by which
the Company or any of its subsidiaries or any of its
respective properties may be bound or affected, or (B) any
statute or any authorization, judgment, decree, order, rule
or regulation of any court or any regulatory body,
administrative agency or other governmental body applicable
to the Company or any of its subsidiaries or any of their
respective properties. No consent, approval, authorization
or other order of any court, regulatory body, administrative
agency or other governmental body which has not already been
obtained is required for the execution and delivery of this
Agreement or the consummation of the transactions
contemplated by this Agreement, except for compliance with
the Act, the Blue Sky or real estate syndication purchase of
the Securities by the Purchasers, and the Nevada Gaming
Control Act and rules and regulations thereunder (the
"Gaming Act"), and the clearance of such offering with the
NASD.
(i) Except as disclosed in the Final Memorandum, there
are no legal or governmental actions, suits or proceedings
pending or, to the best of the Company's knowledge,
threatened to which the Company or any of its subsidiaries
is or is threatened to be made a party or of which property
owned or leased by the Company or any of its subsidiaries is
or is threatened to be made the subject, which actions,
suits or proceedings could, individually or in the
aggregate, prevent or adversely affect the transactions
contemplated by this Agreement or result in a material
adverse change in the condition (financial or otherwise),
properties, business, results of operations or prospects of
the Company or its subsidiaries; and no labor disturbance
<PAGE>
by the employees of the Company or any of its subsidiaries
exists or is imminent which could materially adversely
affect such condition, properties, business, results of
operations or prospects. Neither the Company nor any of its
subsidiaries is a party or subject to the provisions of any
material injunction, judgment, decree or order of any court,
regulatory body, administrative agency or other governmental
body. The Company has no reason to believe that the Nevada
Gaming Commission, the Nevada State Gaming Control Board or
the Clark County Liquor and Gaming Licensing Board or any
other governmental agencies are investigating the Company or
any related parties, other than in ordinary course
administrative reviews or in any ordinary course review of
the transactions contemplated hereby.
(j) Except as disclosed in or specifically contemplated
by the Final Memorandum, the Company and its subsidiaries
have sufficient trademarks, trade names, patent rights,
copyrights, licenses, approvals and governmental
authorizations (including, without limitation, all
authorizations from Nevada gaming and liquor authorities) to
conduct their businesses as now conducted; the Company's and
its subsidiaries' controlling persons, key employees and
stockholders have all necessary permits, licenses and other
authorizations required by applicable law for the Company
and its subsidiaries to conduct their businesses as now
conducted; the expiration of any trademarks, trade names,
patent rights, copyrights, licenses, approvals or
governmental authorizations would not have a material
adverse effect on the condition (financial or otherwise),
business, results of operations or prospects of the Company
or its subsidiaries; the Company has no knowledge that any
of its stockholders is unsuitable or may be deemed
unsuitable by the Nevada Gaming Commission or the Nevada
State Gaming Control Board.
(k) The Company and its subsidiaries are conducting
business in compliance with all applicable laws, rules and
regulations of the jurisdictions in which they are
conducting business, including, without limitation, all
applicable local, state and federal gaming, liquor and
environmental laws and regulations, except where the failure
to be so in compliance would not materially adversely affect
the condition (financial or otherwise), business, results of
operations or prospects of the Company and its subsidiaries,
taken as a whole.
2. PURCHASE AND SALE. Subject to the terms and
conditions and in reliance upon the representations and
warranties herein set forth, the Company agrees to sell to the
Purchasers, and the Purchasers agree to purchase from the
Company, at a purchase price of 100.000% of the principal amount
thereof, plus accrued interest, if any, from July 21, 1995, to
the Closing Date, the principal amount of the Securities.
3. DELIVERY AND PAYMENT. Delivery of and payment for
the Securities shall be made at 12:00 PM, New York City time, on
July 21, 1995, or such later date (not later than July 28, 1995)
as the Purchasers designate, which date and time may be postponed
by agreement between the Purchasers and the Company (such date
and time of delivery and payment for the Securities being herein
called the "Closing Date"). Delivery of the Securities shall be
made to the Purchasers against payment by the Purchasers of the
purchase price thereof by wire transfer in federal (same-day)
funds, provided that the Company shall reimburse the Purchasers
<PAGE>
for the difference between making such payment in same-day and
next-day funds. Delivery of the Securities shall be made at such
location as the Purchasers shall reasonably designate at least
one business day in advance of the Closing Date and payment for
the Securities shall be made at the offices of Cravath, Swaine &
Moore, 825 Eighth Avenue, New York, New York. Certificates for
the Securities shall be registered in such names and in such
denominations as the Purchasers may request not less than three
full business days in advance of the Closing Date.
The Company agrees to have the Securities available for
inspection, checking and packaging by the Purchasers in New York,
New York, not later than 1:00 PM on the business day prior to the
Closing Date.
4. OFFERING OF SECURITIES; RESTRICTIONS ON TRANSFER.
(a) The Purchasers represent and warrant to and agree with the
Company that (i) they have not solicited and will not solicit any
offer to buy or offer to sell the Securities by means of any form
of general solicitation or general advertising (within the
meaning of Regulation D) or in any manner involving a public
offering within the meaning of Section 4(2) of the Act or, with
respect to Securities sold in reliance on Regulation S, by means
of any directed selling efforts and (ii) they have solicited and
will solicit offers to buy the Securities only from, and have
offered and will offer, sell or deliver the Securities only to,
(A) persons who they reasonably believe to be qualified
institutional buyers (as defined in Rule 144A under the Act) or,
if any such person is buying for one or more institutional
accounts for which such person is acting as fiduciary or agent,
only when such person has represented to them that each such
account is a qualified institutional buyer, to whom notice has
been given that such sale or delivery is being made in reliance
on Rule 144A, and, in each case, in transactions under Rule 144A,
(B) persons who they reasonably believe to be institutional
"accredited investors" (as defined in Rule 501(a)(1), (2), (3)
or (7) of Regulation D), and who provide to them a letter in the
form of Exhibit A hereto or (C) persons to whom, and under circum
stances which, they reasonably believe offers and sales of
Securities may be made without registration of the Securities
under the Act in reliance upon Regulation S thereunder. The
Purchasers also represent and warrant and agree that they have
offered and will offer to sell the Securities only to, and have
solicited and will solicit offers to buy the Securities only
from, persons that in purchasing such Securities will be deemed
to have represented and agreed as provided under "Investor
Representations and Restrictions on Resale" in Exhibit B hereto.
(b) The Purchasers represent and warrant that (i) they
have not offered or sold, and will not offer or sell, in the
United Kingdom, by means of any document, any Securities other
than to persons whose ordinary business it is to buy or sell
shares or debentures, whether as principal or agent, or in
circumstances which do not constitute an offer to the public
within the meaning of the United Kingdom Companies Act 1985,
(ii) they have complied and will comply with all applicable
provisions of the Financial Services Act 1986 of the United
Kingdom with respect to anything done by them in relation to the
Securities in, from or otherwise involving the United Kingdom and
(iii) they have only issued or passed on, and will only issue or
pass on, in the United Kingdom any document received by them in
connection with the issue of the Securities to a person who is of
the kind described in Article 9(3) of the Financial Services
Act 1986 (Investment Advertisements) (Exemptions) Order 1988 or
<PAGE>
is a person to whom the document may otherwise lawfully be issued
or passed on.
5. AGREEMENTS. The Company agrees with the Purchasers
that:
(a) The Company will furnish to the Purchasers,
without charge as many copies of the Final Memorandum and
any supplements and amendments thereof or thereto as the
Purchasers may reasonably request. The Company will pay the
expenses of printing or other production of all documents
relating to the offering.
(b) The Company will not amend or supplement the Final
Memorandum, other than by filing documents under the
Exchange Act which are incorporated by reference therein,
without prior consent of the Purchaser. Prior to the
completion of the sale of the Securities by the Purchasers,
the Company will not file any document under the Exchange
Act which is incorporated by reference in the Final
Memorandum unless the Company has furnished you a copy for
your review prior to filing and will not file any such
document to which you reasonably and timely object.
(c) The Company will promptly advise the Purchasers
when, prior to the completion of the sale of the Securities
by the Purchasers, any document filed under the Exchange Act
which is incorporated by reference in the Final Memorandum
shall have been filed with the Securities and Exchange
Commission (the "Commission").
(d) If at any time prior to the completion of the sale
of the Securities by the Purchasers, any event occurs as a
result of which the Final Memorandum as then amended or
supplemented would include any untrue statement of a
material fact or omit to state any material fact necessary
to make the statements therein in the light of the
circumstances under which they were made not misleading, or
if it shall be necessary to amend or supplement the Final
Memorandum (including any document incorporated by reference
therein which was filed under the Exchange Act) to comply
with the Exchange Act or the rules thereunder or other
applicable law, the Company promptly will notify the
Purchasers of the same and, subject to paragraph (b) of this
Section 5, will prepare and provide to the Purchasers
pursuant to paragraph (a) of this Section 5 an amendment or
supplement which will correct such statement or omission or
effect such compliance and, in the case of such an amendment
or supplement which is to be filed under the Exchange Act
and which is incorporated by reference in the Final
Memorandum, will file such amendment or supplement with the
Commission.
(e) The Company will arrange for the qualification of
the Securities for sale under the laws of such jurisdictions
as the Purchasers may reasonably designate, will maintain
such qualifications in effect so long as reasonably required
for the sale of the Securities and will arrange for the
determination of the legality of the Securities for purchase
by institutional investors. The Company will promptly
advise the Purchasers of the receipt by the Company of any
notification with respect to the suspension of the
<PAGE>
qualification of the Securities for sale in any jurisdiction
or the initiation or threatening of any proceeding for such
purpose.
(f) Neither the Company nor any affiliate (as defined
in Rule 501(b) of Regulation D) of the Company will solicit
any offer to buy or offer or sell the Securities by means of
any form of general solicitation or general advertising
(within the meaning of Regulation D).
(g) None of the Company, its affiliates nor any person
acting on behalf of the Company or its affiliates will
engage in any directed selling efforts with respect to the
Securities within the meaning of Regulation S, and the
Company, its affiliates and each such person acting on its
or their behalf will comply with the offering restrictions
requirement of Regulation S.
(h) The Company shall, during any period in the three
years after the Closing Date in which the Company is not
subject to Section 13 or 15(d) of the Exchange Act, make
available, upon request, to any holder of such Securities in
connection with any sale thereof and any prospective
purchaser of Securities from such holder the information
("Rule 144A Information") specified in Rule 144A(d)(4) under
the Act.
(i) The Company will not, and will not permit any of
its affiliates (as defined in Rule 501(b) of Regulation D)
to, resell any Securities which constitute "restricted
securities" under Rule 144 that have been reacquired by any
of them.
(j) Neither the Company nor any affiliate (as defined
in Rule 501(b) of Regulation D) will sell, offer for sale or
solicit offers to buy or otherwise negotiate in respect of
any security (as defined in the Act) the offering of which
security will be integrated with the sale of the Securities
in a manner which would require the registration of the
Securities under the Act.
(k) The Company shall include information sub
stantially in the form set forth in Exhibit B in each Final
Memorandum.
(l) The Company shall use its best efforts in
cooperation with the Purchasers to permit the Securities to
be eligible for clearance and settlement through The
Depository Trust Company.
(m) The Company will not, for a period of 90 days
following the Execution Time without prior written consent
of the Purchasers (which consent will not be unreasonably or
untimely withheld), offer, sell or contract to sell, or
otherwise dispose of, directly or indirectly, or announce
the offering of, any debt securities issued or guaranteed by
the Company (other than the Securities and other than steps
necessary to complete the increase to $175 million of the
Rio Bank Loan (as defined in the Final Memorandum)).
<PAGE>
(n) The Company will apply the net proceeds from the
sale of the Notes sold by it substantially in accordance
with its statements under the caption "Use of Proceeds" in
the Final Memorandum.
6. CONDITIONS TO THE OBLIGATIONS OF THE PURCHASERS.
The obligations of the Purchasers to purchase the Securities
shall be subject to the accuracy of the representations and
warranties on the part of the Company contained herein as of the
date and time that this Agreement is executed and delivered by
the parties hereto (the "Execution Time") and the Closing Date,
to the accuracy of the statements of the Company made in any
certificates pursuant to the provisions hereof, to the
performance by the Company of its obligations hereunder and to
the following additional conditions:
(a) At the Closing Date, you shall have received
evidence in form and substance satisfactory to you that the
offering of the Securities complies (whether as a result of
the receipt of appropriate waivers or otherwise) with
applicable gaming laws.
(b) The Company shall have furnished to the Purchasers
the opinion of Kummer Kaempfer Bonner & Renshaw, counsel for
the Company, dated the Closing Date, to the effect that:
(i) each of the Company and the Subsidiary
has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the
jurisdiction in which it is chartered or organized,
with full corporate power and authority to own its
properties and conduct its business as described in the
Final Memorandum, and is duly qualified to do business
as a foreign corporation and is in good standing under
the laws of each jurisdiction which requires such
qualification wherein it owns or leases material proper
ties or conducts material business;
(ii) all the outstanding shares of capital
stock of the Subsidiary have been duly and validly
authorized and issued and are fully paid and
nonassessable, and all outstanding shares of capital
stock of the Subsidiary are owned by the Company
directly free and clear of any perfected security
interest (except for a pledge thereof securing the Rio
Bank Loan)and, to the knowledge of such counsel, after
due inquiry, any other security interests, claims,
liens or encumbrances;
(iii) the Company's authorized equity capital
ization is as set forth in the Final Memorandum; and
the Securities conform to the description thereof
contained in the Final Memorandum;
(iv) the Indenture has been duly authorized,
executed and delivered, and constitutes a legal, valid
and binding instrument enforceable against the Company
in accordance with its terms (subject, as to
enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws
affecting creditors' rights generally from time to time
in effect); and the Securities have been duly
authorized and, when executed and authenticated in
<PAGE>
accordance with the provisions of the Indenture and
delivered to and paid for by the Purchasers pursuant to
this Agreement, will constitute legal, valid and
binding obligations of the Company entitled to the
benefits of the Indenture (in rendering the opinion in
this paragraph, such counsel may assume that New York
law is identical to Nevada law on such applicable parts
of the opinion governed by New York law);
(v) the statements in the Final Memorandum
under the headings Legal Matters fairly summarize the
matters therein described;
(vi) such counsel has no reason to believe
that as of the Execution Time the Final Memorandum
contained any untrue statement of a material fact or
omitted to state any material fact required to be
stated therein or necessary to make the statements
therein not misleading or that the Final Memorandum
includes any untrue statement of a material fact or
omits to state a material fact necessary to make the
statements therein, in the light of the circumstances
under which they were made, not misleading;
(vii) this Agreement has been duly
authorized, executed and delivered by the Company;
(viii) no consent, approval, authorization or
order of any court or governmental agency or body is
required for the consummation of the transactions
contemplated herein, except such as may be required
under the blue sky laws of any jurisdiction in
connection with the purchase and distribution of the
Securities by the Purchasers and such other approvals
(specified in such opinion) as have been obtained;
(ix) neither the issue and sale of the Securi
ties, the execution and delivery of the Indenture, the
consummation of any other of the transactions herein
contemplated nor the fulfillment of the terms hereof
will conflict with, result in a breach or violation of,
or constitute a default under any law or the charter or
by-laws of the Company or the terms of any indenture or
other agreement or instrument known to such counsel and
to which the Company or any of its subsidiaries is a
party or bound or any judgment, order or decree known
to such counsel to be applicable to the Company or any
of its subsidiaries of any court, regulatory body,
administrative agency, governmental body or arbitrator
having jurisdiction over the Company or any of its
subsidiaries;
(x) the Company has full corporate power and
authority to enter into this Agreement and to sell and
deliver the Securities to be sold by it to the
Purchasers; this Agreement has been duly and validly
authorized by all necessary corporate action by the
Company, has been duly and validly executed and
delivered by and on behalf of the Company, and is a
valid and binding agreement of the Company enforceable
in accordance with its terms, except as enforceability
may be limited by general equitable principles,
bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors' rights generally and
<PAGE>
except as to those provisions relating to indemnity or
contribution for liabilities arising under federal and
state securities laws (as to which no opinion need be
expressed); and to the best of such counsel's knowledge
after due inquiry no approval, authorization, order,
consent, registration, filing, qualification, license
or permit of or with any court, regulatory,
administrative or other governmental body is required
for the execution and delivery of this Agreement by the
Company or the consummation of the transactions
contemplated by this Agreement, except such as have
been obtained and are in full force and effect under
the Act or gaming laws and such as may be required
under applicable Blue Sky or real estate syndication
laws in connection with the purchase and distribution
of the Securities by the Purchasers and the clearance
of such offering with the NASD;
(xi) it is not necessary in connection with
the offer, sale and delivery of the Securities in the
manner contemplated by this Agreement to register the
Securities under the Act or to qualify the Indenture
under the Trust Indenture Act;
(xii) no approval of the Nevada gaming
authorities is required with respect to the issuance of
Securities or the transactions contemplated by this
agreement and the Indenture;
(xiii) to the best of such counsel's
knowledge, there are no legal or governmental actions,
suits or proceedings pending or threatened to which the
Company or any of its subsidiaries is or is threatened
to be made a party or of which property owned or leased
by the Company or any of its subsidiaries is or is
threatened to be made the subject, which actions, suits
or proceedings could, individually or in the aggregate,
prevent or adversely affect the transactions
contemplated by this Agreement or result in a material
adverse change in the condition (financial or
otherwise), properties, business, results of operations
or prospects of the Company and its subsidiaries; and
neither the Company nor any of its subsidiaries is a
party or subject to the provisions of any material
injunction, judgment, decree or order of any court,
regulatory body, administrative agency or other
governmental body; and neither the Company nor any
related party is being investigated by the Nevada
Gaming Commission, the Nevada State Gaming Control
Board or any federal, state or local liquor or gaming
regulatory body or any other governmental agency, other
than in ordinary course administrative reviews or in
any ordinary course review of the transactions
contemplated by this Agreement; and
(xiv) the Company is not, and upon the
closing of the offering contemplated by this Agreement,
will not, be an "investment company" within the meaning
of the Investment Company Act of 1940, as amended.
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any
jurisdiction other than the State of Nevada or the United
<PAGE>
States, to the extent they deem proper and specified in
such opinion, upon the opinion of other counsel of good
standing whom they believe to be reliable and who are
satisfactory to counsel for the Purchaser and (B) as to
matters of fact, to the extent they deem proper, on
certificates of responsible officers of the Company and
public officials. References to the Final Memorandum in
this paragraph (a) include any amendments or supplements
thereof or thereto at the Closing Date.
(c) The Purchasers shall have received from Cravath,
Swaine & Moore, counsel for the Purchasers, such opinion or
opinions, dated the Closing Date, with respect to the
issuance and sale of the Securities, the Indenture, the
Final Memorandum (together with any amendment or supplement
thereof or thereto) and other related matters as the
Purchasers may reasonably require, and the Company shall
have furnished to such counsel such documents as they
request for the purpose of enabling them to pass upon such
matters.
(d) The Company shall have furnished to the Purchasers
a certificate of the Company, signed by the Chairman of the
Board or the President and the principal financial or
accounting officer of the Company, dated the Closing Date,
to the effect that the signers of such certificate have
carefully examined the Final Memorandum, any amendment or
supplement to the Final Memorandum and this Agreement and
that:
(i) the representations and warranties of the
Company in this Agreement are true and correct in all
material respects on and as of the Closing Date with
the same effect as if made on the Closing Date and the
Company has complied with all the agreements and
satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Date;
and
(ii) since the date of the most recent finan
cial statements included in the Final Memorandum (exclu
sive of any amendment or supplement thereof or
thereto), there has been no material adverse change in
the condition (financial or other), earnings, business
or properties of the Company and its subsidiaries,
whether or not arising from transactions in the
ordinary course of business, except as set forth in or
contemplated in the Final Memorandum (exclusive of any
amendment or supplement thereof or thereto).
(e) At the Execution Time and at the Closing Date,
Arthur Andersen LLP shall have furnished to the Purchasers a
letter or letters, dated respectively as of the Execution
Time and as of the Closing Date, in form and substance
satisfactory to the Purchasers, confirming that they are
independent certified public accountants under Rule 101 of
the AICPA's Code of Professional Conduct and its
interpretations and rulings and stating in effect that:
(i) with respect to the period from April 1,
1995 and May 31, 1995, officials of the Company having
advised them that no consolidated financial statements
for that period are available, they have:
<PAGE>
(a) read the unaudited stand-alone
April 30, May 31 and June 30, 1995 financial
statements of the Subsidiary furnished them
by the Company and agreed the amounts
contained therein to the Company's accounting
records.
(b) made inquiry of certain
officials of the Company who have
responsibility for financial and accounting
matters regarding whether the unaudited
financial statements referred to in (a) above
are stated on a basis substantially
consistent with that of the audited
consolidated financial statements and that
such officials stated that the unaudited
financial statements referred to in (a) above
are stated on a basis substantially
consistent with that of the audited
consolidated financial statements.
(ii) they have made inquiries of certain
officials of the Company who have responsibility for
financial and accounting matters regarding whether (a)
there was any change at July 13, 1995, in the capital
stock or long-term debt of the Company or any decreases
in stockholders' equity as compared with amounts shown
on the March 31, 1995, unaudited condensed consolidated
balance sheet, included in the Final Memorandum or
(b) for the period from April 1, 1995 to June 30, 1995,
there were any decreases, as compared with the
corresponding period in the preceding year, in net
revenues or in the total or per share amounts of income
before extraordinary items of net income, that such
officials stated that there were no such changes or
decreases and that the Company has prepared no
financial statements as of any date or for any period
subsequent to June 30, 1995.
(iii) they have performed certain other speci
fied procedures as a result of which they determined
that certain information of an accounting, financial or
statistical nature (which is limited to accounting,
financial or statistical information derived from the
general accounting records of the Company and its
subsidiaries) set forth in the Final Memorandum,
including the information set forth under the caption
"Management's Discussion and Analysis of Financial
Condition and Results of Operations" in the Final
Memorandum, complies with certain information provided
in the past.
References to the Final Memorandum in this para
graph (e) include any amendment or supplement thereof or
thereto at the date of the letter.
(f) Subsequent to the Execution Time or, if earlier,
the dates as of which information is given in the Final
Memorandum (exclusive of any amendment or supplement thereof
or thereto), there shall not have been (i) any change or
decrease specified in the letter or letters referred to in
paragraph (d) of this Section 6 or (ii) any change, or any
development involving a prospective change, in or affecting
the business or properties of the Company and its
subsidiaries the effect of which, in any case referred to in
clause (i) or (ii) above, is, in the judgment of the
<PAGE>
Purchasers, so material and adverse as to make it impracti
cal or inadvisable to market the Securities as contemplated
by the Final Memorandum (exclusive of any amendment or
supplement thereof or thereto).
(g) Subsequent to the Execution Time, there shall not
have been any decrease in the rating of any of the Company's
debt securities by any "nationally recognized statistical
rating organization" (as defined for purposes of Rule 436(g)
under the Act) or any notice given of any intended or
potential decrease in any such rating or of a possible
change in any such rating that does not indicate the
direction of the possible change.
(h) Prior to the Closing Date, the Company shall have
furnished to the Purchasers such further information,
certificates and documents as the Purchasers may reasonably
request.
If any of the conditions specified in this Section 6
shall not have been fulfilled in all material respects when and
as provided in this Agreement, or if any of the opinions and
certificates mentioned above or elsewhere in this Agreement shall
not be in all material respects reasonably satisfactory in form
and substance to the Purchasers and counsel for the Purchasers,
this Agreement and all obligations of the Purchasers hereunder
may be canceled at, or at any time prior to, the Closing Date by
the Purchasers. Notice of such cancellation shall be given to
the Company in writing or telegraph confirmed in writing.
The documents required to be delivered by this
Section 6 shall be delivered at the office of Cravath, Swaine &
Moore, counsel for the Purchasers, at Worldwide Plaza, 825 Eighth
Avenue, New York, New York, on the Closing Date.
7. REIMBURSEMENT OF PURCHASER'S EXPENSES. If the sale
of the Securities provided for herein is not consummated because
any condition to the obligations of the Purchasers set forth in
Section 6 hereof is not satisfied,
because of any termination pursuant to Section 9(i) hereof or
because of any refusal, inability or failure on the part of the
Company to perform any agreement herein or comply with any
provision hereof other than by reason of a default by the
Purchasers, the Company will reimburse the Purchaser upon demand
for all reasonable out-of-pocket expenses (including reasonable
fees and reasonable disbursements of counsel) that shall have
been incurred by it in connection with the proposed purchase and
sale of the Securities.
8. INDEMNIFICATION AND CONTRIBUTION. (a) The Company
agrees to indemnify and hold harmless the Purchasers, the
directors, officers, employees and agents of the Purchasers and
each person who controls the Purchasers within the meaning of
either the Act or the Exchange Act against any and all losses,
claims, damages or liabilities, joint or several, to which they
or any of them may become subject under the Act, the Exchange Act
or other Federal or state statutory law or regulation, at common
law or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of a
material fact contained in the Preliminary Memorandum, the Final
Memorandum or any Rule 144A Information provided by the Company
to any holder or prospective purchaser of Securities pursuant to
<PAGE>
Section 5(h), or in any amendment thereof or supplement thereto,
or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not
misleading, and agrees to reimburse each such indemnified party,
as incurred, for any legal or other expenses reasonably incurred
by them in connection with investigating or defending any such
loss, claim, damage, liability or action; PROVIDED, HOWEVER, that
the Company will not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or
is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made in the Preliminary
Memorandum or the Final Memorandum, or in any amendment thereof
or supplement thereto, in reliance upon and in conformity with
written information furnished to the Company by or on behalf of
the Purchasers specifically for inclusion therein. This
indemnity agreement will be in addition to any liability which
the Company may otherwise have.
(b) The Purchasers agree to indemnify and hold
harmless the Company, its directors, its officers, and each
person who controls the Company within the meaning of either the
Act or the Exchange Act, to the same extent as the foregoing
indemnity from the Company to the Purchasers, but only with refer
ence to written information relating to the Purchasers furnished
to the Company by or on behalf of the Purchasers specifically for
inclusion in the Preliminary Memorandum or the Final Memorandum,
or in any amendment thereof or supplement thereto. This
indemnity agreement will be in addition to any liability which
the Purchasers may otherwise have. The Company acknowledges that
the statements set forth in the last paragraph of the cover page
and under the heading "Plan of Distribution" in the Preliminary
Memorandum and the Final Memorandum constitute the only
information furnished in writing by or on behalf of the
Purchasers for inclusion in the Preliminary Memorandum or the
Final Memorandum.
(c) Promptly after receipt by an indemnified party
under this Section 8 of notice of the commencement of any action,
such indemnified party will, if a claim in respect thereof is to
be made against the indemnifying party under this Section 8,
notify the indemnifying party in writing of the commencement
thereof; but the failure so to notify the indemnifying party
(i) will not relieve it from liability under paragraph (a) or (b)
above unless and to the extent it did not otherwise learn of such
action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party
from any obligations to any indemnified party other than the
indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint
counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action
for which indemnification is sought (in which case the indemni
fying party shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the indemnified
party or parties except as set forth below); PROVIDED, HOWEVER,
that such counsel shall be satisfactory to the indemnified party.
Notwithstanding the indemnifying party's election to appoint
counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel
(including local counsel), and the indemnifying party shall bear
the reasonable fees, costs and expenses of such separate counsel
if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a
conflict of interest, (ii) the actual or potential defendants in,
or targets of, any such action include both the indemnified party
and the indemnifying party and the indemnified party shall have
<PAGE>
reasonably concluded that there may be legal defenses available
to it and/or other indemnified parties which are different from
or additional to those available to the indemnifying party,
(iii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of the
institution of such action or (iv) the indemnifying party shall
authorize the indemnified party to employ separate counsel at the
expense of the indemnifying party. An indemnifying party will
not, without the prior written consent of the indemnified par
ties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action,
suit or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim
or action) unless such settlement, compromise or consent includes
an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in
paragraph (a) or (b) of this Section 8 is unavailable to or
insufficient to hold harmless an indemnified party for any
reason, the Company and the Purchasers agree to contribute to the
aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with
investigating or defending same) (collectively "Losses") to which
the Company and the Purchasers may be subject in such proportion
as is appropriate to reflect the relative benefits received by
the Company and by the Purchasers from the offering of the
Securities; PROVIDED, HOWEVER, that in no case shall the
Purchasers be responsible for any amount in excess of the
purchase discount or commission applicable to the Securities
purchased by the Purchasers hereunder. If the allocation
provided by the immediately preceding sentence is unavailable for
any reason, the Company and the Purchasers shall contribute in
such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company and
of the Purchasers in connection with the statements or omissions
which resulted in such Losses as well as any other relevant
equitable considerations. Benefits received by the Company shall
be deemed to be equal to the total net proceeds from the offering
(before deducting expenses), and benefits received by the
Purchasers shall be deemed to be equal to the total purchase
discounts and commissions, in each case as set forth on the cover
page of the Final Memorandum. Relative fault shall be determined
by reference to whether any alleged untrue statement or omission
relates to information provided by the Company or the Purchasers.
The Company and the Purchasers agree that it would not be just
and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take
account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), no person
guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 8, each person
who controls the Purchasers within the meaning of either the Act
or the Exchange Act and each director, officer, employee and
agent of a Purchaser shall have the same rights to contribution
as such Purchaser, and each person who controls the Company
within the meaning of either the Act or the Exchange Act and each
officer and director of the Company shall have the same rights to
contribution as the Company, subject in each case to the
applicable terms and conditions of this paragraph (d).
<PAGE>
9. TERMINATION. This Agreement shall be subject to
termination in the absolute discretion of the Purchasers, by
notice given to the Company prior to delivery of and payment for
the Securities, if prior to such time (i) trading in the
Company's Common Stock shall have been suspended by the
Commission or the National Association of Securities Dealers
Automated Quotation National Market System or trading in
securities generally on the New York Stock Exchange the National
Association of Securities Dealers Automated Quotation National
Market System shall have been suspended or limited or minimum
prices shall have been established on either of such Exchange or
Market System, (ii) a banking moratorium shall have been declared
either by Federal or New York State authorities or (iii) there
shall have occurred any outbreak or escalation of hostilities,
declaration by the United States of a national emergency or war
or other calamity or crisis the effect of which on financial
markets is such as to make it, in the judgment of the Purchasers,
impracticable or inadvisable to proceed with the offering or
delivery of the Securities as contemplated by the Final
Memorandum (exclusive of any amendment or supplement thereof or
thereto).
10. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The
respective agreements, representations, warranties, indemnities
and other statements of the Company or its officers and of the
Purchaser set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation
made by or on behalf of the Purchasers or the Company or any of
the officers, directors or controlling persons referred to in
Section 8 hereof, and will survive delivery of and payment for
the Securities. The provisions of Sections 7 and 8 hereof shall
survive the termination or cancellation of this Agreement.
11. NOTICES. All communications hereunder will be in
writing and effective only on receipt, and, if sent to the
Purchaser, will be mailed, delivered or telegraphed and confirmed
to it, at Seven World Trade Center, New York, New York, 10048;
or, if sent to the Company, will be mailed, delivered or tele
graphed and confirmed to it at 3700 West Flamingo Road, Las
Vegas, Nevada 89103, attention of Susan Johnson.
12. SUCCESSORS. This Agreement will inure to the
benefit of and be binding upon the parties hereto and their
respective successors and the officers and directors and
controlling persons referred to in Section 8 hereof, and no other
person will have any right or obligation hereunder.
13. APPLICABLE LAW. This Agreement will be governed
by and construed in accordance with the laws of the State of New
York.
<PAGE>
If the foregoing is in accordance with your under
standing of our agreement, please sign and return to us the
enclosed duplicate hereof, whereupon this letter and your
acceptance shall represent a binding agreement between the
Company and the Purchaser.
Very truly yours,
Rio Hotel & Casino, Inc.
By:_/S/ HARLAN D. BRAATEN___
Name: Harlan D. Braaten
Title: Senior Vice President
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Salomon Brothers Inc
for itself and on behalf
of Montgomery Securities
By:_/S/ WENDELL M. BROOKS__
Name:Wendell M. Brooks
Title: Vice President
<PAGE>
EXHIBIT A
FORM OF INVESTMENT LETTER
FOR INSTITUTIONAL ACCREDITED INVESTORS
Rio Hotel & Casino, Inc.
c/o IBJ Schroder Bank and Trust Company, as Trustee
One State Street
New York, NY 10004
Dear Sirs:
In connection with our proposed purchase of
$ aggregate principal amount of 10 5/8% Senior Subordinated
Notes Due 2005 (the "Notes") of Rio Hotel & Casino, Inc., a
Nevada corporation (the "Company"), we confirm that:
1. We understand that the Notes have not been
registered under the Securities Act of 1933 (the "Securities
Act"), and may not be sold except as permitted in the
following sentence. We understand and agree, on our own
behalf and on behalf of any accounts for which we are acting
as hereinafter stated, (x) that such Notes are being offered
only in a transaction not involving any public offering
within the meaning of the Securities Act, (y) that if we
decide to resell, pledge or otherwise transfer such Notes
within three years after the date of the original issuance
of the Notes or if within three months after we cease to be
an affiliate (within the meaning of Rule 144 under the
Securities Act) of the Company, such Notes may be resold,
pledged or transferred only (i) to the Company, (ii) so long
as the Notes are eligible for resale pursuant to Rule 144A
under the Securities Act ("Rule 144A"), to a person whom we
reasonably believe is a "qualified institutional buyer" (as
defined in Rule 144A) ("QIB") that purchases for its own
account or for the account of QIB to whom notice is given
that the resale, pledge or transfer is being made in
reliance on Rule 144A (as indicated by the box checked by
the transferor on the Certificate of Transfer on the reverse
of the certificate for the Notes), (iii) in an offshore
transaction in accordance with Regulation S under the
Securities Act (as indicated by the box checked by the
transferor on the Certificate of Transfer on the reverse of
the certificate for the Notes), (iv) to an institution that
is an "accredited investor" as defined in Rule 501(a)(1),
(2), (3) or (7) under the Securities Act (as indicated by
the box checked by the transferor on the Certificate of
Transfer on the reverse of the certificate for the Notes)
which has certified to the Company and the Trustee that is
such an accredited investor and is acquiring the Notes for
investment purposes and not for distribution, (v) pursuant
to an exemption from registration under the Securities Act
provided by Rule 144 (if applicable) under the Securities
Act, or (vi) pursuant to an effective registration statement
under the Securities Act, in each case in accordance with
any applicable securities laws of any of the United States,
and we will notify any purchaser of the Notes from us of
<PAGE>
the above resale restriction, if then applicable. We
further understand that in connection with any transfer of
the Notes by us that the Company and the Trustee may
request, and if so requested we will furnish, such
certificates, legal opinions and other information as they
may reasonably require to confirm that any such transfer
complies with the foregoing restrictions.
2. We are able to fend for ourselves in the
transactions contemplated by this Offering Memorandum, we
have knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks
of our investment in the Notes, and we and any accounts for
which we are acting are each able to bear the economic risk
of our or its investment and can afford the complete loss of
such investment.
3. We understand that the minimum principal amount of
Notes that may be purchased by an institutional accredited
investor is $250,000.
4. We understand that the Company, Salomon Brothers
Inc and Montgomery Securities as the initial purchasers of
the Notes ("Initial Purchasers"), and others will rely upon
the truth and accuracy of the foregoing acknowledgements,
representations and agreements, and we agree that if any of
the acknowledgements, representations and warranties deemed
to have been made by us by our purchase of Notes, for our
own account or of one or more accounts as to each of which
we exercise sole investment discretion, are no longer
accurate, we shall promptly notify the Company and the
Initial Purchasers.
5. We are acquiring the Notes purchased by us for
investment purposes and not for distribution of our own
account or for one or more accounts as to each of which we
exercise sole investment discretion and we are or such
account is an institutional "accredited investor" (as
defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D
under the Securities Act).
6. You are entitled to rely upon this letter and you
are irrevocably authorized to produce this letter or a copy
hereof to any interested party in any administrative or
legal proceeding or official inquiry with respect to the
matters covered hereby.
Very truly yours,
(Name of Purchaser)
By:
Date:
<PAGE>
EXHIBIT B
NOTICE TO INVESTORS
OFFERS AND SALES BY THE INITIAL PURCHASERS
The Notes have not been registered under the Securities
Act and may not be offered or sold in the United States or to, or
for the account or benefit of, U.S. persons except in accordance
with an applicable exemption from the registration requirements
thereof. Accordingly, the Notes are being offered and sold only
(1) in the United States to qualified institutional buyers
("Qualified Institutional Buyers") under Rule 144A under the
Securities Act and other institutional "accredited investors" (as
defined in Rule 501(a)(1), (2), (3) or (7) under the Securities
Act) ("Institutional Accredited Investors") in a private sale
exempt from the registration requirements of the Securities Act,
and (2) outside the United States to non-U.S. persons ("foreign
purchasers") in reliance upon Regulation S under the Securities
Act. Each Institutional Accredited Investor that is a purchaser
of Notes from an Initial Purchaser will be required to sign a
certificate in the form provided by an Initial Purchaser. The
only Notes that will be eligible to be deposited with The Deposi
tory Trust Company are Notes held by Qualified Institutional
Buyers and Institutional Accredited Investors.
INVESTOR REPRESENTATIONS AND RESTRICTIONS ON RESALE
Each purchaser of the Notes will be deemed to have
represented and agreed as follows:
(1) it is acquiring the Notes for its own account or
for an account with respect to which it exercises sole
investment discretion, and that it or such account is a
Qualified Institutional Buyer, an Institutional Accredited
Investor acquiring the Notes for investment purposes and not
for distribution or a foreign purchaser outside the United
States;
(2) it acknowledges that the Notes have not been
registered under the Securities Act and may not be sold
except as permitted below.
