<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 8, 1995
REGISTRATION NO. 33-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
------------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
PLAYERS INTERNATIONAL, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
NEVADA 95-41745832
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
</TABLE>
------------------------
3900 PARADISE ROAD
SUITE 135
LAS VEGAS, NEVADA 89109
(702) 792-9998
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
ADDITIONAL REGISTRANTS
ARE SET FORTH ON THE FOLLOWING PAGES
------------------------
PETER J. ARANOW
EXECUTIVE VICE PRESIDENT, CHIEF FINANCIAL OFFICER AND SECRETARY
3900 PARADISE ROAD
SUITE 135
LAS VEGAS, NEVADA 89109
(702) 792-9998
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------
Copies to:
STEPHEN M. GOODMAN, ESQ.
MORGAN, LEWIS & BOCKIUS
2000 ONE LOGAN SQUARE
PHILADELPHIA, PENNSYLVANIA 19103-6993
(215) 963-5000
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this
registration statement.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. / /
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF CLASS OF OFFERING AGGREGATE AMOUNT OF
SECURITIES AMOUNT TO BE PRICE PER OFFERING REGISTRATION
TO BE REGISTERED REGISTERED NOTE(1) PRICE(1) FEE
<S> <C> <C> <C> <C>
10 7/8% Senior Notes Due
2005..................... $150,000,000 100% $150,000,000 $51,724.15
Guarantees Evidencing
Additional Registrants'
Joint and Several
Guarantees of 10 7/8%
Senior Notes due 2005.... $150,000,000 (2) (2) (2)
</TABLE>
(1) Calculated in accordance with Rule 457(f)(2).
(2) No additional consideration for the Guarantees of the 10 7/8% Senior Notes
will be furnished. Pursuant to Rule 457(n), no separate fee is payable with
respect to such Guarantees.
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. INFORMATION CONTAINED HEREIN IS
SUBJECT TO COMPLETION OR AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE
SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE
SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME
THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS REGISTRATION STATEMENT SHALL
NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL
THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION
UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
ADDITIONAL REGISTRANTS
(INITIAL GUARANTORS OF 10 7/8% SENIOR NOTES)
PLAYERS LAKE CHARLES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
Louisiana 7933 72-1233908
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER)
</TABLE>
800 Bilbo Street
Lake Charles, LA 70601
(318) 437-1560
(NAME, ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
PLAYERS RIVERBOAT MANAGEMENT, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
Nevada 7933 88-0332373
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER)
</TABLE>
3900 Paradise Road, Suite 135
Las Vegas, Nevada 89109
(702) 792-9998
(NAME, ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
PLAYERS RIVERBOAT, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
Nevada 7933 88-0332372
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER)
</TABLE>
3900 Paradise Road, Suite 135
Las Vegas, Nevada 89109
(702) 792-9998
(NAME, ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
PLAYERS RIVERBOAT, LLC
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
A Louisiana Limited Liability Company 7933 72-1297055
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER)
</TABLE>
800 Bilbo Street
Lake Charles, LA 70601
(318) 437-1560
(NAME, ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
SHOWBOAT STAR PARTNERSHIP
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
A Louisiana General Partnership 7933 72-1246016
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER)
</TABLE>
800 Bilbo Street
Lake Charles, LA 70601
(318) 437-1560
(NAME, ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
<PAGE>
PLAYERS NEVADA, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
Nevada 7933 88-0318879
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER)
</TABLE>
3900 Paradise Road, Suite 135
Las Vegas, Nevada 89109
(702) 792-9998
(NAME, ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
PLAYERS MESQUITE GOLF CLUB, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
Nevada 7933 72-1230796
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER)
</TABLE>
3900 Paradise Road, Suite 135
Las Vegas, Nevada 89109
(702) 792-9998
(NAME, ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
PLAYERS MESQUITE LAND, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
Nevada 7933 88-0335901
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER)
</TABLE>
3900 Paradise Road, Suite 135
Las Vegas, Nevada 89109
(702) 792-9998
(NAME, ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
PLAYERS INDIANA, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
Indiana 7933 35-1916353
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER)
</TABLE>
3900 Paradise Road, Suite 135
Las Vegas, Nevada 89109
(702) 792-9998