(3) it understands and agrees (x) that such Notes are
being offered only in a transaction not involving any public
offering within the meaning of the Securities Act, and (y)
that (A) if within three years after the date of original
issuance of the Notes or if it was during the three months
preceding such date of transfer an affiliate of the Company,
it decides to resell, pledge or otherwise transfer such
Notes on which the legend set forth below appears, such
Notes may be resold, pledged or transferred only (i) to the
Company, (ii) so long as such Security is eligible for
resale pursuant to Rule 144A, to a person whom the seller
reasonably believes is a Qualified Institutional Buyer that
purchases for its own account or for the account of a
Qualified Institutional Buyer to whom notice is given that
the resale, pledge or transfer is being made in reliance on
<PAGE>
Rule 144A (as indicated by the box checked by the transferor
on the Certificate of Transfer on the reverse of the Note),
(iii) in an offshore transaction in accordance with
Regulation S (as indicated by the box checked by the
transferor on the Certificate of Transfer on the reverse of
the Note) but, if such transfer is being effected by an
Initial Foreign Purchaser or any foreign purchaser who has
purchased Notes from an Initial Foreign Purchaser or from
any person other than a QIB or an Institutional Accredited
Investor pursuant to this clause (iii) prior to the
expiration of the 40 day restricted period (within the
meaning of Rule 903(c)(3) of Regulation S under the
Securities Act), the transferee shall have certified to the
Company and the Trustee for the Notes that such transferee
is a non-U.S. Person (within the meaning of Regulation S)
and that such transferee is acquiring the Notes in an
offshore transaction, or (iv) to an Institutional Accredited
Investor (as indicated by the box checked by the transferor
on the Certificate of Transfer on the reverse of the Note if
such Note is not in book-entry form) who has certified to
the Company and the Trustee for the Notes that such
transferee is an Institutional Accredited Investor and is
acquiring the Notes for investment purposes and not for
distribution, (provided that no Initial Foreign Purchaser or
any foreign purchaser who has purchased Notes from an
Initial Foreign Purchaser or from any person other than a
QIB or an Institutional Accredited Investor pursuant to
clause (iii) shall be permitted to transfer any Notes
purchased by it to an Institutional Accredited Investor
pursuant to this clause (iv) prior to the expiration of the
"40 day restricted period" (within the meaning of
Rule 903(c)(3) of Regulations under the Securities Act)),
(v) pursuant to an exemption from the registration under the
Securities Act provided by Rule 144 (if applicable under,
the Securities Act, or (vi) pursuant to an effective
registration statement under the Securities Act, in each
case in accordance with any applicable securities laws of
any state of the United States, (B) the purchaser will, and
each subsequent holder is required to, notify any purchaser
of Notes from it of the resale restrictions referred to in
(A) above, if then applicable, and (C) with respect to any
transfer of Notes by an Institutional Accredited Investor,
such holder will deliver to the Company and the Trustee such
certificates and other information as they may reasonably
require to confirm that the transfer by it complies with the
foregoing restrictions including, without limitation, a
certificate in the form of Exhibit A; and
(3) it understands that the notification requirement
referred to in (2) above will be satisfied in the case only
of transfer by physical delivery of certificated Notes other
than a global certificate by virtue of the fact that the
following legend will be placed on the Notes unless
otherwise agreed by the Company:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"). THE HOLDER HEREOF, BY PURCHASING THIS SECURITY,
AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS SECURI
TY MAY NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED
(X) PRIOR TO THE THIRD ANNIVERSARY OF THE ISSUANCE
HEREOF (OR ANY PREDECESSOR SECURITY HERETO) OR (Y) BY
ANY HOLDER THAT WAS AN AFFILIATE OF THE COMPANY AT ANY
<PAGE>
TIME DURING THE THREE MONTHS PRECEDING THE DATE OF SUCH
TRANSFER, IN EITHER CASE, OTHER THAN (1) TO THE COMPA
NY, (2) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
("RULE 144A"), TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A, PURCHASING FOR ITS OWN ACCOUNT OR
FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO
WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A (AS
INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE
CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS
SECURITY), (3) IN AN OFFSHORE TRANSACTION IN ACCORDANCE
WITH REGULATION S UNDER THE SECURITIES ACT (AS
INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE
CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS
SECURITY) OR (4) TO AN INSTITUTION THAT IS AN
"ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a)(1),
(2), (3) OR (7) UNDER THE SECURITIES ACT (AS INDICATED
BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE
OF TRANSFER ON THE REVERSE OF THIS SECURITY) THAT IS
ACQUIRING THIS SECURITY FOR INVESTMENT PURPOSES AND NOT
FOR DISTRIBUTION, AND A CERTIFICATE IN THE FORM
ATTACHED TO THIS SECURITY IS DELIVERED BY THE
TRANSFEREE TO THE COMPANY AND THE TRUSTEE, IN EACH CASE
IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF
ANY STATE OF THE UNITED STATES. AN INSTITUTIONAL
ACCREDITED INVESTOR HOLDING THIS SECURITY AGREES THAT
IT WILL FURNISH TO THE COMPANY AND THE TRUSTEE SUCH
CERTIFICATES AND OTHER INFORMATION AS THEY MAY REASON
ABLY REQUIRE TO CONFIRM THAT ANY TRANSFER BY IT OF THIS
SECURITY COMPLIES WITH THE FOREGOING RESTRICTIONS. THE
HOLDER HEREOF, BY PURCHASING THIS SECURITY, REPRESENTS
AND AGREES FOR THE BENEFIT OF THE COMPANY THAT IT IS
(1) A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING
OF RULE 144A OR (2) AN INSTITUTION THAT IS AN "ACCREDIT
ED INVESTOR" AS DEFINED IN RULE 501(a)(1), (2), (3) OR
(7) UNDER THE SECURITIES ACT AND THAT IS HOLDING THIS
SECURITY FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBU
TION OR (3) A NON-U.S. PERSON OUTSIDE THE UNITED STATES
WITHIN THE MEANING OF (OR AN ACCOUNT SATISFYING THE
REQUIREMENTS OF PARAGRAPH (0)(2) OF RULE 902 UNDER)
REGULATION S UNDER THE SECURITIES ACT."
<PAGE>
(5) it (i) is able to fend for itself in the
transactions contemplated by this Offering Memorandum;
(ii) has such knowledge and experience in financial and
business matters as to be capable of evaluating the merits
and risks of it prospective investment in the Notes; and
(iii) has the ability to bear the economic risks of its
prospective investment and can afford the complete loss of
such investment; and
(6) it understands that the Company, the Initial
Purchasers and other will rely upon the truth and accuracy
of the foregoing acknowledgements, representations and
agreements and agrees that if any of the acknowledgements,
representations and warranties deemed to have been made by
it by its purchase of Notes are no longer accurate, it shall
promptly notify the Company and the Initial Purchaser. If
it is acquiring the Notes as a fiduciary or agent for one or
more investor accounts, it represents that it has sole
investment discretion with respect to each such account and
it has full power to make the foregoing acknowledgements,
representations and agreements on behalf of such account.
<PAGE>
EXHIBIT 4.2
<PAGE>
RIO HOTEL & CASINO, INC.
10 5/8% Senior Subordinated Notes Due July 15, 2005
REGISTRATION AGREEMENT
New York, New York
July 18, 1995
To: SALOMON BROTHERS INC
MONTGOMERY SECURITIES
In care of:
Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Dear Sirs:
Rio Hotel & Casino, Inc., a Nevada corporation
(the "Company"), proposes to issue and sell to certain purchasers
(the "Purchasers"), upon the terms set forth in a purchase
agreement of even date herewith (the "Purchase Agreement"), its
10 5/8% Senior Subordinated Notes due July 15, 2005 (the
"Securities") (the "Initial Placement"), which Securities are to
be unconditionally guaranteed on a senior subordinated and
unsecured basis by Rio Properties, Inc. (the "Guarantor"). As an
inducement to the Purchasers to enter into the Purchase Agreement
and in satisfaction of a condition to your obligations
thereunder, the Company agrees with you, (i) for your benefit and
the benefit of the other Purchasers and (ii) for the benefit of
the holders from time to time of the Securities (including you
and the other Purchasers) (each of the foregoing a "Holder" and
together the "Holders"), as follows:
1. DEFINITIONS. Capitalized terms used herein without
definition shall have their respective meanings set forth in the
Purchase Agreement. As used in this Agreement, the following
capitalized defined terms shall have the following meanings:
<PAGE>
"ACT" means the Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated
thereunder.
"AFFILIATE" of any specified person means any other
person which, directly or indirectly, is in control of, is
controlled by, or is under common control with, such specified
person. For purposes of this definition, control of a person
means the power, direct or indirect, to direct or cause the
direction of the management and policies of such person whether
by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"CLOSING DATE" has the meaning set forth in the
Purchase Agreement.
"COMMISSION" means the Securities and Exchange
Commission.
"EXCHANGE ACT" means the Securities Exchange Act of
1934, as amended, and the rules and regulations of the Commission
promulgated thereunder.
"EXCHANGE OFFER REGISTRATION PERIOD" means the 1 year
period following the consummation of the Registered Exchange
Offer, exclusive of any period during which any stop order shall
be in effect suspending the effectiveness of the Exchange Offer
Registration Statement.
"EXCHANGE OFFER REGISTRATION STATEMENT" means a
registration statement of the Company on an appropriate form
under the Act with respect to the Registered Exchange Offer, all
amendments and supplements to such registration statement,
including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"EXCHANGING DEALER" means any Holder (which may include
the Purchasers) which is a broker-dealer, electing to exchange
Securities acquired for its own account as a result of market-
making activities or other trading activities, for New
Securities.
"FINAL MEMORANDUM" has the meaning set forth in the
Purchase Agreement.
"HOLDER" has the meaning set forth in the preamble
hereto.
"INDENTURE" means the Indenture relating to the
Securities dated as of , 1995, between the Company, the
Guarantor and IBJ Schroder Bank and Trust Company, as trustee, as
the same may be amended from time to time in accordance with the
terms thereof.
"INITIAL PLACEMENT" has the meaning set forth in the
preamble hereto.
<PAGE>
"MAJORITY HOLDERS" means the Holders of a majority of
the aggregate principal amount of securities registered under a
Registration Statement.
"MANAGING UNDERWRITERS" means the investment banker or
investment bankers and manager or managers that shall administer
an underwritten offering.
"NEW SECURITIES" means debt securities of the Company
identical in all material respects to the Securities (except that
the cash interest and interest rate step-up provisions and the
transfer restrictions will be modified or eliminated, as
appropriate), to be issued under the Indenture or the New
Securities Indenture.
"NEW SECURITIES INDENTURE" means an indenture between
the Company and the New Securities Trustee, identical in all
material respects with the Indenture (except that the cash
interest and interest rate step-up provisions will be modified or
eliminated, as appropriate).
"NEW SECURITIES TRUSTEE" means a bank or trust company
reasonably satisfactory to the Purchaser, as trustee with respect
to the New Securities under the New Securities Indenture.
"PROSPECTUS" means the prospectus included in any
Registration Statement (including, without limitation, a
prospectus that discloses information previously omitted from a
prospectus filed as part of an effective registration statement
in reliance upon Rule 430A under the Act), as amended or
supplemented by any prospectus supplement, with respect to the
terms of the offering of any portion of the Securities or the New
Securities, covered by such Registration Statement, and all
amendments and supplements to the Prospectus, including post-
effective amendments.
"REGISTERED EXCHANGE OFFER" means the proposed offer to
the Holders to issue and deliver to such Holders, in exchange for
the Securities, a like principal amount of the New Securities.
"REGISTRATION STATEMENT" means any Exchange Offer
Registration Statement or Shelf Registration Statement that
covers any of the Securities or the New Securities pursuant to
the provisions of this Agreement, amendments and supplements to
such registration statement, including post-effective amendments,
in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference
therein.
"SECURITIES" has the meaning set forth in the preamble
hereto.
"SHELF REGISTRATION" means a registration effected
pursuant to Section 3 hereof.
<PAGE>
"SHELF REGISTRATION PERIOD" has the meaning set forth
in Section 3(b) hereof.
"SHELF REGISTRATION STATEMENT" means a "shelf"
registration statement of the Company pursuant to the provisions
of Section 3 hereof which covers some or all of the Securities or
New Securities, as applicable, on an appropriate form under
Rule 415 under the Act, or any similar rule that may be adopted
by the Commission, amendments and supplements to such
registration statement, including post-effective amendments, in
each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference
therein.
"TRUSTEE" means the trustee with respect to the
Securities under the Indenture.
"UNDERWRITER" means any underwriter of Securities in
connection with an offering thereof under a Shelf Registration
Statement.
2. REGISTERED EXCHANGE OFFER; RESALES OF NEW
SECURITIES BY EXCHANGING DEALERS; PRIVATE EXCHANGE. (a) The
Company shall prepare and, not later than 45 days following the
Closing Date, shall file with the Commission the Exchange Offer
Registration Statement with respect to the Registered Exchange
Offer. The Company shall cause the Exchange Offer Registration
Statement to become effective under the Act within 120 days of
the Closing Date.
(b) Upon the effectiveness of the Exchange Offer
Registration Statement, the Company shall promptly commence the
Registered Exchange Offer, it being the objective of such
Registered Exchange Offer to enable each Holder electing to
exchange Securities for New Securities (assuming that such Holder
is not an affiliate of the Company within the meaning of the Act,
acquires the New Securities in the ordinary course of such
Holder's business and has no arrangements with any person to
participate in the distribution of the New Securities) to trade
such New Securities from and after their receipt without any
limitations or restrictions under the Act and without material
restrictions under the securities laws of a substantial
proportion of the several states of the United States.
(c) In connection with the Registered Exchange Offer,
the Company shall:
(i) mail to each Holder a copy of the Prospectus
forming part of the Exchange Offer Registration Statement,
together with an appropriate letter of transmittal and
related documents;
(ii) keep the Registered Exchange Offer open for not less
than 30 days and not more than 45 days after the date notice
thereof is mailed to the Holders (or longer if required by
applicable law);
<PAGE>
(iii) utilize the services of a depositary for the
Registered Exchange Offer with an address in the Borough of
Manhattan, The City of New York; and
(iv) comply in all respects with all applicable laws.
(d) As soon as practicable after the close of the
Registered Exchange Offer, the Company shall:
(i) accept for exchange all Securities tendered and not
validly withdrawn pursuant to the Registered Exchange Offer;
(ii) deliver to the Trustee for cancellation all
Securities so accepted for exchange; and
(iii) cause the Trustee or the New Securities Trustee,
as the case may be, promptly to authenticate and deliver to
each Holder of Securities New Securities equal in principal
amount to the Securities of such Holder so accepted for
exchange.
(e) The Purchasers and the Company acknowledge that,
pursuant to interpretations by the Commission's staff of
Section 5 of the Act, and in the absence of an applicable
exemption therefrom, each Exchanging Dealer is required to
deliver a Prospectus in connection with a sale of any New
Securities received by such Exchanging Dealer pursuant to the
Registered Exchange Offer in exchange for Securities acquired for
its own account as a result of market-making activities or other
trading activities. Accordingly, the Company shall:
(i) include the information set forth in Annex A hereto
on the cover of the Exchange Offer Registration Statement,
in Annex B hereto in the forepart of the Exchange Offer
Registration Statement in a section setting forth details of
the Exchange Offer, and in Annex C hereto in the
underwriting or plan of distribution section of the
Prospectus forming a part of the Exchange Offer Registration
Statement, and include the information set forth in Annex D
hereto in the Letter of Transmittal delivered pursuant to
the Registered Exchange Offer; and
(ii) use its best efforts to keep the Exchange Offer
Registration Statement continuously effective under the Act
during the Exchange Offer Registration Period for delivery
by Exchanging Dealers in connection with sales of New
Securities received pursuant to the Registered Exchange
Offer, as contemplated by Section 4(h) below.
(f) In the event that any Purchaser determines that it
is not eligible to participate in the Registered Exchange Offer
<PAGE>
with respect to the exchange of Securities constituting any
portion of an unsold allotment, at the request of such Purchaser,
the Company shall issue and deliver to such Purchaser or the
party purchasing New Securities registered under a Shelf
Registration Statement as contemplated by Section 3 hereof from
such Purchaser, in exchange for such Securities, a like principal
amount of New Securities. The Company shall seek to cause the
CUSIP Service Bureau to issue the same CUSIP number for such New
Securities as for New Securities issued pursuant to the
Registered Exchange Offer.
3. SHELF REGISTRATION. If, (i) because of any change
in law or applicable interpretations thereof by the Commission's
staff, the Company determines upon advice of its outside counsel
that it is not permitted to effect the Registered Exchange Offer
as contemplated by Section 2 hereof, or (ii) if for any other
reason the Registered Exchange Offer is not declared effective
within 120 days of the date hereof, or (iii) if any Purchaser so
requests with respect to Securities held by it following
consummation of the Registered Exchange Offer, or (iv) if any
Holder (other than a Purchaser) is not eligible to participate in
the Registered Exchange Offer or (v) in the case of any Purchaser
that participates in the Registered Exchange Offer or acquires
New Securities pursuant to Section 2(f) hereof, such Purchaser
does not receive freely tradeable New Securities in exchange for
Securities constituting any portion of an unsold allotment (it
being understood that, for purposes of this Section 3, (x) the
requirement that a Purchaser deliver a Prospectus containing the
information required by Items 507 and/or 508 of Regulation S-K
under the Act in connection with sales of New Securities acquired
in exchange for such Securities shall result in such New
Securities being not "freely tradeable" but (y) the requirement
that an Exchanging Dealer deliver a Prospectus in connection with
sales of New Securities acquired in the Registered Exchange Offer
in exchange for Securities acquired as a result of market-making
activities or other trading activities shall not result in such
New Securities being not "freely tradeable"), the following
provisions shall apply:
(a) The Company shall as promptly as practicable (but
in no event more than 30 days after so required or requested
pursuant to this Section 3), file with the Commission and
thereafter shall cause to be declared effective under the Act by
the 150th day after the original issuance of the Securities a
Shelf Registration Statement relating to the offer and sale of
the Securities or the New Securities, as applicable, by the
Holders from time to time in accordance with the methods of
distribution elected by such Holders and set forth in such Shelf
Registration Statement; PROVIDED, that with respect to New
Securities received by a Purchaser in exchange for Securities
constituting any portion of an unsold allotment, the Company may,
if permitted by current interpretations by the Commission's
staff, file a post-effective amendment to the Exchange Offer
Registration Statement containing the information required by
Regulation S-K Items 507 and/or 508, as applicable, in
satisfaction of its obligations under this paragraph (a) with
respect thereto, and any such Exchange Offer Registration
Statement, as so amended, shall be referred to herein as, and
governed by the provisions herein applicable to, a Shelf
Registration Statement.
<PAGE>
(b) The Company shall keep the Shelf Registration
Statement continuously effective in order to permit the
Prospectus forming part thereof to be usable by Holders for a
period of three years from the date the Shelf Registration
Statement is declared effective by the Commission or until one
year after such effective date if such Shelf Registration
Statement is filed at the request of a Purchaser (in any such
case, such period being called the "Shelf Registration Period").
The Company shall be deemed not to have used its best efforts to
keep the Shelf Registration Statement effective during the
requisite period if it voluntarily takes any action that would
result in Holders of securities covered thereby not being able to
offer and sell such securities during that period, unless
(i) such action is required by applicable law, or (ii) such
action is taken by the Company in good faith and for valid
business reasons (not including avoidance of the Company's
obligations hereunder), including the acquisition or divestiture
of assets, so long as the Company promptly thereafter complies
with the requirements of Section 4(k) hereof, if applicable.
4. REGISTRATION PROCEDURES. In connection with any
Shelf Registration Statement and, to the extent applicable, any
Exchange Offer Registration Statement, the following provisions
shall apply:
(a) The Company shall furnish to you and to each
Holder, prior to the filing thereof with the Commission, a
copy of any Shelf Registration Statement and any Exchange
Offer Registration Statement, and each amendment thereof and
each amendment or supplement, if any, to the Prospectus
included therein and shall use its best efforts to reflect
in each such document, when so filed with the Commission,
such comments as you or any Holder reasonably may propose.
(b) The Company shall ensure that (i) any Registration
Statement and any amendment thereto and any Prospectus
forming part thereof and any amendment or supplement thereto
complies in all material respects with the Act and the rules
and regulations thereunder, (ii) any Registration Statement
and any amendment thereto does not, when it becomes
effective, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading
and (iii) any Prospectus forming part of any Registration
Statement, and any amendment or supplement to such
Prospectus, does not include an untrue statement of a
material fact or omit to state a material fact necessary in
order to make the statements, in the light of the
circumstances under which they were made, not misleading.
<PAGE>
(c) (1) The Company shall advise you and, in the case
of a Shelf Registration Statement, the Holders of securities
covered thereby, and, if requested by you or any such
Holder, confirm such advice in writing:
(i) when a Registration Statement and any amendment
thereto has been filed with the Commission and when the
Registration Statement or any post-effective amendment
thereto has become effective; and
(ii) of any request by the Commission for
amendments or supplements to the Registration Statement
or the Prospectus included therein or for additional
information.
(2) The Company shall advise you and, in
the case of a Shelf Registration Statement, the Holders of
securities covered thereby, and, in the case of an Exchange Offer
Registration Statement, any Exchanging Dealer which has
provided in writing to the Company a telephone or facsimile
number and address for notices, and, if requested by you or
any such Holder or Exchanging Dealer, confirm such advice in
writing:
(i) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that
purpose;
(ii) of the receipt by the Company of any
notification with respect to the suspension of the
qualification of the securities included therein for
sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and
(iii) of the happening of any event that
requires the making of any changes in the Registration
Statement or the Prospectus so that, as of such date,
the statements therein are not misleading and do not
omit to state a material fact required to be stated
therein or necessary to make the statements therein (in
the case of the Prospectus, in light of the
circumstances under which they were made) not
misleading (which advice shall be accompanied by an
instruction to suspend the use of the Prospectus until
the requisite changes have been made).
(d) The Company shall use its best efforts to obtain
the withdrawal of any order suspending the effectiveness of
any Registration Statement at the earliest possible time.
(e) The Company shall furnish to each Holder of
securities included within the coverage of any Shelf
Registration Statement, without charge, at least one copy of
such Shelf Registration Statement and any post-effective
<PAGE>
amendment thereto, including financial statements and
schedules, and, if the Holder so requests in writing, all
exhibits (including those incorporated by reference).
(f) The Company shall, during the Shelf Registration
Period, deliver to each Holder of securities included within
the coverage of any Shelf Registration Statement, without
charge, as many copies of the Prospectus (including each
preliminary Prospectus) included in such Shelf Registration
Statement and any amendment or supplement thereto as such
Holder may reasonably request; and the Company consents to
the use of the Prospectus or any amendment or supplement
thereto by each of the selling Holders of securities in
connection with the offering and sale of the securities
covered by the Prospectus or any amendment or supplement
thereto.
(g) The Company shall furnish to each Exchanging
Dealer which so requests, without charge, at least one copy
of the Exchange Offer Registration Statement and any post-
effective amendment thereto, including financial statements
and schedules, any documents incorporated by reference
therein, and, if the Exchanging Dealer so requests in
writing, all exhibits (including those incorporated by
reference).
(h) The Company shall, during the Exchange Offer
Registration Period, promptly deliver to each Exchanging
Dealer, without charge, as many copies of the Prospectus
included in such Exchange Offer Registration Statement and
any amendment or supplement thereto as such Exchanging
Dealer may reasonably request for delivery by such
Exchanging Dealer in connection with a sale of New
Securities received by it pursuant to the Registered
Exchange Offer; and the Company consents to the use of the
Prospectus or any amendment or supplement thereto by any
such Exchanging Dealer, as aforesaid.
(i) Prior to the Registered Exchange Offer or any
other offering of securities pursuant to any Registration
Statement, the Company shall register or qualify or cooperate
with the Holders of securities included therein and their
respective counsel in connection with the registration or
qualification of such securities for offer and sale under the
securities or blue sky laws of such jurisdictions as any such
Holders reasonably request in writing and do any and all other
acts or things necessary or advisable to enable the offer and
sale in such jurisdictions of the securities covered by such
Registration Statement; PROVIDED, HOWEVER, that the Company will
not be required to qualify generally to do business in any
jurisdiction where it is not then so qualified or to take any
action which would subject it to general service of process or to
taxation in any such jurisdiction where it is not then so
subject.
(j) The Company shall cooperate with the Holders of
Securities to facilitate the timely preparation and delivery
of certificates representing Securities to be sold pursuant
to any Registration Statement free of any restrictive
<PAGE>
legends and in such denominations and registered in such
names as Holders may request prior to sales of securities
pursuant to such Registration Statement.
(k) Upon the occurrence of any event contemplated by
paragraph (c)(2)(iii) above, the Company shall promptly
prepare a post-effective amendment to any Registration
Statement or an amendment or supplement to the related
Prospectus or file any other required document so that, as
thereafter delivered to purchasers of the securities
included therein, the Prospectus will not include an untrue
statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not
misleading.
(l) Not later than the effective date of any such
Registration Statement hereunder, the Company shall provide
a CUSIP number for the Securities or New Securities, as the
case may be, registered under such Registration Statement,
and provide the applicable trustee with printed certificates
for such Securities or New Securities, in a form eligible
for deposit with The Depository Trust Company.
(m) The Company shall use its best efforts to comply
with all applicable rules and regulations of the Commission
and shall make generally available to its security holders
as soon as practicable after the effective date of the
applicable Registration Statement an earnings statement
satisfying the provisions of Section 11(a) of the Act.
(n) The Company shall cause the Indenture or the New
Securities Indenture, as the case may be, to be qualified
under the Trust Indenture Act in a timely manner.
(o) The Company may require each Holder of securities
to be sold pursuant to any Shelf Registration Statement to
furnish to the Company such information regarding the holder
and the distribution of such securities as the Company may
from time to time reasonably require for inclusion in such
Registration Statement.
(p) The Company shall, if requested, promptly
incorporate in a Prospectus supplement or post-effective
amendment to a Shelf Registration Statement, such
information as the Managing Underwriters and Majority
Holders reasonably agree should be included therein and
shall make all required filings of such Prospectus
supplement or post-effective amendment as soon as notified
of the matters to be incorporated in such Prospectus
supplement or post-effective amendment.
<PAGE>
(q) In the case of any Shelf Registration Statement,
the Company shall enter into such agreements (including
underwriting agreements) and take all other appropriate
actions in order to expedite or facilitate the registration
or the disposition of the Securities, and in connection
therewith, if an underwriting agreement is entered into,
cause the same to contain indemnification provisions and
procedures no less favorable than those set forth in Section
6 (or such other provisions and procedures acceptable to the
Majority Holders and the Managing Underwriters, if any, with
respect to all parties to be indemnified pursuant to Section
6 from Holders of Securities to the Company.
(r) In the case of any Shelf Registration Statement,
the Company shall (i) make reasonably available for inspection by
the Holders of securities to be registered thereunder, any
underwriter participating in any disposition pursuant to such
Registration Statement, and any attorney, accountant or other
agent retained by the Holders or any such underwriter all
relevant financial and other records, pertinent corporate
documents and properties of the Company and its subsidiaries;
(ii) cause the Company's officers, directors and employees to
supply all relevant information reasonably requested by the
Holders or any such underwriter, attorney, accountant or agent in
connection with any such Registration Statement as is customary
for similar due diligence examinations; PROVIDED, HOWEVER, that
any information that is designated in writing by the Company, in
good faith, as confidential at the time of delivery of such
information shall be kept confidential by the Holders or any such
underwriter, attorney, accountant or agent, unless such
disclosure is made in connection with a court proceeding or
required by law, or such information becomes available to the
public generally or through a third party without an accompanying
obligation of confidentiality; (iii) make such representations
and warranties to the Holders of securities registered thereunder
and the underwriters, if any, in form, substance and scope as are
customarily made by issuers to underwriters in primary
underwritten offerings and covering matters including, but not
limited to, those set forth in the Purchase Agreement; (iv)
obtain opinions of counsel to the Company and updates thereof
(which counsel and opinions (in form, scope and substance) shall
be reasonably satisfactory to the Managing Underwriters, if any)
addressed to each selling Holder and the underwriters, if any,
covering such matters as are customarily covered in opinions
requested in underwritten offerings and such other matters as may
be reasonably requested by such Holders and underwriters; (v)
obtain "cold comfort" letters and updates thereof from the
independent certified public accountants of the Company (and, if
necessary, any other independent certified public accountants of
any subsidiary of the Company or of any business acquired by the
Company for which financial statements and financial data are, or
are required to be, included in the Registration Statement),
addressed to each selling Holder of securities registered
thereunder and the underwriters, if any, in customary form and
covering matters of the type customarily covered in "cold
comfort" letters in connection with primary underwritten
<PAGE>
offerings; and (vi) deliver such documents and certificates as
may be reasonably requested by the Majority Holders and the
Managing Underwriters, if any, including those to evidence
compliance with Section 4(k) and with any customary conditions
contained in the underwriting agreement or other agreement
entered into by the Company. The foregoing actions set forth in
clauses (iii), (iv), (v) and (vi) of this Section 4(r) shall be
performed at (A) the effectiveness of such Registration Statement
and each post-effective amendment thereto and (B) each closing
under any underwriting or similar agreement as and to the extent
required thereunder.
(s) In the case of any Exchange Offer Registration
Statement, the Company shall (i) make reasonably available for
inspection by such Purchaser, and any attorney, accountant or
other agent retained by such Purchaser, all relevant financial
and other records, pertinent corporate documents and properties
of the Company and its subsidiaries; (ii) cause the Company's
officers, directors and employees to supply all relevant
information reasonably requested by such Purchaser or any such
attorney, accountant or agent in connection with any such
Registration Statement as is customary for similar due diligence
examinations; PROVIDED, HOWEVER, that any information that is
designated in writing by the Company, in good faith, as
confidential at the time of delivery of such information shall be
kept confidential by such Purchaser or any such attorney,
accountant or agent, unless such disclosure is made in connection
with a court proceeding or required by law, or such information
becomes available to the public generally or through a third
party without an accompanying obligation of confidentiality;
(iii) make such representations and warranties to such Purchaser,
in form, substance and scope as are customarily made by issuers
to underwriters in primary underwritten offerings and covering
matters including, but not limited to, those set forth in the
Purchase Agreement; (iv) obtain opinions of counsel to the
Company and updates thereof (which counsel and opinions (in form,
scope and substance) shall be reasonably satisfactory to such
Purchaser and its counsel, addressed to such Purchaser, covering
such matters as are customarily covered in opinions requested in
underwritten offerings and such other matters as may be
reasonably requested by such Purchaser or its counsel; (v) obtain
"cold comfort" letters and updates thereof from the independent
certified public accountants of the Company (and, if necessary,
any other independent certified public accountants of any
subsidiary of the Company or of any business acquired by the
Company for which financial statements and financial data are, or
are required to be, included in the Registration Statement),
addressed to such Purchaser, in customary form and covering
matters of the type customarily covered in "cold comfort" letters
in connection with primary underwritten offerings, or if
requested by such Purchaser or its counsel in lieu of a "cold
comfort" letter, an agreed-upon procedures letter under Statement
on Auditing Standards No. 35, covering matters requested by such
Purchaser or its counsel; and (vi) deliver such documents and
certificates as may be reasonably requested by such Purchaser or
its counsel, including those to evidence compliance with Section
<PAGE>
4(k) and with conditions customarily contained in underwriting
agreements. The foregoing actions set forth in clauses (iii),
(iv), (v), and (vi) of this Section 4(s) shall be performed at
the close of the Registered Exchange Offer and the effective date
of any post-effective amendment to the Exchange Offer
Registration Statement.
5. REGISTRATION EXPENSES. The Company shall bear all
expenses incurred in connection with the performance of its
obligations under Sections 2, 3 and 4 hereof and, in the event of
any Shelf Registration Statement, will reimburse the Holders for
the reasonable fees and disbursements of one firm or counsel
designated by the Majority Holders to act as counsel for the
Holders in connection therewith, and, in the case of any Exchange
Offer Registration Statement, will reimburse the Purchasers for
the reasonable fees and disbursements of counsel acting in
connection therewith.
6. INDEMNIFICATION AND CONTRIBUTION. (a) In
connection with any Registration Statement, the Company agrees to
indemnify and hold harmless each Holder of securities covered
thereby (including each Purchaser and, with respect to any
Prospectus delivery as contemplated in Section 4(h) hereof, each
Exchanging Dealer), the directors, officers, employees and agents
of each such Holder and each person who controls any such Holder
within the meaning of either the Act or the Exchange Act against
any and all losses, claims, damages or liabilities, joint or
several, to which they or any of them may become subject under
the Act, the Exchange Act or other Federal or state statutory law
or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement as originally filed or in any amendment
thereof, or in any preliminary Prospectus or Prospectus, or in
any amendment thereof or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to
make the statements therein not misleading, and agrees to
reimburse each such indemnified party, as incurred, for any legal
or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage,
liability or action; PROVIDED, HOWEVER, that the Company will not
be liable in any case to the extent that any such loss, claim,
damage or liability arises out of or is based upon any such
untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity
with written information furnished to the Company by or on behalf
of any such Holder specifically for inclusion therein. This
indemnity agreement will be in addition to any liability which
the Company may otherwise have.
The Company also agrees to indemnify or contribute to
Losses of, as provided in Section 6(d), any underwriters of
Securities registered under a Shelf Registration Statement, their
officers and directors and each person who controls such
underwriters on substantially the same basis as that of the
indemnification of the Purchaser and the selling Holders provided
<PAGE>
in this Section 6(a) and shall, if requested by any Holder,
enter into an underwriting agreement reflecting such agreement,
as provided in Section 4(q) hereof.
(b) Each Holder of securities covered by a
Registration Statement (including each Purchaser and, with
respect to any Prospectus delivery as contemplated in Section
4(h) hereof, each Exchanging Dealer) severally agrees to
indemnify and hold harmless (i) the Company, (ii) each of its
directors, (iii) each of its officers who signs such Registration
Statement and (iv) each person who controls the Company within
the meaning of either the Act or the Exchange Act to the same
extent as the foregoing indemnity from the Company to each such
Holder, but only with reference to written information relating
to such Holder furnished to the Company by or on behalf of such
Holder specifically for inclusion in the documents referred to in
the foregoing indemnity. This indemnity agreement will be in
addition to any liability which any such Holder may otherwise
have.
(c) Promptly after receipt by an indemnified party
under this Section 6 or notice of the commencement of any action,
such indemnified party will, if a claim in respect thereof is to
be made against the indemnifying party under this Section 6,
notify the indemnifying party in writing of the commencement
thereof; but the failure so to notify the indemnifying party
(i) will not relieve it from liability under paragraph (a) or (b)
above unless and to the extent it did not otherwise learn of such
action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and
(ii) will not, in any event, relieve the indemnifying party from
any obligations to any indemnified party other than the
indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint
counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action
for which indemnification is sought (in which case the
indemnifying party shall not thereafter be responsible for the
fees and expenses of any separate counsel retained by the
indemnified party or parties except as set forth below);
PROVIDED, HOWEVER, that such counsel shall be satisfactory to the
indemnified party. Notwithstanding the indemnifying party's
election to appoint counsel to represent the indemnified party in
an action, the indemnified party shall have the right to employ
separate counsel (including local counsel), and the indemnifying
party shall bear the reasonable fees, costs and expenses of such
separate counsel (and local counsel) if (i) the use of counsel
chosen by the indemnifying party to represent the indemnified
party would present such counsel with a conflict of interest,
(ii) the actual or potential defendants in, or targets of, any
such action include both the indemnified party and the
indemnifying party and the indemnified party shall have
reasonably concluded that there may be legal defenses available
to it and/or other indemnified parties which are different from
or additional to those available to the indemnifying party,
(iii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of the
institution of such action or (iv) the indemnifying party shall
authorize the indemnified party to employ separate counsel at the
expense of the indemnifying party. An indemnifying party will
not, without the prior written consent of the indemnified
<PAGE>
parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action,
suit or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim
or action) unless such settlement, compromise or consent includes
an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in
paragraph (a) or (b) of this Section 6 is unavailable to or
insufficient to hold harmless an indemnified party for any
reason, then each applicable indemnifying party, in lieu of
indemnifying such indemnified party, shall have a joint and
several obligation to contribute to the aggregate losses, claims,
damages and liabilities (including legal or other expenses
reasonably incurred in connection with investigating or defending
same) (collectively "Losses") to which such indemnified party may
be subject in such proportion as is appropriate to reflect the
relative benefits received by such indemnifying party, on the one
hand, and such indemnified party, on the other hand, from the
Initial Placement and the Registration Statement which resulted
in such Losses; PROVIDED, HOWEVER, that in no case shall any
Purchaser or any subsequent Holder of any Security or New
Security be responsible, in the aggregate, for any amount in
excess of the purchase discount or commission applicable to such
Security, or in the case of a New Security, applicable to the
Security which was exchangeable into such New Security, as set
forth on the cover page of the Final Memorandum, nor shall any
underwriter be responsible for any amount in excess of the
underwriting discount or commission applicable to the securities
purchased by such underwriter under the Registration Statement
which resulted in such Losses. If the allocation provided by the
immediately preceding sentence is unavailable for any reason, the
indemnifying party and the indemnified party shall contribute in
such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of such
indemnifying party, on the one hand, and such indemnified party,
on the other hand, in connection with the statements or omissions
which resulted in such Losses as well as any other relevant
equitable considerations. Benefits received by the Company shall
be deemed to be equal to the sum of (x) the total net proceeds
from the Initial Placement (before deducting expenses) as set
forth on the cover page of the Final Memorandum and (y) the total
amount of additional interest which the Company was not required
to pay as a result of registering the securities covered by the
Registration Statement which resulted in such Losses. Benefits
received by the Purchasers shall be deemed to be equal to the
total purchase discounts and commissions as set forth on the
cover page of the Final Memorandum, and benefits received by any
other Holders shall be deemed to be equal to the value of
receiving Securities or New Securities, as applicable, registered
under the Act. Benefits received by any underwriter shall be
deemed to be equal to the total underwriting discounts and
commissions, as set forth on the cover page of the Prospectus
forming a part of the Registration Statement which resulted in
such Losses. Relative fault shall be determined by reference to
whether any alleged untrue statement or omission relates to
information provided by the indemnifying party, on the one hand,
<PAGE>
or by the indemnified party, on the other hand. The parties
agree that it would not be just and equitable if contribution
were determined by pro rata allocation or any other method of
allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions
of this paragraph (d), no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. For purposes of
this Section 6, each person who controls a Holder within the
meaning of either the Act or the Exchange Act and each director,
officer, employee and agent of such Holder shall have the same
rights to contribution as such Holder, and each person who
controls the Company within the meaning of either the Act or the
Exchange Act, each officer of the Company who shall have signed
the Registration Statement and each director of the Company shall
have the same rights to contribution as the Company, subject in
each case to the applicable terms and conditions of this
paragraph (d).
(e) The provisions of this Section 6 will remain in
full force and effect, regardless of any investigation made by or
on behalf of any Holder or the Company or any of the officers,
directors or controlling persons referred to in Section 6 hereof,
and will survive the sale by a Holder of securities covered by a
Registration Statement.
7. MISCELLANEOUS.
(a) NO INCONSISTENT AGREEMENTS. The Company has not,
as of the date hereof, entered into, nor shall it, on or after
the date hereof, enter into, any agreement with respect to its
securities that is inconsistent with the rights granted to the
Holders herein or otherwise conflicts with the provisions hereof.
(b) AMENDMENTS AND WAIVERS. The provisions of this
Agreement, including the provisions of this sentence, may not be
amended, qualified, modified or supplemented, and waivers or
consents to departures from the provisions hereof may not be
given, unless the Company has obtained the written consent of the
Holders of at least a majority of the then outstanding aggregate
principal amount of Securities (or, after the consummation of any
Exchange Offer in accordance with Section 2 hereof, of New
Securities); PROVIDED that, with respect to any matter that
directly or indirectly affects the rights of any Purchaser
hereunder, the Company shall obtain the written consent of each
such Purchaser against which such amendment, qualification,
supplement, waiver or consent is to be effective.
Notwithstanding the foregoing (except the foregoing proviso), a
waiver or consent to departure from the provisions hereof with
respect to a matter that relates exclusively to the rights of
Holders whose securities are being sold pursuant to a
Registration Statement and that does not directly or indirectly
affect the rights of other Holders may be given by the Majority
Holders, determined on the basis of securities being sold rather
than registered under such Registration Statement.
<PAGE>
(c) NOTICES. All notices and other communications
provided for or permitted hereunder shall be made in writing by
hand-delivery, first-class mail, telex, telecopier, or air
courier guaranteeing overnight delivery:
(1) if to a Holder, at the most current
address given by such holder to the Company in
accordance with the provisions of this Section 7(c),
which address initially is, with respect to each
Holder, the address of such Holder maintained by the
Registrar under the Indenture, with a copy in like
manner to Salomon Brothers Inc;
(2) if to you, initially at the respective
addresses set forth in the Purchase Agreement; and
(3) if to the Company, initially at its
address set forth in the Purchase Agreement.
All such notices and communications shall be deemed to
have been duly given when received.
The Purchasers or the Company by notice to the other
may designate additional or different addresses for subsequent
notices or communications.
(d) SUCCESSORS AND ASSIGNS. This Agreement shall
inure to the benefit of and be binding upon the successors and
assigns of each of the parties, including, without the need for
an express assignment or any consent by the Company thereto,
subsequent Holders of Securities and/or New Securities. The
Company hereby agrees to extend the benefits of this Agreement to
any Holder of Securities and/or New Securities and any such
Holder may specifically enforce the provisions of this Agreement
as if an original party hereto.
(e) COUNTERPARTS. This agreement may be executed in
any number of counterparts and by the parties hereto in separate
counterparts, each of which when so executed shall be deemed to
be an original and all of which taken together shall constitute
one and the same agreement.
(f) HEADINGS. The headings in this agreement are for
convenience of reference only and shall not limit or otherwise
affect the meaning hereof.
(g) GOVERNING LAW. This agreement shall be governed
by and construed in accordance with the internal laws of the
State of New York applicable to agreements made and to be
performed in said State.
(h) SEVERABILITY. In the event that any one of more
of the provisions contained herein, or the application thereof in
any circumstances, is held invalid, illegal or unenforceable in
<PAGE>
any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and
of the remaining provisions hereof shall not be in any way
impaired or affected thereby, it being intended that all of the
rights and privileges of the parties shall be enforceable to the
fullest extent permitted by law.
(i) SECURITIES HELD BY THE COMPANY, ETC. Whenever the
consent or approval of Holders of a specified percentage of
principal amount of Securities or New Securities is required
hereunder, Securities or New Securities, as applicable, held by
the Company or its Affiliates (other than subsequent Holders of
Securities or New Securities if such subsequent Holders are
deemed to be Affiliates solely by reason of their holdings of
such Securities or New Securities) shall not be counted in
determining whether such consent or approval was given by the
Holders of such required percentage.
<PAGE>
Please confirm that the foregoing correctly sets forth
the agreement between the Company and you.
Very truly yours,
RIO HOTEL & CASINO, INC.
By: /s/ Harlan D. Braaten
Name: Harlan D. Braaten
Title: Senior Vice President
Accepted in New York, New York
July 18, 1995
SALOMON BROTHERS INC
MONTGOMERY SECURITIES
By: SALOMON BROTHERS INC
By: /s/ Wendell M. Brooks
Name: Wendell M. Brooks
Title: Vice President
<PAGE>
EXHIBIT 4.3
<PAGE>
___________________________________________________________
___________________________________________________________
RIO HOTEL & CASINO, INC.,
Issuer
10 5/8% Senior Subordinated Notes Due July 15, 2005
RIO PROPERTIES, INC.,
Guarantor
________________________
INDENTURE
Dated as of July 21, 1995
_________________________
IBJ SCHRODER BANK & TRUST COMPANY,
Trustee
___________________________________________________________
___________________________________________________________
<PAGE>
CROSS-REFERENCE TABLE
TIA INDENTURE
SECTION SECTION
310(a)(1) .............................. 7.10
(a)(2) .............................. 7.10
(a)(3) .............................. N.A.
(a)(4) .............................. N.A.
(b) .............................. 7.08; 7.10
(c) .............................. N.A.
311(a) .............................. 7.11
(b) .............................. 7.11
(c) .............................. N.A.
312(a) .............................. 2.05
(b) .............................. 12.03
(c) .............................. 12.03
313(a) .............................. 7.06
(b)(1) .............................. N.A.
(b)(2) .............................. 7.06
(c) .............................. 12.02
(d) .............................. 7.06
314(a) .............................. 4.02;
4.10; 4.11;
12.02
(b) .............................. N.A.
(c)(1) .............................. 12.04
(c)(2) .............................. 12.04
(c)(3) .............................. N.A.
(d) .............................. N.A.
(e) .............................. 12.05
(f) .............................. 4.11
315(a) .............................. 7.01
(b) .............................. 7.05; 12.02
(c) .............................. 7.01
(d) .............................. 7.01
(e) .............................. 6.11
316(a)(last sentence) ....................... 12.06
(a)(1)(A) .............................. 6.05
(a)(1)(B) .............................. 6.04
(a)(2) .............................. N.A.
(b) .............................. 6.07
317(a)(1) .............................. 6.08
(a)(2) .............................. 6.09
(b) .............................. 2.04
318(a) .............................. 12.01
N.A. means Not Applicable.
Note: This Cross-Reference Table shall not, for any purpose, be
deemed to be part of the Indenture.
<PAGE>
TABLE OF CONTENTS
ARTICLE 1 PAGE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions ............................ 1
SECTION 1.02. Other Definitions ...................... 18
SECTION 1.03. Incorporation by Reference of Trust
Indenture Act ........................ 18
SECTION 1.04. Rules of Construction .................. 19
ARTICLE 2
THE SECURITIES
SECTION 2.01. Form and Dating ........................ 19
SECTION 2.02. Execution and Authentication ........... 21
SECTION 2.03. Registrar and Paying Agent ............. 22
SECTION 2.04. Paying Agent To Hold Money in Trust..... 22
SECTION 2.05. Securityholder Lists ................... 23
SECTION 2.06. Transfer and Exchange .................. 23
SECTION 2.07. Replacement Securities ................. 28
SECTION 2.08. Outstanding Securities ................. 28
SECTION 2.09. Temporary Securities ................... 29
SECTION 2.10. Cancellation ........................... 30
SECTION 2.11. Defaulted Interest ..................... 30
ARTICLE 3
REDEMPTION
SECTION 3.01. Notices to Trustee ..................... 30
SECTION 3.02. Selection of Securities To Be
Redeemed ............................. 31
SECTION 3.03. Notice of Redemption ................... 31
SECTION 3.04. Effect of Notice of Redemption ......... 32
SECTION 3.05. Deposit of Redemption Price ............ 32
SECTION 3.06. Securities Redeemed in Part ............ 32
<PAGE>
ARTICLE 4
COVENANTS
SECTION 4.01. Payment of Securities .................. 32
SECTION 4.02. SEC Reports ............................ 32
SECTION 4.03. Limitation on Indebtedness ............. 33
SECTION 4.04. Limitation on Restricted Payments ...... 34
SECTION 4.05. Limitation on Restrictions on Dis-
tributions from Subsidiaries ......... 36
SECTION 4.06. Limitation on Sales of Assets and
Subsidiary Stock ..................... 37
SECTION 4.07. Limitation on Transactions with
Affiliates ........................... 40
SECTION 4.08. Change of Control ...................... 40
SECTION 4.09. Limitation on Layered Indebtedness...... 42
SECTION 4.10. Compliance Certificate ................. 42
SECTION 4.11. Further Instruments and Acts ........... 42
SECTION 4.12. Limitation on Liens .................... 42
SECTION 4.13. Limitation on Issuance and Sale of
Capital Stock of Restricted
Subsidiaries ......................... 42
SECTION 4.14. Ownership of the Guarantor ............. 43
ARTICLE 5
SUCCESSOR COMPANY
SECTION 5.01. When Company May Merge or Transfer
Assets ............................... 43
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default ...................... 44
SECTION 6.02. Acceleration ........................... 46
SECTION 6.03. Other Remedies ......................... 46
SECTION 6.04. Waiver of Past Defaults ................ 46
SECTION 6.05. Control by Majority .................... 46
SECTION 6.06. Limitation on Suits .................... 47
SECTION 6.07. Rights of Holders To Receive Payment ... 47
SECTION 6.08. Collection Suit by Trustee ............. 47
SECTION 6.09. Trustee May File Proofs of Claim ....... 47
SECTION 6.10. Priorities ............................. 48
SECTION 6.11. Undertaking for Costs .................. 48
SECTION 6.12. Waiver of Stay or Extension Laws ....... 48
<PAGE>
ARTICLE 7
TRUSTEE
SECTION 7.01. Duties of Trustee ...................... 48
SECTION 7.02. Rights of Trustee ...................... 49
SECTION 7.03. Individual Rights of Trustee ........... 50
SECTION 7.04. Trustee's Disclaimer ................... 50
SECTION 7.05. Notice of Defaults ..................... 50
SECTION 7.06. Reports by Trustee to Holders .......... 50
SECTION 7.07. Compensation and Indemnity ............. 50
SECTION 7.08. Replacement of Trustee ................. 51
SECTION 7.09. Successor Trustee by Merger ............ 52
SECTION 7.10. Eligibility; Disqualification .......... 52
SECTION 7.11. Preferential Collection of Claims
Against Company ...................... 52
ARTICLE 8
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Discharge of Liability on Securities;
Defeasance ........................... 53
SECTION 8.02. Conditions to Defeasance ............... 53
SECTION 8.03. Application of Trust Money ............. 54
SECTION 8.04. Repayment to Company ................... 55
SECTION 8.05. Indemnity for Government
Obligations .......................... 55
SECTION 8.06. Reinstatement .......................... 55
ARTICLE 9
AMENDMENTS
SECTION 9.01. Without Consent of Holders ............. 55
SECTION 9.02. With Consent of Holders ................ 56
SECTION 9.03. Compliance with Trust Indenture Act .... 57
SECTION 9.04. Revocation and Effect of Consents
and Waivers .......................... 57
SECTION 9.05. Notation on or Exchange of
Securities ........................... 57
SECTION 9.06. Trustee To Sign Amendments ............. 58
SECTION 9.07. Payment for Consent .................... 58
<PAGE>
ARTICLE 10
SUBORDINATION
SECTION 10.01. Agreement To Subordinate .............. 58
SECTION 10.02. Liquidation, Dissolution,
Bankruptcy .......................... 59
SECTION 10.03. Default on Senior Indebtedness ........ 59
SECTION 10.04. Mandatory Redemption and
Subordination ....................... 59
SECTION 10.05 Acceleration of Payment of
Securities .......................... 60
SECTION 10.06. When Distribution Must Be Paid
Over ................................ 60
SECTION 10.07. Subrogation ........................... 60
SECTION 10.08. Relative Rights ....................... 60
SECTION 10.09. Subordination May Not Be Impaired
by Company .......................... 60
SECTION 10.10. Rights of Trustee and Paying
Agent ............................... 60
SECTION 10.11. Distribution or Notice to
Representative ...................... 61
SECTION 10.12. Article 10 Not To Prevent Events of
Default or Limit Right To
Accelerate .......................... 61
SECTION 10.13. Trust Moneys Not Subordinated ......... 61
SECTION 10.14. Trustee Entitled To Rely .............. 61
SECTION 10.15. Trustee To Effectuate
Subordination ....................... 62
SECTION 10.16. Trustee Not Fiduciary for Holders
of Senior Indebtedness .............. 62
SECTION 10.17. Reliance by Holders of Senior
Indebtedness on Subordination
Provisions .......................... 62
ARTICLE 11
RIO GUARANTEE; SUBORDINATION OF RIO GUARANTEE
SECTION 11.01. Rio Guarantee ......................... 63
SECTION 11.02. Agreement to Subordinate .............. 64
SECTION 11.03. Liquidation, Dissolution,
Bankruptcy .......................... 64
SECTION 11.04. Default on Senior Indebtedness ........ 64
SECTION 11.05. Mandatory Redemption and
Subordination ....................... 65
<PAGE>
SECTION 11.06. Acceleration of Payment of
Securities .......................... 65
SECTION 11.07. When Distribution Must Be
Paid Over ........................... 65
SECTION 11.08. Subrogation ........................... 65
SECTION 11.09. Relative Rights ....................... 66
SECTION 11.10. Subordination May Not Be
Impaired by the Guarantor ........... 66
SECTION 11.11. Rights of Trustee and Paying Agent .... 66
SECTION 11.12. Distribution or Notice
to Representative ................... 66
SECTION 11.13. Article 11 Not to Prevent
Events of Default or Limit
Right to Accelerate ................. 66
SECTION 11.14. Trust Moneys Not Subordinated ......... 66
SECTION 11.15. Trustee Entitled to Rely .............. 67
SECTION 11.16. Trustee to Effectuate Subordination ... 67
SECTION 11.17. Trustee Not Fiduciary for Holders
of Senior Indebtedness
of Guarantor ........................ 67
SECTION 11.18. Reliance by Holders of Senior
Indebtedness of Guarantor on
Subordination Provisions ............ 67
ARTICLE 12
MISCELLANEOUS
SECTION 12.01. Trust Indenture Act Controls .......... 68
SECTION 12.02. Notices ............................... 68
SECTION 12.03. Communication by Holders with Other
Holders ............................. 69
SECTION 12.04. Certificate and Opinion as to
Conditions Precedent ................ 69
SECTION 12.05. Statements Required in Certificate
or Opinion .......................... 69
SECTION 12.06. When Securities Disregarded ........... 70
SECTION 12.07. Rules by Trustee, Paying Agent and
Registrar ........................... 70
SECTION 12.08. Legal Holidays ........................ 70
SECTION 12.09. Governing Law ......................... 70
SECTION 12.10. No Recourse Against Others ............ 70
SECTION 12.11. Successors ............................ 70
SECTION 12.12. Multiple Originals .................... 71
SECTION 12.13. Table of Contents; Headings ........... 71
SECTION 12.14. Severability .......................... 71
<PAGE>
Exhibit A - Form of Initial Note
Exhibit B - Form of Exchange Note
Exhibit C - Form of Transfer Certificate Pursuant to
Section 2.06(a)(ii)
Exhibit D - Form of Transfer Certificate Pursuant to
Section 2.06(a)(iii)
Exhibit E - Form of Transfer Certificate Pursuant to
Section 2.06(a)(iv) and (v)
Exhibit F - Form of Transfer Certificate Pursuant to
Section 2.06(a)(iv) and (v)
<PAGE>
INDENTURE dated as of July 21,
1995, between RIO HOTEL & CASINO, INC., a
Nevada corporation (the "Company"), RIO
PROPERTIES, INC., a Nevada corporation (the
"Guarantor") and IBJ SCHRODER BANK & TRUST
COMPANY, a New York banking corporation (the
"Trustee").
Each party agrees as follows for the benefit of the
other party and for the equal and ratable benefit of the Holders
of the Company's 10-5/8% Senior Subordinated Securities Due
July 15, 2005 (the "Initial Notes") and if and when issued in
exchange for the Initial Notes, the Company's 10-5/8% Senior
Subordinated Securities Due July 15, 2005 (the "Exchange Notes"
together with the Initial Notes, the "Securities"):
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS.
"ADDITIONAL ASSETS" means (i) any property or assets
(other than Indebtedness and Capital Stock) in a Related
Business; (ii) Capital Stock of a Person that becomes a
Restricted Subsidiary as a result of the acquisition of such
Capital Stock by the Company or another Restricted Subsidiary; or
(iii) Capital Stock constituting a minority interest in any
Person that at such time is a Restricted Subsidiary; PROVIDED,
HOWEVER, that, in the case of clauses (ii) and (iii), such
Restricted Subsidiary is primarily engaged in a Related Business.
"AFFILIATE" of any specified Person means (i) any other
Person, directly or indirectly, controlling or controlled by or
under direct or indirect common control with such specified
Person or (ii) any other Person who is a director or officer (a)
of such specified Person, (b) of any subsidiary of such specified
Person or (c) of any Person described in clause (i) above. For
the purposes of this definition, "control" when used with respect
to any Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and
the terms "controlling" and "controlled" have meanings
correlative to the foregoing. For purposes of Section 4.07 only,
"Affiliate" shall also mean any beneficial owner of shares
representing 10% or more of the total voting power of the Voting
Stock (on a fully diluted basis) of the Company or of rights or
warrants to purchase such Voting Stock (whether or not currently
exercisable) and any Person who would be an Affiliate of any such
beneficial owner pursuant to the first sentence hereof.
"ASSET DISPOSITION" means any direct or indirect sale
including a Sale/Leaseback Transaction, lease, transfer,
conveyance or other disposition (or series of related sales,
Sale/Leaseback Transactions, leases, transfers, conveyances or
dispositions) of shares of Capital Stock of a Restricted
Subsidiary (other than directors' qualifying shares), property or
other assets (each referred to for the purposes of this
definition as a "disposition") by the Company or any of its
Restricted Subsidiaries (including any disposition by means of a
<PAGE>
merger, consolidation or similar transaction) other than (i) a
disposition by a Restricted Subsidiary to the Company or by the
Company or a Restricted Subsidiary to a Wholly Owned Subsidiary,
(ii) a disposition of property or assets at Fair Market Value in
the ordinary course of business and consistent with past
practices of the Company or any of its Restricted Subsidiaries,
as applicable, (iii) a disposition with a Fair Market Value and a
sale price of less than $10 million, and (iv) for purposes of
Section 4.06 only, a disposition subject to the limitations set
forth under Section 4.04.
"ATTRIBUTABLE INDEBTEDNESS" means Indebtedness deemed
to be incurred in respect of a Sale/Leaseback Transaction and
shall be, at the date of determination, the greater of (i) the
fair market value of the property subject to such Sale/Leaseback
Transaction (as determined in good faith by the Board of
Directors) or (ii) the present value (discounted at the actual
rate of interest implicit in such transaction, compounded
annually) of the total obligations of the lessee for rental
payments during the remaining term of the lease included in such
Sale/Leaseback Transaction (including any period for which such
lease has been extended).
"AVERAGE LIFE" means, as of the date of determination,
with respect to any Indebtedness or Preferred Stock, the quotient
obtained by dividing (i) the sum of the products of the numbers
of years from the date of determination to the dates of each
successive scheduled principal payment of such Indebtedness or
redemption or similar payment with respect to such Preferred
Stock multiplied by the amount of such payment by (ii) the sum of
all such payments.
"BANK INDEBTEDNESS" means any and all amounts payable
under or in respect of the Credit Agreement, as amended (or
refinanced or replaced) from time to time, including principal,
premium (if any), interest (including interest accruing on or
after the filing of any petition in bankruptcy or for
reorganization relating to the Company or the Guarantor whether
or not a claim for post-filing interest is allowed in such
proceedings), fees, charges, expenses, reimbursement obligations,
guarantees and all other amounts payable thereunder or in respect
thereof.
"BANKS" has the meaning specified in the Credit
Agreement.
"BOARD OF DIRECTORS" means the Board of Directors of
the Company or any committee thereof duly authorized to act on
behalf of such Board.
"BOARD RESOLUTION" means a duly adopted resolution of
the Board of Directors in full force and effect at the time of
determination and certified as such by the Secretary or an
Assistant Secretary of the Company.
"BUSINESS DAY" shall mean any Monday, Tuesday,
Wednesday, Thursday or Friday which is not a Legal Holiday.
"CAPITALIZED LEASE OBLIGATIONS" means an obligation
that is required to be classified and accounted for as a
capitalized lease for financial reporting purposes in accordance
with GAAP; and the amount of Indebtedness represented by such
obligation shall be the capitalized amount of such obligation
determined in accordance with GAAP; and the Stated Maturity
thereof shall be the date of the last payment of rent or any
<PAGE>
other amount due under such lease prior to the first date upon
which such lease may be terminated by the lessee without payment
of a penalty.
"CAPITAL STOCK" of any Person means any and all shares,
interests, rights to purchase, warrants, options, participations
or other equivalents of or interests in (however designated)
equity of such Person, including any Preferred Stock, but
excluding any debt securities convertible or exchangeable into
such equity.
"CASINO" means any gaming establishment and other
property or assets directly ancillary thereto or used in
connection therewith, including any building, restaurant, hotel,
theater, parking facilities, retail shops, land, golf courses and
other recreation and entertainment facilities, vessel, barge,
ship and equipment.
"CHANGE OF CONTROL" means the occurrence of any of the
following events: (i) any "person" (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act), other than one or
more Permitted Holders or an underwriter engaged in a firm
commitment underwriting in connection with a public offering of
the Voting Stock of the Company, is or becomes the "beneficial
owner" (as that term is used in Rules 13d-3 and 13d-5 under the
Exchange Act, except that a person shall be deemed to have
"beneficial ownership" of all shares that any such person has the
right to acquire, whether such right is exercisable immediately
or only after the passage of time), directly or indirectly, of
more than 40% of the total voting power of the Voting Stock of
the Company; (ii) during any period of 12 consecutive months
after the date of the Indenture, individuals who at the beginning
of such period constituted the Board of Directors of the Company
(together with any new directors whose election by such Board of
Directors or whose nomination for election by the stockholders of
the Company was approved by a vote of a majority of the directors
of the Company then still in office who were either directors at
the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to
constitute a majority of the Board of Directors then in office;
or (iii) the Company consolidates or merges with or into, or,
directly or indirectly, sells all or substantially all of its
assets to any person, other than a Wholly Owned Subsidiary or a
Permitted Holder.
"CODE" means the Internal Revenue Code of 1986, as
amended.
"COMPANY" means the party named as such in this
Indenture until a successor replaces it and, thereafter, means
the successor and, for purposes of any provision contained herein
and required by the TIA, each other obligor on the indenture
securities.
"CONSOLIDATED COVERAGE RATIO" as of any date of
determination means the ratio of (i) the aggregate amount of
EBITDA for the period of the most recent four consecutive fiscal
quarters ending at least 45 days (or at least 30 days if the
Company's Report on Form 10-Q or 10-K for the most recent fiscal
quarter or year, as the case may be, has been filed with the SEC)
prior to the date of such determination to (ii) Consolidated
Interest Expense for such four fiscal quarters; PROVIDED,
HOWEVER, that (a) if the Company or any Restricted Subsidiary has
Incurred any Indebtedness since the beginning of such period that
remains outstanding or if the transaction giving rise to the need
to calculate the Consolidated Coverage Ratio is an Incurrence of
Indebtedness, or both, Consolidated Interest Expense for such
<PAGE>
period shall be calculated after giving effect on a PRO FORMA
basis to such Indebtedness as if such Indebtedness had been
Incurred on the first day of such period and the discharge of any
other Indebtedness repaid, repurchased, defeased or otherwise
discharged with the proceeds of such new Indebtedness as if such
discharge had occurred on the first day of such period, (b) if
since the beginning of such period the Company or any Restricted
Subsidiary shall have made any Asset Disposition or if the
transaction giving rise to the need to calculate the Consolidated
Coverage Ratio is an Asset Disposition, or both, the EBITDA for
such period shall be reduced by an amount equal to the EBITDA (if
positive) directly attributable to the assets which are the
subject of such Asset Disposition for such period, or increased
by an amount equal to the EBITDA (if negative), directly
attributable thereto for such period as if such Asset Disposition
had occurred on the first day of such period and Consolidated
Interest Expense for such period shall be reduced by an amount
equal to the Consolidated Interest Expense directly attributable
to any Indebtedness of the Company or any Restricted Subsidiary
repaid, repurchased, defeased or otherwise discharged with
respect to the Company and its continuing Restricted Subsidiaries
in connection with such Asset Dispositions for such period as if
such Asset Disposition had occurred on the first day of such
period (or, if the Capital Stock of any Restricted Subsidiary is
sold, the Consolidated Interest Expense for such period as if
such Asset Disposition had occurred on the first day of such
period directly attributable to the Indebtedness of such
Restricted Subsidiary to the extent the Company and its
continuing Restricted Subsidiaries are no longer liable for such
Indebtedness after such sale), (c) if since the beginning of such
period the Company or any Restricted Subsidiary (by merger or
otherwise) shall have made an Investment in any Restricted
Subsidiary (or any Person which becomes a Restricted Subsidiary)
or an acquisition of assets, including any acquisition of assets
occurring in connection with a transaction causing a calculation
to be made hereunder, which constitutes all or substantially all
of an operating unit of a business, EBITDA and Consolidated
Interest Expense for such period shall be calculated after giving
PRO FORMA effect thereto (including the Incurrence of any
Indebtedness) as if such Investment or acquisition occurred on
the first day of such period and (d) if since the beginning of
such period any Person (that subsequently became a Restricted
Subsidiary or was merged with or into the Company or any
Restricted Subsidiary since the beginning of such period) shall
have made any Asset Disposition or any Investment that would have
required an adjustment pursuant to clause (b) or (c) above if
made by the Company or a Restricted Subsidiary during such
period, EBITDA and Consolidated Interest Expense for such period
shall be calculated after giving PRO FORMA effect thereto as if
such Asset Disposition or Investment occurred on the first day of
such period. For purposes of this definition, whenever PRO FORMA
effect is to be given to an acquisition of assets, the amount of
income or earnings relating thereto and the amount of
Consolidated Interest Expense associated with any Indebtedness
Incurred in connection therewith, the PRO FORMA calculations
shall be determined in good faith by a responsible financial or
accounting Officer of the Company and as further contemplated by
the definition of PRO FORMA. If any Indebtedness bears a floating
rate of interest and is being given PRO FORMA effect, the
interest expense on such Indebtedness shall be calculated as if
the rate in effect on the date of determination had been the
applicable rate for the entire period (taking into account any
Interest Rate Protection Agreement applicable to such
Indebtedness if such Interest Rate Protection Agreement has a
remaining term in excess of 12 months).
"CONSOLIDATED INTEREST EXPENSE" means, for any period,
the total interest expense of the Company and its consolidated
Subsidiaries, plus, to the extent not included in such interest
expense, (i) interest expense attributable to capital leases,
<PAGE>
(ii) amortization of debt discount and debt issuance cost, (iii)
capitalized interest, (iv) non-cash interest expense, (v) accrued
interest, (vi) commissions, discounts and other fees and charges
owed with respect to letters of credit and bankers' acceptance
financing, (vii) interest actually paid by the Company or any
such Subsidiary under any Guarantee of Indebtedness or other
obligation of any other Person, (viii) net costs associated with
Interest Rate Protection Agreements (including amortization of
fees), (ix) the interest portion of any deferred obligation, (x)
Preferred Stock dividends in respect of all Preferred Stock of
Subsidiaries and Redeemable Stock of the Company held by Persons
other than the Company or a Wholly Owned Subsidiary, (xi) fees
payable in connection with financings to the extent not included
in (ii) above, including commitment, availability and similar
fees and (xii) the cash contributions to any employee stock
ownership plan or similar trust to the extent such contributions
are used by such plan or trust to pay interest or fees to any
Person (other than the Company) in connection with Indebtedness
Incurred by such plan or trust; PROVIDED, HOWEVER, that there
shall be excluded therefrom any such interest expense of any
Unrestricted Subsidiary to the extent the related Indebtedness is
not Guaranteed or paid by the Company or any Restricted
Subsidiary.
"CONSOLIDATED NET INCOME" means, for any period, the
net income (loss) of the Company and its Subsidiaries; PROVIDED,
HOWEVER, that there shall not be included in such Consolidated
Net Income (i) any net income (loss) of any Person if such Person
is not a Restricted Subsidiary, except that (a) subject to the
limitations contained in (iv) below, the Company's equity in the
net income of any such Person for such period shall be included
in such Consolidated Net Income up to the aggregate amount of
cash actually distributed by such Person during such period to
the Company or a Restricted Subsidiary as a dividend or other
distribution (subject, in the case of a dividend or other
distribution to a Restricted Subsidiary, to the limitations
contained in clause (iii) below) and (b) the Company's equity in
a net loss of any such Person (other than an Unrestricted
Subsidiary) for such period shall be included in determining such
Consolidated Net Income, (ii) any net income (loss) of any person
acquired by the Company or a Subsidiary in a pooling of interests
transaction for any period prior to the date of such acquisition,
(iii) any net income (loss) of any Restricted Subsidiary if such
Subsidiary is subject to restrictions, directly or indirectly, on
the payment of dividends or the making of distributions by such
Restricted Subsidiary, directly or indirectly, to the Company,
except that (a) subject to the limitations contained in (iv)
below, the Company's equity in the net income of any such
Restricted Subsidiary for such period shall be included in such
Consolidated Net Income up to the aggregate amount of cash that
could have been distributed by such Restricted Subsidiary during
such period to the Company or another Restricted Subsidiary as a
dividend (subject, in the case of a dividend to another
Restricted Subsidiary, to the limitation contained in this
clause) and (b) the Company's equity in a net loss of any such
Restricted Subsidiary for such period shall be included in
determining such Consolidated Net Income, (iv) any gain (but not
loss) realized upon the sale or other disposition of any
property, plant or equipment of the Company or its consolidated
Subsidiaries (including pursuant to any Sale/Leaseback
Transaction) which is not sold or otherwise disposed of in the
ordinary course of business and any gain (but not loss) realized
upon the sale or other disposition of any Capital Stock of any
Person, (v) any extraordinary gain or loss and (vi) the
cumulative effect of a change in accounting principles.
"CONSOLIDATED NET WORTH" means the total of the amounts
shown on the balance sheet of the Company and its consolidated
<PAGE>
Subsidiaries, determined on a consolidated basis in accordance
with GAAP, as of the end of the most recent fiscal quarter of the
Company ending at least 45 days (or at least 30 days if the
Company's Report on Form 10-Q or 10-K for the most recent fiscal
quarter or year, as the case may be, has been filed with the SEC)
prior to the taking of any action for the purpose of which the
determination is being made, as (i) the par or stated value of
all outstanding Capital Stock of the Company plus (ii) paid-in
capital or capital surplus relating to such Capital Stock plus
(iii) any retained earnings or earned surplus less (a) any
accumulated deficit and (b) any amounts attributable to
Disqualified Stock.
"CREDIT AGREEMENT" means the $175 million revolving
credit agreement, as amended, between the Company and a syndicate
of banks, and any extensions, revisions, refinancings or
replacements thereof by a bank or a syndicate of banks.
"CURRENT MARKET PRICE" on any date means the arithmetic
mean of the Quoted Price of the Securities for 20 consecutive
trading days commencing 30 days before such date.
"DEFAULT" means any event which is, or after notice or
passage of time or both would be, an Event of Default.
"DEPOSITARY" shall mean the Depository Trust Company,
its nominees and their respective successors.
"DESIGNATED SENIOR INDEBTEDNESS" means (i) the
Company's Guarantee of the Bank Indebtedness and (ii) any other
Senior Indebtedness which, at the date of determination, has an
aggregate principal amount outstanding of, or under which, at the
date of determination, the holders thereof, are committed to lend
up to, at least $25 million and is specifically designated by the
Company in the instrument evidencing or governing such Senior
Indebtedness as "Designated Senior Indebtedness" for purposes of
the Indenture and has been designated as "Designated Senior
Indebtedness" for purposes of the Indenture in an Officers'
Certificate received by the Trustee.
"DESIGNATED SENIOR INDEBTEDNESS OF GUARANTOR" means (i)
the Bank Indebtedness and (ii) any other Senior Indebtedness of
Guarantor which, at the date of determination, has an aggregate
principal amount outstanding of, or under which, at the date of
determination, the holders thereof are committed to lend up to,
at least $25 million and is specifically designated by the
Guarantor in the instrument evidencing or governing such Senior
Indebtedness of Guarantor as "Designated Senior Indebtedness of
Guarantor" for purposes of the Indenture and has been designated
as "Designated Senior Indebtedness of Guarantor" for purposes of
the Indenture in an Officers' Certificate received by the
Trustee.
"DISQUALIFIED STOCK" of a Person means Redeemable Stock
of such Person as to which the maturity, mandatory redemption,
conversion or exchange or redemption at the option of the holder
thereof occurs, or may occur, on or prior to the first
anniversary of the Stated Maturity of the Securities.
"EBITDA" for any period means the Consolidated Net
Income for such period, plus the following to the extent deducted
<PAGE>
in calculating such Consolidated Net Income: (i) income tax
expense, (ii) Consolidated Interest Expense, (iii) depreciation
expense and (iv) amortization expense, in each case for such
period.
"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.
"FAIR MARKET VALUE" means, with respect to any asset or
property, the price which could be negotiated in an arms'-length
free market transaction, for cash, between a willing seller and a
willing buyer, neither of whom is under undue pressure or
compulsion to complete the transaction.
"GAAP" means generally accepted accounting principles
in the United States of America as in effect as of the date of
the Indenture, including those set forth in the opinions and
pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as approved by a
significant segment of the accounting profession. All ratios and
computations based on GAAP contained in the Indenture shall be
computed in conformity with GAAP consistently applied.
"GAMING AUTHORITY" means the Nevada Gaming Commission,
the Nevada State Gaming Control Board or any agency which has, or
may at any time after the date of the Indenture have,
jurisdiction over the gaming activities of the Company or any of
its Subsidiaries or any successor to such authority.
"GAMING LAWS" means the gaming laws of a jurisdiction
or jurisdictions to which the Company or any of its Subsidiaries
is, or may at any time after the date of the Indenture be,
subject.
"GAMING LICENSE" means any license, permit, franchise
or other authorization from any governmental authority required
on the date of the Indenture or at any time thereafter to own,
lease, operate or otherwise conduct the gaming business of the
Company and its Subsidiaries, including all licenses granted
under Gaming Laws and other Legal Requirements.
"GUARANTEE" means any obligation, contingent or
otherwise, of any Person directly or indirectly guaranteeing any
Indebtedness or other obligation of any other Person and any
obligation, direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness or other obligation of
such other Person (whether arising by virtue of partnership
arrangements, or by agreement to keep-well, to purchase assets,
goods, securities or services, to take-or-pay, or to maintain
financial statement conditions or otherwise) or (ii) entered into
for purposes of assuring in any other manner the obligee of such
Indebtedness or other obligation of the payment thereof or to
protect such obligee against loss in respect thereof (in whole or
in part); PROVIDED, HOWEVER, that the term "Guarantee" shall not
include endorsements for collection or deposit in the ordinary
course of business. The term "Guarantee" used as a verb has a
corresponding meaning.
<PAGE>
"GUARANTOR" means Rio Properties, Inc.
"HOLDER" OR "SECURITYHOLDER" means the Person in whose
name a Security is registered on the Registrar's books.
"INCUR" means issue, assume, Guarantee, incur or
otherwise become liable for; PROVIDED, HOWEVER, that any
Indebtedness or Capital Stock of a Person existing at the time
such person becomes a Subsidiary (whether by merger,
consolidation, acquisition or otherwise) shall be deemed to be
incurred by such Subsidiary at the time it becomes a Subsidiary.
The terms "Incurred", "Incurrence" and "Incurring" shall each
have a correlative meaning.
"INDEBTEDNESS" means, with respect to any Person on any
date of determination (without duplication),
(i) the principal of and premium (if any) in respect of
indebtedness of such Person for borrowed money;
(ii) the principal of and premium (if any) in respect of
obligations of such Person evidenced by bonds, debentures,
Securities or other similar instruments;
(iii) all Capitalized Lease Obligations and Attributable
Indebtedness of such Person;
(iv) all obligations of such Person to pay the deferred and
unpaid purchase price of property or services (except Trade
Payables), which purchase price is due more that six months after
the date of placing such property in service or taking delivery
and title thereto or the completion of such services;
(v) all obligations of such Person in respect of letters of
credit, banker's acceptances or other similar instruments or
credit transactions (including reimbursement obligations with
respect thereto), other than obligations with respect to letters
of credit securing obligations (other than obligations described
in (i) through (iv) above) entered into in the ordinary course of
business of such Person to the extent such letters of credit are
not drawn upon or, if and to the extent drawn upon, such drawing
is reimbursed no later than the third Business Day following
receipt by such Person of a demand for reimbursement following
payment on the letter of credit;
(vi) the amount of all obligations of such Person with
respect to the redemption, repayment or other repurchase of any
Disqualified Stock or, with respect to any Subsidiary, any
Preferred Stock (but excluding, in each case, any accrued
dividends);
(vii) all Indebtedness of other Persons secured by a Lien on
any asset of such Person, whether or not such Indebtedness is
assumed by such Person; PROVIDED, HOWEVER, that the amount of
such Indebtedness shall be the lesser of (a) the fair market
value of such asset at such date of determination and (b) the
amount of such Indebtedness of such other Persons;
(viii) all Indebtedness of other Persons to the extent
Guaranteed by such Person; and
<PAGE>
(ix) to the extent not otherwise included in this
definition, obligations in respect of Interest Rate Protection
Agreements.
The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations
as described above and the maximum liability, upon the occurrence
of the contingency giving rise to the obligation, of any
contingent obligations at such date.
"INDENTURE" means this instrument as originally
executed or as it may from time to time be supplemented or
amended by one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof, including, for
all purposes of this instrument and any such supplemental
indenture, the provisions of the TIA that are deemed to be a part
of and govern this instrument, and any such supplemental
indenture, respectively.
"INDEPENDENT DIRECTOR" means a director of the Company
other than a director who is a party, or who is a director,
officer, employee or Affiliate (or is related by blood or
marriage to any such person) of a party, to the transaction in
question, and who is, in fact, independent in respect of such
transaction.
"INTEREST RATE PROTECTION AGREEMENT" means, in respect
of a Person, any interest rate swap agreement, interest rate
option agreement, interest rate cap agreement, interest rate
collar agreement, interest rate floor agreement or other similar
agreement or arrangement.
"INVESTMENT" in any Person means any direct or indirect
advance, loan (other than advances to customers in the ordinary
course of business that are recorded as accounts receivable on
the balance sheet of such Person) or other extension of credit
(including by way of Guarantee or similar arrangement) or capital
contribution to (by means of any transfer of cash or other
property to others or any payment for property or services for
the account or use of others), or any purchase or acquisition of
Capital Stock, Indebtedness or other similar instruments issued
by such Person. For purposes of the definition of "Unrestricted
Subsidiary" and the limitations set forth in Section 4.04, (i)
"Investment" shall include the portion (proportionate to the
Company's equity interest in such Subsidiary) of the Fair Market
Value of the net assets of any Subsidiary of the Company at the
time that such Subsidiary is designated an Unrestricted
Subsidiary; PROVIDED, HOWEVER, that upon a redesignation of such
Subsidiary as a Restricted Subsidiary, the Company shall be
deemed to continue to have a permanent "Investment" in an
Unrestricted Subsidiary in an amount (if positive) equal to (x)
the Company's "Investment" in such Subsidiary at the time of such
redesignation less (y) the portion (proportionate to the
Company's equity interest in such Subsidiary) of the Fair Market
Value of the net assets of such Subsidiary at the time that such
Subsidiary is so re-designated a Restricted Subsidiary; and (ii)
any property transferred to or from an Unrestricted Subsidiary
shall be valued at its fair market value at the time of such
transfer. In determining the amount of any Investment in respect
of any property or assets other than cash, such property or asset
shall be valued at its fair market value at the time of such
Investment (unless otherwise specified in this definition), as
determined in good faith by the Board of Directors, whose
determination shall be evidenced by a Board Resolution.
"ISSUE DATE" means the date on which the Securities are
originally issued.
<PAGE>
"LEGAL REQUIREMENTS" means all laws, statutes and
ordinances and all rules, orders, rulings, regulations,
directives, decrees, injunctions and requirements of all
governmental authorities, that are now or may hereafter be in
existence, and that may be applicable to the Company or any
Subsidiary or Affiliate thereof or the Trustee (including
building codes, zoning and environmental laws, regulations and
ordinances and Gaming Laws), as modified by any variances,
special use permits, waivers, exceptions or other exemptions
which may from time to time be applicable.
"LIEN" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any
conditional sale or other title retention agreement or lease in
the nature thereof) or any Sale/Leaseback Transaction.
"NET AVAILABLE CASH" from an Asset Disposition or Event
of Loss means cash payments received (including any cash payments
received by way of deferred payment of principal pursuant to a
security or installment receivable or otherwise, but only as and
when received, but excluding any other consideration received in
the form of assumption by the acquiring person of Indebtedness or
other obligations relating to such properties or assets or
received in any other noncash form) therefrom, in each case net
of (i) all legal, title and recording tax expenses, commissions
and other fees and expenses incurred, and all Federal, state,
provincial, foreign and local taxes required to be paid or
accrued as a liability under GAAP, as a consequence of such Asset
Disposition or Event of Loss, (ii) all payments made on any
Indebtedness which is secured by any assets subject to such Asset
Disposition, in accordance with the terms of any Lien upon such
assets, or which must by its terms, or in order to obtain a
necessary consent to such Asset Disposition, or by applicable law
be repaid out of the proceeds from such Asset Disposition, (iii)
all distributions and other payments required to be made to
minority interest holders in Subsidiaries or joint ventures as a
result of such Asset Disposition or Event of Loss and (iv) the
deduction of appropriate amounts to be provided by the seller as
a reserve, in accordance with GAAP, against any liabilities
associated with the assets disposed of in such Asset Disposition
and retained by the Company or any Restricted Subsidiary after
such Asset Disposition.