(NAME, ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
PLAYERS MICHIGAN CITY, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
Indiana 7933 35-1909688
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER)
</TABLE>
3900 Paradise Road, Suite 135
Las Vegas, Nevada 89109
(702) 792-9998
(NAME, ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
<PAGE>
PLAYERS MICHIGAN CITY MANAGEMENT, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
Indiana 7933 61-1283930
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER)
</TABLE>
3900 Paradise Road, Suite 135
Las Vegas, Nevada 89109
(702) 792-9998
(NAME, ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
PLAYERS BLUEGRASS DOWNS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
Kentucky 7933 61-1250331
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER)
</TABLE>
150 Downs Drive
Paducah, KY 42001
(502) 444-7117
(NAME, ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
RIVER BOTTOM, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
Missouri 7933 43-1708876
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER)
</TABLE>
3900 Paradise Road, Suite 135
Las Vegas, Nevada 89109
(702) 792-9998
(NAME, ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
PLAYERS MARYLAND HEIGHTS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
Missouri 7933 43-1662850
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER)
</TABLE>
3900 Paradise Road, Suite 135
Las Vegas, Nevada 89109
(702) 792-9998
(NAME, ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
SOUTHERN ILLINOIS RIVERBOAT/CASINO CRUISES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
Illinois 7933 37-1272361
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER)
</TABLE>
109 West 5th Street, 2nd Floor
Metropolis, IL 62960
(618) 524-2628
(NAME, ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
<PAGE>
This Prospectus and the information contained herein are subject to
completion or amendment. This Prospectus shall not constitute an offer to
sell or the solicitation of an offer to buy the securities described
herein, nor shall there be any sale of these securities, in any
jurisdiction in which such offer, solicitation or sale would be unlawful.
SUBJECT TO COMPLETION, DATED JUNE __, 1995
OFFER TO EXCHANGE
ALL OUTSTANDING
10 7/8% SENIOR NOTES DUE 2005
($150,000,000 PRINCIPAL AMOUNT OUTSTANDING)
OF
The Exchange Offer and withdrawal rights will expire at 5:00 p.m., New York
City time, on ____________, 1995 (as such date may be extended, the 'Expiration
Date').
Players International, Inc. (the 'Company') hereby offers (the 'Exchange
Offer'), upon the terms and subject to the conditions set forth in this
Prospectus and the accompanying letter of transmittal (the 'Letter of
Transmittal'), to exchange $1,000 in principal amount of its 10 7/8 % Senior
Notes due 2005 (the 'New Notes') for each $1,000 in principal amount of its
outstanding 10 7/8 % Senior Notes due 2005 (the 'Old Notes') (the Old Notes and
the New Notes are collectively referred to herein as the 'Notes') held by
Eligible Holders (as defined), of which an aggregate principal amount of
$150,000,000 is outstanding. See 'The Exchange Offer.' For purposes of the
Exchange Offer, 'Eligible Holder' shall mean the registered owner of any Old
Notes that remain Transfer Restricted Securities (as defined) as reflected on
the records of First Fidelity Bank, National Association, as registrar for the
Old Notes (in such capacity, the 'Registrar'), or any person whose Old Notes are
held of record by the Depositary (as defined), as of the Record Date (as
defined). For purposes of the Exchange Offer, 'Transfer Restricted Securities'
means each Old Note until the earliest to occur of (i) the date on which such
Old Note has been exchanged for a New Note in the Exchange Offer, (ii) the date
on which such Old Note has been effectively registered under the Securities Act
of 1933, as amended (the 'Securities Act'), and disposed of in accordance with a
shelf registration statement, or (iii) the date on which such Old Note is
distributed to the public pursuant to Rule 144 under the Securities Act or is
saleable pursuant to Rule 144(k) under the Securities Act.
The Company will accept for exchange any and all Old Notes that are validly
tendered prior to 5:00 p.m., New York City time, on the Expiration Date. Tenders
of Old Notes may be withdrawn at any time prior to 5:00 p.m., New York City
time, on the Expiration Date. The Exchange Offer is not conditioned upon any
minimum principal amount of the Old Notes being tendered for exchange. However,
the Exchange Offer is subject to certain customary conditions, which may be
waived by the Company, and to the terms and provisions of the Exchange and
Registration Rights Agreement dated as of April 17, 1995 among the Company,
Donaldson, Lufkin & Jenrette Securities Corporation and Salomon Brothers Inc
(the 'Initial Purchasers') (the 'Registration Rights Agreement'). The Old Notes
may be tendered only in multiples of $1,000. See 'The Exchange Offer.'