"NET CASH PROCEEDS", with respect to any issuance or
sale of Capital Stock, means the cash proceeds of such issuance
or sale net of attorneys' fees, accountants' fees, underwriters'
or placement agents' fees, discounts or commissions and
brokerage, consultant and other fees actually incurred in
connection with such issuance or sale and net of taxes paid or
payable as a result thereof.
"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, if any, on such Indebtedness, and (ii) enforcement of
obligations on such Indebtedness is limited only to recourse
against interests in Property and assets purchased with the
proceeds of the Incurrence of such Indebtedness and as to which
neither the Company nor any of its Restricted Subsidiaries
provides any credit support or is liable.
<PAGE>
"OFFICER" means the Chairman of the Board, the
President, the Treasurer or the Secretary of the Company.
"OFFICERS' CERTIFICATE" means a certificate signed by
two Officers at least one of whom shall be the principal
executive officer, principal accounting officer or principal
financial officer of the Company.
"OPINION OF COUNSEL" means a written opinion from legal
counsel who is acceptable to the Trustee. The counsel may be an
employee of or counsel to the Company or the Trustee.
"PARI PASSU", as applied to the ranking of any
Indebtedness of a Person in relation to other Indebtedness of
such Person, means that each such Indebtedness either (i) is not
subordinate in right of payment to any Indebtedness or (ii) is
subordinate in right of payment to the same Indebtedness as is
the other, and is so subordinate to the same extent, and is not
subordinate in right of payment to each other or to any
Indebtedness as to which the other is not so subordinate.
"PERMITTED FF&E FINANCING" means Indebtedness which is
Non-Recourse Indebtedness to the Company or any of its Restricted
Subsidiaries or any of their properties that is Incurred to
finance the acquisition or lease after the date of the Indenture
of newly acquired or leased furniture, fixtures or equipment
("FF&E") used directly in the operation of any casino hotel owned
or leased by the Company or its Restricted Subsidiaries 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).
"PERMITTED HOLDERS" means Anthony A. Marnell II, James
A. Barrett, Jr., their estates, spouses, ancestors, and lineal
descendants, the legal representatives of any of the foregoing
and the trustee of any bona fide trust of which the foregoing are
the sole beneficiaries or the grantors, or any Person of which
the foregoing "beneficially owns" (as defined in Rules 13d-3 and
13d-5 under the Exchange Act) voting securities representing at
least 66 2/3% of the total voting power of all classes of Capital
Stock of such Person (exclusive of any matters as to which class
voting rights exist).
"PERMITTED INVESTMENT" means an Investment by the
Company or any Restricted Subsidiary in (i) a Restricted
Subsidiary or a Person which will, upon the making of such
Investment, become a Restricted Subsidiary; PROVIDED, HOWEVER,
that the primary business of such Restricted Subsidiary is a
Related Business; (ii) another Person if as a result of such
Investment such other Person is merged or consolidated with or
into, or transfers or conveys all or substantially all its assets
to, the Company or a Restricted Subsidiary; PROVIDED, HOWEVER,
that such Person's primary business is a Related Business; (iii)
Temporary Cash Investments; (iv) receivables owing to the Company
or any Restricted Subsidiary, if created or acquired in the
ordinary course of business and payable or dischargeable in
accordance with customary trade terms; PROVIDED, HOWEVER, that
such trade terms may include such concessionary trade terms as
the Company or any such Restricted Subsidiary deems reasonable
under the circumstances; (v) payroll, travel and similar advances
to cover matters that are expected at the time of such advances
ultimately to be treated as expenses for accounting purposes and
<PAGE>
that are made in the ordinary course of business; (vi) loans or
advances to employees made in the ordinary course of business
consistent with past practices of the Company or such Restricted
Subsidiary, as the case may be; and (vii) stock, obligations or
securities received in settlement of debts created in the
ordinary course of business and owing to the Company or any
Restricted Subsidiary or in satisfaction of judgments.
"PERMITTED LIENS" means, with respect to any Person,
(a) pledges or deposits by such Person under workmen's
compensation laws, unemployment insurance laws or similar
legislation, or good faith deposits in connection with bids,
tenders, contracts (other than for the payment of Indebtedness)
or leases to which such Person is a party, or deposits to secure
public or statutory obligations of such Person or deposits of
cash or United States government bonds to secure surety or appeal
bonds to which such Person is a party, or deposits as security
for contested taxes or import duties or for the payment of rent,
in each case Incurred in the ordinary course of business; (b)
Liens imposed by law, such as carriers', warehousemen's and
mechanics' Liens, in each case for sums not yet due or being
contested in good faith by appropriate proceedings, or other
Liens arising out of judgments or awards against such Person with
respect to which such Person shall then be prosecuting an appeal
or other proceedings for review; (c) Liens for property taxes not
yet due or payable or subject to penalties for non-payment and
which are being contested in good faith by appropriate
proceedings; (d) Liens in favor of issuers of surety bonds or
letters of credit issued pursuant to the request of and for the
account of such Person in the ordinary course of its business;
(e) minor survey exceptions, minor encumbrances, easements or
reservations of, or rights of others for, licenses, rights-of-
way, sewers, electric lines, telegraph and telephone lines and
other similar purposes, or zoning or other restrictions as to the
use of real property or Liens incidental to the conduct of the
business of such Person or to the ownership of its properties
which were not Incurred in connection with Indebtedness and which
do not in the aggregate materially adversely affect the value of
said properties or materially impair their use in the operation
of the business of such Person; (f) Liens existing on the date of
the Indenture; (g) Liens on property or shares of stock of a
Person at the time such Person becomes a Subsidiary; PROVIDED,
HOWEVER, that any such Lien may not extend to any other property
owned by the Company or any Restricted Subsidiary; (h) Liens on
property at the time the Company or a Subsidiary acquired the
property, including any acquisition by means of a merger or
consolidation with or into the Company or any Restricted
Subsidiary; PROVIDED, HOWEVER, that any such Lien may not extend
to any other property owned by the Company or any Restricted
Subsidiary; (i) Liens securing an Interest Rate Protection
Agreement so long as the related Indebtedness is permitted to be
incurred under the Indenture, (j) Liens to secure any
refinancing, refunding, extension, renewal or replacement (or
successive refinancings, refundings, extensions, renewals or
replacements) as a whole, or in part, of any Indebtedness secured
by any Lien referred to in the foregoing clauses (f), (g), (h)
and (k); PROVIDED, HOWEVER, that (x) such new Lien shall be
limited to all or part of the same property that secured the
original Lien (plus improvements on such property) and (y) the
Indebtedness secured by such Lien at such time is not increased
to any amount greater than the sum of (A) the outstanding
principal amount or, if greater, committed amount of the
Indebtedness described under clauses (f), (g), (h) or (k) at the
time the original Lien became a Permitted Lien under the
Indenture and (B) an amount necessary to pay any fees and
expenses, including premiums, related to such refinancing,
refunding, extension, renewal or replacement and (k) Liens
securing Permitted FF&E Financings.
<PAGE>
"PERSON" means any individual, corporation,
partnership, joint venture, association, joint-stock company,
trust, unincorporated organization, government or any agency or
political subdivision thereof or any other entity.
"PREFERRED STOCK", as applied to the Capital Stock of
any corporation, means Capital Stock of any class or classes
(however designated) which is preferred as to the payment of
dividends, or as to the distribution of assets upon any voluntary
or involuntary liquidation or dissolution of such corporation,
over shares of Capital Stock of any other class of such
corporation.
"PRINCIPAL" of a Security means the principal of the
Security plus the premium, if any, payable on the Security which
is due or overdue or is to become due at the relevant time.
"PRO FORMA" means, with respect to any calculation made
or required to be made pursuant to the terms hereof, a
calculation in accordance with Article 11 of Regulation S-X
promulgated under the Securities Act (to the extent applicable),
as interpreted in good faith by the Board of Directors after
consultation with the independent certified public accountants of
the Company, or otherwise a calculation made in good faith by the
Board of Directors after consultation with the independent
certified public accountants of the Company, as the case may be.
"QUOTED PRICE" means for any day the last reported sale
price regular way or, in case no such reported sale takes place
on such day, the average of the closing bid and asked prices
regular way for such day, in either case on the principal
national securities exchange on which the Securities are listed
or admitted to trading, or if the Securities are not so listed or
admitted to trading, but are traded in the over the counter
market, the closing sale price of the Securities or, in case no
sale is publicly reported, the average of the closing bid and
asked prices, as furnished by two members of the National
Association of Securities Dealers, Inc. selected from time to
time by the Company for that purpose.
"REDEEMABLE STOCK" means, with respect to any Person,
any Capital Stock which by its terms (or by the terms of any
security into which it is convertible or for which it is
exchangeable) or upon the happening of any event (i) matures or
is mandatorily redeemable pursuant to a sinking fund obligation
or otherwise, (ii) is convertible or exchangeable for
Indebtedness (other than Preferred Stock) or Disqualified Stock
or (iii) is redeemable at the option of the holder thereof, in
whole or in part.
"REFINANCING INDEBTEDNESS" means Indebtedness that
refunds, refinances, replaces, renews, repays or extends
(including pursuant to any defeasance or discharge mechanism)
(collectively, "refinances," and "refinanced" shall have a
correlative meaning) any Indebtedness existing on the date of the
Indenture or Incurred in compliance with the Indenture (including
Indebtedness of the Company that refinances Indebtedness of any
Restricted Subsidiary and Indebtedness of any Restricted
Subsidiary that refinances Indebtedness of another Restricted
Subsidiary) including Indebtedness that refinances Refinancing
Indebtedness; PROVIDED, HOWEVER, that (i) the Refinancing
Indebtedness has a Stated Maturity no earlier than the Stated
Maturity of the Indebtedness being refinanced, (ii) the
Refinancing Indebtedness has an Average Life at the time such
Refinancing Indebtedness is Incurred that is equal to or greater
<PAGE>
than the Average Life of the Indebtedness being refinanced,
(iii) such Refinancing Indebtedness is Incurred in an aggregate
principal amount (or if issued with original issue discount, an
aggregate issue price) that is equal to or less than the
aggregate principal amount (or if issued with original issue
discount, the aggregate accreted value) then outstanding of the
Indebtedness being refinanced and (iv) if the Indebtedness of the
Company or a Restricted Subsidiary being refinanced is
subordinated to other Indebtedness of the Company or a Restricted
Subsidiary in any respect, such Refinancing Indebtedness is
subordinated at least to the same extent; PROVIDED FURTHER,
HOWEVER, that Refinancing Indebtedness shall not include (a)
Indebtedness of a Subsidiary that refinances Indebtedness of the
Company or (b) Indebtedness of the Company or a Restricted
Subsidiary that refinances Indebtedness of an Unrestricted
Subsidiary.
"REGISTERED EXCHANGE OFFER" shall have the meaning set
forth in the Registration Agreement.
"REGISTRATION AGREEMENT" means the Registration
Agreement dated July 18, 1995, between the Company and the
Initial Purchasers.
"RELATED BUSINESS" means the gaming business conducted
(or proposed to be conducted) by the Company and its Subsidiaries
as of the date of the Indenture and any and all reasonably
related businesses necessary for, in support or anticipation of
and ancillary to or in preparation for, the gaming business
including, without limitation, the development, expansion or
operation of any Casino (including any land-based, dockside,
riverboat or other type of Casino), owned, or to be owned, by the
Company or one of its Subsidiaries.
"REPRESENTATIVE" means the trustee, agent or
representative (if any) for an issue of Senior Indebtedness or
Senior Indebtedness of Guarantor, as the case may be.
"RESTRICTED SUBSIDIARY" means (i) Rio Properties, Inc.
and (ii) any other Subsidiary of the Company that is not an
Unrestricted Subsidiary.
"SALE/LEASEBACK TRANSACTION" means an arrangement
relating to property now owned or hereafter acquired whereby the
Company or a Restricted Subsidiary transfers such property to a
Person and the Company or a Restricted Subsidiary leases it from
such Person.
"SEC" means the Securities and Exchange Commission.
"SENIOR INDEBTEDNESS" means (i) the Company's Guarantee
of the Bank Indebtedness and (ii) all other Indebtedness of the
Company including interest thereon, whether outstanding on the
date of the Indenture or thereafter issued, unless in the
instrument creating or evidencing the same or pursuant to which
the same is outstanding it is provided that such obligations are
not superior in right of payment to the Securities; PROVIDED,
HOWEVER, that Senior Indebtedness shall not include (a) any
obligation of the Company to any Subsidiary, (b) any liability
for Federal, state, local or other taxes owed or owing by the
Company, (c) any accounts payable or other liability to trade
creditors arising in the ordinary course of business (including
Guarantees thereof or instruments evidencing such liabilities),
(d) any Indebtedness, Guarantee or obligation of the Company
which is subordinate or junior in any respect to any other
Indebtedness, Guarantee or obligation of the Company, including
<PAGE>
any Senior Subordinated Indebtedness and any Subordinated
Obligations, (e) any obligations with respect to any Capital
Stock or (f) any Indebtedness Incurred in violation of the
Indenture.
"SENIOR INDEBTEDNESS OF GUARANTOR" means (i) the Bank
Indebtedness and (ii) all other Indebtedness of the Guarantor
including interest thereon, whether outstanding on the date of
the Indenture or thereafter issued, unless in the instrument
creating or evidencing the same or pursuant to which the same is
outstanding it is provided that such Indebtedness shall not
include (a) any obligation of the Guarantor to any Subsidiary,
(b) any liability for Federal, state, local or other taxes owed
or owing by the Guarantor, (c) any accounts payable or other
liability to trade creditors arising in the ordinary course of
business (including Guarantees thereof or instruments evidencing
such liabilities), (d) any Indebtedness, Guarantee or obligation
of the Guarantor which is subordinate or junior in any respect to
any other Indebtedness, Guarantee or obligation of the Guarantor,
including Senior Subordinated Indebtedness of Guarantor and any
Subordinated Obligations, (e) any obligations with respect to any
Capital Stock or (f) any Indebtedness Incurred in violation of
the Indenture.
"SENIOR SUBORDINATED INDEBTEDNESS" means the Securities
and any other Indebtedness of the Company that specifically
provides that such Indebtedness is to rank PARI PASSU with the
Securities and is not subordinated by its terms to any
Indebtedness or other obligation of the Company which is not
Senior Indebtedness.
"SENIOR SUBORDINATED INDEBTEDNESS OF GUARANTOR" means
the Rio Guarantee and any other Indebtedness of the Guarantor
that specifically provides that such Indebtedness is to rank PARI
PASSU with the Rio Guarantee and is not subordinated by its terms
to any Indebtedness or other obligation of the Guarantor which is
not Senior Indebtedness of Guarantor.
"SHELF REGISTRATION STATEMENT" shall have the meaning
set forth in the Registration Agreement.
"STATED MATURITY" means, with respect to any security,
the date specified in such security as the fixed date on which
the payment of principal of such security is due and payable,
including pursuant to any mandatory redemption provision (but
excluding any provision providing for the repurchase of such
security at the option of the holder thereof upon the happening
of any contingency beyond the control of the issuer unless such
contingency has occurred).
"SUBORDINATED OBLIGATION" means (i) any Indebtedness of
the Company (whether outstanding on the date of the Indenture or
thereafter Incurred) which is subordinate or junior in right of
payment to the Securities or (ii) any Indebtedness of the
Guarantor (whether outstanding on the date of the Indenture or
thereafter Incurred) which is subordinate or junior in right of
payment to the Rio Guarantee.
"SUBSIDIARY" of any Person means any corporation,
association, partnership or other business entity of which more
than 50% of the total voting power of shares of Capital Stock or
other interests (including partnership interests) entitled
(without regard to the occurrence of any contingency) to vote in
<PAGE>
the election of directors, managers or trustees thereof is at
the time owned or controlled, directly or indirectly, by (i) such
Person, (ii) such Person and one or more Subsidiaries of such
Person or (iii) one or more Subsidiaries of such Person.
"TEMPORARY CASH INVESTMENTS" means any of the
following: (i) investments in U.S. Government Obligations
maturing within 90 days of the date of acquisition thereof, (ii)
investments in time deposit accounts, certificates of deposit and
money market deposits maturing within 90 days of the date of
acquisition or any state thereof having capital, surplus and
undivided profits aggregating in excess of $500,000,000 and whose
long-term debt is rated "A-3" or "A-" or higher according to
Moody's Investors Service, Inc. or Standard and Poor's
Corporation (or such similar equivalent rating by at least one
"nationally recognized statistical rating organization" (as
defined in Rule 436 under the Securities Act)), (iii) repurchase
obligations with a term of not more than 7 days for underlying
securities of the types described in clause (i) above entered
into with a bank meeting the qualifications described in clause
(ii) above, and (iv) investments in commercial paper, maturing
not more than 90 days after the date of acquisition, issued by a
corporation (other than an Affiliate of the Company) organized
and in existence under the laws of the United States of America
with a rating at the time as of which any investment therein is
made of "P-1" (or higher) according to Moody's Investors Service,
Inc. or "A-1" (or higher) according to Standard and Poor's
Corporation.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C.
SECTIONS 77aaa-77bbbb) as in effect on the date of this
Indenture; PROVIDED, HOWEVER, that in the event the Trust
Indenture Act of 1939 is amended after such date, "TIA" means, to
the extent required by any such amendment, the Trust Indenture
Act of 1939, as may be amended from time to time.
"TRADE PAYABLES" means, with respect to any Person, any
accounts payable or any indebtedness or monetary obligation to
trade creditors created, assumed or Guaranteed by such Person
arising in the ordinary course of business of such Person in
connection with the acquisition of goods or services.
"TRUSTEE" means the party named as such in the
Indenture until a successor replaces it in accordance with the
provisions of the Indenture and, thereafter, means the successor.
"TRUST OFFICER" means the Chairman of the Board, the
President or any other officer or assistant officer of the
Trustee assigned by the Trustee to administer its corporate trust
matters.
"UNIFORM COMMERCIAL CODE" means the New York Uniform
Commercial Code as in effect from time to time.
"UNRESTRICTED SUBSIDIARY" means (i) any Subsidiary of
the Company that at the time of determination shall be designated
an Unrestricted Subsidiary by the Board of Directors in the
manner provided below and (ii) any Subsidiary of an Unrestricted
Subsidiary. The Board of Directors may designate any Subsidiary
of the Company (including any newly acquired or newly formed
Subsidiary of the Company) to be an Unrestricted Subsidiary
unless such Subsidiary owns any Capital Stock or Indebtedness of,
or owns or holds any Lien on any property of, the Company or any
other Subsidiary of the Company that is not a Subsidiary of the
<PAGE>
Subsidiary to be so designated; PROVIDED, HOWEVER, that either
(a) the Subsidiary to be so designated has total assets of $1,000
or less or (b) if such Subsidiary has assets greater than $1,000,
then such designation would be permitted under Section 4.04
hereof as a "Restricted Payment". The Board of Directors may
designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; PROVIDED, HOWEVER, that immediately after giving PRO
FORMA effect to such designation (1) the Company could incur
$1.00 of additional Indebtedness if it complies with the
Consolidated Coverage Ratio limitations in Section 4.03 hereof
and (2) no Default shall have occurred and be continuing. Any
such designation by the Board of Directors shall be evidenced to
the Trustee by promptly filing with the Trustee a copy of the
Board Resolution giving effect to such designation and an
Officers' Certificate certifying that such designation complies
with the foregoing provisions.
"U.S. GOVERNMENT OBLIGATIONS" means direct obligations
(or certificates representing an ownership interest in such
obligations) of the United States of America (including any
agency or instrumentality thereof) for the payment of which the
full faith and credit of the United States of America is pledged
and which are not callable or redeemable at the issuer's option.
"VOTING STOCK" of a corporation means all classes of
Capital Stock of such corporation then outstanding and normally
entitled to vote in the election of directors.
"WHOLLY OWNED SUBSIDIARY" means a Restricted Subsidiary
of the Company all the Capital Stock of which (other than
directors' qualifying shares) is owned by the Company or another
Wholly Owned Subsidiary.
<PAGE>
SECTION 1.02. OTHER DEFINITIONS.
DEFINED IN
TERM SECTION
"Affiliate Transaction" 4.07
"Agent Members" 2.01(b)
"Bankruptcy Law" 6.01
"Blockage Notice" 10.03
"CEDEL" 2.01(a)
"covenant defeasance option" 8.01(b)
"Custodian" 6.01
"Euroclear" 2.01(a)
"Event of Default" 6.01
"Global Securities" 2.01(b)
"Guarantor Blockage Notice" 11.04
"Guarantor Payment Blockage Period" 11.04
"Initial Purchasers" 2.01(a)
"legal defeasance option" 8.01(b)
"Legal Holiday" 12.08
"Non-Global Purchasers" 2.01(c)
"Offer" 4.06
"Offer Amount" 4.06
"Offer Period" 4.06
"pay the Securities" 10.03
"Paying Agent" 2.03
"Payment Blockage Period" 10.03
"Purchase Agreement" 2.01(a)
"Purchase Date" 4.06
"Registrar" 2.03
"Regulation S" 2.01(a)
"Regulation S Global Securities 2.01(a)
"Reports" 4.06
"Restricted Global Securities 2.01(a)
"Restricted Payment" 4.04
"Restricted Securities" 2.01(c)
"Rio Guarantee" 11.01
"Rule 144A" 2.01(a)
"Successor Company" 5.01
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST
INDENTURE ACT. This Indenture is subject to the mandatory
provisions of the TIA which are incorporated by reference in and
made a part of this Indenture. The following TIA terms have the
following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
<PAGE>
"indenture security holder" means 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 indenture 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 have the meanings assigned to them by such
definitions.
SECTION 1.04. RULES OF CONSTRUCTION. Unless the
context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words
in the plural include the singular;
(6) unsecured Indebtedness shall not be deemed to be
subordinate or junior to Secured Indebtedness merely by
virtue of its nature as unsecured Indebtedness;
(7) the principal amount of any noninterest bearing or
other discount security at any date shall be the principal
amount thereof that would be shown on a balance sheet of the
issuer dated such date prepared in accordance with GAAP and
accretion of principal on such security shall be deemed to
be the Incurrence of Indebtedness; and
(8) the principal amount of any Preferred Stock shall
be the greater of (i) the maximum liquidation value of such
Preferred Stock or (ii) the maximum mandatory redemption or
mandatory repurchase price with respect to such Preferred
Stock.
<PAGE>
ARTICLE 2
THE SECURITIES
SECTION 2.01. FORM AND DATING. The Initial Notes and
the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A, which is hereby
incorporated in and expressly made a part of this Indenture. The
Exchange Notes and the Trustee's certificate of authentication
shall be substantially in the form of Exhibit B, which is hereby
incorporated in and expressly made a part of this Indenture. The
Securities may have notations, legends or endorsements required
by law, stock exchange rule, agreements to which the Company is
subject, if any, or usage (provided that any such notation,
legend or endorsement is in a form acceptable to the Company).
The Company shall furnish any such legend not contained in
Exhibit A and Exhibit B to the Trustee in writing. Each Security
shall be dated the date of its authentication. The terms of the
Securities set forth in Exhibit A are part of the terms of this
Indenture.
(a) GLOBAL SECURITIES. The Initial Notes are being
offered and sold by the Company pursuant to a Purchase Agreement,
dated July 18, 1995, among the Company, Salomon Brothers Inc and
Montgomery Securities (the "Initial Purchasers") (the "Purchase
Agreement").
Initial Notes offered and sold in reliance on
Regulation S under the Securities Act ("Regulation S"), as
provided in the Purchase Agreement, shall be issued initially in
the form of a single, permanent global Security in definitive,
fully registered form without interest coupons with the Global
Securities Legend and Restricted Securities Legend set forth in
Exhibit A hereto (the "Regulation S Global Security") which shall
be deposited on behalf of the purchasers of the Initial Notes
represented thereby with the Trustee, at its New York office, as
custodian, for the Depositary, and registered in the name of the
Depositary or the nominee of the Depositary for the accounts of
designated agents holding on behalf of the Euroclear System
("Euroclear") or Centrale de Livraison de Valeurs Mobileres S.A.
("CEDEL"), duly executed by the Company and authenticated by the
Trustee as hereinafter provided. The aggregate principal amount
of the Regulation S Global Security may from time to time be
increased or decreased by adjustments made on the records of the
Trustee and the Depositary or its nominee, as the case may be, as
hereinafter provided.
Initial Notes offered and sold to QIBs in reliance on
Rule 144A under the Securities Act ("Rule 144A") as provided in
the Purchase Agreement, shall be issued initially in the form of
a single, permanent global Security in definitive, fully
registered form without interest coupons with the Global
Securities Legend and Restricted Securities Legend set forth in
Exhibit A hereto (the "Restricted Global Security"), which shall
be deposited on behalf of the purchasers of the Initial Notes
represented thereby with the Trustee, at its New York office, as
custodian for the Depositary, and registered in the name of the
Depositary or a nominee of the Depositary, duly executed by the
Company and authenticated by the Trustee as hereinafter provided.
The aggregate principal amount of the Restricted Global Security
may from time to time be increased or decreased by adjustments
made on the records of the Trustee and the Depositary or its
nominee as hereinafter provided.
<PAGE>
(b) BOOK-ENTRY PROVISIONS. This Section 2.01(b) shall
apply only to the Regulation S Global Security and the Restricted
Global Security (the "Global Securities") deposited with or on
behalf of the Depositary.
The Company shall execute and the Trustee shall, in
accordance with this Section 2.01(b), authenticate and deliver
initially one or more Global Securities that (a) shall be
registered in the name of the Depositary for such Global Security
or Global Securities or the nominee of such Depositary and
(b) shall be delivered by the Trustee to such Depositary or
pursuant to such Depositary's instructions or held by the Trustee
as custodian for the Depositary.
Members of, or participants in, the Depositary ("Agent
Members") shall have no rights under this Indenture with respect
to any Global Security held on their behalf by the Depositary or
by the Trustee as the custodian of the Depositary or under such
Global Security, and the Depositary may be treated by the
Company, the Trustee and any agent of the Company or the Trustee
as the absolute owner of such Global Security for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall
(i) prevent the Company, the Trustee or any agent of the Company
or the Trustee from giving effect to any written certification,
proxy or other authorization furnished by the Depositary or
(ii) impair, as between the Depositary and its Agent Members, the
operation of customary practices of such Depositary governing the
exercise of the rights of a holder of a beneficial interest in
any Global Security.
(c) CERTIFICATED SECURITIES. Except as provided in
Section 2.09, owners of beneficial interests in Global Securities
will not be entitled to receive physical delivery of certificated
Securities. Purchasers of Initial Notes who are not QIBs and did
not purchase Initial Notes sold in reliance on Regulation S under
the Securities Act (referred to herein as the "Non-Global
Purchasers") will receive certificated Initial Notes bearing the
Restricted Securities Legend set forth in Exhibit A hereto
("Restricted Securities"); PROVIDED, HOWEVER, that upon transfer
of such certificated Initial Notes to a QIB or in accordance with
Regulation S, such certificated Initial Notes will, unless the
relevant Global Security has previously been exchanged, be
exchanged for an interest in a Global Security pursuant to the
provisions of Section 2.06 hereof. Restricted Securities will
bear the Restricted Securities Legend set forth on Exhibit A
unless removed in accordance with Section 2.06(b) hereof.
After a transfer of any Initial Notes during the period
of the effectiveness of a Shelf Registration Statement with
respect to the Initial Notes, all requirements pertaining to
legends on such Initial Note will cease to apply, the
requirements requiring any such Initial Note issued to certain
Holders be issued in global form will cease to apply, and a
certificated Initial Note without legends will be available to
the Holder of such Initial Notes. Upon the consummation of a
Registered Exchange Offer with respect to the Initial Notes
pursuant to which Holders of Initial Notes are offered Exchange
Notes in exchange for their Initial Notes, all requirements that
Initial Notes issued to certain Holders be issued in global form
will cease to apply and (i) certificated Initial Notes with the
Restricted Securities Legend set forth in Exhibit A hereto will
be available to Holders of such Initial Notes that do not
exchange their Initial Notes, and (ii) Exchange Notes in
certificated form will be available to Holders that exchange such
Initial Notes in such Registered Exchange Offer.
<PAGE>
SECTION 2.02. EXECUTION AND AUTHENTICATION. Two
Officers shall sign the Securities for the Company by manual or
facsimile signature. The Company's seal shall be impressed,
affixed, imprinted or reproduced on the Securities and may be in
facsimile form.
If an Officer whose signature is on a Security no
longer holds that office at the time the Trustee authenticates
the Security, the Security shall be valid nevertheless.
A Security shall not be valid until an authorized
signatory of the Trustee manually signs the certificate of
authentication on the Security. The signature shall be con
clusive evidence, and the only evidence, that the Security has
been authenticated under this Indenture.
The Trustee shall authenticate and deliver (1) Initial
Notes for original issue in an aggregate principal amount of
$100,000,000, and (2) Exchange Notes for issue only in a
Registered Exchange Offer, pursuant to the Registration
Agreement, for Initial Notes for a like principal amount of
Initial Notes in each case, upon a written order of the Company
signed by two Officers. Such order shall specify the amount of
the Securities to be authenticated, the date on which the
original issue of Securities is to be authenticated, whether the
Securities are to be Initial Notes or Exchange Notes and shall
further provide instructions concerning registration, amounts for
each Holder and delivery. The aggregate principal amount of
Securities outstanding at any time may not exceed that amount
except as provided in Section 2.07.
The Trustee may appoint an authenticating agent
reasonably acceptable to the Company to authenticate the
Securities. Unless limited by the terms of such 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 any
Registrar, Paying Agent or agent for service of notices and
demands.
SECTION 2.03. REGISTRAR AND PAYING AGENT. The Company
shall maintain an office or agency where Securities may be
presented for registration of transfer or for exchange (the
"Registrar") and an office or agency where Securities may be
presented for payment (the "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 shall enter into an appropriate agency
agreement with any Registrar, Paying Agent or co-registrar not a
party to this Indenture, which shall incorporate the terms of the
TIA. The agreement shall implement the provisions of this
Indenture that relate to such agent. The Company shall notify
the Trustee 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 and shall be entitled to appropriate
compensation therefor pursuant to Section 7.07. The Company or
any of its domestically incorporated Wholly Owned Subsidiaries
may act as Paying Agent, Registrar, co-registrar or transfer
agent.
The Company initially appoints the Trustee as Registrar
and Paying Agent in connection with the Securities.
<PAGE>
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST. At
least one Business Day prior to each due date of the principal
and interest on any Security, the Company shall deposit with the
Paying Agent a sum sufficient to pay such principal and interest
when so becoming due. The Company shall require each Paying
Agent (other than the Trustee) to agree in writing that the
Paying Agent shall hold in trust for the benefit of Security
holders or the Trustee all money held by the Paying Agent for the
payment of principal of or interest on the Securities and shall
notify the Trustee of any default by the Company in making any
such payment. If the Company or a Subsidiary acts as Paying
Agent, it shall segregate the money held by it as Paying Agent
and hold it as a separate trust fund. The Company at any time
may require a Paying Agent to pay all money held by it to the
Trustee and to account for any funds disbursed by the Paying
Agent. Upon complying with this Section, the Paying Agent shall
have no further liability for the money delivered to the Trustee.
SECTION 2.05. 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
Securityholders. If the Trustee is not the Registrar, the
Company shall furnish to the Trustee, in writing at least five
Business Days before each interest payment date and at such other
times as the Trustee may request in writing, a list in such form
and as of such date as the Trustee may reasonably require of the
names and addresses of Securityholders.
SECTION 2.06. TRANSFER AND EXCHANGE. The Securities
shall be issued in registered form and shall be transferable only
upon the surrender of a Security for registration of transfer.
When a Security is presented to the Registrar or a co-registrar
with a request to register a transfer, the Registrar shall
register the transfer as requested if the requirements of
Section 8-401(1) of the Uniform Commercial Code are met. When
Securities are presented to the Registrar or a co-registrar with
a request to exchange them for an equal principal amount of
Securities of other denominations, the Registrar shall make the
exchange as requested if the same requirements are met. To
permit registration of transfers and exchanges, the Company shall
execute and, upon receipt of an Officer's Certificate, the
Trustee shall authenticate Securities at the Registrar's or co-
registrar's request. The Company may require that a
Securityholder requesting a transfer or exchange pay a sum suffi
cient to pay all taxes, assessments or other governmental charges
in connection with any transfer or exchange pursuant to this
Section. The Company shall not be required to make and the
Registrar need not register transfers or exchanges of Securities
selected for redemption (except, in the case of Securities to be
redeemed in part, the portion thereof not to be redeemed) or any
Securities for a period of 15 days before a selection of
Securities to be redeemed or 15 days before an interest payment
date.
Prior to the due presentation for registration of
transfer of any Security, the Company, the Trustee, the Paying
Agent, the Registrar or any co-registrar may deem and treat the
person in whose name a Security is registered as the absolute
owner of such Security for the purpose of receiving payment of
principal of and interest on such Security and for all other
purposes whatsoever, whether or not such Security is overdue, and
none of the Company, the Trustee, the Paying Agent, the Registrar
or any co-registrar shall be affected by notice to the contrary.
<PAGE>
All Securities issued upon any transfer or exchange
pursuant to the terms of this Indenture will evidence the same
debt and will be entitled to the same benefits under this
Indenture as the Securities surrendered upon such transfer or
exchange.
(a) Notwithstanding any provision to the contrary
herein, so long as a Global Security remains outstanding and is
held by or on behalf of the Depositary, transfers of a Global
Security, in whole or in part, or of any beneficial interest
therein, shall only be made in accordance with Section 2.01(b)
and this Section 2.06(a); PROVIDED, HOWEVER, that beneficial
interests in a Global Security may be transferred to Persons who
take delivery thereof in the form of a beneficial interest in the
same Global Security in accordance with the transfer restrictions
set forth in the Restricted Securities Legend and under the
heading "Notice to Investors" in the Offering Memorandum dated
July 18, 1995.
(i) Subject to clauses (ii) through (v) of this
Section 2.06(a), transfers of a Global Security shall be
limited to transfers of such Global Security in whole, but
not in part, to nominees of the Depositary or to a successor
of the Depositary or such successor's nominee.
(ii) RESTRICTED GLOBAL SECURITY TO REGULATION S GLOBAL
SECURITY. If a holder of a beneficial interest in the
Restricted Global Security deposited with the Depositary or
the Trustee as custodian for the Depositary wishes at any
time to exchange its interest in such Restricted Global
Security for an interest in the Regulation S Global
Security, or to transfer its interest in such Restricted
Global Security to a Person who is required to take delivery
thereof in the form of an interest in the Regulation S
Global Security, such holder may, subject to the rules and
procedures of the Depositary, exchange or cause the exchange
of such interest for an equivalent beneficial interest in
the Regulation S Global Security. Upon receipt by the
Trustee, as Registrar, at its office in The City of New York
of (1) instructions given in accordance with the
Depositary's procedures from an Agent Member directing the
Trustee to credit or cause to be credited a beneficial
interest in the Regulation S Global Security in an amount
equal to the beneficial interest in the Restricted Global
Security to be exchanged, (2) a written order given in
accordance with the Depositary's procedures containing
information regarding the participant account of the
Depositary and, in the case of a transfer pursuant to and in
accordance with Regulation S, the Euroclear or CEDEL account
to be credited with such increase, (3) in the case of a
transfer, a certificate in the form of Exhibit C attached
hereto given by the holder of such beneficial interest
stating that the transfer of such interest has been made in
compliance with the transfer restrictions applicable to the
Global Securities and (A) pursuant to and in accordance with
Regulation S, (B) that the Security being transferred is not
a "restricted security" as defined in Rule 144 under the
Securities Act, or (C) stating that the Person transferring
such interest reasonably believes that the Person acquiring
such interest in the Regulation S Global Security is a QIB
and is obtaining such beneficial interest in a transaction
meeting the requirements of Rule 144A and (4) such opinion
of counsel as the Trustee may reasonably request to ensure
that the requested transfer or exchange is being made
pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities
Act, then the Trustee, as Registrar, shall instruct the
Depositary to reduce or cause to be reduced the principal
amount of the Restricted Global Security and to increase or
<PAGE>
cause to be increased the principal amount of the
Regulation S Global Security by the aggregate principal
amount of the beneficial interest in the Restricted Global
Security to be exchanged, to credit or cause to be credited
to the account of the Person specified in such instructions
a beneficial interest in the Regulation S Global Security
equal to the reduction in the principal amount of the
Restricted Global Security, and to debit or cause to be
debited from the account of the Person making such exchange
or transfer the beneficial interest in the Restricted Global
Security that is being exchanged or transferred.
(iii) REGULATION S GLOBAL SECURITY TO RESTRICTED
GLOBAL SECURITY. If a holder of a beneficial interest in
the Regulation S Global Security deposited with the
Depositary or with the Trustee as custodian for the
Depositary wishes at any time to transfer its interest in
such Regulation S Global Security to a Person who is
required to take delivery thereof in the form of an interest
in the Restricted Global Security, such holder may, subject
to the rules and procedures of Euroclear or CEDEL, as the
case may be, and the Depositary, exchange or cause the
exchange of such interest for an equivalent beneficial
interest in the Restricted Global Security. Upon receipt by
the Trustee, as Registrar, at its office in The City of New
York of (1) instructions from Euroclear or CEDEL, if
applicable, and the Depositary, directing the Trustee, as
Registrar, to credit or cause to be credited a beneficial
interest in the Restricted Global Security equal to the
beneficial interest in the Regulation S Global Security to
be exchanged, such instructions to contain information
regarding the participant account with the Depositary to be
credited with such increase, (2) a written order given in
accordance with the Depositary's procedures containing
information regarding the participant account of the
Depositary, (3) a certificate in the form of Exhibit D
attached hereto given by the holder of such beneficial
interest and stating that the Person transferring such
interest in the Regulation S Global Security reasonably
believes that the Person acquiring such interest in the
Restricted Global Security is a QIB and is obtaining such
beneficial interest in a transaction meeting the
requirements of Rule 144A and (4) such opinion of counsel as
the Trustee may reasonably request to ensure that the
requested transfer or exchange is being made pursuant to an
exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act, then
Euroclear or CEDEL or the Trustee, as Registrar, as the case
may be, will instruct the Depositary to reduce or cause to
be reduced the Regulation S Global Security and to increase
or cause to be increased the principal amount of the
Restricted Global Security by the aggregate principal amount
of the beneficial interest in the Regulation S Global
Security to be exchanged, and the Trustee, as Registrar,
shall instruct the Depositary, concurrently with such
reduction, to credit or cause to be credited to the account
of the Person specified in such instructions a beneficial
interest in the Restricted Global Security equal to the
reduction in the principal amount of the Regulation S Global
Security and to debit or cause to be debited from the
account of the Person making such transfer the beneficial
interest in the Regulation S Global Security that is being
transferred.
(iv) GLOBAL SECURITY TO RESTRICTED SECURITY. If a
holder of a beneficial interest in a Global Security
deposited with the Depositary or with the Trustee as
custodian for the Depositary wishes at any time to transfer
its interest in such Global Security to a Person who is
required to take delivery thereof in the form of a
<PAGE>
Restricted Security, such holder may, subject to the rules
and procedures of Euroclear or CEDEL, if applicable, and the
Depositary, cause the exchange of such interest for one or
more Restricted Securities of any authorized denomination or
denominations and of the same aggregate principal amount.
Upon receipt by the Trustee, as Registrar, at its office in
The City of New York of (1) instructions from Euroclear or
CEDEL, if applicable, and the Depositary directing the
Trustee, as Registrar, to authenticate and deliver one or
more Restricted Securities of the same aggregate principal
amount as the beneficial interest in the Global Security to
be exchanged, such instructions to contain the name or names
of the designated transferee or transferees, the authorized
denomination or denominations of the Restricted Securities
to be so issued and appropriate delivery instructions, (2) a
certificate in the form of Exhibit E attached hereto given
by the holder of such beneficial interest and stating that
the Person transferring such interest in such Global
Security reasonably believes that the Person acquiring the
Restricted Securities for which such interest is being
exchanged is an institutional "accredited investor" (as
defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D
under the Securities Act) and is acquiring such Restricted
Securities having an aggregate principal amount of not less
than $250,000 for its own account or for one or more
accounts as to which the transferee exercises sole
investment discretion, (3) a certificate in the form of
Exhibit F attached hereto given by the Person acquiring the
Restricted Securities for which such interest is being
exchanged, to the effect set forth therein, and (4) such
other certifications, legal opinions or other information as
the Company or the Trustee may reasonably require to confirm
that such transfer is being made pursuant to an exemption
from, or in a transaction not subject to, the registration
requirements of the Securities Act, then Euroclear or CEDEL,
if applicable, or the Trustee, as Registrar, as the case may
be, will instruct the Depositary to reduce or cause to be
reduced such Global Security by the aggregate principal
amount of the beneficial interest therein to be exchanged
and to debit or cause to be debited from the account of the
Person making such transfer the beneficial interest in the
Global Security that is being transferred, and concurrently
with such reduction and debit the Company shall execute, and
the Trustee shall authenticate and deliver, one or more
Restricted Securities of the same aggregate principal amount
in accordance with the instructions referred to above.
(v) RESTRICTED SECURITY TO GLOBAL SECURITY. If a
holder of a Restricted Security wishes at any time to
transfer such Restricted Security to a Person who is
required to take delivery thereof in the form of an interest
in a Global Security, such holder may, subject to the rules
and procedures of Euroclear or CEDEL, if applicable, and the
Depositary, cause the exchange of such Restricted Security
for an equivalent beneficial interest in the appropriate
Global Security. Upon receipt by the Trustee, as Registrar,
at its office in The City of New York of (1) such Restricted
Security, duly endorsed as provided herein, (2) instructions
from such holder directing the Trustee, as Registrar, to
credit or cause to be credited a beneficial interest in the
applicable Global Security equal to the principal amount of
the Restricted Security to be exchanged, such instructions
to contain information regarding the participant account
with the Depositary to be credited with such increase, (3) a
certificate in the form of Exhibit C attached hereto (in the
event that the applicable Global Security is the
Regulation S Global Security) or in the form of Exhibit D
attached hereto (in the event that the applicable Global
Security is the Restricted Global Security), and (4) such
<PAGE>
opinion of counsel as the Trustee may reasonably request to
ensure that the requested transfer or exchange is being made
pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities
Act then the Trustee, as Registrar, shall cancel or cause to
be cancelled such Restricted Security and shall instruct the
Depositary to increase or cause to be increased such Global
Security by the aggregate principal amount of the beneficial
interest in the Restricted Security to be exchanged and to
credit or cause to be credited to the account of the Person
specified in such instructions a beneficial interest in the
applicable Global Security equal to the principal amount of
the Restricted Security so cancelled.
(vi) RESTRICTED SECURITY TO RESTRICTED SECURITY. If a
holder of a Restricted Security wishes at any time to
transfer such Restricted Security to a Person who is
required to take delivery thereof in the form of a
Restricted Security, such holder may, subject to the
restrictions on transfer set forth herein and in such
Restricted Security, cause the exchange of such Restricted
Security for one or more Restricted Securities of any
authorized denomination or denominations and of the same
aggregate principal amount. Upon receipt by the Trustee, as
Registrar, at its office in The City of New York of (1) such
Restricted Security, duly endorsed as provided herein,
(2) instructions from such holder directing the Trustee, as
Registrar, to authenticate and deliver one or more
Restricted Securities of the same aggregate principal amount
as the Restricted Security to be exchanged, such
instructions to contain the name or authorized denomination
or denominations of the Restricted Securities to be so
issued and appropriate delivery instructions, (3) a
certificate from the holder of the Restricted Security to be
exchanged in the form of Exhibit E attached hereto, (4) a
certificate in the form of Exhibit F attached hereto given
by the Person acquiring the Restricted Securities for which
such interest is being exchanged, to the effect set forth
therein, and (5) such other certifications, legal opinions
or other information as the Company or the Trustee may
reasonably require to confirm that such transfer is being
made pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities
Act, then the Trustee, as Registrar, shall cancel or cause
to be cancelled such Restricted Security and concurrently
therewith, the Company shall execute, and the Trustee shall
authenticate and deliver, one or more Restricted Securities
of the same aggregate principal amount, in accordance with
the instructions referred to above.
(vii) OTHER EXCHANGES. In the event that a Global
Security is exchanged for Securities in definitive
registered form pursuant to Section 2.09, prior to the
consummation of a Registered Exchange Offer or the
effectiveness of a Shelf Registration Statement with respect
to such Securities, such Securities may be exchanged only in
accordance with such procedures as are substantially
consistent with the provisions of clauses (ii) through (v)
above (including the certification requirements intended to
ensure that such transfers comply with Rule 144A or
Regulation S under the Securities Act, as the case may be)
and such other procedures as may from time to time be
adopted by the Company.
(viii) RESTRICTED PERIOD. Prior to the termination of
the "restricted period" (as defined in Regulation S under
the Securities Act) with respect to the issuance of the
<PAGE>
Initial Notes, transfers of interests in the Regulation S
Global Security to "U.S. persons" (as defined in
Regulation S under the Securities Act) shall be limited to
transfers made pursuant to the provisions of
Section 2.06(a)(iii). The Company shall provide an
Officer's Certificate advising the Trustee as to the
termination of the restricted period and the Trustee may
rely conclusively thereon.
(b) Except in connection with a Registered Exchange
Offer or a Shelf Registration Statement contemplated by and in
accordance with the terms of the Registration Agreement, if
Initial Notes are issued upon the transfer, exchange or
replacement of Initial Notes bearing the Restricted Securities
Legend set forth in Exhibit A hereto, or if a request is made to
remove such Restricted Securities Legend on Initial Notes, the
Initial Notes so issued shall bear the Restricted Securities
Legend, or the Restricted Securities Legend shall not be removed,
as the case may be, unless there is delivered to the Company or
the Trustee such satisfactory evidence, including an Opinion of
Counsel, as may be reasonably required by the Company or the
Trustee, that neither the legend nor the restrictions on transfer
set forth therein are required to ensure that transfers thereof
comply with the provisions of Rule 144A, Rule 144 or Regulation S
under the Securities Act or, with respect to Restricted
Securities, that such Securities are not "restricted" within the
meaning of Rule 144 under the Securities Act. Upon provision of
such satisfactory evidence, the Trustee, upon receipt of a
written order from the Company in accordance with Section 2.02,
shall authenticate and deliver Initial Notes that do not bear the
legend.
(c) The Trustee shall have no responsibility for any
actions taken or not taken by the Depositary.
SECTION 2.07. REPLACEMENT SECURITIES. If a mutilated
Security is surrendered to the Registrar or if the Holder of a
Security (including without limitation temporary securities
issued in accordance with Section 2.09, if any) claims that the
Security has been lost, destroyed or wrongfully taken, the
Company shall issue and the Trustee, upon written order of the
Company signed by two Officers, shall authenticate a replacement
Security if the requirements of Section 8-405 of the Uniform
Commercial Code are met and the Holder satisfies any other
reasonable requirements of the Trustee or the Company. If
required by the Trustee or the Company, such Holder shall furnish
an indemnity bond sufficient in the judgment of the Company and
the Trustee to protect the Company, the Trustee, the Paying
Agent, the Registrar and any co-registrar from any loss which any
of them may suffer if a Security is replaced. The Company and
the Trustee may charge the Holder for their expenses in replacing
a Security.
Every replacement Security is an additional obligation
of the Company.
SECTION 2.08. OUTSTANDING SECURITIES. Securities
outstanding at any time are all Securities authenticated by the
Trustee except for those canceled by it, those delivered to it
for cancellation and those described in this Section as not
outstanding. A Security does not cease to be outstanding because
the Company or an Affiliate of the Company holds the Security.
If a Security is replaced pursuant to Section 2.07, it
ceases to be outstanding unless the Trustee and the Company
receive proof satisfactory to them that the replaced Security is
held by a bona fide purchaser.
<PAGE>
If the Paying Agent segregates and holds in trust, in
accordance with this Indenture, on a redemption date or maturity
date money sufficient to pay all principal and interest payable
on that date with respect to the Securities (or portions thereof)
to be redeemed or maturing, as the case may be, and the Paying
Agent is not prohibited from paying such money to the
Securityholders on that date pursuant to the terms of this
Indenture, then on and after that date such Securities (or
portions thereof) cease to be outstanding and interest on them
ceases to accrue.
In determining whether the Holders of the required
principal amount of Securities have concurred in any direction or
consent or any amendment, modification or other change to the
Indenture, Securities owned by the Company or by an Affiliate of
the Company shall be disregarded, except that for the purposes of
determining whether the Trustee shall be protected in relying on
any such direction, waiver or consent or any amendment,
modification or other change to the Indenture, only Securities
which the Trustee knows are so owned shall be so disregarded.
Securities so owned which have been pledged in good faith shall
not be disregarded if the pledgee establishes to the satisfaction
of the Trustee the pledgee's right so to act with respect to the
Securities and that the pledgee is not the Company or an
Affiliate of the Company.
SECTION 2.09. TEMPORARY SECURITIES. (a) Until
definitive Securities are ready for delivery, the Company may
prepare and, upon receipt of a written order of the Company
signed by two Officers, the Trustee shall authenticate temporary
Securities. Temporary Securities shall be substantially in the
form of definitive Securities but may have variations that the
Company considers appropriate for temporary Securities. Without
unreasonable delay, the Company shall prepare and the Trustee
shall authenticate definitive Securities and deliver them in
exchange for temporary Securities.
(b) A Global Security deposited with the Depositary or
with the Trustee as custodian for the Depositary pursuant to
Section 2.01 shall be transferred to the beneficial owners
thereof only if such transfer complies with Section 2.06 and
(i) the Depositary notifies the Company that it is unwilling or
unable to continue as Depositary for such Global Security or if
at any time such Depositary ceases to be a "clearing agency"
registered under the Exchange Act and a successor depositary is
not appointed by the Company within 90 days of such notice, or
(ii) an Event of Default has occurred and is continuing.
(c) Any Global Security that is transferable to the
beneficial owners thereof pursuant to this Section shall be
surrendered by the Depositary to the Trustee located in the
Borough of Manhattan, The City of New York, to be so transferred,
in whole or from time to time in part, without charge, and the
Trustee shall authenticate and deliver, upon such transfer of
each portion of such Global Security, an equal aggregate
principal amount of Initial Notes of authorized denominations.
Any portion of a Global Security transferred pursuant to this
Section shall be executed, authenticated and delivered only in
denominations of $1,000 and any integral multiple thereof and
registered in such names as the Depositary shall direct. Any
Initial Note delivered in exchange for an interest in the
Restricted Global Security shall, except as otherwise provided by
Section 2.06(b) bear the Restricted Securities Legend set forth
in Exhibit A hereto. Any Initial Note delivered in exchange for
an interest in the Regulation S Global Security shall, except as
otherwise provided by Section 2.06(b) bear the Restricted
Securities Legend set forth in Exhibit A hereto.
<PAGE>
(d) Subject to the provisions of Section 2.09(c), the
registered Holder of a Global Security may grant proxies and
otherwise authorize any Person, including Agent Members and
Persons that may hold interests through Agent Members, to take
any action which a Holder is entitled to take under this
Indenture or the Securities.
(e) In the event of the occurrence of either of the
events specified in Section 2.09(b), the Company will promptly
make available to the Trustee a reasonable supply of certificated
Securities in definitive, fully registered form without interest
coupons.
SECTION 2.10. 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 registration of transfer,
exchange or payment. The Trustee and no one else shall cancel
and destroy (subject to the record retention requirements of the
Exchange Act) all Securities surrendered for registration of
transfer, exchange, payment or cancellation and deliver a
certificate of such destruction to the Company unless the Company
directs the Trustee to deliver canceled Securities to the
Company. The Company may not issue new Securities to replace
Securities it has redeemed, paid or delivered to the Trustee for
cancellation.
SECTION 2.11. DEFAULTED INTEREST. If the Company
defaults in a payment of interest on the Securities, the Company
shall pay defaulted interest (plus interest on such defaulted
interest to the extent lawful) in any lawful manner. The Company
may pay the defaulted interest to the persons who are
Securityholders on a subsequent special record date. The Company
shall fix or cause to be fixed any such special record date and
payment date to the reasonable satisfaction of the Trustee and
shall promptly mail to each Securityholder a notice that states
the special record date, the payment date and the amount of
defaulted interest to be paid.
ARTICLE 3
REDEMPTION
SECTION 3.01. NOTICES TO TRUSTEE. If the Company
elects or is required to redeem Securities pursuant to
paragraphs 6 or 7 of the Securities, it shall notify the Trustee
in writing of the redemption date, the principal amount of
Securities to be redeemed and the paragraph of the Securities
pursuant to which the redemption will occur.
The Company shall give each notice to the Trustee
provided for in this Section at least 60 days but not more than
90 days prior to the redemption date unless the Trustee consents
to a shorter period. Such notice shall be accompanied by an
Officers' Certificate and an Opinion of Counsel from the Company
to the effect that such redemption will comply with the condi
tions herein. If fewer than all the Securities are to be
redeemed, the record date relating to such redemption shall be
selected by the Company and given to the Trustee, which record
date shall be not less than 15 days after the date of notice to
the Trustee.
<PAGE>
SECTION 3.02. SELECTION OF SECURITIES TO BE REDEEMED.
If fewer than all the Securities are to be redeemed, the Trustee
shall select the Securities to be redeemed pro rata or by lot or
by a method that complies with applicable legal and securities
exchange requirements, if any, and that the Trustee considers
fair and appropriate and in accordance with methods generally
used at the time of selection by fiduciaries in similar
circumstances. The Trustee shall make the selection from
outstanding Securities not previously called for redemption. The
Trustee may select for redemption portions of the principal of
Securities that have denominations larger than $1,000. Secur
ities and portions of them the Trustee selects shall be in
amounts of $1,000 or a whole multiple of $1,000. Provisions of
this Indenture that apply to Securities called for redemption
also apply to portions of Securities called for redemption. The
Trustee shall notify the Company promptly of the Securities or
portions of Securities to be redeemed.
SECTION 3.03. NOTICE OF REDEMPTION. At least 30 days
but not more than 60 days before a date for redemption of
Securities, the Company shall mail a notice of redemption by
first-class mail to each Holder of Securities to be redeemed.
The notice shall identify the Securities to be redeemed
and shall state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be
surrendered to the Paying Agent to collect the redemption
price;
(5) if fewer than all the outstanding Securities are to
be redeemed, the identification and principal amounts of the
particular Securities to be redeemed;
(6) that, unless the Company defaults in making such
redemption payment or the Paying Agent is prohibited from
making such payment pursuant to the terms of this Indenture,
interest on Securities (or portion thereof) called for
redemption ceases to accrue on and after the redemption
date;
(7) the paragraph of the Securities pursuant to which
the Securities called for redemption are being redeemed; and
(8) that no representation is made as to the
correctness or accuracy of the CUSIP number, if any, listed
in such notice or printed on the Securities.
At the Company's written request, the Trustee shall
give the notice of redemption in the Company's name and at the
Company's expense. In such event, the Company shall provide the
Trustee with the information required by this Section at least
50 days prior to the redemption date.
<PAGE>
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION. Once
notice of redemption is mailed, Securities called for redemption
become due and payable on the redemption date and at the
redemption price stated in the notice. Upon surrender to the
Paying Agent, such Securities shall be paid at the redemption
price stated in the notice, plus accrued interest to the
redemption date. Failure to give notice or any defect in the
notice to any Holder shall not affect the validity of the notice
to any other Holder.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE. At least
one Business Day prior to the redemption date, the Company shall
deposit with the Paying Agent (or, if the Company or a Subsidiary
is the Paying Agent, shall segregate and hold in trust) money
sufficient to pay the redemption price of and accrued interest on
all Securities to be redeemed on that date other than Securities
or portions of Securities called for redemption which have been
delivered by the Company to the Trustee for cancellation.
SECTION 3.06. SECURITIES REDEEMED IN PART. Upon
surrender of a Security that is redeemed in part, the Company
shall execute and, upon receipt of a written order of the Company
signed by two Officers, the Trustee shall authenticate for the
Holder (at the Company's expense) a new Security equal in
principal amount to the unredeemed portion of the Security
surrendered.
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF SECURITIES. At least one
Business Day prior to any due date for the payment of principal
of and interest on the Securities the Company shall deposit with
the Paying Agent money sufficient to pay all principal and
interest on the Securities due on such due date. Principal and
interest shall be considered paid on the date due if on such date
the Trustee or the Paying Agent holds in accordance with this
Indenture money sufficient to pay all principal and interest then
due and the Trustee or the Paying Agent, as the case may be, is
not prohibited from paying such money to the Securityholders on
that date pursuant to the terms of this Indenture.
The Company shall pay interest on overdue principal at
the rate specified therefor in the Securities, and it shall pay
interest on overdue installments of interest at the same rate to
the extent lawful.
SECTION 4.02. SEC REPORTS. At the Company's expense,
the Company shall file with the Trustee and provide
Securityholders at the Company's expense, within 15 days after it
files them with the SEC, copies of its annual report and other
reports which the Company is required to file with the SEC
pursuant to Section 13 or 15(d) of the Exchange Act.
Notwithstanding that the Company may not be required to remain
subject to the reporting requirements of Section 13 or 15(d) of
the Exchange Act, the Company shall continue to file with the SEC
and provide the Trustee and Securityholders with the annual
reports and other reports which are specified in Sections 13 and
15(d) of the Exchange Act. The Company also shall comply with
the other provisions of TIA SECTION 314(a).
<PAGE>
SECTION 4.03. LIMITATION ON INDEBTEDNESS. (a) The
Company shall not, and shall not permit any Restricted Subsidiary
to, Incur any Indebtedness; PROVIDED, HOWEVER, that the Company
or any Restricted Subsidiary may Incur Indebtedness if on the
date thereof the Consolidated Coverage Ratio would be greater
than 2.00:1.00.
(b) Notwithstanding the foregoing limitation, the
Company and its Restricted Subsidiaries may Incur the following
Indebtedness:
(i) Indebtedness under the Credit Agreement in an
aggregate amount outstanding at any time not to exceed $175
million (less the amount of any permanent reductions in the
amount of available borrowings);
(ii) Indebtedness outstanding under Permitted FF&E
Financings in an amount not to exceed 100% of the lower of
cost or fair market value of the FF&E so purchased or
leased;
(iii) Indebtedness (other than Indebtedness permitted
by the immediately preceding paragraph or elsewhere in this
paragraph) in an aggregate principal amount outstanding at
any time not to exceed $40 million;
(iv) Indebtedness of the Company owing to and held by
any Wholly Owned Subsidiary or Indebtedness of a Restricted
Subsidiary owing to and held by the Company or any Wholly
Owned Subsidiary; PROVIDED, HOWEVER, that any subsequent
issuance or transfer of any Capital Stock which results in
any such Wholly Owned Subsidiary ceasing to be a Wholly
Owned Subsidiary or any subsequent transfer of any such
Indebtedness (except to the Company or a Wholly Owned
Subsidiary) shall be deemed, in each case, to constitute the
Incurrence of such Indebtedness by the issuer thereof;
(v) Indebtedness represented by the Securities and the
Rio Guarantee and any Indebtedness (other than the
Indebtedness described in clauses (i) or (iv) above)
outstanding on the date of the Indenture;
(vi) Indebtedness under Interest Rate Protection
Agreements; PROVIDED, HOWEVER, such Interest Rate Protection
Agreements do not increase the Indebtedness of the Company
outstanding at any time other than as a result of
fluctuations in the exchange rates or interest rates or by
reason of customary fees, indemnities and compensation
payable thereunder;
(vii) Indebtedness in connection with one or more
standby letters of credit issued in the ordinary course of
business or pursuant to self-insurance obligations;
(viii) Indebtedness Incurred solely in respect of
performance bonds or completion guarantees, to the extent
that such Incurrence does not result in the Incurrence by
the Company or any Restricted Subsidiary of any obligation
for the payment of borrowed money to others; and
<PAGE>
(ix) Refinancing Indebtedness Incurred in respect of
Indebtedness Incurred pursuant to Section 4.03(a) or clauses
(ii) and (v) above.
(c) For purposes of determining the outstanding
principal amount of any particular Indebtedness Incurred pursuant
to this section 4.03, (i) Indebtedness permitted by this section
need not be permitted solely by reference to one provision
permitting such Indebtedness but may be permitted in part by one
such provision and in part by one or more other provisions of
this provision permitting such Indebtedness and (ii) in the event
that Indebtedness or any portion thereof meets the criteria of
more than one of the types of Indebtedness described in this
section, the Company, in its sole discretion, shall classify such
Indebtedness and only be required to include the amount of such
Indebtedness in one of such clauses.
SECTION 4.04. LIMITATION ON RESTRICTED PAYMENTS.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, (i) declare or pay any
dividend or make any distribution on or in respect of its Capital
Stock (including any payment in connection with any merger or
consolidation involving the Company) except dividends or
distributions payable solely in its Capital Stock (other than
Disqualified Stock) or in options, warrants or other rights to
purchase such Capital Stock and except dividends or distributions
payable to the Company or a Restricted Subsidiary (and, if such
Restricted Subsidiary is not wholly owned, to its other
shareholders on a pro rata basis), (ii) purchase, redeem, retire
or otherwise acquire for value any Capital Stock of the Company
or any Restricted Subsidiary held by Persons other than the
Company or a Restricted Subsidiary, (iii) purchase, repurchase,
redeem, defease or otherwise acquire or retire for value, prior
to scheduled maturity, scheduled repayment or scheduled sinking
fund payment any Subordinated Obligations (other than the
purchase, repurchase or other acquisition of Subordinated
Obligations purchased in anticipation of satisfying a sinking
fund obligation, principal installment or final maturity, in each
case due within one year of the date of acquisition) or (iv) make
any Investment (other than a Permitted Investment) in any Person
(any such dividend, distribution, purchase, redemption,
repurchase, defeasance, other acquisition, retirement or
Investment being herein referred to as a "Restricted Payment") if
at the time the Company or such Restricted Subsidiary makes such
Restricted Payment:
(A) a Default shall have occurred and be continuing (or
would result therefrom);
(B) the Company could not Incur at least $1.00 of
additional Indebtedness under the Consolidated Coverage
Ratio limitation set forth in Section 4.03 above; or
(C) the aggregate amount of such Restricted Payment and
all other Restricted Payments (the amount so expended, if
other than in cash, to be determined in good faith by the
Board of Directors, whose determination shall be evidenced
by a Board Resolution) declared or made since June 30, 1995,
would exceed, without duplication, the sum of:
(1) 50% of the Consolidated Net Income accrued
during the period (treated as one accounting period)
from June 30, 1995, to the end of the most recent
fiscal quarter ending at least 45 days (or at least 30
days if the Company's Report on Form 10-Q or 10-K for
the most recent fiscal quarter or year, as the case may
<PAGE>
be, has been filed with the SEC) prior to the date of
such Restricted Payment (or, in case such Consolidated
Net Income shall be a deficit, minus 100% of such
deficit) and minus 100% of the amount of any write-
downs, write-offs, other negative revaluations and
other negative extraordinary charges not otherwise
reflected in Consolidated Net Income during such
period;
(2) the aggregate Net Cash Proceeds received by
the Company from the issue or sale of its Capital Stock
(other than Disqualified Stock) subsequent to June 30,
1995 (other than an issuance or sale to a Subsidiary of
the Company or an employee stock ownership plan or
other trust established by the Company or any of its
Subsidiaries);
(3) the amount by which Indebtedness of the
Company or its Restricted Subsidiaries is reduced on
the Company's balance sheet upon the conversion or
exchange (other than by a Subsidiary) subsequent to
June 30, 1995, of any Indebtedness of the Company or
its Restricted Subsidiaries convertible or exchangeable
for Capital Stock (other than Disqualified Stock) of
the Company (less the amount of any cash or other
property distributed by the Company or any Restricted
Subsidiary upon such conversion or exchange);
(4) the amount equal to the net reduction in
Investments resulting from (A) payments of dividends,
repayments of loans or advances or other transfers of
assets to the Company or any Restricted Subsidiary or
(B) the redesignation of Unrestricted Subsidiaries as
Restricted Subsidiaries (valued in each case as
provided in the definition of "Investment") not to
exceed the amount of Investments previously made by the
Company or any Restricted Subsidiary, which amount was
treated as a Restricted Payment, in each case to the
extent not included in Consolidated Net Income; and
(5) $20 million.
(b) The provisions of Section 4.04(a) shall not
prohibit:
(i) any purchase or redemption of Capital Stock of the
Company or Subordinated Obligations made by exchange for, or
out of the proceeds of the substantially concurrent sale of,
Capital Stock of the Company (other than Disqualified Stock
and other than Capital Stock issued or sold to a Subsidiary
or an employee stock ownership plan or other trust
established by the Company or any of its Subsidiaries);
PROVIDED, HOWEVER, that (A) such purchase or redemption
shall be excluded in the calculation of the amount of
Restricted Payments and (B) the Net Cash Proceeds from such
sale shall be excluded from clause (C)(2) of Section
4.04(a);
(ii) any purchase or redemption of Subordinated
Obligations made by exchange for, or out of the proceeds of
the substantially concurrent sale of, Refinancing
Indebtedness; PROVIDED, HOWEVER, that such purchase or
redemption shall be excluded in the calculation of the
amount of Restricted Payments;
<PAGE>
(iii) the Company or the Guarantor from redeeming
or repurchasing Capital Stock of the Company or any
Subordinated Obligation in the event that the holder of
such Capital Stock or Subordinated Obligation has
failed to qualify or to be found suitable or otherwise
eligible under a Gaming Law to remain a holder of such
Capital Stock or Subordinated Obligation; PROVIDED,
HOWEVER, that the amount of such redemption or
repurchase shall be included in the calculation of the
amount of Restricted Payments;
(iv) dividends paid within 60 days after the date
of declaration thereof if at such date of declaration
such dividend would have complied with the preceding
paragraph; PROVIDED, HOWEVER, that at the time of
payment of such dividend, no other Default shall have
occurred and be continuing (or result therefrom);
PROVIDED FURTHER, HOWEVER, that such dividend shall be
included in the calculation of the amount of Restricted
Payments; or
(v) the Company from making Investments (other
than Investments in the Capital Stock of the Company)
the cost to the Company of which do not exceed $30
million in the aggregate at any one time outstanding
for all such Investments made in reliance upon this
clause (v), PROVIDED FURTHER, HOWEVER, that such
Investments shall be included in the calculation of the
amount of Restricted Payments.
SECTION 4.05. LIMITATION ON RESTRICTIONS ON
DISTRIBUTIONS FROM SUBSIDIARIES. The Company shall not, and
shall not permit any Restricted Subsidiary to, create or
otherwise cause or permit to exist or become effective any
consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to (i) pay dividends or make any other
distributions on its Capital Stock or pay any Indebtedness
owed to the Company, (ii) make any loans or advances to the
Company or (iii) transfer any of its property or assets to
the Company, except:
(a) any encumbrance or restriction pursuant to an
agreement in effect at or entered into on the date of
the Indenture;
(b) any encumbrance or restriction with respect to
a Restricted Subsidiary pursuant to an agreement
relating to any Indebtedness Incurred by such
Restricted Subsidiary prior to the date on which such
Restricted Subsidiary was acquired by the Company
(other than Indebtedness Incurred as consideration in,
or to provide all or any portion of the funds or credit
support utilized to consummate, the transaction or
series of related transactions pursuant to which such
Restricted Subsidiary became a Restricted Subsidiary or
was acquired by the Company) and outstanding on such
date;
(c) any encumbrance or restriction pursuant to an
agreement effecting a refinancing of Indebtedness
Incurred pursuant to an agreement referred to in clause
(a) or (b) of this provision or contained in any
amendment to an agreement referred to in clause (a) or
(b) of this provision; PROVIDED, HOWEVER, that the
encumbrances and restrictions contained in any such
refinancing agreement or amendment are no less
favorable to the Securityholders than encumbrances and
restrictions contained in such agreements;
<PAGE>
(d) in the case of clause (iii), any encumbrance
or restriction (1) that restricts in a customary manner
the subletting, assignment or transfer of any property
or asset that is a lease, license, conveyance or
contract or similar property or asset, (2) arising by
virtue of any transfer of, agreement to transfer,
option or right with respect to, or Lien on, any
property or assets of the Company or any Restricted
Subsidiary not otherwise prohibited by the Indenture,
or (3) arising or agreed to in the ordinary course of
business and that does not, individually or in the
aggregate, detract from the value of property or assets
of the Company or any Restricted Subsidiary in any
manner material to the Company or such Restricted
Subsidiary;
(e) any encumbrance or restriction pursuant to an
agreement relating to an acquisition of property, so
long as such encumbrance or restriction relate solely
to the property so acquired;
(f) any encumbrances or restrictions pursuant to
the Credit Agreement and any extensions or revisions
thereof; and
(g) any encumbrance or restriction imposed by any
Gaming Authority.
SECTION 4.06. LIMITATION ON SALES OF ASSETS AND
SUBSIDIARY STOCK. (a) The Company shall not, and shall not
permit any Restricted Subsidiary to, make any Asset
Disposition unless (i) the Company or such Restricted
Subsidiary receives consideration at the time of such Asset
Disposition at least equal to the Fair Market Value, as
determined in good faith by the Board of Directors, the
determination of which shall be evidenced by a Board
Resolution (including as to the value of all non-cash
consideration), of the shares and assets subject to such
Asset Disposition; (ii) at least 85% of the consideration
thereof received by the Company or such Restricted
Subsidiary is in the form of cash or cash equivalents; (iii)
the Company delivers an Officers' Certificate to the Trustee
certifying that such Asset Disposition complies with clauses
(i) and (ii); and (iv) an amount equal to 100% of the Net
Available Cash from such Asset Disposition is applied by the
Company (or such Restricted Subsidiary, as the case may be)
(A) FIRST, to the extent the Company elects (or is required
by the terms of any Senior Indebtedness), to prepay, repay
or purchase Senior Indebtedness or Indebtedness (other than
any Preferred Stock) of a Wholly Owned Subsidiary (in each
case other than Indebtedness owed to the Company or an
Affiliate of the Company) within 270 days from the later of
the date of such Asset Disposition or the receipt of such
Net Available Cash; (B) SECOND, to the extent of the balance
of Net Available Cash after application in accordance with
clause (A), to the extent the Company or such Restricted
Subsidiary elects, to reinvest in Additional Assets
(including by means of an Investment in Additional Assets by
a Restricted Subsidiary with Net Available Cash received by
the Company or another Restricted Subsidiary) within 270
days from the later of such Asset Disposition or the receipt
of such Net Available Cash; (C) THIRD, to the extent of the
balance of such Net Available Cash after application in
accordance with clauses (A) and (B), to make an Offer to
purchase Securities pursuant to and subject to the
conditions of the following paragraph; PROVIDED, HOWEVER
that in connection with any prepayment, repayment or
purchase of Indebtedness pursuant to clause (A) or (C)
above, the Company or such Restricted Subsidiary shall
retire such Indebtedness and shall cause the related loan
commitment (if any) to be permanently reduced in an amount
equal to the principal amount so prepaid, repaid or
purchased. Notwithstanding the foregoing provisions of this
<PAGE>
provision, the Company and its Restricted Subsidiaries
shall not be required to apply any Net Available Cash in
accordance with this provision except to the extent that the
aggregate Net Available Cash from all Asset Dispositions
which are not applied in accordance with this provision
exceed $15 million. Pending application of Net Available
Cash pursuant to this provision, such Net Available Cash
shall be invested in Temporary Cash Investments.
Upon an Event of Loss incurred by the Company or
any of its Restricted Subsidiaries, the Net Available Cash
received from such Event of Loss shall be applied in the
same manner as proceeds from Asset Dispositions described
above and pursuant to the procedures set forth in
Section 4.06(c) below.
(b) In the event of an Asset Disposition or Event
of Loss that requires the purchase of Securities pursuant to
Section 4.06(a)(iv)(C) of the preceding subsection, the
Company will be required to purchase Securities tendered
pursuant to an offer by the Company for the Securities (the
"Offer") at a purchase price of 100% of their principal
amount plus accrued interest to the Purchase Date in
accordance with the procedures (including prorationing in
the event of over subscription) set forth in the next
paragraph. If the aggregate purchase price of Securities
tendered pursuant to the Offer is less than the Net
Available Cash allotted to the purchase of the Securities,
the Company may use the remaining Net Available Cash in its
general operations. The Company shall not be required to
make an Offer for Securities pursuant to this provision if
the Net Available Cash available therefor (after application
of the proceeds as provided in clauses (A) and (B) of clause
(iv) of Section 4.06(a)) are less than $15 million for any
particular Asset Disposition or Event of Loss (which lesser
amounts shall be carried forward for purposes of determining
whether an Offer is required with respect to the Net
Available Cash from any subsequent Asset Disposition or
Event of Loss).
(c)(1) Promptly, and in any event within 10 days
after the Company becomes obligated to make an Offer, the
Company shall be obligated to deliver to the Trustee and to
send, by first-class mail, to each Holder, a written notice
stating that the Holder may elect to have his Securities
purchased by the Company either in whole or in part (subject
to prorationing as hereinafter described in the event the
Offer is oversubscribed) in integral multiples of $1,000 of
principal amount, at the applicable purchase price. The
notice shall specify a purchase date not less than 30 days
nor more than 60 days after the date of such notice (the
"Purchase Date") and shall contain information concerning
the business of the Company which the Company in good faith
believes will enable such Holders to make an informed
decision (which at a minimum will include (i) the most
recently filed Annual Report on Form 10-K (including audited
consolidated financial statements) of the Company, the most
recent subsequently filed Quarterly Report on Form 10-Q and
any Current Report on Form 8-K of the Company filed
subsequent to such Quarterly Report, other than Current
Reports describing Asset Dispositions or Events of Loss
otherwise described in the offering materials (or
corresponding successor reports) (collectively, the
"Reports"), (ii) a description of material developments in
the Company's business subsequent to the date of the latest
of the Reports, and (iii) if material, appropriate PRO FORMA
financial information) and all instructions and materials
necessary to tender Securities pursuant to the Offer,
together with the information contained in the next
following paragraph.
(2) Not later than the date upon which written
notice of an Offer is delivered to the Trustee as provided
below, the Company shall deliver to the Trustee an Officers'
<PAGE>
Certificate as to (i) the amount of the Offer (the "Offer
Amount"), (ii) the allocation of the Net Available Cash from
the Asset Dispositions or Event of Loss pursuant to which
such Offer is being made and (iii) the compliance of such
allocation with the provisions of the next preceding
paragraph. On such date, the Company shall also irrevocably
deposit with the Trustee or with a paying agent (or, if the
Company is acting as its own paying agent, segregate and
hold in trust) in Temporary Cash Investments an amount equal
to the Offer Amount to be held for payment in accordance
with the provisions of this provision. Upon the expiration
of the period for which the Offer remains open (the "Offer
Period"), the Company shall deliver to the Trustee the
Securities or portions thereof which have been properly
tendered to and are to be accepted by the Company and which
have not been properly withdrawn by the Holder(s) thereof.
The Trustee shall, on the Purchase Date, or as soon as
practicable thereafter, mail or deliver payment to each
tendering Holder in the amount of the purchase price. In the
event that the aggregate purchase price of the Securities
delivered by the Company to the Trustee is less than the
Offer Amount, the Trustee shall deliver the excess to the
Company promptly after the expiration of the Offer Period.
(3) Holders electing to have a Security purchased
will be required to surrender the Security, with an
appropriate form duly completed, to the Company at the
address specified in the notice at least five Business Days
prior to the Purchase Date. Holders will be entitled to
withdraw their election if the Trustee or the Company
receives not later than three Business Days prior to the
Purchase Date, a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder, the principal
amount of the Security which was delivered for purchase by
the Holder and a statement that such Holder is withdrawing
his election to have such Security purchased. If at the
expiration of the Offer Period the aggregate principal
amount of Securities surrendered by Holders exceeds the
Offer Amount, the Company shall select the Securities to be
purchased on a pro rata basis (with such adjustments as may
be deemed appropriate by the Company so that only Securities
in denominations of $1,000, or integral multiples thereof,
shall be purchased). Holders whose Securities are purchased
only in part will be issued new Securities equal in
principal amount to the unpurchased portion of the
Securities surrendered.
(4) At the time the Company delivers Securities to
the Trustee which are to be accepted for purchase, the
Company will also deliver an Officers' Certificate stating
that such Securities are to be accepted by the Company
pursuant to and in accordance with the terms of this
provision. A Security shall be deemed to have been accepted
for purchase at the time the Trustee, directly or through an
agent, mails or delivers payment therefor to the
surrendering Holder.
(d) The Company shall comply, to the extent
applicable, with the requirements of Section 14(e) of the
Exchange Act and any other securities laws or regulations in
connection with the repurchase of Securities pursuant to
this provision. To the extent that the provisions of any
securities laws or regulations conflict with this provision,
the Company shall comply with the applicable securities laws
and regulations and shall not be deemed to have breached its
obligations under this provision by virtue thereof.
SECTION 4.07. LIMITATION ON TRANSACTIONS WITH
AFFILIATES. (a) The Company shall not, and shall not permit
any Restricted Subsidiary to, directly or indirectly,
conduct any business, enter into or permit to exist any
transaction (including the purchase, conveyance,
disposition, sale, lease or exchange of any property or the
<PAGE>
rendering of any service) with any Affiliate of the Company
(an "Affiliate Transaction") unless the terms of such
Affiliate Transaction are (i) set forth in writing, (ii) in
the best interest of the Company or such Restricted
Subsidiary, as the case may be, (iii) as favorable to the
Company or such Restricted Subsidiary, as the case may be,
as those that could be obtained at the time of such
transaction for a similar transaction in arm's-length
dealings with a Person who is not such an Affiliate, and
(iv) with respect to an Affiliate Transaction involving
aggregate payments or value of $1 million or greater, the
Independent Directors have determined in good faith that the
criteria set forth in clauses (ii) and (iii) are satisfied
and have approved the relevant Affiliate Transaction, such
approval to be evidenced by a Board Resolution. The
determinations pursuant to clauses (ii) and (iii) above
shall not require the Board of Directors or the Independent
Directors to obtain independent expert opinions unless, in
the sole judgment of the Board of Directors or the
Independent Directors, the Board of Directors or the
Independent Directors decide to obtain such an opinion.
(b) The provisions of Section 4.07(a) shall not
prohibit (i) any Restricted Payment permitted to be paid
pursuant to Section 4.04, (ii) any issuance of securities,
or other payments, awards or grants in cash, securities or
otherwise pursuant to, or the funding of, employment
arrangements, stock options and stock ownership plans
approved by the Board of Directors, (iii) loans or advances
to employees in the ordinary course of business in
accordance with past practices of the Company, (iv) the
payment of reasonable fees to directors of the Company and
its Restricted Subsidiaries who are not employees of the
Company or its Restricted Subsidiaries or (v) any
transaction between the Company and a Wholly Owned
Subsidiary or between Wholly Owned Subsidiaries.
SECTION 4.08. CHANGE OF CONTROL. (a) Upon a
Change of Control, each Holder shall have the right to
require that the Company repurchase such Holder's Securities
at a purchase price in cash equal to 101% of the principal
amount thereof plus accrued and unpaid interest, if any, to
the date of purchase, in accordance with the terms
contemplated in Section 4.08(b). In the event that at the
time of such Change of Control the terms of the Bank
Indebtedness or other Senior Indebtedness restrict or
prohibit the repurchase of Securities pursuant to this
provision, then prior to the mailing of the notice to
Holders provided for in the next paragraph below but in any
event within 30 days following any Change of Control, the
Company covenants to (i) repay in full all Bank Indebtedness
or such other Senior Indebtedness or to offer to repay in
full all Bank Indebtedness or such other Senior Indebtedness
and to repay the Bank Indebtedness or such other Senior
Indebtedness of each lender who has accepted such offer or
(ii) obtain the requisite consent under the agreements
governing the Bank Indebtedness or such other Senior
Indebtedness to permit the repurchase of the Securities as
provided for in Section 4.08(b).