The Old Notes were issued in a transaction (the 'Offering') pursuant to
which the Company issued an aggregate of $150 million principal amount of the
Old Notes. The Old Notes were sold by the Company to the Initial Purchasers on
April 17, 1995 (the 'Closing Date') pursuant to a Purchase Agreement, dated
April 10, 1995 (the 'Purchase Agreement') among the Company and the Initial
Purchasers. The Initial Purchasers subsequently resold the Old Notes in reliance
on Rule 144A under the Securities Act. The Company and the Initial Purchasers
also entered into the Registration Rights Agreement, pursuant to which the
Company granted certain registration rights for the benefit of the holders of
the Old Notes. The Exchange Offer is intended to satisfy certain of the
Company's obligations under the Registration Rights Agreement with respect to
the Old Notes. See 'The Exchange Offer--Purpose and Effect.'
The Old Notes were, and the New Notes will be, issued under the Indenture,
dated as of April 10, 1995 (the 'Indenture'), among the Company, certain
subsidiaries of the Company that have agreed to guarantee the Notes
(collectively, the 'Guarantors') and First Fidelity Bank, National Association
as trustee (in such capacity, the 'Trustee'). The form and terms of the New
Notes will be identical in all material respects to the form and terms of the
Old Notes, except that (i) the New Notes have been registered under the
Securities Act and, therefore, will not bear legends restricting the transfer
thereof, (ii) holders of New Notes will not be entitled to the liquidated
damages of $.10 per week per $1,000 principal amount of the Old Notes otherwise
payable under the terms of the Registration Rights Agreement in respect of Old
Notes constituting Transfer Restricted Securities held by such holders during
any period in which a Registration Default (as defined) is continuing (the
'Liquidated Damages') and (iii) holders of New Notes will not be, and upon the
consummation of the Exchange Offer, Eligible Holders of Old Notes will no longer
be, entitled to certain rights under the Registration Rights Agreement intended
for the holders of unregistered securities; provided, however, that an Eligible
Holder of Old Notes who reasonably determines and notifies the Company within 20
business days of the consummation of the Exchange Offer that (i) such Eligible
Holder is prohibited by applicable law or Securities and Exchange Commission
policy from participating in the Exchange Offer, or (ii) that such Eligible
Holder may not resell the New Notes acquired by it in the Exchange Offer to the
public without delivering a prospectus and that this Prospectus is not
appropriate or available for such resales by such Eligible Holder, or (iii) that
such Eligible Holder is a broker-dealer registered under the Exchange Act and
holds the Old Notes acquired directly from the Company or one of its affiliates,
subject to reasonable verification by the Company, shall have the right to
require the Company to file a shelf registration statement pursuant to Rule 415
under the Securities Act solely for the benefit of such Eligible Holder of Old
Notes and will be entitled to receive the Liquidated Damages following the
occurrence of defined events of default in connection with the filing of such
shelf registration statement. The Exchange Offer shall be deemed consummated
upon the occurrence of the delivery by the Company to the Registrar under the
Indenture of New Notes in the same aggregate principal amount as the aggregate
principal amount of Old Notes that were tendered by holders thereof pursuant to
the Exchange Offer. See 'The Exchange Offer--Termination of Certain Rights' and
'--Procedures for Tendering Old Notes' and 'Description of New Notes.'
(continued on next page)
------------------------------
SEE 'RISK FACTORS' FOR A DISCUSSION OF CERTAIN RISKS THAT SHOULD BE CONSIDERED
BY ELIGIBLE HOLDERS IN EVALUATING THE EXCHANGE
OFFER.
------------------------------
THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE
------------------------------
NEITHER THE LOUISIANA RIVERBOAT GAMING COMMISSION, THE RIVERBOAT GAMING
ENFORCEMENT DIVISION OF THE LOUISIANA STATE POLICE, THE ILLINOIS GAMING BOARD,
THE NEVADA GAMING CONTROL BOARD, THE NEVADA GAMING COMMISSION NOR ANY
OTHER GAMING AUTHORITY HAS PASSED UPON THE ADEQUACY OR ACCURACY OF THIS
PROSPECTUS OR THE INVESTMENT MERITS OF
THE SECURITIES OFFERED HEREBY.
------------------------------
The date of this Prospectus is June _, 1995
<PAGE>
The New Notes will bear interest at a rate equal to 10 7/8 % per annum from
and including their date of issuance. Interest on the New Notes is payable
semiannually on April 15 and October 15 of each year (each, an 'Interest Payment
Date'). Eligible Holders whose Old Notes are accepted for exchange will have the
right to receive interest accrued thereon from the date of their original
issuance or the last Interest Payment Date, as applicable to, but not including,
the date of issuance of the New Notes, such interest to be payable with the
first interest payment on the New Notes. Interest on the Old Notes accepted for
exchange will cease to accrue on the day prior to the issuance of the New Notes.
The New Notes will mature on April 15, 2005. See 'Description of New Notes--
General.'
The New Notes will not be redeemable, in whole or in part, prior to April
15, 2000. Thereafter, the New Notes will be redeemable at the redemption prices
set forth herein, plus interest accrued thereon to the redemption date. Upon the
occurrence of a Change of Control (as defined), each holder of New Notes will
have the right to require the Company to purchase all or a portion of such
holder's New Notes at 101% of the principal amount thereof, plus interest
accrued thereon to the purchase.
Based on an interpretation by the staff of the Securities and Exchange
Commission (the 'Commission') set forth in no-action letters issued to third
parties, the Company believes that the New Notes issued pursuant to the Exchange
Offer to an Eligible Holder in exchange for Old Notes may be offered for resale,
resold and otherwise transferred by such Eligible Holder (other than (i) a
broker-dealer who purchased Old Notes directly from the Company for resale
pursuant to Rule 144A under the Securities Act or any other available exemption
under the Securities Act or (ii) a person that is an affiliate of the Company
within the meaning of Rule 405 under the Securities Act), without compliance
with the registration and prospectus delivery provisions of the Securities Act,
provided that the Eligible Holder is not an affiliate of the Company, is
acquiring the New Notes in the ordinary course of business and is not
participating, and has no arrangement or understanding with any person to
participate, in the distribution of the New Notes. Eligible Holders wishing to
accept the Exchange Offer must represent to the Company, as required by the
Registration Rights Agreement, that such conditions have been met. Each
broker-dealer that receives New Notes for its own account pursuant to the
Exchange Offer must acknowledge that it will deliver a prospectus in connection
with any resale of such New Notes. See 'The Exchange Offer--Resales of the New
Notes.' This Prospectus, as it may be amended or supplemented from time to time,
may be used by a broker-dealer in connection with resales of New Notes received
in exchange for Old Notes where such Old Notes were acquired by such
broker-dealer as a result of market-making or other trading activities.
As of June , 1995, Cede & Co. ('Cede'), as nominee for The Depository
Trust Company, New York, New York ('DTC'), was the sole registered holder of the
Old Notes and held the Old Notes for __ of its participants. The Company
believes that no such participant is an affiliate (as such term is defined in
Rule 405 under the Securities Act) of the Company. There has previously been,
only a limited secondary market and no public market for the Old Notes. The Old
Notes are eligible for trading in the Private Offering, Resales and Trading
through Automatic Linkages ('PORTAL') market. In addition, the Initial
Purchasers have advised the Company that they currently intend to make a market
in the New Notes, however, neither is obligated to do so and any market making
activities may be discontinued by either of the Initial Purchasers at any time.
Therefore, there can be no assurance that an active market for the New Notes
will develop. If such a trading market develops for the New Notes, future
trading prices will depend on many factors, including, among other things,
prevailing interest rates, the Company's results of operations and the market
for similar securities. Depending on such factors, the New Notes may trade at a
discount from their face value. See 'Risk Factors--Lack of Public Market for New
Notes.'
The Company will not receive any proceeds from this offering, but, pursuant
to the Registration Rights Agreement, the Company will bear certain registration
expenses. No underwriter is being utilized in connection with the Exchange
Offer.