(b) Within 30 days following any Change of
Control, the Company shall send, by first-class mail to each
Holder, a notice to each Holder with a copy to the Trustee
stating:
(1) that a Change of Control has occurred and that
such Holder has the right to require the Company to
purchase such Holder's Securities at a purchase price
in cash equal to 101% of the principal amount thereof
plus accrued and unpaid interest, if any, to the date
of purchase;
<PAGE>
(2) the circumstances and relevant facts regarding
such Change of Control which the Company in good faith
believes will enable Holders to make an informed
decision (which at a minimum will include information
with respect to PRO FORMA historical income, cash flow
and capitalization, each after giving effect to such
Change of Control, events causing such Change of
Control and the date such Change of Control is deemed
to have occurred);
(3) the purchase date (which shall be no earlier
than 30 days nor later than 60 days from the date such
notice is mailed); and
(4) the instructions determined by the Company,
consistent with this Section, that a Holder must follow
in order to have its Securities purchased, together
with the information contained in Section 4.08(c) (and
including any related materials).
(c) Holders electing to have a Security purchased
will be required to surrender the Security, with an appro
priate form duly completed, to the Company at the address
specified in the notice at least five Business Days prior to
the purchase date. Holders will be entitled to withdraw
their election if the Trustee or the Company receives not
later than three Business Days prior to the purchase date, a
telegram, telex, facsimile transmission or letter setting
forth the name of the Holder, the principal amount of the
Security which was delivered for purchase by the Holder and
a statement that such Holder is withdrawing his election to
have such Security purchased.
(d) At least one Business Day prior to the
purchase date, all Securities to be purchased by the Company
under this Section shall be delivered to the Trustee for
cancellation, and, at least one Business Day prior to the
purchase date, the Company shall deposit with the Paying
Agent money sufficient to pay the purchase price plus
accrued and unpaid interest, if any, to the Holders and the
Paying Agent shall immediately pay such money to the
Holders.
(e) The Company shall comply, to the extent appli
cable, with the requirements of Section 14(e) of the
Exchange Act and any other securities laws or regulations
in connection with the repurchase of Securities pursuant to
this Section. To the extent that the provisions of any
securities laws or regulations conflict with provisions of
this Section, the Company shall comply with the applicable
securities laws and regulations and shall not be deemed to
have breached its obligations under this Section by virtue
thereof.
(f) The Company's obligations to repurchase the
Securities upon a Change of Control will be guaranteed on a
senior subordinated basis by the Guarantor pursuant to the
Rio Guarantee. Such Guarantee will be subordinated to Senior
Indebtedness of Guarantor to the same extent described in
Article 11.
SECTION 4.09. LIMITATION ON LAYERED INDEBTEDNESS.
(a) The Company will not, and will not permit the Guarantor
to, directly or indirectly, Incur any Indebtedness that is
subordinate in right of payment to any other Indebtedness of
the Company or the Guarantor, as the case may be, unless
such Indebtedness is subordinate in right of payment to, or
ranks PARI PASSU with, the Securities in the case of the
Company or the Rio Guarantee in the case of the Guarantor.
<PAGE>
(b) The Guarantor will not, directly or
indirectly, Guarantee any Indebtedness of the Company that
is subordinated in right of payment to any other
Indebtedness of the Company unless such Guarantee is
subordinate in right of payment to, or ranks PARI PASSU
with, the Rio Guarantee.
SECTION 4.10. COMPLIANCE CERTIFICATE. The
Company shall deliver to the Trustee within 120 days after
the end of each fiscal year of the Company an Officers'
Certificate stating that in the course of the performance by
the signers of their duties as Officers of the Company they
would normally have knowledge of any Default and whether or
not the signers know of any Default that occurred during
such period. If they do, the certificate shall describe the
Default, its status and what action the Company is taking or
proposes to take with respect thereto. The Company also
shall comply with TIA SECTION 314(a)(4).
SECTION 4.11. FURTHER INSTRUMENTS AND ACTS. Upon
request of the Trustee, the Company will execute and deliver
such further instruments and do such further acts as may be
reasonably necessary or proper to carry out more effectively
the purpose of this Indenture.
SECTION 4.12. LIMITATION ON LIENS. The Company
shall not, and shall not permit the Guarantor to, directly
or indirectly, create or permit to exist any Lien (other
than Permitted Liens and Liens securing Senior Indebtedness
or Senior Indebtedness of Guarantor, including Attributable
Indebtedness that is Senior Indebtedness or Senior
Indebtedness of Guarantor) on any of its property or assets
(including Capital Stock), whether owned on the date of the
Indenture or thereafter acquired, or any income or profits
therefrom securing any obligation unless contemporaneously
therewith effective provision is made to secure the
Securities equally and ratably with (or prior to) such
obligation for so long as such obligation is so secured.
SECTION 4.13. LIMITATION ON ISSUANCE AND SALE OF
CAPITAL STOCK OF RESTRICTED SUBSIDIARIES. The Company will
not permit any Restricted Subsidiary to, directly or
indirectly, issue any Capital Stock other than to the
Company or a Restricted Subsidiary, that shall entitle the
holder of such Capital Stock to a preference in right of
payment in the event of the liquidation, dissolution or
winding-up of such Restricted Subsidiary or with respect to
dividends of such Restricted Subsidiary.
SECTION 4.14. OWNERSHIP OF THE GUARANTOR. The
Company will maintain its 100% ownership of the Capital
Stock of the Guarantor.
<PAGE>
ARTICLE 5
SUCCESSOR COMPANY
SECTION 5.01. WHEN COMPANY MAY MERGE OR TRANSFER
ASSETS. Neither the Company nor the Guarantor shall
consolidate with or merge with or into, or convey, transfer
or lease all or substantially all its assets to, any Person,
unless: (i) the resulting, surviving or transferee Person
(the "Successor Company") shall be a corporation organized
and existing under the laws of the United States of America,
any State thereof or the District of Columbia and the
Successor Company (if not the Company or the Guarantor)
shall expressly assume, by an indenture supplemental hereto,
executed and delivered to the Trustee, in form satisfactory
to the Trustee, all the obligations of the Company under the
Securities and the Indenture or the Guarantor under the Rio
Guarantee and the Indenture, as the case may be; (ii)
immediately after giving effect to such transaction on a PRO
FORMA basis (and treating any Indebtedness which becomes an
obligation of the Successor Company or any Restricted
Subsidiary as a result of such transaction as having been
Incurred by the Successor Company or such Restricted
Subsidiary at the time of such transaction), no Default
shall have occurred and be continuing; (iii) immediately
after giving effect to such transaction on a PRO FORMA basis
(and treating any Indebtedness which becomes an obligation
of the Successor Company or any Restricted Subsidiary as a
result of such transaction as having been Incurred by the
Successor Company or such Restricted Subsidiary at the time
of such transaction), the Successor Company would be able to
incur an additional $1.00 of Indebtedness in compliance with
the Consolidated Coverage Ratio limitations set forth in
Section 4.03 hereof; (iv) immediately after giving effect to
such transaction on a PRO FORMA basis (and treating any
Indebtedness which becomes an obligation of the Successor
Company or any Restricted Subsidiary as a result of such
transaction as having been Incurred by the Successor Company
or such Restricted Subsidiary at the time of such
transaction), the Successor Company shall have Consolidated
Net Worth in an amount which is not less than the
Consolidated Net Worth of the Company immediately prior to
such transaction; and (v) the Company shall have delivered
to the Trustee an Officers' Certificate and an Opinion of
Counsel, each stating that such consolidation, merger or
transfer and such supplemental indenture (if any) comply
with the Indenture.
The Successor Company shall succeed to, and be
substituted for, and may exercise every right and power of,
the Company or the Guarantor, as the case may be, under the
Indenture, but the predecessor Company in the case of a
lease shall not be released from the obligation to pay the
principal of and interest on the Securities.
Notwithstanding the foregoing clauses (ii), (iii)
and (iv), any Restricted Subsidiary may consolidate with,
merge into or transfer all or part of its properties and
assets to the Company.
<PAGE>
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT. An "Event of
Default" occurs if:
(i) the Company and the Guarantor default in any
payment of interest on any Security when the same
becomes due and payable, and such default continues for
a period of 30 days;
(ii) the Company and the Guarantor (a) default in
the payment of the principal of any Security when the
same becomes due and payable at its Stated Maturity,
upon redemption, upon declaration or otherwise, or (b)
fail to redeem or purchase Securities when required
pursuant to the Indenture or the Securities;
(iii) the Company or the Guarantor fails to comply
with the provisions of Article 5 hereof;
(iv) the Company or the Guarantor, as the case may
be, fails to comply with Sections 4.02, 4.03, 4.04,
4.05, 4.06, 4.07, 4.08, 4.09, 4.12, 4.13, and 4.14
(other than a failure to purchase Securities when
required under Sections 4.06 or 4.08) of the Indenture
and such failure continues for 30 days after the notice
specified below or the Company fails to give the notice
specified below;
(v) the Company or the Guarantor fails to comply
with any of its agreements in the Securities or the
Indenture (other than those referred to in (i), (ii),
(iii) or (iv) above) and such failure continues for 60
days after the notice specified below or the Company
fails to give the notice specified below;
(vi) the principal, any premium or accrued and
unpaid interest of Indebtedness of the Company or any
Restricted Subsidiary is not paid within any applicable
grace period after final maturity or is accelerated by
the holders thereof because of a default, the total
amount of such Indebtedness unpaid or accelerated
exceeds $10 million at the time and such default
continues for 10 days;
(vii) the Company or any Restricted Subsidiary
pursuant to or within the meaning of any Bankruptcy
Law: (a) commences a voluntary case; (b) consents to
the entry of an order for relief against it in an
involuntary case; (c) consents to the appointment of a
Custodian of it or for any substantial part of its
property; or (d) makes a general assignment for the
benefit of its creditors; or takes any comparable
action under any foreign laws relating to insolvency;
(viii) a court of competent jurisdiction enters an
order or decree under any Bankruptcy Law that: (a) is
for relief against the Company or any Restricted
Subsidiary in an involuntary case; (b) appoints a
Custodian of the Company or any Restricted Subsidiary
or for any substantial part of its property; or (c)
orders the winding up or liquidation of the Company or
any Restricted Subsidiary; or any similar relief is
<PAGE>
granted under any foreign laws and the order or decree
remains unstayed and in effect for 60 days;
(ix) any judgment or decree for the payment of
money in excess of $10 million at the time is entered
against the Company or any Restricted Subsidiary and is
not discharged and either (a) an enforcement proceeding
has been commenced by any creditor upon such judgment
or decree or (b) there is a period of 60 days following
the entry of such judgment or decree during which such
judgment or decree is not discharged, waived or the
execution thereof stayed and, in the case of (a) or
(b), such default continues for 10 days; or
(x) any Gaming License of the Company or any of
its Restricted Subsidiaries is revoked, terminated or
suspended or otherwise ceases to be effective,
resulting in the cessation or suspension of operation
for a period of more than 90 days of the casino
business of any casino hotel owned, leased or operated
directly or indirectly by the Company or any of its
Restricted Subsidiaries (other than any voluntary
relinquishment of a Gaming License if such
relinquishment is, in the reasonable, good faith
judgment of the Board of Directors of the Company
evidenced by a Board Resolution, both desirable in the
conduct of the business of the Company and its
Subsidiaries, taken as a whole, and not disadvantageous
in any material respect to the Holders).
The foregoing will constitute Events of Default
whatever the reason for any such Event of Default and
whether it is voluntary or involuntary or is effected 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.
The term "Bankruptcy Law" means Title 11, UNITED
STATES CODE, or any similar Federal or state law for the
relief of debtors. The term "Custodian" means any receiver,
trustee, assignee, liquidator, custodian or similar official
under any Bankruptcy Law.
A Default under clause (iv) or (v) is not an Event
of Default until the Trustee or the Holders of at least 25%
in principal amount of the Securities notify the Company of
the Default and the Company does not cure such Default
within the time specified after receipt of such notice. Such
notice must specify the Default, demand that it be remedied
and state that such notice is a "Notice of Default".
The Company shall deliver to the Trustee, within
30 days after the occurrence thereof, written notice in the
form of an Officers' Certificate of any event which with the
giving of notice and the lapse of time would become an Event
of Default under clause (iv), (v), (vi) or (ix), its status
and what action the Company is taking or proposes to take
with respect thereto.
SECTION 6.02. ACCELERATION. If an Event of
Default (other than an Event of Default specified in
Section 6.01 (vii) or (viii) above with respect to the
Company) occurs and is continuing, the Trustee by notice to
the Company, or the Holders of at least 25% in principal
amount of the Securities by written notice to the Company
and the Trustee, may declare the principal of and accrued
interest on all the Securities to be due and payable. Upon
such a declaration, such principal and interest shall be due
<PAGE>
and payable immediately. If an Event of Default specified
in Section 6.01 (vii) or (viii) above with respect to the
Company occurs, the principal of and interest on all the
Securities shall IPSO FACTO become and be immediately due
and payable without any declaration or other act on the part
of the Trustee or any Securityholders. The Holders of a
majority in principal amount of the Securities by written
notice to the Trustee may rescind an acceleration and its
consequences if the rescission would not conflict with any
judgment or decree and if all existing Events of Default
have been cured or waived except nonpayment of principal or
interest that has become due solely because of acceleration.
No such rescission shall affect any subsequent Default or
impair any right consequent thereto.
SECTION 6.03. OTHER REMEDIES. If an Event of
Default occurs and is continuing, the Trustee may pursue any
available remedy to collect the payment of principal of or
interest on the Securities or to enforce the performance of
any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it
does not possess any of the Securities or does not produce
any of them in the proceeding. A delay or omission by the
Trustee or any Securityholder in exercising any right or
remedy accruing upon an Event of Default shall not impair
the right or remedy or constitute a waiver of or acquies
cence in the Event of Default. No remedy is exclusive of
any other remedy. All available remedies are cumulative.
SECTION 6.04. WAIVER OF PAST DEFAULTS. The
Holders of a majority in principal amount of the Securities
by written notice to the Trustee may waive an existing
Default and its consequences except (i) a Default in the
payment of the principal of or interest on a Security or
(ii) a Default in respect of a provision that under Section
9.02 cannot be amended without the consent of each
Securityholder affected. When a Default is waived, it is
deemed cured, but no such waiver shall extend to any
subsequent or other Default or impair any consequent right.
SECTION 6.05. CONTROL BY MAJORITY. The Holders
of a majority in principal amount of the Securities may
direct the time, method and place of conducting any proceed
ing for any remedy available to the Trustee or of exercising
any trust or power conferred on the Trustee. However, the
Trustee may refuse to follow any direction that conflicts
with law or this Indenture or, subject to Section 7.01, that
the Trustee determines is unduly prejudicial to the rights
of other Securityholders or would involve the Trustee in per
sonal liability; PROVIDED, HOWEVER, that the Trustee may
take any other action deemed proper by the Trustee that is
not inconsistent with such direction. Prior to taking any
action hereunder, the Trustee shall be entitled to indemni
fication satisfactory to it in its sole discretion against
all losses and expenses caused by taking or not taking such
action.
SECTION 6.06. LIMITATION ON SUITS. A Security
holder may not pursue any remedy with respect to this Inden
ture or the Securities unless:
(1) the Holder gives to the Trustee written notice
stating that an Event of Default is continuing;
(2) the Holders of at least 25% in principal
amount of the Securities make a written request to the
Trustee to pursue the remedy;
<PAGE>
(3) such Holder or Holders offer to the Trustee
reasonable security or indemnity against any loss,
liability or expense;
(4) the Trustee does not comply with the request
within 60 days after receipt of the request and the
offer of security or indemnity; and
(5) the Holders of a majority in principal amount
of the Securities do not give the Trustee a direction
inconsistent with the request during such 60-day
period.
A Securityholder may not use this Indenture to
prejudice the rights of another Securityholder or to obtain
a preference or priority over another Securityholder.
SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE
PAYMENT. Notwithstanding any other provision of this Inden
ture, the right of any Holder to receive payment of princi
pal of and interest on the Securities held by such Holder,
on or after the respective due dates expressed in the Secu
rities, or to bring suit for the enforcement of any such pay
ment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE. If an
Event of Default in payment of interest or principal speci
fied in Section 6.01(i) or (ii) occurs and is continuing,
the Trustee may recover judgment in its own name and as
trustee of an express trust against the Company for the
whole amount of principal and interest remaining unpaid
(together with interest on such unpaid interest to the
extent lawful) and the amounts provided for in Section 7.07.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee may file such proofs of claim and other papers
or documents as may be necessary or advisable in order to
have the claims of the Trustee and the Securityholders
allowed in any judicial proceedings relative to the Company,
its creditors or its property and, unless prohibited by law
or applicable regulations, may vote on behalf of the Holders
in any election of a trustee in bankruptcy or other Person
performing similar functions, and any Custodian in any such
judicial proceeding is hereby authorized by each Holder to
make 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, disburse
ments and advances of the Trustee, its agents and its
counsel, and any other amounts due the Trustee under Section
7.07.
SECTION 6.10. PRIORITIES. If the Trustee col
lects any money or property pursuant to this Article 6, it
shall pay out the money or property in the following order:
FIRST: to the Trustee for amounts due under Sec
tion 7.07;
SECOND: to holders of Senior Indebtedness to the
extent required by Article 10;
THIRD: to Securityholders for amounts due and
unpaid on the Securities for principal and interest,
ratably, without preference or priority of any kind,
<PAGE>
according to the amounts due and payable on the Securi
ties for principal and interest, respectively; and
FOURTH: to the Company.
The Trustee may fix a record date and payment date
for any payment to Securityholders pursuant to this Section.
At least 15 days before such record date, the Company shall
mail to each Securityholder and the Trustee a notice that
states the record date, the payment date and amount to be
paid.
SECTION 6.11. UNDERTAKING FOR COSTS. In any suit
for the enforcement of any right or remedy under this Inden
ture or in any suit against the Trustee for any action taken
or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in
its discretion may assess reasonable costs, including rea
sonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section
does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.07 or a suit by Holders of more than
10% in principal amount of the Securities.
SECTION 6.12. WAIVER OF STAY OR EXTENSION LAWS.
The Company (to the extent it may lawfully do so) shall not
at any time insist upon, or plead, or in any manner whatso
ever claim or take the benefit or advantage of, any stay or
extension law wherever enacted, now or at any time hereafter
in force, which may affect the covenants or the performance
of this Indenture; and the Company (to the extent that it
may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and shall not hinder, delay or
impede the execution of any power herein granted to the
Trustee, but shall suffer and permit the execution of every
such power as though no such law had been enacted.
ARTICLE 7
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE. (a) If an
Event of Default has occurred and is continuing, the Trustee
shall exercise 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 such Person's own affairs.
(b) Except during the continuance of an Event of
Default: (1) the Trustee undertakes to perform such duties
and only such duties as are specifically set forth in this
Indenture and no implied covenants or obligations shall be
read into this Indenture against the Trustee; and (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.
<PAGE>
(c) The Trustee may not be relieved from liabil
ity for its own negligent action, its own negligent failure
to act or its own wilful misconduct, except that: (1) this
paragraph does not limit the effect of paragraph (b) of this
Section; (2) 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; and (3) the Trustee shall not be liable
with respect to any action it takes or omits to take in good
faith in accordance with a direction received by it pursuant
to Section 6.05.
(d) Every provision of this Indenture that in any
way relates to the Trustee is subject to paragraphs (a), (b)
and (c) of this Section.
(e) The Trustee shall not be liable for interest
on any money received by it except as the Trustee may agree
in writing with the Company.
(f) Money held in trust by the Trustee need not
be segregated from other funds except to the extent required
by law.
(g) No provision of this Indenture shall require
the Trustee to expend or risk its own funds or otherwise
incur financial liability in the performance of any of its
duties hereunder or in the exercise of any of its rights or
powers, if it shall have reasonable grounds to believe that
repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it.
(h) Every provision of this Indenture relating to
the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions
of this Section and to the provisions of the TIA.
SECTION 7.02. RIGHTS OF TRUSTEE. (a) The
Trustee may rely on any document believed by it to be genu
ine and to have been signed or presented by the proper per
son. The Trustee need not investigate any fact or matter
stated in the document.
(b) Before the Trustee acts or refrains from
acting, it may require an Officers' Certificate or an Opin
ion of Counsel. The Trustee shall not be liable for any
action it takes or omits to take in good faith in reliance
on the Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through 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;
PROVIDED, HOWEVER, that the Trustee's conduct does not
constitute wilful misconduct or negligence.
(e) The Trustee may consult with counsel, and the
advice or opinion of counsel with respect to legal matters
relating to this Indenture and the Securities shall be full
and complete authorization and protection from liability in
respect to any action taken, omitted or suffered by it here
under in good faith and in accordance with the advice or
opinion of such counsel.
<PAGE>
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE. The
Trustee in its individual or any other capacity may become
the owner or pledgee of Securities and may otherwise deal
with the Company or its Affiliates with the same rights it
would have if it were not Trustee. Any Paying Agent,
Registrar, co-registrar or co-paying agent may do the same
with like rights. However, the Trustee must comply with
Sections 7.10 and 7.11.
SECTION 7.04. TRUSTEE'S DISCLAIMER. The Trustee
shall not be responsible for and makes no representation as
to the validity or adequacy of this Indenture or the Secur
ities, it shall not be accountable for the Company's use of
the proceeds from the Securities, and it shall not be
responsible for any statement of the Company in the Inden
ture or in any document issued in connection with the sale
of the Securities or in the Securities other than the
Trustee's certificate of authentication.
SECTION 7.05. NOTICE OF DEFAULTS. If a Default
occurs and is continuing and if it is known to the Trustee,
the Trustee shall mail to each Securityholder notice of the
Default within 90 days after it occurs. Except in the case
of a Default in payment of principal of or interest on any
Security (including payments pursuant to the mandatory
redemption provisions of such Security, if any), the Trustee
may withhold the notice if and so long as a committee of its
Trust Officers in good faith determines that withholding the
notice is in the interests of Securityholders.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS. At
the expense of The Company, as promptly as practicable after
each May 15 beginning with the May 15 following the date of
this Indenture, and in any event prior to July 15 in each
year, the Trustee shall mail to each Securityholder a brief
report dated as of May 15 that complies with TIA
SECTION 313(a). The Trustee also shall comply with TIA
SECTION 313(b).
A copy of each report at the time of its mailing
to Securityholders shall be filed with the SEC and each
stock exchange (if any) on which the Securities are listed.
The Company agrees to notify promptly the Trustee whenever
the Securities become listed on any stock exchange and of
any delisting thereof.
SECTION 7.07. COMPENSATION AND INDEMNITY. The
Company shall pay to the Trustee from time to time rea
sonable 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 reim
burse the Trustee upon request for all reasonable out-of-
pocket expenses incurred or made by it, including costs of
collection, in addition to the compensation for its
services. Such expenses shall include the reasonable
compensation and expenses, disbursements and advances of the
Trustee's agents, counsel, accountants and experts. The
Company shall indemnify the Trustee and its agents,
officers, directors and employees for, and hold them
harmless against, any and all loss, liability or expense
(including attorneys' fees) incurred by it in connection
with the administration of this trust and the performance of
its duties hereunder. The Trustee shall notify the Company
promptly of any claim for which it may seek indemnity.
Failure by the Trustee to so notify the Company shall not
relieve the Company of its obligations hereunder. The
Company shall defend the claim and the Trustee may have
separate counsel and the Company shall pay the fees and
expenses of such counsel. The Company need not reimburse
<PAGE>
any expense or indemnify against any loss, liability or
expense incurred by the Trustee through the Trustee's own
wilful misconduct, negligence or bad faith.
To secure the Company's payment obligations in
this Section, the Trustee shall have a Lien prior to the
Securities on all money or property held or collected by the
Trustee other than money or property held in trust to pay
principal of and interest on particular Securities.
The Company's payment obligations pursuant to this
Section shall survive the discharge of this Indenture. When
the Trustee incurs expenses after the occurrence of a
Default specified in Section 6.01(vii) or (viii) with
respect to the Company, the expenses are intended to
constitute expenses of administration under the Bankruptcy
Law.
SECTION 7.08. REPLACEMENT OF TRUSTEE. The
Trustee may resign at any time by so notifying the Company.
The Holders of a majority in principal amount of the Secur
ities may remove the Trustee by so notifying the Trustee and
may appoint a successor Trustee. The Company shall remove
the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes
charge of the Trustee or its property; or
(4) the Trustee otherwise becomes incapable of
acting.
If the Trustee resigns, is removed by the Company
or by the Holders of a majority in principal amount of the
Securities and such Holders do not reasonably promptly
appoint a successor Trustee, or if a vacancy exists in the
office of Trustee for any reason (the Trustee in such event
being referred to herein as the retiring Trustee), the
Company shall promptly appoint a successor Trustee.
A successor Trustee shall deliver a written
acceptance of its appointment to the retiring Trustee and to
the Company. Thereupon the resignation or removal of the
retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. The successor Trustee shall
mail a notice of its succession to Securityholders. The
retiring Trustee shall promptly transfer all property held
by it as Trustee to the successor Trustee, subject to the
lien provided for in Section 7.07.
If a successor Trustee does not take office within
60 days after the retiring Trustee resigns or is removed,
the retiring Trustee or the Holders of 25% in principal
amount of the Securities may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10,
any Securityholder may petition any court of competent
jurisdiction for the removal of the Trustee and the appoint
ment of a successor Trustee.
<PAGE>
Notwithstanding the replacement of the Trustee
pursuant to this Section, the Company's obligations under
Section 7.07 shall continue for the benefit of the retiring
Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER. If
the Trustee consolidates with, merges or converts into, or
transfers all or substantially all its corporate trust busi
ness or assets to, another corporation or banking associa
tion, the resulting, surviving or transferee corporation or
banking association without any further act shall be the
successor Trustee.
In case at the time such successor or successors
by merger, conversion or consolidation to the Trustee shall
succeed to the trusts created by this Indenture any of the
Securities shall have been authenticated but not delivered,
any such successor to the Trustee may adopt the certificate
of authentication of any predecessor trustee, and deliver
such Securities so authenticated; and in case at that time
any of the Securities shall not have been authenticated, any
successor to the Trustee may authenticate such Securities
either in the name of any predecessor hereunder or in the
name of the successor to the Trustee; and in all such cases
such certificates shall have the full force which it is
anywhere in the Securities or in this Indenture provided
that the certificate of the Trustee shall have.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION. The
Trustee shall at all times satisfy the requirements of TIA
SECTION 310(a). The Trustee shall have a combined capital
and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition. The Trustee
shall comply with TIA SECTION 310(b); PROVIDED, HOWEVER,
that there shall be excluded from the operation of
TIA SECTION 310(b)(1) any indenture or indentures under
which other securities or certificates of interest or
participation in other securities of the Company are out
standing if the requirements for such exclusion set forth in
TIA SECTION 310(b)(1) are met.
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS
AGAINST COMPANY. The Trustee shall comply with TIA
SECTION 311(a), excluding any creditor relationship listed
in TIA SECTION 311(b). A Trustee who has resigned or been
removed shall be subject to TIA SECTION 311(a) to the extent
indicated.
<PAGE>
ARTICLE 8
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. DISCHARGE OF LIABILITY ON SECURI
TIES; DEFEASANCE. (a) When (i) the Company delivers to the
Trustee all outstanding Securities (other than Securities
replaced pursuant to Section 2.07) for cancellation or
(ii) all outstanding Securities have become due and payable,
whether at maturity or as a result of the mailing of a
notice of redemption pursuant to Article 3 hereof and the
Company irrevocably deposits with the Trustee funds suffi
cient to pay at maturity or upon redemption all outstanding
Securities, including interest thereon (other than
Securities replaced pursuant to Section 2.07), and if in
either case the Company pays all other sums payable
hereunder by the Company, then this Indenture shall, subject
to Sections 8.01(c) and 8.06, cease to be of further effect.
The Trustee shall acknowledge satisfaction and discharge of
this Indenture on demand of the Company accompanied by an
Officers' Certificate and an Opinion of Counsel and at the
cost and expense of the Company.
(b) Subject to Sections 8.01(c), 8.02 and 8.06,
the Company at any time may terminate (i) all its obliga
tions under the Securities and this Indenture ("legal
defeasance option") or (ii) its obligations under Sections
4.02 (to the extent that the failure to comply with such
Section 4.02 shall not violate the TIA), 4.03, 4.04, 4.05,
4.06, 4.07, 4.08, 4.09, 4.11, 4.12, 4.13 and 4.14 or
Article 5 and the related operation of Sections 6.01(iii),
(iv), (v), (vi), (ix) and (x) ("covenant defeasance
option"). The Company may exercise its legal defeasance
option notwithstanding its prior exercise of its covenant
defeasance option.
If the Company exercises its legal defeasance
option, payment of the Securities may not be accelerated
because of an Event of Default. If the Company exercises
its covenant defeasance option, payment of the Securities
may not be accelerated because of an Event of Default
specified in Sections 6.01(iii), (iv), (v), (vi), (ix) and
(x) (except to the extent covenants or agreements referenced
in such Sections remain applicable).
Upon satisfaction of the conditions set forth
herein and upon written request of the Company, the Trustee
shall acknowledge in writing the discharge of those obliga
tions that the Company terminates.
(c) Notwithstanding clauses (a) and (b) above,
the Company's obligations in Sections 2.03, 2.04, 2.05,
2.06, 2.07, 7.07, 7.08, 8.04, 8.05 and 8.06 shall survive
until the Securities have been paid in full. Thereafter,
the Company's obligations in Sections 7.07, 8.04 and 8.05
shall survive.
SECTION 8.02. CONDITIONS TO DEFEASANCE. The
Company may exercise its legal defeasance option or its
covenant defeasance option only if:
(1) the Company irrevocably deposits in trust with
the Trustee money or U.S. Government Obligations for
the payment of principal and interest on the Securities
to maturity or redemption, as the case may be;
<PAGE>
(2) the Company delivers to the Trustee a cer
tificate from a nationally recognized firm of indepen
dent accountants expressing their opinion that the pay
ments of principal and interest when due and without
reinvestment on the deposited U.S. Government Obliga
tions plus any deposited money without investment will
provide cash at such times and in such amounts as will
be sufficient to pay principal and interest when due on
all the Securities to maturity or redemption, as the
case may be;
(3) 123 days pass after the deposit is made and
during the 123-day period no Default specified in
Section 6.01(vii) or (viii) with respect to the Company
occurs which is continuing at the end of the period;
(4) no Default has occurred and is continuing on
the date of such deposit and after giving effect
thereto;
(5) the deposit does not constitute a default
under any other agreement binding on the Company and is
not prohibited by Article 10 or 11;
(6) the Company delivers to the Trustee an Opinion
of Counsel to the effect that the trust resulting from
the deposit does not constitute, or is qualified as, a
regulated investment company under the Investment
Company Act of 1940;
(7) in the case of the legal defeasance option,
the Company shall have delivered to the Trustee an
Opinion of Counsel stating that (i) the Company has
received from, or there has been published by, the
Internal Revenue Service a ruling, or (ii) since the
date of this Indenture there has been a change in the
applicable Federal income tax law, in either case to
the effect that, and based thereon such Opinion of
Counsel shall confirm that, the Securityholders will
not recognize income, gain or loss for Federal income
tax purposes as a result of such 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 defeasance had not occurred;
(8) in the case of the covenant defeasance option,
the Company shall have delivered to the Trustee an
Opinion of Counsel to the effect that the Security
holders will not recognize income, gain or loss for
Federal income tax purposes as a result of such cove
nant 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; and
(9) the Company delivers to the Trustee an Offi
cers' Certificate and an Opinion of Counsel, each
stating that all conditions precedent to the defeasance
and discharge of the Securities as contemplated by this
Article 8 have been complied with.
Before or after a deposit, the Company may make
arrangements satisfactory to the Trustee for the redemption
of Securities at a future date in accordance with Article 3.
SECTION 8.03. APPLICATION OF TRUST MONEY. The
Trustee shall hold in trust money or U.S. Government Obliga
tions deposited with it pursuant to this Article 8. It
<PAGE>
shall apply the deposited money and the money from U.S.
Government Obligations through the Paying Agent and in
accordance with this Indenture to the payment of principal
of and interest on the Securities. Money and securities so
held in trust are not subject to Article 10.
SECTION 8.04. REPAYMENT TO COMPANY. The Trustee
and the Paying Agent shall promptly turn over to the Company
upon request any excess money or securities held by them at
any time.
Subject to any applicable abandoned property law,
the Trustee and the Paying Agent shall pay to the Company
upon request any money held by them for the payment of
principal or interest that remains unclaimed for two years,
and, thereafter, Securityholders entitled to the money must
look to the Company for payment as general creditors.
SECTION 8.05. INDEMNITY FOR GOVERNMENT OBLIGA
TIONS. The Company shall pay and shall indemnify the
Trustee against any tax, fee or other charge imposed on or
assessed against deposited U.S. Government Obligations or
the principal and interest received on such U.S. Government
Obligations.
SECTION 8.06. REINSTATEMENT. If the Trustee or
Paying Agent is unable to apply any money or U.S. Government
Obligations in accordance with this Article 8 by reason of
any legal proceeding or by reason of any order or judgment
of any court or governmental authority enjoining, restrain
ing or otherwise prohibiting such application, the Company's
obligations under this Indenture and the Securities shall be
revived and reinstated as though no deposit had occurred
pursuant to this Article 8 until such time as the Trustee or
Paying Agent is permitted to apply all such money or U.S.
Government Obligations in accordance with this Article 8;
PROVIDED, HOWEVER, that, if the Company has made any payment
of interest on or principal of any Securities because of 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 or U.S. Government
Obligations held by the Trustee or Paying Agent.
ARTICLE 9
AMENDMENTS
SECTION 9.01. WITHOUT CONSENT OF HOLDERS. The
Company, the Guarantor and the Trustee may amend this
Indenture, the Rio Guarantee or the Securities without
notice to or consent of any Securityholder:
(1) to cure any ambiguity, omission, defect or
inconsistency;
(2) to comply with Article 5;
(3) to provide for uncertificated Securities in
addition to or in place of certificated Securities;
PROVIDED, HOWEVER, that the uncertificated Securities
are issued in registered form for purposes of Sec
tion 163(f) of the Code or in a manner such that the
uncertificated Securities are described in
Section 163(f)(2)(B) of the Code;
<PAGE>
(4) to make any change in Article 10 that would
limit or terminate the benefits available to any holder
of Senior Indebtedness (or Representatives therefor)
under Articles 10 and 11;
(5) to add guarantees with respect to the Secur
ities or to secure the Securities;
(6) 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;
(7) to comply with any requirements of the SEC in
connection with qualifying this Indenture under the
TIA; or
(8) to make any change that does not adversely
affect the rights of any Securityholder.
An amendment under this Section may not make any
change that adversely affects the rights under Articles 10
and 11 of any holder of Senior Indebtedness then outstanding
unless the holders of such Senior Indebtedness (or any group
or representative thereof authorized to give a consent),
consent to such change.
After an amendment under this Section becomes
effective, the Company or the Trustee at the Company's
request and expense, shall mail to Securityholders a notice
briefly describing such amendment. The failure to give such
notice to all Securityholders, or any defect therein, shall
not impair or affect the validity of an amendment under this
Section.
SECTION 9.02. WITH CONSENT OF HOLDERS. The
Company, the Guarantor and the Trustee may amend this
Indenture, the Rio Guarantee or the Securities without
notice to any Securityholder but with the written consent of
the Holders of at least a majority in principal amount of
the Securities; PROVIDED, HOWEVER, that no amendment may be
made to Section 4.08 without the written consent of the
Holders of at least 75% in principal amount of the
Securities. However, without the consent of each
Securityholder affected, an amendment may not:
(1) reduce the amount of Securities whose Holders
must consent to an amendment;
(2) reduce the rate of or extend the time for
payment of interest on any Security;
(3) reduce the principal of or extend the Stated
Maturity of any Security;
(4) reduce the premium payable upon the redemption
of any Security or change the time at which any Secur
ity may be redeemed in accordance with Article 3;
(5) make any Security payable in money other than
that stated in the Security;
(6) make any change in Article 10 or 11 that
adversely affects the rights of any Securityholder
under Article 10 or 11; or
<PAGE>
(7) make any change in Section 6.04 or 6.07 or the
second sentence of this Section.
It shall not be necessary for the consent of the
Holders under this Section to approve the particular form of
any proposed amendment, but it shall be sufficient if such
consent approves the substance thereof.
An amendment under this Section may not make any
change that adversely affects the rights under Article 10 or
11 of any holder of Senior Indebtedness or Senior
Indebtedness of Guarantor then outstanding unless the hold
ers of such Senior Indebtedness or Senior Indebtedness of
Guarantor, as the case may be (or any group or
representative thereof authorized to give a consent),
consent to such change.
After an amendment under this Section becomes
effective, the Company, or the Trustee at the Company's
request and expense, shall mail to Securityholders a notice
briefly describing such amendment. The failure to give such
notice to all Securityholders, or any defect therein, shall
not impair or affect the validity of an amendment under this
Section.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE
ACT. Every amendment to this Indenture or the Securities
shall comply with the TIA as then in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS
AND WAIVERS. A consent to an amendment or a waiver by a
Holder of a Security shall bind the Holder and every subse
quent Holder of that Security or portion of the Security
that evidences the same debt as the consenting Holder's
Security, even if notation of the consent or waiver is not
made on the Security. However, any such Holder or subse
quent Holder may revoke the consent or waiver as to such
Holder's Security or portion of the Security if the Trustee
receives the notice of revocation before the date the
amendment or waiver becomes effective. After an amendment
or waiver becomes effective, it shall bind every Security
holder.
The Company may, but shall not be obligated to,
fix a record date for the purpose of determining the
Securityholders entitled to give their consent or take any
other action described above or required or permitted to be
taken pursuant to this Indenture. If a record date is
fixed, then notwithstanding the immediately preceding
paragraph, those Persons who were Securityholders at such
record date (or their duly designated proxies), and only
those Persons, shall be entitled to give such consent or to
revoke any consent previously given or to take any such
action, whether or not such Persons continue to be Holders
after such record date. No such consent shall be valid or
effective for more than 120 days after such record date.
SECTION 9.05. NOTATION ON OR EXCHANGE OF SECURI
TIES. If an amendment changes the terms of a Security, the
Trustee may require the Holder of the Security to deliver it
to the Trustee. The Trustee may place an appropriate
notation on the Security regarding the changed terms and
return it to the Holder. Alternatively, if the Company or
the Trustee so determines, the Company in exchange for the
Security shall issue and the Trustee shall authenticate a
new Security that reflects the changed terms. Failure to
make the appropriate notation or to issue a new Security
shall not affect the validity of such amendment.
<PAGE>
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS. The
Trustee shall sign any amendment authorized pursuant to this
Article 9 if the amendment does not adversely affect the
rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In sign
ing such amendment the Trustee shall be entitled to receive
indemnity reasonably satisfactory to it and to receive, and
(subject to Section 7.01) shall be fully protected in
relying upon, an Officers' Certificate and an Opinion of
Counsel stating that such (i) amendment is authorized or
permitted by this Indenture and that all conditions
precedent to the execution, delivery and performance of such
amendment have been satisfied; (ii) the Company has all
necessary corporate power and authority to execute and
deliver the amendment and that the execution, delivery and
performance of such amendment has been duly authorized by
all necessary corporate action; (iii) the execution,
delivery and performance of the amendment do not conflict
with, or result in the breach of or constitute a default
under any of the terms, conditions or provisions of (a) the
Indenture, (b) the Certificate of Incorporation or By-Laws
of the Company, (c) any law or regulation applicable to the
Company, (d) any material order, writ, injunction or decree
of any court or governmental instrumentality applicable to
the Company or (e) any material agreement or instrument to
which the Company is subject; (iv) such amendment has been
duly and validly executed and delivered by the Company, and
the Indenture together with such amendment constitutes a
legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its
terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency or similar laws affecting
the enforcement of creditors' rights generally and general
equitable principles; and (v) the Indenture together with
such amendment complies with the TIA.