THE EXCHANGE OFFER IS NOT BEING MADE TO, NOR WILL THE COMPANY ACCEPT
SURRENDERS FOR EXCHANGE FROM, HOLDERS OF OLD NOTES IN ANY JURISDICTION IN WHICH
THE EXCHANGE OFFER OR THE ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE WITH THE
SECURITIES OR BLUE SKY LAWS OF SUCH JURISDICTION. IN ADDITION, HOLDERS OF THE
NEW NOTES FOLLOWING THE EXCHANGE OFFER SHALL BE PROHIBITED FROM SELLING THE NEW
NOTES TO NON-INSTITUTIONAL BUYERS IN THE STATES OF ALABAMA, CALIFORNIA AND
WISCONSIN IN THE ABSENCE OF REGISTRATION OF THE NEW NOTES AND THE GUARANTEES (OR
A VALID EXEMPTION THEREFROM) UNDER THE SECURITIES LAWS OF SUCH STATES.
The Old Notes were issued originally in global form (the 'Global Old
Notes'). The Global Old Note was deposited with, or on behalf of, DTC, as the
initial depository with respect to the Old Notes (in such capacity, the
'Depository'). The Global Old Note is registered in the name of Cede, as nominee
of DTC, and beneficial interests in the Global Old Note are shown on, and
transfers thereof are effected only through, records maintained by the
Depository and its participants. The use of the Global Old Note to represent
certain of the Old Notes permits the Depository's participants, and anyone
holding a beneficial interest in an Old Note registered in the name of such a
participant, to transfer interests in the Old Notes electronically in accordance
with the Depository's established procedures without the need to transfer a
physical certificate. Except as provided below, the New Notes will also be
issued initially as a note in global form (the 'Global New Note', and together
with the Global Old Note, the 'Global Notes') and deposited with, or on behalf
of, the Depository. Notwithstanding the foregoing, holders of Old Notes that
were held, at any time, by a person that is not a qualified institutional buyer
under Rule 144A, (a 'Qualified Institutional Buyer'), and any Eligible Holder
that is not a Qualified Institutional Buyer that exchanges Old Notes in the
Exchange Offer, will receive the New Notes in certificated form and is not, and
will not be, able to trade such securities through the Depository unless the New
Notes are resold to a Qualified Institutional Buyer. After the initial issuance
of the Global New Note, New Notes in certificated form will be issued in
exchange for a holder's proportionate interest in the Global New Note only as
set forth in the Indenture.
2
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
---
<S> <C>
Available Information........................... 3
Summary......................................... 4
Risk Factors.................................... 14
The Exchange Offer.............................. 21
Capitalization.................................. 28
Selected Consolidated Financial Data............ 29
Management's Discussion and Analysis
of Financial Condition and
Results of Operations......................... 30
PAGE
---
Business........................................ 35
Regulatory Matters.............................. 46
Management...................................... 58
Description New Notes........................... 60
Incorporation of Certain Documents By
Reference..................................... 84
Legal Matters................................... 84
Experts......................................... 84
Index to Financial Statements................... F-1
</TABLE>
AVAILABLE INFORMATION
The Company has filed a registration statement on Form S-4 (together with
any amendments thereto, the 'Registration Statement') with the Securities and
Exchange Commission (the 'Commission') under the Securities Act of 1933, as
amended (the 'Securities Act') with respect to the New Notes. This Prospectus,
which constitutes a part of the Registration Statement, omits certain
information contained in the Registration Statement and reference is made to the
Registration Statement and the exhibits and schedules thereto for further
information with respect to the Company and the New Notes offered hereby. This
Prospectus contains summaries of the material terms and provisions of certain
documents and in each instance reference is made to the copy of such document
filed as an exhibit to the Registration Statement. Each such summary is
qualified in its entirety by such reference.
The Company is subject to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the 'Exchange Act'), and in accordance
therewith, is required to file reports and other information with the
Commission. In addition, upon registration of the guarantees of the Notes in
connection with the Exchange Offer, each subsidiary of the Company that is a
guarantor of the New Notes (a 'Guarantor') will also be subject to the reporting
requirements of the Exchange Act so long as the guarantee of the Guarantor
remains outstanding. Upon effectiveness of the Registration Statement, the
Guarantors will be subject to the reporting requirements of the Exchange Act and
the interpretations issued thereunder by the Commission staff.
ALL DOCUMENTS FILED BY THE COMPANY AND ITS GUARANTORS PURSUANT TO SECTION
13(A), 13(C), 14 OR 15(D) OF THE EXCHANGE ACT SUBSEQUENT TO THE DATE OF THIS
PROSPECTUS AND PRIOR TO THE TERMINATION OF THE EXCHANGE OFFER TO WHICH THIS
PROSPECTUS RELATES SHALL BE DEEMED TO BE INCORPORATED BY REFERENCE HEREIN AND TO
BE A PART HEREOF FROM THE DATE OF THE FILING OF SUCH REPORTS AND DOCUMENTS. THE
COMPANY WILL PROVIDE A COPY OF ANY AND ALL OF SUCH DOCUMENTS (EXCLUSIVE OF
EXHIBITS UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE
THEREIN) WITHOUT CHARGE TO EACH PERSON TO WHOM A COPY OF THIS PROSPECTUS IS
DELIVERED, UPON WRITTEN OR ORAL REQUEST TO PETER J. ARANOW, EXECUTIVE VICE
PRESIDENT AND CHIEF FINANCIAL OFFICER, 800 BILBO STREET, LAKE CHARLES, LOUISIANA
70601, (518) 387-1560.
The Registration Statement (including the exhibits and schedules thereto)
and the periodic reports and other information filed by the Company and the
Guarantors with the Commission may be inspected without charge at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549 and at the regional offices of the
Commission located at 7 World Trade Center, 13th Floor, New York, New York
10048, and Suite 1400, Northwestern Atrium Center, 500 West Madison Street,
Chicago, Illinois 60661. Copies of such materials may be obtained from the
Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and its public reference facilities in New York, New
York and Chicago, Illinois, at prescribed rates. The Common Stock of the Company
is traded under the symbol 'PLAY' on the Nasdaq National Market. Proxy
statements, reports and other information filed by the Company and the
Guarantors with the Commission and other information can be inspected at the
offices of the National Association of Securities Dealers, Inc., Report Section,
17835 K Street N.W., Washington, D.C. 20006.
3
<PAGE>
PLAYERS INTERNATIONAL, INC.
CROSS-REFERENCE TABLE
PURSUANT TO RULE 404(A) AND ITEM 501(B) OF REGULATION S-K
<TABLE>
<CAPTION>
ITEM NO. FORM S-4 CAPTION PROSPECTUS CAPTION
<S> <C> <C>
Item 1 Forepart of the Registration Statement and Outside Front........ Outside Front Cover Page of
Prospectus
Item 2 Inside Front and Outside Back Cover Pages of Prospectus......... Inside Front and Outside Back Cover
Pages of Prospectus
Item 3 Risk Factors, Ratio of Earnings to Fixed Charges and Other
Information..................................................... Summary; Risk Factors; Selected
Consolidated Financial Information
Item 4 Terms of the Transaction........................................ Summary; The Exchange Offer;
Description of New Notes
Item 5 Pro Forma Financial Information................................. Not Applicable
Item 6 Material Contacts with the Company Being Acquired............... Not Applicable
Item 7 Additional Information Required for Reoffering by Persons and
Parties Deemed to be Underwriters............................... Not Applicable
Item 8 Interests of Named Experts and Counsel.......................... Legal Matters; Experts
Item 9 Disclosure of Commission Position on Indemnification for
Securities Acts Liabilities..................................... Management
Item 10 Information with Respect to S-3 Registrants..................... Summary; Risk Factors;
Capitalization; Management's
Discussion and Analysis of Financial
Condition and Results of Operations;
Business; Regulatory Matters
Item 11 Incorporation of Certain Information by
Reference....................................................... Incorporation of Certain Documents by
Reference
Item 12 Information with Respect to S-2 or S-3
Registrants..................................................... Not Applicable
Item 13 Incorporation of Certain Information by
Reference....................................................... Incorporation of Certain Documents by
Reference
Item 14 Information with Respect to Registrants Other than S-3 or S-2
Registrants..................................................... Not Applicable
Item 15 Information with Respect to S-3 Companies....................... Not Applicable
Item 16 Information with Respect to S-2 or S-3
Companies....................................................... Not Applicable
Item 17 Information with Respect to Companies Other than S-3 or S-2
Companies....................................................... Not Applicable
Item 18 Information if Proxies, Consents or Authorizations are to be
Solicited....................................................... Not Applicable
Item 19 Information if Proxies, Consents or Authorizations are not to be
Solicited or in an Exchange Offer............................... Management; Incorporation of Certain
Documents by Reference
</TABLE>
SUMMARY
4
<PAGE>
The following summary is qualified in its entirety by the more detailed
information and financial statements (including notes thereto) appearing
elsewhere in this Prospectus. Throughout this Prospectus, except where the
context otherwise requires, references to the term 'Players' or the 'Company'
refer collectively to Players International, Inc. and its subsidiaries.