SECTION 9.07. PAYMENT FOR CONSENT. Neither the
Company nor any Affiliate of the Company shall, directly or
indirectly, pay or cause to be paid any consideration,
whether by way of interest, fee or otherwise, to any Holder
for or as an inducement to any consent, waiver or amendment
of any of the terms or provisions of this Indenture or the
Securities unless such consideration is offered to be paid
to all Holders that so consent, waive or agree to amend in
the time frame set forth in solicitation documents relating
to such consent, waiver or agreement.
ARTICLE 10
SUBORDINATION OF SECURITIES
SECTION 10.01. AGREEMENT TO SUBORDINATE. The
Company agrees, and each Securityholder by accepting a
Security agrees, that the Indebtedness evidenced by the
Securities is subordinated in right of payment, to the
extent and in the manner provided in this Article 10, to the
prior payment of all Senior Indebtedness and that the
subordination is for the benefit of and enforceable by the
holders of Senior Indebtedness. The Securities shall in all
respects rank PARI PASSU with all other Senior Subordinated
Indebtedness of the Company and only Indebtedness of the
Company which is Senior Indebtedness shall rank senior to
the Securities in accordance with the provisions set forth
herein. All provisions of this Article 10 shall be subject
to Section 10.12.
<PAGE>
SECTION 10.02. LIQUIDATION, DISSOLUTION, BANK
RUPTCY. Upon any payment or distribution of the assets of
the Company to creditors upon a total or partial liquidation
or a total or partial dissolution of the Company or in a
bankruptcy, reorganization, insolvency, receivership or
similar proceeding relating to the Company or its property:
(1) holders of Senior Indebtedness shall be
entitled to receive payment in full of the Senior
Indebtedness before Securityholders shall be entitled
to receive any payment of principal of or interest on
the Securities; and
(2) until the Senior Indebtedness is paid in full,
any distribution to which Securityholders would be
entitled but for this Article 10 shall be made to
holders of Senior Indebtedness as their interests may
appear, except that Securityholders may receive shares
of stock and any debt securities that are subordinated
to Senior Indebtedness to at least the same extent as
the Securities.
SECTION 10.03. DEFAULT ON SENIOR INDEBTEDNESS.
The Company may not pay the principal of or interest on the
Securities or make any deposit pursuant to Section 8.01 and
may not repurchase, redeem or otherwise retire any
Securities (collectively, "pay the Securities") if (i) any
Senior Indebtedness is not paid when due or (ii) any other
default on Senior Indebtedness occurs and the maturity of
such Senior Indebtedness is accelerated in accordance with
its terms unless, in either case, (x) the default has been
cured or waived and any such acceleration has been rescinded
or (y) such Senior Indebtedness has been paid in full.
During the continuance of any default (other than a default
described in clause (i) or (ii) of the preceding sentence)
with respect to any Senior Indebtedness pursuant to which
the maturity thereof may be accelerated immediately without
further notice (except such notice as may be required to
effect such acceleration) or the expiration of any applica
ble grace periods, the Company may not pay the Securities
for a period (a "Payment Blockage Period") commencing upon
the receipt by the Company and the Trustee of written notice
of such default from the Representative of any Designated
Senior Indebtedness specifying an election to effect a
Payment Blockage Period (a "Blockage Notice") and ending
179 days thereafter (or earlier if such Payment Blockage
Period is terminated (i) by written notice to the Trustee
and the Company from the Person or Persons who gave such
Blockage Notice, (ii) by repayment in full of such Senior
Indebtedness or (iii) because the default giving rise to
such Blockage Notice is no longer continuing). Notwithstand
ing the provisions described in the immediately preceding
sentence (but subject to the provisions contained in the
first sentence of this Section), unless the holders of such
Senior Indebtedness or the Representative of such holders
shall have accelerated the maturity of such Senior
Indebtedness, the Company may resume payments on the Securi
ties after such Payment Blockage Period. Not more than one
Blockage Notice may be given in any consecutive 360-day
period, irrespective of the number of defaults with respect
to Senior Indebtedness during such period.
SECTION 10.04. MANDATORY REDEMPTION AND
SUBORDINATION. The provisions described in Sections 10.02
or 10.03 shall not prevent or delay (i) the Company from
redeeming any Securities if required by any Gaming Authority
as described in paragraph 7 of Exhibit A or from otherwise
purchasing any Securities pursuant to any Legal Requirement
relating to the gaming business of the Company and its
Subsidiaries or (ii) the receipt by the Securityholders of
<PAGE>
payments of principal and interest on the Securities, as
described under Article 8, from the application of any money
or U.S. Government Obligations held in trust by the Trustee.
SECTION 10.05. ACCELERATION OF PAYMENT OF
SECURITIES. If payment of the Securities is accelerated
because of an Event of Default, the Company or the Trustee
shall promptly notify the holders of the Designated Senior
Indebtedness (or their Representatives) of the acceleration.
SECTION 10.06. WHEN DISTRIBUTION MUST BE PAID
OVER. If a distribution is made to Securityholders that
because of this Article 10 should not have been made to
them, the Securityholders who receive the distribution shall
hold it in trust for holders of Senior Indebtedness and pay
it over to them as their interests may appear.
SECTION 10.07. SUBROGATION. After all Senior
Indebtedness is paid in full and until the Securities are
paid in full, Securityholders shall be subrogated to the
rights of holders of Senior Indebtedness to receive
distributions applicable to Senior Indebtedness. A
distribution made under this Article 10 to holders of Senior
Indebtedness which otherwise would have been made to
Securityholders is not, as between the Company and
Securityholders, a payment by the Company on Senior
Indebtedness.
SECTION 10.08. RELATIVE RIGHTS. This Article 10
defines the relative rights of Securityholders and holders
of Senior Indebtedness. Nothing in this Indenture shall:
(1) impair, as between the Company and Secu
rityholders, the obligation of the Company, which is
absolute and unconditional, to pay principal of and
interest on the Securities in accordance with their
terms; or
(2) prevent the Trustee or any Securityholder from
exercising its available remedies upon a Default, sub
ject to the rights of holders of Senior Indebtedness to
receive distributions otherwise payable to
Securityholders.
SECTION 10.09. SUBORDINATION MAY NOT BE IMPAIRED
BY COMPANY. No right of any holder of Senior Indebtedness
to enforce the subordination of the Indebtedness evidenced
by the Securities shall be impaired by any act or failure to
act by the Company or by its failure to comply with this
Indenture.
SECTION 10.10. RIGHTS OF TRUSTEE AND PAYING
AGENT. Notwithstanding Section 10.03, the Trustee or Paying
Agent may continue to make payments on the Securities and
shall not be charged with knowledge of the existence of
facts that would prohibit the making of any such payments
unless, not less than two Business Days prior to the date of
such payment, a Trust Officer of the Trustee receives
written notice satisfactory to it that payments may not be
made under this Article 10. The Company, the Registrar or
co-registrar, the Paying Agent, a Representative of holders
of or a holder or holders holding a majority of, Senior
Indebtedness may give the written notice; PROVIDED, HOWEVER,
that, if an issue of Senior Indebtedness has a
Representative, only the Representative may give the notice.
<PAGE>
The Trustee in its individual or any other capa
city may hold Senior Indebtedness with the same rights it
would have if it were not Trustee. The Registrar and co-
registrar and the Paying Agent may do the same with like
rights. The Trustee shall be entitled to all the rights set
forth in this Article 10 with respect to any Senior
Indebtedness which may at any time be held by it, to the
same extent as any other holder of Senior Indebtedness; and
nothing in Article 7 shall deprive the Trustee of any of its
rights as such holder. Nothing in this Article 10 shall
apply to claims of, or payments to, the Trustee under or
pursuant to Section 7.07.
SECTION 10.11. DISTRIBUTION OR NOTICE TO REPRE
SENTATIVE. Whenever a distribution is to be made or a
notice given to holders of Senior Indebtedness, the
distribution may be made and the notice given to their
Representative (if any).
SECTION 10.12. ARTICLE 10 NOT TO PREVENT EVENTS
OF DEFAULT OR LIMIT RIGHT TO ACCELERATE. The failure to
make a payment pursuant to the Securities by reason of any
provision in this Article 10 shall not be construed as pre
venting the occurrence of a Default. Nothing in this
Article 10 shall have any effect on the right of the Secu
rityholders or the Trustee to accelerate the maturity of the
Securities.
SECTION 10.13. TRUST MONEYS NOT SUBORDINATED.
Notwithstanding anything contained herein to the contrary,
payments from money or the proceeds of U.S. Government
Obligations held in trust under Article 8 by the Trustee for
the payment of principal of and interest on the Securities
shall not be subordinated to the prior payment of any Senior
Indebtedness or subject to the restrictions set forth in
this Article 10, and none of the Securityholders shall be
obligated to pay over any such amount to the Company or any
holder of Senior Indebtedness of the Company or any other
creditor of the Company.
SECTION 10.14. TRUSTEE ENTITLED TO RELY. Upon
any payment or distribution pursuant to this Article 10, the
Trustee and the Securityholders shall be entitled to rely
(i) upon any order or decree of a court of competent juris
diction in which any proceedings of the nature referred to
in Section 10.02 are pending, (ii) upon a certificate of the
liquidating trustee or agent or other Person making such
payment or distribution to the Trustee or to the Security
holders or (iii) upon the Representatives for the holders of
Senior Indebtedness for the purpose of ascertaining the
Persons entitled to participate in such payment or
distribution, the holders of the Senior Indebtedness and
other Indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this
Article 10. In the event that the Trustee determines, in
good faith, that evidence is required with respect to the
right of any Person as a holder of Senior Indebtedness to
participate in any payment or distribution pursuant to this
Article 10, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to
the amount of Senior Indebtedness held by such Person, the
extent to which such Person is entitled to participate in
such payment or distribution and other facts pertinent to
the rights of such Person under this Article 10, 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. The
provisions of Sections 7.01 and 7.02 shall be applicable to
all actions or omissions of actions by the Trustee pursuant
to this Article 10.
<PAGE>
SECTION 10.15. TRUSTEE TO EFFECTUATE SUBORDINA
TION. Each Securityholder by accepting a Security author
izes and directs the Trustee on his behalf to take such
action as may be necessary or appropriate to acknowledge or
effectuate the subordination between the Securityholders and
the holders of Senior Indebtedness as provided in this
Article 10 and appoints the Trustee as attorney-in-fact for
any and all such purposes.
SECTION 10.16. TRUSTEE NOT FIDUCIARY FOR HOLDERS
OF SENIOR INDEBTEDNESS. The Trustee shall not be deemed to
owe any fiduciary duty to the holders of Senior Indebtedness
and shall not be liable to any such holders if it shall
mistakenly pay over or distribute to Securityholders or the
Company or any other Person, money or assets to which any
holders of Senior Indebtedness shall be entitled by virtue
of this Article 10 or otherwise.
SECTION 10.17. RELIANCE BY HOLDERS OF SENIOR
INDEBTEDNESS ON SUBORDINATION PROVISIONS. Each
Securityholder by accepting a Security acknowledges and
agrees that the foregoing subordination provisions are, and
are intended to be, an inducement and a consideration to
each holder of any Senior Indebtedness, whether such Senior
Indebtedness was created or acquired before or after the
issuance of the Securities, to acquire and continue to hold,
or to continue to hold, such Senior Indebtedness and such
holder of Senior Indebtedness shall be deemed conclusively
to have relied on such subordination provisions in acquiring
and continuing to hold, or in continuing to hold, such
Senior Indebtedness.
<PAGE>
ARTICLE 11
RIO GUARANTEE; SUBORDINATION OF RIO GUARANTEE
SECTION 11.01. RIO GUARANTEE. Subject to the
provisions of this Article 11, the Guarantor hereby
unconditionally guarantees to each Holder and to the Trustee
on behalf of the Holders (i) the due and punctual payment of
principal of and interest on each Security when and as the
same shall become due and payable whether at the date of
maturity or by declaration of acceleration or otherwise,
(ii) the due and punctual payment of interest on the overdue
principal of and interest, if any, on the Securities, to the
extent lawful, and (iii) the due and punctual performance of
all other obligations of the Company to the Holders or the
Trustee, all in accordance with the terms of the Securities
and this Indenture (the "Rio Guarantee"). In case of the
failure of the Company punctually to make any such principal
or interest payment, the Guarantor hereby agrees to cause
any such payment to be made punctually when and as the same
shall become due and payable, whether at the date of
maturity or by declaration of acceleration or otherwise, and
as if such payment were made by the Company. The Guarantor
hereby agrees that its obligations hereunder shall be
unconditional, irrespective of and unaffected by the
validity, regularity or enforceability of the Securities or
this Indenture, or of any amendment thereto or hereto, the
absence of any action to enforce the same, the waiver or
consent by any Holder or by the Trustee with respect to any
provisions thereof or of this Indenture, the recovery of any
judgment against the Company or any action to enforce the
same or any other circumstance which might otherwise
constitute a legal or equitable discharge or defense of a
guarantor. The Company hereby waives diligence,
presentment, demand of payment, filing of claims with a
court in the event of merger, insolvency or bankruptcy of
the Company, any right to require a proceeding first against
the Company, protest or notice with respect to the
Securities or the Indebtedness evidenced thereby and all
demands whatsoever, and covenants that the Rio Guarantee
will not be discharged except by complete performance of the
obligations contained in the Securities, in this Indenture
and pursuant to the Rio Guarantee. The Guarantor further
agrees that, as between the Guarantor, on the one hand, and
Holders and the Trustee, on the other hand, (i) for purposes
of the Rio Guarantee, the maturity of the obligations
guaranteed by the Rio Guarantee may be accelerated as
provided in Article 6, notwithstanding any stay, injunction
or other prohibition preventing such acceleration in respect
of the obligations guaranteed thereby, and (ii) in the event
of any acceleration of such obligations (whether or not due
and payable) shall forthwith become due and payable by the
Guarantor for purposes of the Rio Guarantee.
The Rio Guarantee shall continue to be effective
or shall be reinstated, as the case may be, if at any time
any payment, or any part thereof, of principal of or
interest on any of the Securities is rescinded or must
otherwise be returned by the Holders or the Trustee upon the
insolvency, bankruptcy or reorganization of the Company or
the Guarantor or otherwise, all as though such payment had
not been made.
The Guarantor shall be subrogated to all rights of
the Holders against the Company in respect of any amounts
paid by the Guarantor pursuant to the provisions of the Rio
Guarantee or this Indenture; PROVIDED, HOWEVER, that the
Guarantor shall not be entitled to enforce or to receive any
payments until the principal of and interest on all
Securities issued hereunder shall have been paid in full.
<PAGE>
The Rio Guarantee is specifically designated by
the Guarantor as Indebtedness of the Guarantor for purposes
of this Indenture.
SECTION 11.02. AGREEMENT TO SUBORDINATE. The
Guarantor agrees, and each Securityholder by accepting a
Security agrees, that the Rio Guarantee is subordinated in
right of payment, to the extent and in the manner provided
in this Article 11, to the prior payment of all Senior
Indebtedness of Guarantor and that the subordination is for
the benefit of and enforceable by the holders of Senior
Indebtedness of Guarantor. The Securities shall in all
respects rank PARI PASSU with all other Senior Subordinated
Indebtedness of Guarantor and only Indebtedness of Guarantor
which is Senior Indebtedness of Guarantor shall rank senior
to the Securities in accordance with the provisions set
forth herein. All provisions of this Article 11 shall be
subject to Section 11.13.
SECTION 11.03. LIQUIDATION, DISSOLUTION, BANK
RUPTCY. Upon any payment or distribution of the assets of
the Guarantor to creditors upon a total or partial liqui
dation or a total or partial dissolution of the Guarantor or
in a bankruptcy, reorganization, insolvency, receivership or
similar proceeding relating to the Guarantor or its
property:
(1) holders of Senior Indebtedness of Guarantor
shall be entitled to receive payment in full of the
Senior Indebtedness of Guarantor before Securityholders
shall be entitled to receive any payment of principal
of or interest on the Securities pursuant to the Rio
Guarantee; and
(2) until the Senior Indebtedness of Guarantor is
paid in full, any distribution to which Securityholders
would be entitled but for this Article 11 shall be made
to holders of Senior Indebtedness of Guarantor as their
interests may appear, except that Securityholders may
receive shares of stock and any debt securities that
are subordinated to Senior Indebtedness of Guarantor to
at least the same extent as under the Rio Guarantee.
SECTION 11.04. DEFAULT ON SENIOR INDEBTEDNESS.
The Guarantor may not pay the principal of or interest on
the Securities pursuant to the Rio Guarantee if (i) any
Senior Indebtedness of Guarantor is not paid when due or
(ii) any other default on Senior Indebtedness of Guarantor
occurs and the maturity of such Senior Indebtedness of
Guarantor is accelerated in accordance with its terms
unless, in either case, (x) the default has been cured or
waived and any such acceleration has been rescinded or
(y) such Senior Indebtedness of Guarantor has been paid in
full. During the continuance of any default (other than a
default described in clause (i) or (ii) of the preceding
sentence) with respect to any Senior Indebtedness of
Guarantor pursuant to which the maturity thereof may be
accelerated immediately without further notice (except such
notice as may be required to effect such acceleration) or
the expiration of any applicable grace periods, the
Guarantor may not pay the Securities for a period (a
"Guarantor Payment Blockage Period") commencing upon the
receipt by the Guarantor and the Trustee of written notice
of such default from the Representative of any Designated
Senior Indebtedness of Guarantor specifying an election to
effect a Guarantor Payment Blockage Period (a "Guarantor
Blockage Notice") and ending 179 days thereafter (or earlier
if such Guarantor Payment Blockage Period is terminated
(i) by written notice to the Trustee and the Guarantor from
the Person or Persons who gave such Guarantor Blockage
Notice, (ii) by repayment in full of such Senior
<PAGE>
Indebtedness of Guarantor or (iii) because the default
giving rise to such Guarantor Blockage Notice is no longer
continuing). Notwithstanding the provisions described in
the immediately preceding sentence (but subject to the provi
sions contained in the first sentence of this
Section 11.04), unless the holders of such Senior
Indebtedness of Guarantor or the Representative of such
holders shall have accelerated the maturity of such Senior
Indebtedness of Guarantor, the Guarantor may resume payments
on the Securities pursuant to the Rio Guarantee after such
Payment Blockage Period. Not more than one Guarantor
Blockage Notice may be given in any consecutive 360-day
period, irrespective of the number of defaults with respect
to Senior Indebtedness of Guarantor during such period.
SECTION 11.05. MANDATORY REDEMPTION AND
SUBORDINATION. The provisions described in Sections 11.02
or 11.03 shall not prevent or delay (i) the Guarantor from
redeeming any Securities if the Company is so required by
any Gaming Authority as described in paragraph 7 of the Form
of Security attached hereto as Exhibit A or from otherwise
purchasing any Securities pursuant to any Legal Requirement
relating to the gaming business of the Company and its
Subsidiaries or (ii) the receipt by the Securityholders of
payments of principal and interest on the Securities, as
described under Article 8, from the application of any money
or U.S. Government Obligations held in trust by the Trustee.
SECTION 11.06. ACCELERATION OF PAYMENT OF
SECURITIES. If payment of the Securities is accelerated
because of an Event of Default, the Company shall promptly
notify the holders of the Designated Senior Indebtedness of
Guarantor (or their Representatives) of the acceleration.
SECTION 11.07. WHEN DISTRIBUTION MUST BE PAID
OVER. If a distribution is made to Securityholders that
because of this Article 11 should not have been made to
them, the Securityholders who receive the distribution shall
hold it in trust for holders of Senior Indebtedness of
Guarantor and pay it over to them as their interests may
appear.
SECTION 11.08. SUBROGATION. After all Senior
Indebtedness is paid in full and until the Securities are
paid in full, Securityholders shall be subrogated to the
rights of holders of Senior Indebtedness of Guarantor to
receive distributions applicable to Senior Indebtedness of
Guarantor. A distribution made under this Article 11 to
holders of Senior Indebtedness of Guarantor which otherwise
would have been made to Securityholders is not, as between
the Company and Securityholders, a payment by the Guarantor
on Senior Indebtedness of Guarantor.
SECTION 11.09. RELATIVE RIGHTS. This Article 11
defines the relative rights of Securityholders and holders
of Senior Indebtedness of Guarantor. Nothing in this
Indenture shall:
(1) impair, as between the Guarantor and Secu
rityholders, the obligation of the Guarantor, which is
absolute and unconditional, to pay principal of and
interest on the Securities pursuant to the Rio
Guarantee in accordance with their terms; or
(2) prevent the Trustee or any Securityholder from
exercising its available remedies upon a Default, sub
ject to the rights of holders of Senior Indebtedness of
Guarantor to receive distributions otherwise payable to
Securityholders.
<PAGE>
SECTION 11.10. SUBORDINATION MAY NOT BE IMPAIRED
BY THE GUARANTOR. No right of any holder of Senior
Indebtedness of Guarantor to enforce the subordination of
the Indebtedness evidenced by the Securities shall be
impaired by any act or failure to act by the Guarantor or by
its failure to comply with this Indenture.
SECTION 11.11. RIGHTS OF TRUSTEE AND PAYING
AGENT. Notwithstanding Section 11.04, the Trustee or Paying
Agent may continue to make payments on the Securities and
shall not be charged with knowledge of the existence of
facts that would prohibit the making of any such payments
unless, not less than two Business Days prior to the date of
such payment, a Trust Officer of the Trustee receives notice
satisfactory to it that payments may not be made under this
Article 11. The Guarantor, the Registrar or co-registrar,
the Paying Agent, a Representative of holders of, or holders
holding a majority of Senior Indebtedness may give the
notice; PROVIDED, HOWEVER, that, if an issue of Senior
Indebtedness of Guarantor has a Representative, only the
Representative may give the notice.
The Trustee in its individual or any other capa
city may hold Senior Indebtedness of Guarantor with the same
rights it would have if it were not Trustee. The Registrar
and co-registrar and the Paying Agent may do the same with
like rights. The Trustee shall be entitled to all the
rights set forth in this Article 11 with respect to any
Senior Indebtedness of Guarantor which may at any time be
held by it, to the same extent as any other holder of Senior
Indebtedness of Guarantor; and nothing in Article 7 shall
deprive the Trustee of any of its rights as such holder.
Nothing in this Article 11 shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 7.07.
SECTION 11.12. DISTRIBUTION OR NOTICE TO REPRE
SENTATIVE. Whenever a distribution is to be made or a
notice given to holders of Senior Indebtedness of Guarantor,
the distribution may be made and the notice given to their
Representative (if any).
SECTION 11.13. ARTICLE 11 NOT TO PREVENT EVENTS
OF DEFAULT OR LIMIT RIGHT TO ACCELERATE. The failure to
make a payment pursuant to the Securities by reason of any
provision in this Article 11 shall not be construed as pre
venting the occurrence of a Default. Nothing in this
Article 11 shall have any effect on the right of the Secu
rityholders or the Trustee to accelerate the maturity of the
Securities.
SECTION 11.14. TRUST MONEYS NOT SUBORDINATED.
Notwithstanding anything contained herein to the contrary,
payments from money or the proceeds of U.S. Government
Obligations held in trust under Article 8 by the Trustee for
the payment of principal of and interest on the Securities
shall not be subordinated to the prior payment of any Senior
Indebtedness or subject to the restrictions set forth in
this Article 11, and none of the Securityholders shall be
obligated to pay over any such amount to the Guarantor or
any holder of Senior Indebtedness of Guarantor or any other
creditor of the Guarantor.
SECTION 11.15. TRUSTEE ENTITLED TO RELY. Upon
any payment or distribution pursuant to this Article 11, the
Trustee and the Securityholders shall be entitled to rely
(i) upon any order or decree of a court of competent juris
diction in which any proceedings of the nature referred to
in Section 11.03 are pending, (ii) upon a certificate of the
<PAGE>
liquidating trustee or agent or other Person making such
payment or distribution to the Trustee or to the Security
holders or (iii) upon the Representatives for the holders of
Senior Indebtedness of Guarantor for the purpose of
ascertaining the Persons entitled to participate in such
payment or distribution, the holders of the Senior
Indebtedness of Guarantor and other Indebtedness of the
Guarantor, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article 11. In the event that
the Trustee determines, in good faith, that evidence is
required with respect to the right of any Person as a holder
of Senior Indebtedness of Guarantor to participate in any
payment or distribution pursuant to this Article 11, the
Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of
Senior Indebtedness of Guarantor held by such Person, the
extent to which such Person is entitled to participate in
such payment or distribution and other facts pertinent to
the rights of such Person under this Article 11, 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. The
provisions of Sections 7.01 and 7.02 shall be applicable to
all actions or omissions of actions by the Trustee pursuant
to this Article 11.
SECTION 11.16. TRUSTEE TO EFFECTUATE SUBORDINA
TION. Each Securityholder by accepting a Security author
izes and directs the Trustee on his behalf to take such
action as may be necessary or appropriate to acknowledge or
effectuate the subordination between the Securityholders and
the holders of Senior Indebtedness of Guarantor as provided
in this Article 11 and appoints the Trustee as attorney-in-
fact for any and all such purposes.
SECTION 11.17. TRUSTEE NOT FIDUCIARY FOR HOLDERS
OF SENIOR INDEBTEDNESS OF GUARANTOR. The Trustee shall not
be deemed to owe any fiduciary duty to the holders of Senior
Indebtedness of Guarantor and shall not be liable to any
such holders if it shall mistakenly pay over or distribute
to Securityholders or the Guarantor or any other Person,
money or assets to which any holders of Senior Indebtedness
of Guarantor shall be entitled by virtue of this Article 11
or otherwise.
SECTION 11.18. RELIANCE BY HOLDERS OF SENIOR
INDEBTEDNESS OF GUARANTOR ON SUBORDINATION PROVISIONS. Each
Securityholder by accepting a Security acknowledges and
agrees that the foregoing subordination provisions are, and
are intended to be, an inducement and a consideration to
each holder of any Senior Indebtedness of Guarantor, whether
such Senior Indebtedness of Guarantor was created or
acquired before or after the issuance of the Securities, to
acquire and continue to hold, or to continue to hold, such
Senior Indebtedness of Guarantor and such holder of Senior
Indebtedness of Guarantor shall be deemed conclusively to
have relied on such subordination provisions in acquiring
and continuing to hold, or in continuing to hold, such
Senior Indebtedness of Guarantor.
ARTICLE 12
MISCELLANEOUS
SECTION 12.01. TRUST INDENTURE ACT CONTROLS. If
and to the extent that any provision of this Indenture
limits, qualifies or conflicts with the duties imposed by,
or with another provision (an "incorporated provision")
<PAGE>
included in this Indenture by operation of, Sections 310 to
318, inclusive, of the TIA, such imposed duties or
incorporated provision shall control.
SECTION 12.02. NOTICES. Any notice or communica
tion shall be in writing and delivered in person or mailed
by first-class mail addressed as follows:
if to the Company:
Rio Hotel & Casino, Inc.
3700 West Flamingo Road
Las Vegas, NV 89103
Attention of
President
Chief Financial Officer
if to the Guarantor:
Rio Hotel & Casino, Inc.
3700 West Flamingo Road
Las Vegas, NV 89103
Attention of
President
Chief Financial Officer
if to the Trustee:
IBJ Schroder Bank & Trust Company
One State Street
New York, NY 10004
Attention of: Corporate Trust & Agency Administration
With a copy to:
Squire, Saunders & Dempsey
Two Renaissance Square
40 North Central Avenue, Suite 2700
Attn: Bradley S. Paulson
Phoenix, AZ 85004
The Company or the Trustee by notice to the other
may designate additional or different addresses for subse
quent notices or communications.
<PAGE>
Any notice or communication mailed to a Security
holder shall be mailed to the Securityholder at the Secu
rityholder's address as it appears on the registration books
of the Registrar and shall be sufficiently given 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.
SECTION 12.03. COMMUNICATION 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 Trustee, the Registrar and anyone else shall
have the protection of TIA SECTION 312(c).
SECTION 12.04. CERTIFICATE AND OPINION AS TO
CONDITIONS PRECEDENT. Upon any request or application by
the Company to the Trustee to take or refrain from taking
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 and complying
with Section 12.05 stating that, in the opinion of the
signers, all conditions precedent, if any, provided for
in this Indenture relating to the proposed action have
been complied with; and
(2) an Opinion of Counsel in form and substance
reasonably satisfactory to the Trustee stating that, in
the opinion of such counsel, all such conditions
precedent have been complied with.
SECTION 12.05. STATEMENTS REQUIRED IN CERTIFICATE
OR OPINION. Each certificate or opinion with respect to
compliance with a covenant or condition provided for in this
Indenture shall include:
(1) a statement that the individual making such
certificate or opinion has read such covenant or condi
tion;
(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
individual, 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 opin
ion of such individual, such covenant or condition has
been complied with.
SECTION 12.06. WHEN SECURITIES DISREGARDED. In
determining whether the Holders of the required principal
amount of Securities have concurred in any direction, waiver
<PAGE>
or consent, Securities owned by the Company or by any
Person directly or indirectly controlling or controlled by
or under direct or indirect common control with the Company
shall be disregarded and deemed not to be outstanding,
except that, for the purpose of determining whether the
Trustee shall be protected in relying on any such direction,
waiver or consent, only Securities which the Trustee knows
are so owned shall be so disregarded. Also, subject to the
foregoing, only Securities outstanding at the time shall be
considered in any such determination.
SECTION 12.07. RULES BY TRUSTEE, PAYING AGENT AND
REGISTRAR. The Trustee may make reasonable rules for action
by or a meeting of Securityholders. The Registrar and the
Paying Agent may make reasonable rules for their functions.
SECTION 12.08. LEGAL HOLIDAYS. A "Legal Holiday"
is a Saturday, a Sunday or a day on which banking institu
tions are not required to be open in the State of New York.
If a payment date is a Legal Holiday, payment shall be made
on the next succeeding day that is not a Legal Holiday, and
no interest shall accrue for the intervening period. If a
regular record date is a Legal Holiday, the record date
shall not be affected.
SECTION 12.09. GOVERNING LAW. THIS INDENTURE AND
THE SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT
WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS
OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
SECTION 12.10. NO RECOURSE AGAINST OTHERS. A
director, officer, employee or stockholder, as such, of the
Company shall not have any liability for any obligations of
the Company under the Securities or this Indenture or for
any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Security,
each Securityholder shall waive and release all such lia
bility. The waiver and release shall be part of the consi
deration for the issue of the Securities.
SECTION 12.11. SUCCESSORS. All agreements of the
Company in this Indenture and the Securities shall bind its
successors. All agreements of the Trustee in this Indenture
shall bind its successors.
<PAGE>
SECTION 12.12. MULTIPLE ORIGINALS. The parties
may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together
represent the same agreement. One signed copy is enough to
prove this Indenture.
SECTION 12.13. TABLE OF CONTENTS; HEADINGS. The
table of contents, cross-reference sheet and headings of the
Articles and Sections of this Indenture have been inserted
for convenience of reference only, are not intended to be
considered a part hereof and shall not modify or restrict
any of the terms or provisions hereof.
SECTION 12.14. SEVERABILITY. In case any
provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
IN WITNESS WHEREOF, the parties have caused this
Indenture to be duly executed as of the date first written
above.
RIO HOTEL & CASINO, INC.
by
/s/ Harlan D. Braaten
Name: Harlan D. Braaten
Title: Senior Vice President
RIO PROPERTIES, INC.
by
/s/ Harlan D. Braaten
Name: Harlan D. Braaten
Title: Treasurer and Chief
Executive Officer
IBJ SCHRODER
BANK & TRUST COMPANY
by
/s/ Irene Teutonico
Name: Irene Teutonico
Title: AVP
<PAGE> EXHIBIT A
[FORM OF FACE OF INITIAL SECURITY]
[Global Securities Legend -- if applicable]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), NEW YORK, NEW YORK, TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC)
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A
SUCCESSOR THEREOF OR SUCH SUCCESSORS NOMINEE AND TRANSFERS OF
PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS
MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[RESTRICTED SECURITY LEGEND]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE
HOLDER HEREOF, BY PURCHASING THIS SECURITY, AGREES FOR THE
BENEFIT OF THE COMPANY THAT THIS SECURITY MAY NOT BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE THIRD ANNIVER
SARY OF THE ISSUANCE HEREOF (OR ANY PREDECESSOR SECURITY HERETO)
OR (Y) BY ANY HOLDER THAT WAS AN AFFILIATE OF THE COMPANY AT ANY
TIME DURING THE THREE MONTHS PRECEDING THE DATE OF SUCH TRANSFER,
IN EITHER CASE, OTHER THAN (1) TO THE COMPANY, (2) SO LONG AS
THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER
THE SECURITIES ACT ("RULE 144A"), TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A, PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS
GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A (AS INDICATED BY THE BOX CHECKED BY THE
TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS
SECURITY), (3) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH
REGULATION S UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX
CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE
REVERSE OF THIS SECURITY) OR (4) TO AN INSTITUTION THAT IS AN
"ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a)(1), (2), (3) OR
(7) UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY
THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF
THIS SECURITY) THAT IS ACQUIRING THIS SECURITY FOR INVESTMENT
PURPOSES AND NOT FOR DISTRIBUTION, AND A CERTIFICATE IN THE FORM
ATTACHED TO THIS SECURITY IS DELIVERED BY THE TRANSFEREE TO THE
COMPANY AND THE TRUSTEE, IN EACH CASE IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. AN
INSTITUTIONAL ACCREDITED INVESTOR HOLDING THIS SECURITY AGREES
THAT IT WILL FURNISH TO THE COMPANY AND THE TRUSTEE SUCH
CERTIFICATES AND OTHER INFORMATION AS THEY MAY REASONABLY REQUIRE
TO CONFIRM THAT ANY TRANSFER BY IT OF THIS SECURITY COMPLIES WITH
THE FOREGOING RESTRICTIONS. THE HOLDER HEREOF, BY PURCHASING
THIS SECURITY, REPRESENTS AND AGREES FOR THE BENEFIT OF THE
COMPANY THAT IT IS (1) A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A OR (2) AN INSTITUTION THAT IS AN "ACCREDITED
INVESTOR" AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE
SECURITIES ACT AND THAT IS HOLDING THIS SECURITY FOR INVESTMENT
PURPOSES AND NOT FOR DISTRIBUTION OR (3) A NON-U.S. PERSON
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF (OR AN ACCOUNT
SATISFYING THE REQUIREMENTS OF PARAGRAPH (0)(2) OF RULE 902
UNDER) REGULATION S UNDER THE SECURITIES ACT.
<PAGE> CUSIP NO. 767147AA9
No. $
10-5/8% Senior Subordinated Notes Due July 15, 2005
Rio Hotel & Casino, Inc., a Nevada corporation,
promises to pay to , or registered
assigns, the principal sum of Dollars on
Interest Payment Dates: January 15 and July 15
Record Dates: January 1 and July 1
Additional provisions of this Security are set forth on
the other side of this Security.
Dated:
RIO HOTEL & CASINO, INC.
by: _____________________
President
_____________________
Secretary
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
IBJ SCHRODER BANK &
TRUST COMPANY,
as Trustee, certifies
[Seal] that this is one of
the Securities referred
to in the Indenture.
by: _________________________
Authorized Signatory
<PAGE>
[FORM OF REVERSE SIDE OF INITIAL SECURITY]
10-5/8% Senior Subordinated Note Due July 15, 2005
1. INTEREST
Rio Hotel & Casino, Inc., a Nevada corporation (such
corporation, and its successors and assigns under the Indenture
hereinafter referred to, being herein called the "Company"),
promises to pay interest on the principal amount of this Security
at the rate per annum shown above. The Company will pay interest
semiannually on January 15 and July 15 of each year. Interest on
the Securities will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from
July 21, 1995. Interest will be computed on the basis of a 360-
day year of twelve 30-day months. The Company shall pay interest
on overdue principal at the rate borne by the Securities plus 1%
per annum, and it shall pay interest on overdue installments of
interest at the same rate to the extent lawful.
2. SPECIAL INTEREST
The holder of this Security is entitled to the benefits of a
Registration Agreement, dated as of July 18, 1995, among the
Company and the Initial Purchasers (the "Registration
Agreement").
In the event that either (i) the Exchange Offer Registration
Statement is not filed with the Commission on or prior to the
45th day following the date of original issuance of the
Securities (ii) the Exchange Offer Registration Statement is not
declared effective prior to the 120th day following date of
original issuance of the Securities or (iii) the Exchange Offer
is not consummated or a Shelf Registration Statement with respect
to the Securities is not declared effective on or prior to the
150th day following the date of original issuance of the
Securities, interest will accrue (in addition to stated interest
on the Notes) from and including the next day following each of
(a) such 45-day period in the case of clause (i) above and (b)
such 120-day period in the case of clause (ii) above and (c) such
150-day period in the case of clause (iii) above. In each case
such additional interest (the "Special Interest") will be payable
<PAGE>
in cash semiannually in arrears each January 15, and July 15,
commencing January 15, 1996, at a rate per annum equal to 0.50%
of the principal amount of the Securities. The aggregate amount
of Special Interest payable pursuant to the above provisions will
in no event exceed 1.50% per annum of the principal amount of the
Securities. Upon (x) the filing of the Exchange Offer
Registration Statement after the 45-day period described in
clause (i) above, (y) the effectiveness of the Exchange Offer
Registration Statement after the 120-day period described in
clause (ii) above or (z) the consummation of the Exchange Offer
or the effectiveness of a Shelf Registration Statement, as the
case may be, after the 150-day period described in clause
(iii) above, the Special Interest payable on the Securities from
the date of such filing, effectiveness or consummation, as the
case may be, will cease to accrue and all accrued and unpaid
Special Interest as of the occurrence of (x),(y) or (z) shall be
paid to the holders of the Notes promptly thereafter. Following
the occurrence of (x), (y) or (z) above, the terms of the
Securities shall revert to the original terms set forth above.
In the event that a Shelf Registration Statement is
declared effective pursuant to the paragraph preceding the
immediately preceding paragraph, if the Company fails to keep
such Registration Statement continuously effective for the period
required by the Registration Agreement, then from such time as
the Shelf Registration Statement is no longer effective until the
earlier of (i) the date that the Shelf Registration Statement is
again deemed effective, (ii) the date that is the third
anniversary of the Closing or (iii) the date as of which all of
the Securities are sold pursuant to the Shelf Registration
Statement, Special Interest shall accrue at a rate per annum
equal to 0.50% of the principal amount of the Securities (1.00%
thereof if the Shelf Registration Statement is no longer
effective for 30 days or more) and shall be payable in cash
semiannually in arrears each January 15 and July 15, commencing
January 15, 1996.
3. METHOD OF PAYMENT
The Company will pay interest on the Securities (except
defaulted interest) to the Persons who are registered holders of
Securities at the close of business on the January 1 or July 1
next preceding the interest payment date even if Securities are
concealed after the record date and on or before the interest
<PAGE>
payment date. Holders must surrender Securities to a Paying
Agent to collect principal payments. The Company will pay
principal and interest in money of the United States of America
that at the time of payment is legal tender for payment of public
and private debts. However, the Company may pay principal and
interest by check payable in such money. It may mail an interest
check to a Holder's registered address.
4. PAYING AGENT AND REGISTRAR
Initially, IBJ Schroder Bank & Trust Company, a New
York corporation ("Trustee"), will act as Paying Agent and
Registrar. The Company may appoint and change any Paying Agent,
Registrar or co-registrar without notice. The Company or any of
its domestically incorporated Wholly Owned Subsidiaries may act
as Paying Agent, Registrar or co-registrar.