THE COMPANY
Players International, Inc. is a multi-jurisdictional gaming company which
owns and operates the Players Riverboat Casino in Metropolis, Illinois (the
'Metropolis Complex') and two riverboat casinos in Lake Charles, Louisiana, the
Players Riverboat Casino (the 'Players Lake Charles Riverboat') and the Players
Lake Charles Star Riverboat (the 'Lake Charles Star Riverboat'). The Metropolis
Complex, which is the only riverboat operating in Southern Illinois and is one
of only ten statutorily authorized Illinois licensees, commenced operations in
February 1993 and has successfully marketed to patrons of its target markets in
Illinois, Indiana, Kentucky, Missouri and Tennessee. The Players Lake Charles
Riverboat, which serves the large Houston gaming market and is one of the
highest revenue producing riverboat casinos in the United States, commenced
operations in December 1993. The Lake Charles Star Riverboat commenced
operations in April 1995. For the latest twelve months ended December 31, 1994,
the Company generated net revenues of $211.1 million and Adjusted EBITDA (as
defined) of $75.6 million.
The Company's business strategy, which has been successfully implemented at
its existing operations, emphasizes providing customers with a high quality
entertainment experience, with particular emphasis on customer service. The
Company targets sites that are conveniently located near frequently traveled
interstate highways, and which have easy access and ample parking, in order to
attract local patronage and repeat visitors. The Company's strategy in
developing and constructing facilities is to create a destination complex which
provides a total entertainment experience rather than merely casino gaming.
The Company's marketing strategy focuses on middle-income customers who
live within a 200 mile radius of each of the Company's facilities. The Company
continuously evaluates the results of its marketing efforts to focus on programs
that maximize the Company's return on its marketing budget. The Company
implements this strategy through the use of database marketing, on-site
marketing and bus programs. Through its proprietary database of gaming
enthusiasts, the Company targets gaming customers through frequent mailings
promoting visits to its casino facilities. In addition, the Company employs
on-site marketing techniques including the use of player tracking systems, slot
clubs and preferred player hosts to identify and service patrons. To attract
additional patronage during non-peak hours, the Company utilizes bus tours which
are organized through the Company's direct relationship with tour operators.
The Company employs a disciplined development philosophy consisting of the
following principal components: (i) a thorough analysis of demographic,
regulatory, competitive and other factors to identify niche markets or markets
where the Company believes it will have a dominant position; (ii) the
maintenance of adequate financial resources to enable the Company to respond
quickly to development opportunities in existing and new jurisdictions; (iii)
the investment of significant capital and other resources only after a
determination has been made that a project is attractive; and (iv) the
development of themed projects with a high entertainment component that can be
completed in a desirable time frame. The successful implementation of this
philosophy is evidenced by the Company's development record and its existing
facilities at Metropolis and Lake Charles, both of which were developed on-time
and on-budget.
The Company plans to expand existing operations as well as to develop and
construct two new casino entertainment facilities. The first of these projects
is an approximately $110 million expansion of its successful Lake Charles
operation, which has operated at or near capacity on weekends and holidays. This
multi-phase project includes the recently completed purchase of the Showboat
Star Casino riverboat, which in April of 1995 opened in Lake Charles as the Lake
Charles Star Riverboat. In addition, the Company is party to an agreement
pursuant to which it expects to purchase shortly the Players Hotel and related
property currently under lease in Lake Charles. Following such purchase, the
Company expects to reconstruct or substantially improve and expand the hotel and
construct an entertainment barge and a multi-story parking garage.
5
<PAGE>
In addition to the Lake Charles expansion, the Company is completing the
construction of the $75 to $80 million Players Island Resort Casino and Spa (the
'Players Island Resort'), its first land-based casino, in Mesquite, Nevada. This
resort, which will feature a fully-contained island resort environment, is
scheduled to open in the Summer of 1995.