5. INDENTURE
The Company issued the Securities under an Inden-ture
dated as of July 21, 1995 ("Indenture"), between the Company, Rio
Properties, Inc. (the "Guarantor") and the Trustee. 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 of 1939 (15 U.S.C. SECTIONS 77aaa-77bbbb) as in effect on the date
of the Indenture (the "Act"). Terms defined in the Indenture and
not defined herein have the meanings ascribed thereto in the
Indenture. The Securities are subject to all such terms, and
Securityholders are referred to the Indenture and the Act for a
statement of those terms.
The Securities are general unsecured obligations of the
Company limited to $100,000,000 aggregate principal amount
(subject to Section 2.07 of the Indenture). The Indenture
imposes certain limitations on the Company, the Guarantor and the
Restricted Subsidiaries, including the Incurrence of
Indebtedness, pay dividends or make other distributions, make
investments, repurchase subordinated obligations or capital
stock, create certain liens (except, among others, liens securing
Senior Indebtedness), enter into certain transactions with
affiliates, sell assets of the Company or its subsidiaries, issue
or sell subsidiary stock, create or permit to exist restrictions
on distributions from subsidiaries, or enter into certain mergers
and consolidations.
<PAGE>
The payment of principal and interest on the Securities
is unconditionally guaranteed on a senior subordinated and
unsecured basis by the Guarantor.
6. OPTIONAL REDEMPTION
The Securities may not be redeemed prior to
July 15, 2000. On and after that date, the Company may redeem
the Securities in whole at any time or in part from time to time
at the following redemption prices (expressed in percentages of
principal amount), plus accrued interest to the redemption date
(subject to the right of Holders of record on the relevant record
date to receive interest due on the related interest payment
date):
if redeemed during the 12-month period beginning July
15 of the years below.
YEAR PERCENTAGE
2000 103.98%
2001 102.66%
2002 101.33%
and thereafter at 100.00%.
<PAGE>
7. MANDATORY DISPOSITION OR REDEMPTION PURSUANT TO GAMING LAWS
If a Holder or beneficial owner of a Security is
required to be licensed, qualified or found suitable under
applicable Gaming Laws and is not so licensed, qualified or found
suitable, the Holder shall be obliged, at the request of the
Company, to dispose of such Holder's Securities within 30 days
after receipt of notice of failure to be found suitable or such
earlier date prescribed by any Gaming Authority (in which event
the Company's obligation to pay interest after the receipt of
such notice shall be limited as provided in such Gaming Laws),
and thereafter, the Company shall have the right to redeem, on
the date fixed by the Company for the redemption of such
Securities, such Holder's Securities at a redemption price equal
to the lower of (i) the price at which such Holder or beneficial
owner acquired the securities without accrued interest, if any
(unless the payment of such interest is permitted by the
applicable Gaming Authority), (ii) the Current Market Price of
the Securities on such redemption date and (iii) the principal
amount of such securities without accrued interest, if any
(unless the payment of such interest is permitted by the
applicable Gaming Authority). The Company is not required to pay
or reimburse any Holder or beneficial owner of a Security for the
costs of licensure or investigation for such licensure,
qualification or finding of suitability. Any Holder or
beneficial owner of a Security required to be licensed, qualified
or found suitable under Gaming Laws must pay all investigative
fees and costs of the Gaming Authorities in connection with such
qualification or application therefor.
8. NOTICE OF REDEMPTION
Notice of Redemption will be mailed at least 30 days
but not more than 60 days before the redemption date to each
Holder of Securities to be redeemed at his registered address.
Securities in denominations larger than $1,000 may be redeemed in
part but only in whole multiples of $1,000. If money sufficient
to pay the redemption price of and accrued interest on all
Securities (or portions thereof) to be redeemed on the redemption
date is deposited with the Paying Agent on or before the
redemption date and certain other conditions are satisfied, on
and after such date interest ceases to accrue on such Securities
(or such portions thereof) called for redemption.
<PAGE>
9. PUT PROVISIONS
Upon a Change of Control, any Holder of Securities will
have the right, subject to certain conditions, to cause the
Company to repurchase all or any part of the Securities of such
Holder at a repurchase price equal to 101% of the principal
amount of the Securities to be repurchased plus accrued interest
to the date of repurchase (subject to the right of holders of
record in the relevant record date to receive interest due on the
related interest payment date) as provided in, and subject to the
terms of, the Indenture.
10. SUBORDINATION
The Securities are subordinated to Senior Indebtedness,
as defined in the Indenture and the Rio Guarantee is subordinated
to Senior Indebtedness of the Guarantor, as defined in the
Indenture. To the extent provided in the Indenture, Senior
Indebtedness or Senior Indebtedness of the Guarantor must be paid
before the Securities may be paid. The Company and the Guarantor
agree, and each Securityholder by accepting a Security agrees, to
the subordination provisions contained in the Indenture and
authorized the Trustee to give it effect and appoints the Trustee
as attorney-in-fact for such purpose.
11. DENOMINATIONS; TRANSFER; EXCHANGE
The Securities are in registered form without coupons
in denominations of $1,000 and whole multiples of $1,000. A
Holder may transfer or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other
things, to furnish appropriate endorse-ments or transfer
documents and to pay any taxes and fees required by law or
permitted by the Indenture. The Regis-trar need not register the
transfer of or exchange any Securities selected for redemption
(except, in the case of a Security to be redeemed in part, the
portion of the Security not to be redeemed) or any Securities for
a period of 15 days before a selection of Securities to be
redeemed or 15 days before an interest payment date.
12. PERSONS DEEMED OWNERS
The registered Holder of this Security may be treated
as the owner of it for all purposes.
<PAGE>
13. UNCLAIMED MONEY
If money for the payment of principal or interest
remains unclaimed for two years, the Trustee or Paying Agent
shall pay the money back to the Company at its request unless an
abandoned property law designates another Person. After any such
payment, Holders entitled to the money must look only to the
Company and not to the Trustee for payment.
14. DISCHARGE AND DEFEASANCE
Subject to certain conditions, the Company at any time
may terminate some or all of its obligations under the Securities
and the Indenture if the Company deposits with payment of
principal and interest on the Securities to redemption or
maturity, as the case may be.
15. AMENDMENT, WAIVER
Subject to certain exceptions set forth in the
Indenture, (i) the Indenture or the Securities may be amended
with the written consent of the Holders of at least a majority in
principal amount outstanding of the Securities and (ii) any
default or noncompliance with any provision may be waived with
the written consent of the Holders of a majority in principal
amount outstanding of the Securities. Subject to certain
exceptions set forth in the Indenture, without the consent of any
Securityholder, the Company and the Trustee may amend the
Indenture or the Securities to cure any ambiguity, omission,
defect or inconsistency, or to comply with Article 5 of the
Indenture, or to provide for uncertificated Securities in
addition to or in place of certificated Securities, or to add
guarantees with respect to the Securities or to secure the
Securities, or to add additional covenants or surrender rights
and powers conferred on the Company, or to comply with any
request of the SEC in connection with qualifying the indenture
under the Act, or to make certain changes in the subordination
provisions, or to make any change that does not adversely affect
the rights of any Securityholder.
16. DEFAULTS AND REMEDIES
Under the Indenture, Events of Default include
(i) default for 30 days in payment of interest on the Securities;
(ii) default in payment of principal on the Securities at
maturity, upon redemption pursuant to para-graph 5 or 6 of the
Securities, upon acceleration or other-wise, or failure by the
<PAGE>
Company to redeem or purchase Securities when required;
(iii) failure by the Company to comply with other agreements in
the Indenture or the Securities, in certain cases subject to
notice and lapse of time; (iv) certain accelerations (including
failure to pay within any grace period after final maturity) of
other Indebtedness of the Company if the amount accelerated (or
so unpaid) exceeds $10 million and continue for 10 days after the
required notice to the Company; (v) certain events of bankruptcy
or insolvency with respect to the Company and any Restricted
Subsidiary; (vi) certain judgments or decrees for the payment of
money in excess of $10 million or (vii) the revocation,
termination or suspension of any Gaming License of the Company or
any of its Restricted Subsidiaries subject to certain conditions.
If an Event of Default (other than an Event of Default specified
in (v) above) occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the Securities
may, by notice to the Company, declare the principal amount of
and accrued interest on the Securities to be due and payable
immediately upon the occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the
Securities except as provided in the Indenture. The Trustee may
refuse to enforce the Indenture or the Securi-ties unless it
receives reasonable indemnity or security. Subject to certain
limitations, Holders of a majority in principal amount of the
Securities may direct the Trustee in its exercise of any trust or
power. The Trustee may with-hold from Securityholders notice of
any continuing Default (except a Default in payment of principal
or interest) if it determines that withholding notice is in the
interest of the Holders.
17. TRUSTEE DEALINGS WITH THE COMPANY
Subject to certain limitations imposed by the Act, the
Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securi-ties and may
otherwise deal with and collect obligations owed to it by the
Company or its Affiliates and may other-wise deal with the
Company or its Affiliates with the same rights it would have if
it were not Trustee.
18. NO RECOURSE AGAINST OTHERS
A director, officer, employee or stockholder, as such,
of the Company or the Trustee shall not have any liability for
<PAGE>
any obligations of the Company under the Securities or the
Indenture or for any claim based on, in respect of or by reason
of such obligations or their crea-tion. By accepting a Security,
each Securityholder waives and releases all such liability. The
waiver and release are part of the consideration for the issue of
the Securities.
19. AUTHENTICATION
This Security shall not be valid until an author-ized
signatory of the Trustee (or an authenticating agent) manually
signs the certificate of authentication on the other side of this
Security.
20. ABBREVIATIONS
Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as TEN COM (=tenants in
common), TEN ENT (=tenants by the entireties), JT TEN (=joint
tenants with rights of survivorship and not as tenants in
common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
21. CUSIP NUMBERS
Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures the
Company has caused CUSIP numbers to be printed on the Securities
and has directed the Trustee to use CUSIP numbers in notices of
redemption as a convenience to Securityholders. No
representation is made as to the accuracy of such numbers either
as printed on the Securities or as contained in any notice of
redemption and reliance may be placed only on the other
identification numbers placed thereon.
THE COMPANY WILL FURNISH TO ANY SECURITYHOLDER UPON
WRITTEN REQUEST AND WITHOUT CHARGE TO THE SECURITYHOLDER A COPY
OF THE INDENTURE WHICH HAS IN IT THE TEXT OF THIS SECURITY IN
LARGER TYPE. REQUESTS MAY BE MADE TO:
Attention of
<PAGE>
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to
transfer this Security on the books of the Company. The agent
may substitute another to act for him.
Date: Your Signature:
Sign Exactly as your name appears on the other side of this
Security.
In connection with any transfer of any of the Senior
Subordinated Securities evidenced by this certificate occurring
prior to the date that is three years after the later of the date
of original issuance of such Senior Subordinated Securities and
the last date, if any, on which such Senior Subordinated
Securities were owned by the Company or any Affiliate of the
Company, the undersigned confirms that such Senior Subordinated
Securities are being transferred:
CHECK ONE BOX BELOW
(1) _ to the Company; or
(2) _ pursuant to and in compliance
with Rule 144A under the Securities Act of
1933; or
(3) _ pursuant to and in compliance
with Regulation S under the Securities Act of
1933; or
<PAGE>
(4) _ to an institutional
"accredited investor" (as defined in
Schedule 501(a)(1), (2), (3) or (7) under the
Securities Act of 1933) that has furnished to
the Trustee a signed letter containing
certain representations and agreements (the
form of which letter can be obtained from the
Trustee); or
(5) _ pursuant to another available
exemption from the registration requirements
of the Securities Act of 1933.
Unless one of the boxes is checked, the Trustee will
refuse to register any of the Senior Subordinated Securities
evidenced by this certificate in the name of any person other
than the registered holder thereof; PROVIDED, HOWEVER, that if
box (3), (4) or (5) is checked, the Trustee may require, prior to
registering any such transfer of the Senior Subordinated
Securities such legal opinions, certifications and other
information as the Company has reasonably requested t confirm
that such transfer is being made pursuant to an exemption from,
or in a transaction not subject to, the registration requirements
of the Securities Act of 1933, such as the exemption provided by
Rule 144 under such Act.
Signature
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.
The undersigned represents and warrants that it is
purchasing this Senior Subordinated Security for its own account
or an account with respect to which it exercises sole investment
discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the
Securities Act of 1933, and is aware that the sale to it is being
made in reliance on Rule 144A and acknowledges that it has
received such information regarding the Company as the
<PAGE>
undersigned has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the
transferor is relying upon the undersigned's foregoing
representations in order to claim the exemption from registration
provided by Rule 144A.
Date:
NOTICE: To be executed
by an executive
officer
<PAGE>
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global
Security have been made:
Principal
Amount of Amount of Amount [at Signature
decrease in increase in Maturity] of
Date of Principal Principal of this authorized
Exchange Amount [at Amount [at Global officer of
Maturity] Maturity] Security Trustee or
of this of this following Securities
Global Global such Custodian
Security Security decrease or
increase)
- ---------- ---------- ---------- ----------- ----------
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the
Company pursuant to Section 4.06 or 4.08 of the Indenture, check
the box:
_
If you want to elect to have only part of this Security purchased
by the Company pursuant to Section 4.06 or 4.08 of the Indenture,
state the amount:
$
Date: Your Signature:
(Sign exactly as your
name appears on the
other side of the
Security)
Signature Guarantee:
(Signature must be guaranteed by a
member firm of the New York Stock
Exchange or a commercial bank or trust
company)
<PAGE>
EXHIBIT B
[FORM OF FACE OF EXCHANGE SECURITY]
[Global Securities Legend -- if applicable]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), NEW YORK, NEW YORK, TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC)
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A
SUCCESSOR THEREOF OR SUCH SUCCESSORS NOMINEE AND TRANSFERS OF
PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS
MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
<PAGE>
No. $
10-5/8% Senior Subordinated Notes Due July 15, 2005
Rio Hotel & Casino, Inc., a Nevada corporation,
promises to pay to , or registered
assigns, the principal sum of Dollars on
Interest Payment Dates: January 15 and July 15
Record Dates: January 1 and July 1
Additional provisions of this Security are set forth on
the other side of this Security.
Dated:
RIO HOTEL & CASINO, INC.
by: _________________
President
_________________
Secretary
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
IBJ SCHRODER BANK &
TRUST COMPANY,
as Trustee, certifies
[Seal] that this is one of
the Securities referred
to in the Indenture.
by: __________________________
Authorized Signatory
<PAGE>
[FORM OF REVERSE SIDE OF EXCHANGE SECURITY]
10-5/8% Senior Subordinated Notes Due July 15, 2005
1. INTEREST
Rio Hotel & Casino, Inc., a Nevada corporation (such
corporation, and its successors and assigns under the Indenture
hereinafter referred to, being herein called the "Company"),
promises to pay interest on the principal amount of this Security
at the rate per annum shown above. The Company will pay interest
semiannually on January 15 and July 15 of each year. Interest on
the Securities will accrue from the most recent date to which
interest has been paid or, if no interest has been paid,
from July 21, 1995. Interest will be computed on the basis of a
360-day year of twelve 30-day months. The Company shall pay
interest on overdue principal at the rate borne by the Securities
plus 1% per annum, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
2. METHOD OF PAYMENT
The Company will pay interest on the Securities (except
defaulted interest) to the Persons who are registered holders of
Securities at the close of business on the January 1 or July 1
next preceding the interest payment date even if Securities are
concealed after the record date and on or before the interest
payment date. Holders must surrender Securities to a Paying
Agent to collect principal payments. The Company will pay
principal and interest in money of the United States of America
that at the time of payment is legal tender for payment of public
and private debts. However, the Company may pay principal and
interest by check payable in such money. It may mail an interest
check to a Holder's registered address.
3. PAYING AGENT AND REGISTRAR
Initially, IBJ Schroder Bank & Trust Company, a New
York corporation ("Trustee"), will act as Paying Agent and
Registrar. The Company may appoint and change any Paying Agent,
Registrar or co-registrar without notice. The Company or any of
<PAGE>
its domestically incorporated Wholly Owned Subsidiaries may act
as Paying Agent, Registrar or co-registrar.
4. INDENTURE
The Company issued the Securities under an Inden-ture
dated as of July 21, 1995 ("Indenture"), between the Company, Rio
Properties, Inc. (the "Guarantor") and the Trustee. 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 of 1939 (15 U.S.C. SECTIONS 77aaa-77bbbb) as in effect on the
date of the Indenture (the "Act"). Terms defined in the
Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all such
terms, and Securityholders are referred to the Indenture and the
Act for a statement of those terms.
The Securities are general unsecured obligations of the
Company limited to $100,000,000 aggregate principal amount
(subject to Section 2.07 of the Indenture). The Indenture
imposes certain limitations on the Company, the Guarantor and the
Restricted Subsidiaries, including the Incurrence of
Indebtedness, pay dividends or make other distributions, make
investments, repurchase subordinated obligations or capital
stock, create certain liens (except, among others, liens securing
Senior Indebtedness), enter into certain transactions with
affiliates, sell assets of the Company or its subsidiaries, issue
or sell subsidiary stock, create or permit to exist restrictions
on distributions from subsidiaries, or enter into certain mergers
and consolidations.
The payment of principal and interest on the Securities
is unconditionally guaranteed on a senior subordinated and
unsecured basis by the Guarantor.
5. OPTIONAL REDEMPTION
The Securities may not be redeemed prior to
July 15, 2000. On and after that date, the Company may redeem
the Securities in whole at any time or in part from time to time
at the following redemption prices (expressed in percentages of
principal amount), plus accrued interest to the redemption date
(subject to the right of Holders of record on the relevant record
date to receive interest due on the related interest payment
date):
<PAGE>
if redeemed during the 12-month period beginning
July 15 of the years below.
YEAR PERCENTAGE
2000 103.98 %
2001 102.66 %
2002 101.33 %
and thereafter at 100.00%.
6. MANDATORY DISPOSITION OR REDEMPTION PURSUANT TO GAMING LAWS
If a Holder or beneficial owner of a Security is
required to be licensed, qualified or found suitable under
applicable Gaming Laws and is not so licensed, qualified or found
suitable, the Holder shall be obliged, at the request of the
Company, to dispose of such Holder's Securities within 30 days
after receipt of notice of failure to be found suitable or such
earlier date prescribed by any Gaming Authority (in which event
the Company's obligation to pay interest after the receipt of
such notice shall be limited as provided in such Gaming Laws),
and thereafter, the Company shall have the right to redeem, on
the date fixed by the Company for the redemption of such
Securities, such Holder's Securities at a redemption price equal
to the lower of (i) the price at which such Holder or beneficial
owner acquired the securities without accrued interest, if any
(unless the payment of such interest is permitted by the
applicable Gaming Authority), (ii) the Current Market Price of
the Securities on such redemption date and (iii) the principal
amount of such securities without accrued interest, if any
(unless the payment of such interest is permitted by the
applicable Gaming Authority). The Company is not required to pay
or reimburse any Holder or beneficial owner of a Security for the
costs of licensure or investigation for such licensure,
qualification or finding of suitability. Any Holder or
beneficial owner of a Security required to be licensed, qualified
or found suitable under Gaming Laws must pay all investigative
fees and costs of the Gaming Authorities in connection with such
qualification or application therefor.
7. NOTICE OF REDEMPTION
Notice of Redemption will be mailed at least 30 days
but not more than 60 days before the redemption date to each
<PAGE>
Holder of Securities to be redeemed at his registered address.
Securities in denominations larger than $1,000 may be redeemed in
part but only in whole multiples of $1,000. If money sufficient
to pay the redemption price of and accrued interest on all
Securities (or portions thereof) to be redeemed on the redemption
date is deposited with the Paying Agent on or before the
redemption date and certain other conditions are satisfied, on
and after such date interest ceases to accrue on such Securities
(or such portions thereof) called for redemption.
8. PUT PROVISIONS
Upon a Change of Control, any Holder of Securities will
have the right, subject to certain conditions, to cause the
Company to repurchase all or any part of the Securities of such
Holder at a repurchase price equal to 101% of the principal
amount of the Securities to be repurchased plus accrued interest
to the date of repurchase (subject to the right of holders of
record in the relevant record date to receive interest due on the
related interest payment date) as provided in, and subject to the
terms of, the Indenture.
9. SUBORDINATION
The Securities are subordinated to Senior Indebtedness,
as defined in the Indenture and the Rio Guarantee is subordinated
to Senior Indebtedness of the Guarantor, as defined in the
Indenture. To the extent provided in the Indenture, Senior
Indebtedness or Senior Indebtedness of the Guarantor must be paid
before the Securities may be paid. The Company and the Guarantor
agree, and each Securityholder by accepting a Security agrees, to
the subordination provisions contained in the Indenture and
authorized the Trustee to give it effect and appoints the Trustee
as attorney-in-fact for such purpose.
10. DENOMINATIONS; TRANSFER; EXCHANGE
The Securities are in registered form without coupons
in denominations of $1,000 and whole multiples of $1,000. A
Holder may transfer or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other
things, to furnish appropriate endorse-ments or transfer
documents and to pay any taxes and fees required by law or
permitted by the Indenture. The Regis-trar need not register the
transfer of or exchange any Securities selected for redemption
(except, in the case of a Security to be redeemed in part, the
<PAGE>
portion of the Security not to be redeemed) or any Securities for
a period of 15 days before a selection of Securities to be
redeemed or 15 days before an interest payment date.
11. PERSONS DEEMED OWNERS
The registered Holder of this Security may be treated
as the owner of it for all purposes.
12. UNCLAIMED MONEY
If money for the payment of principal or interest
remains unclaimed for two years, the Trustee or Paying Agent
shall pay the money back to the Company at its request unless an
abandoned property law designates another Person. After any such
payment, Holders entitled to the money must look only to the
Company and not to the Trustee for payment.
13. DISCHARGE AND DEFEASANCE
Subject to certain conditions, the Company at any time
may terminate some or all of its obligations under the Securities
and the Indenture if the Company deposits with payment of
principal and interest on the Securities to redemption or
maturity, as the case may be.
14. AMENDMENT, WAIVER
Subject to certain exceptions set forth in the
Indenture, (i) the Indenture or the Securities may be amended
with the written consent of the Holders of at least a majority in
principal amount outstanding of the Securities and (ii) any
default or noncompliance with any provision may be waived with
the written consent of the Holders of a majority in principal
amount outstanding of the Securities. Subject to certain
exceptions set forth in the Indenture, without the consent of any
Securityholder, the Company and the Trustee may amend the
Indenture or the Securities to cure any ambiguity, omission,
defect or inconsistency, or to comply with Article 5 of the
Indenture, or to provide for uncertificated Securities in
addition to or in place of certificated Securities, or to add
guarantees with respect to the Securities or to secure the
Securities, or to add additional covenants or surrender rights
and powers conferred on the Company, or to comply with any
request of the SEC in connection with qualifying the indenture
under the Act, or to make certain changes in the subordination
<PAGE>
provisions, or to make any change that does not adversely affect
the rights of any Securityholder.
15. DEFAULTS AND REMEDIES
Under the Indenture, Events of Default include
(i) default for 30 days in payment of interest on the Securities;
(ii) default in payment of principal on the Securities at
maturity, upon redemption pursuant to para-graph 5 or 6 of the
Securities, upon acceleration or other-wise, or failure by the
Company to redeem or purchase Securities when required;
(iii) failure by the Company to comply with other agreements in
the Indenture or the Securities, in certain cases subject to
notice and lapse of time; (iv) certain accelerations (including
failure to pay within any grace period after final maturity) of
other Indebtedness of the Company if the amount accelerated (or
so unpaid) exceeds $10 million and continue for 10 days after the
required notice to the Company; (v) certain events of bankruptcy
or insolvency with respect to the Company and any Restricted
Subsidiary; (vi) certain judgments or decrees for the payment of
money in excess of $10 million or (vii) the revocation,
termination or suspension of any Gaming License of the Company or
any of its Restricted Subsidiaries subject to certain conditions.
If an Event of Default (other than an Event of Default specified
in (v) above) occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the Securities
may, by notice to the Company, declare the principal amount of
and accrued interest on the Securities to be due and payable
immediately upon the occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the
Securities except as provided in the Indenture. The Trustee may
refuse to enforce the Indenture or the Securi-ties unless it
receives reasonable indemnity or security. Subject to certain
limitations, Holders of a majority in principal amount of the
Securities may direct the Trustee in its exercise of any trust or
power. The Trustee may with-hold from Securityholders notice of
any continuing Default (except a Default in payment of principal
or interest) if it determines that withholding notice is in the
interest of the Holders.
16. TRUSTEE DEALINGS WITH THE COMPANY
Subject to certain limitations imposed by the Act, the
Trustee under the Indenture, in its individual or any other
<PAGE>
capacity, may become the owner or pledgee of Securi-ties and may
otherwise deal with and collect obligations owed to it by the
Company or its Affiliates and may other-wise deal with the
Company or its Affiliates with the same rights it would have if
it were not Trustee.
17. NO RECOURSE AGAINST OTHERS
A director, officer, employee or stockholder, as such,
of the Company or the Trustee shall not have any liability for
any obligations of the Company under the Securities or the
Indenture or for any claim based on, in respect of or by reason
of such obligations or their crea-tion. By accepting a Security,
each Securityholder waives and releases all such liability. The
waiver and release are part of the consideration for the issue of
the Securities.
18. AUTHENTICATION
This Security shall not be valid until an author-ized
signatory of the Trustee (or an authenticating agent) manually
signs the certificate of authentication on the other side of this
Security.
19. ABBREVIATIONS
Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as TEN COM (=tenants in
common), TEN ENT (=tenants by the entireties), JT TEN (=joint
tenants with rights of survivorship and not as tenants in
common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
20. CUSIP NUMBERS
Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures the
Company has caused CUSIP numbers to be printed on the Securities
and has directed the Trustee to use CUSIP numbers in notices of
redemption as a convenience to Securityholders. No
representation is made as to the accuracy of such numbers either
as printed on the Securities or as contained in any notice of
redemption and reliance may be placed only on the other
identification numbers placed thereon.
THE COMPANY WILL FURNISH TO ANY SECURITYHOLDER UPON
WRITTEN REQUEST AND WITHOUT CHARGE TO THE SECURITYHOLDER A COPY
<PAGE>
OF THE INDENTURE WHICH HAS IN IT THE TEXT OF THIS SECURITY IN
LARGER TYPE. REQUESTS MAY BE MADE TO:
Attention of
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to
transfer this Security on the books of the Company. The agent
may substitute another to act for him.
Date: Your Signature:
Sign Exactly as your name appears on the other side of this
Security.
<PAGE>
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global
Security have been made:
Principal
Amount of Amount of Amount [at Signature
decrease in increase in Maturity] of
Date of Principal Principal of this authorized
Exchange Amount [at Amount [at Global officer of
Maturity] Maturity] Security Trustee or
of this of this following Securities
Global Global such Custodian
Security Security decrease or
increase)
- ---------- ---------- ---------- ---------- ----------
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the
Company pursuant to Section 4.06 or 4.08 of the Indenture, check
the box:
_
If you want to elect to have only part of this Security purchased
by the Company pursuant to Section 4.06 or 4.08 of the Indenture,
state the amount:
$
Date: Your Signature:
(Sign exactly as your
name appears on the
other side of the
Security)
Signature Guarantee:
(Signature must be guaranteed by a
member firm of the New York Stock
Exchange or a commercial bank or trust
company)
<PAGE>
EXHIBIT C
FORM OF TRANSFER CERTIFICATE
FOR TRANSFER FROM RESTRICTED GLOBAL
SECURITY OR RESTRICTED SECURITY
TO REGULATION S GLOBAL SECURITY
(Transfers pursuant to SECTION 2.06(a)(ii) or (v)
of the Indenture)
IBJ Schroder Bank & Trust Company
One State Street
New York, NY 10004
Re: Rio Hotel & Casino, Inc. 10-5/8% Senior
Subordianted Notes
DUE 2005 (THE "SECURITIES")
Reference is hereby made to the Indenture dated as of
July 21, 1995 (the "Indenture") between Rio Hotel & Casino, Inc.,
as Issuer, Rio Properties, Inc. as Guarantor, and IBJ Schroder
Bank & Trust Company, as Trustee. Capitalized terms used but not
defined herein shall have the meanings given them in the
Indenture.
This letter relates to U.S. $100 million aggregate
principal amount of Securities which are held [in the form of the
Restricted Global Security (CUSIP No. 767147AA9) with the
Depositary] / 1 in the name of [name of transferor] (the
"Transferor") to effect the transfer of the Securities in
exchange for an equivalent beneficial interest in the
Regulation S Global Security.
In connection with such request, the Transferor does
hereby certify that such transfer has been effected in accordance
with the transfer restrictions set forth in the Securities and
(i) with respect to transfers made in reliance on Regulation S,
does certify that:
(1) the offer of the Securities was not made to a
person in the United States;
(2) the transaction was executed in, on or through the
facilities of a designated offshore securities market and
neither the Transferor nor any person acting on its behalf
knows that the transaction was pre-arranged with a buyer in
the United States,
___________________
1/ Insert, if appropriate.
<PAGE>
(3) no directed selling efforts have been made in
contravention of the requirements of Rule 903(b) or 904(b)
of Regulation S, as applicable; and
(4) the transaction is not part of a plan or scheme to
evade the registration requirements of the United States
Securities Act of 1933 (the "Securities Act");
(ii) with respect to transfers made in reliance on Rule 144
certify that the Securities are being transferred in a
transaction permitted by Rule 144 under the Securities Act; and
(ii) with respect to transfers made in reliance on Rule 144A,
that such Securities are being transferred in accordance with
Rule 144A under the Securities Act to a transferee that the
Transferor reasonably believes is purchasing the Securities for
its own account or an account with respect to which the
transferee exercises sole investment discretion and the
transferee and any such account is a "qualified institutional
buyer" within the meaning of Rule 144A, in a transaction meeting
the requirements of Rule 144A and in accordance with applicable
securities laws of any state of the United States or any other
jurisdiction.
In addition, if the sale is made during a restricted
period and the provisions of Rule 903(c)(2) or (3) or
Rule 904(c)(1) of Regulation S are applicable thereto, we confirm
that such sale has been made in accordance with the applicable
provisions of Rule 903(c)(2) or (3) or Rule 904(c)(1), as the
case may be.
You and the Company are entitled to rely upon this
letter and are irrevocably authorized to produce this letter or a
<PAGE>
copy hereof to any interested party in any administrative or
legal proceedings or official inquiry with respect to the matters
covered hereby. Terms used in this certificate have the meanings
set forth in Regulation S.
[Name of Transferor]
by
__________________________
Name:
Title:
Date:
cc: Rio Hotel & Casino, Inc.
3700 West Flamingo Road
Las Vegas, NV 89103
<PAGE>
EXHIBIT D
FORM OF TRANSFER CERTIFICATE FOR TRANSFER
FROM REGULATION S GLOBAL SECURITY OR RESTRICTED
SECURITY TO RESTRICTED GLOBAL SECURITY
(Transfers pursuant to SECTION 2.06(a)(iii) or (v)
of the Indenture)
IBJ Schroder Bank and Trust Company
One State Street
New York, NY 10004
Re: Rio Hotel & Casino, Inc.
10-5/8% Senior Subordinated Notes Due 2005
(THE "SECURITIES")
Reference is hereby made to the Indenture dated as of
July 21, 1995 (the "Indenture") between Rio Hotel & Casino, Inc.,
as Issuer, Rio Properties, Inc., as Guarantor, and IBJ Schroder
Bank & Trust Company, as Trustee. Capitalized terms used but not
defined herein shall have the meanings given them in the
Indenture.
This letter relates to U.S. $100 million aggregate
principal amount of Securities which are held [in the form of the
Regulation S Global Security with the Depositary (CUSIP No.
767147AA9) ] /1 in the name of [name of transferor] (the
"Transferor") to effect the transfer of the Securities in
exchange for an equivalent beneficial interest in the Restricted
Global Security.
In connection with such request, and in respect of such
Securities, the Transferor does hereby certify that such
Securities are being transferred in accordance with (i) the
transfer restrictions set forth in the Securities and (ii) Rule
144A under the United States Securities Act of 1933 to a
transferee that the Transferor reasonably believes is purchasing
the Securities for its own account or an account with respect to
which the transferee exercises sole investment discretion and the
transferee and any such account is a "qualified institutional
buyer" within the meaning of Rule 144A, in a transaction meeting
the requirements of Rule 144A and in accordance with applicable
______________________________
1/ Insert, if appropriate.
<PAGE>
securities laws of any state of the United States or any other
jurisdiction.
[Name of Transferor],
by ___________________
Name:
Title:
Dated:
cc: Rio Hotel & Casino, Inc.
3700 West Flamingo Road
Las Vegas, NV 89103
<PAGE>
EXHIBIT E
FORM OF TRANSFER CERTIFICATE FOR TRANSFER
FROM GLOBAL SECURITY OR RESTRICTED
SECURITY TO RESTRICTED SECURITY
(Transfers pursuant to SECTION 2.06(a)(iv)
or SECTION 2.06(a)(vi) of the Indenture)
IBJ Schroder Bank and Trust Company
One State Street
New York, NY 10004
Re: Rio Hotel & Casino, Inc.
10-5/8% Senior Subordianted Notes Due 2005
(THE "SECURITIES")
Reference is hereby made to the Indenture dated as of
July 21, 1995 (the "Indenture") between Rio Hotel & Casino, Inc.,
as Issuer, Rio Properties, Inc., as Guarantor, IBJ Schroder Bank
& Trust Company, as Trustee. Capitalized terms used but not
defined herein shall have the meanings given them in the
Indenture.
This letter relates to U.S. $100 million aggregate
principal amount of Securities which are held [in the form of the
[Restricted] [Global] Security (CUSIP No. 767147AA9) with the
Depositary] /1 in the name of [name of transferor] (the
"Transferor") to effect the transfer of the Securities.
In connection with such request, and in respect of such
Securities, the Transferor does hereby certify that such
Securities are being transferred in accordance with (i) the
transfer restrictions set forth in the Securities and (ii) to a
transferee that the Transferor reasonably believes is an
institutional "accredited investor" (as defined in
Rule 501(a)(1), (2), (3) or (7) of Regulation D under the
Securities Act of 1933) and is acquiring at least $250,000
principal amount of Securities for its own account or for one or
more accounts as to which the transferee exercises sole
investment discretion and (iii) in accordance with applicable
_______________________________
1/ Insert, if appropriate.
<PAGE>
securities laws of any state of the United States or any other
jurisdiction.
[Name of Transferor],
by __________________
Name:
Title:
Dated:
cc: Rio Hotel & Casino, Inc.
3700 West Flamingo Road
Las Vegas, NV 89103
<PAGE>
EXHIBIT F
FORM OF ACCREDITED INVESTOR TRANSFEREE CERTIFICATE
(Transfers pursuant to SECTION 2.06(a)(iv)
and SECTION 2.06(a)(vi)
IBJ Schroder Bank and Trust Company
One State Street
New York, NY 10004
Re: Rio Hotel & Casino, Inc. 10-5/8% Senior
Subordianted Notes
DUE 2005 (THE "SECURITIES")
Reference is hereby made to the Indenture dated as of
July 21, 1995 (the "Indenture") between Rio Hotel & Casino, Inc.,
as Issuer, Rio Properties, Inc., as Guarantor, and IBJ Schroder
Bank & Trust Company, as Trustee. Capitalized terms used but not
defined herein shall have the meanings given them in the
Indenture.
This letter relates to U.S. $100 million aggregate
principal amount of Securities which are held [in the form of the
[Restricted/Regulation S] Global Security (CUSIP No. 767147AA9)
with the Depositary] /1 in the name of [name of transferor] (the
"Transferor") to effect the transfer of the Securities to the
undersigned.
In connection with such request, and in respect of such
Securities, we confirm that:
1. We understand that the Securities have not been and
will not be registered under the U.S. Securities Act of 1933
(the "Securities Act"), and are being sold to us in a
transaction that is exempt from the registration
requirements of the Securities Act.
2. We are a corporation, partnership or other entity
having such knowledge and experience in financial and
business matters as to be capable of evaluating the merits
and risks of an investment in the Securities, and we are (or
any account for which we are purchasing under paragraph 4
below is) an institutional accredited investor as defined in
Rule 501(a)(1), (2), (3) or (7) under the Securities Act,
_______________________________
1/ Insert and modify, if appropriate.
<PAGE>
able to bear the economic risk of our proposed investment in
the Securities.
3. We are acquiring the Securities for our own account
(or for accounts as to which we exercise sole investment
discretion and have authority to make, and do make, the
statements contained in this letter) and not with a view to
any distribution of the Securities, subject, nevertheless,
to the understanding that the disposition of our property
shall at all times be and remain within our control.
4. We are, and each account (if any) for which we are
purchasing Securities is, purchasing Securities having an
aggregate principal amount of not less than $250,000.
5. We understand that (a) the Securities will be
delivered to us in registered form only and that the
certificate delivered to us in respect of the Securities
will bear a legend substantially to the following effect:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED
STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS
EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (a) IT IS
A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT) (AN "INSTITUTIONAL
ACCREDITED INVESTOR"), OR (C) IT IS NOT A U.S. PERSON AND IS
ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION,
(2) AGREES THAT IT WILL NOT WITHIN THREE YEARS AFTER THE
ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE
TRANSFER THIS SECURITY EXCEPT (A) TO THE ISSUER OR ANY
SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER
IN COMPLIANCE WITH RULE 144a UNDER THE SECURITIES ACT,
(C) TO AN INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING AT
LEAST $250,000 PRINCIPAL AMOUNT OF THE SECURITIES THAT,
PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED
LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS SECURITY
(THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE),
(D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH RULE 903 OR 904 UNDER THE SECURITIES ACT,
(E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY
<PAGE>
RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR
(F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT AND (3) AGREES THAT IT WILL DELIVER TO
EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION
WITH ANY TRANSFER OF THIS SECURITY WITHIN THREE YEARS AFTER
THE ORIGINAL ISSUANCE OF THE SECURITIES, THE HOLDER MUST
CHECK THE APPROPRIATE AS SET FORTH ON THE REVISE HEREOF
RELATING TO THE MANNER TO SUCH TRANSFER AND SUBMIT THIS
CERTIFICATE TO THE TRUSTEE. IF THE PROPOSED TRANSFEREE IS
AN INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR
TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE ISSUER SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS
EITHER OR THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH
TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN
A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION," "UNITED STATES' AND "U.S. PERSON" HAVE THE
MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES
ACT.
and (b) such certificates will be reissued without the foregoing
legend only in accordance with the terms of the Indenture.
6. We agree that in the event that at some future time
we wish to dispose of any of the Securities, we will not do
so unless:
(a) the Securities are sold to the Company or
any Subsidiary thereof;
(b) the Securities are sold to a qualified
institutional buyer in compliance with Rule 144A under
the Securities Act;
(c) the Securities are sold to an
institutional accredited investor, as defined in
Rule 501(a)(1), (2), (3) or (7) under the Securities
Act, acquiring at least $250,000 Accreted Value of the
Securities that, prior to such transfer, furnishes to
the Trustee a signed letter containing certain
representations and agreements relating to the
restrictions on transfer of the Securities (the form of
which letter can be obtained from such Trustee);
<PAGE>
(d) the Securities are sold outside the
United States in compliance with Rule 903 or Rule 904
under the Securities Act;
(e) the Securities are sold by us pursuant to
Rule 144 under the Securities Act; or
(f) the Securities are sold pursuant to an
effective registration statement under the Securities
Act.
Very truly yours,
[PURCHASER]
By: __________________________
Name:
Title:
Dated:
cc: Rio Hotel & Casino, Inc.
3700 West Flamingo Road
Las Vegas, NV 89103