The Company also recently entered into a letter of intent to form a joint
venture with The Promus Companies Incorporated ('Promus') to co-develop a $200
million two riverboat casino entertainment complex in Maryland Heights, Missouri
(the 'Maryland Heights Project'), which will contain a total of approximately
100,000 square feet of gaming space. The Company and Promus individually have
been endorsed by the City of Maryland Heights for separate riverboat projects.
The development and operation of the Maryland Heights Project are conditioned
upon the negotiation and execution of definitive agreements between the Company
and Promus. The Company and Promus expect to begin construction with an opening
targeted for the Summer of 1996, subject to the receipt of all necessary gaming
and other approvals for the joint development project.
OPERATING CASINOS
Metropolis, Illinois
The Company's Metropolis casino commenced operations February 23, 1993 and
is currently the only riverboat casino in Southern Illinois. The Metropolis
riverboat is a four deck, air conditioned replica of a turn of the century
side-wheeler riverboat. The Metropolis Complex includes a docking site known as
'Merv Griffin's Landing,' which features a bar and grill, buffets, a deli,
meeting rooms and a gift shop. Additionally, the Company has a minority interest
in a 120-room hotel near the docking site which opened in March 1994. To date,
the Metropolis operation's closest gaming competitor operates in the St. Louis,
Missouri area, which is approximately three hours away by car. The Company
expects competing riverboat casinos to open in the next 12 months in Southern
Missouri and Southern Indiana. In order to maintain its market position in light
of potential increased competition, the Company intends to invest up to $10
million for additional amenities, attractions and riverfront parking. As part of
this program, the Company intends to integrate in the Metropolis Complex the
Company's island resort theme which will be featured at the Players Island
Resort and to expand its food and entertainment facilities at the Metropolis
Complex.
Lake Charles, Louisiana; Complex Expansion
The Players Lake Charles Riverboat, which was the second to open in the
state of Louisiana, commenced operations on Lake Charles in Southwestern
Louisiana on December 8, 1993. The Company's current Lake Charles facility
features a small pavilion where entertainment and special promotional events are
presented, a ticketing and boarding area, retail space, bars, two full service
restaurants and additional snack facilities.
In order to offer the equivalent of dockside gaming, expand capacity and
strengthen the Company's market position in Lake Charles, the Company in January
1995 initiated a program to spend approximately $110 million in Lake Charles for
the Lake Charles Star Riverboat and additional infrastructure expansion and
improvements (collectively, the 'Lake Charles Complex Expansion').
The Company began the Lake Charles Complex Expansion by acquiring for
approximately $52 million all partnership interests (the 'Interests') in
Showboat Star Partnership (the 'Partnership'), a Louisiana general partnership
that owns a fully equipped Las Vegas style riverboat casino which had operated
for the past one and one-half years on Lake Pontchartrain, Louisiana. In April
1995, the Company opened the Lake Charles Star Riverboat. With two Lake Charles
riverboats operating on staggered cruise schedules, the Company offers the
equivalent of dockside gaming.
As part of the Lake Charles Complex Expansion, approximately $58 million in
additional expansion projects and improvements are budgeted for the development
of a 50,000 square foot themed entertainment center featuring new restaurants, a
sports bar and lounge and banquet facilities; the reconstruction or substantial
improvement and expansion of hotel space; the construction of a new docking
facility and a covered parking facility; public purpose/city infrastructure
contributions; the integration of the Company's island resort theme at the Lake
Charles facility; and additional amenities.
6
<PAGE>
The Lake Charles casino's primary market area includes such population
centers as Houston, Beaumont, Galveston, Orange and Port Arthur, Texas. The Lake
Charles casino draws over half of its patrons from Texas, due in large part to
the current absence of legalized casino gaming in Texas.
PROJECTS UNDER DEVELOPMENT
Mesquite, Nevada
As part of a strategy to diversify revenue sources, the Company expects to
open the Players Island Resort, its first land-based casino entertainment
facility, in Mesquite, Nevada, during the Summer of 1995. The Players Island
Resort will feature an island resort theme and is estimated to cost between $75
and $80 million to develop and open, approximately $23 million of which had been
invested through December 31, 1994. The majority of the remaining project costs
are covered by fixed price contracts. The Mesquite site is located approximately
70 miles by car from Las Vegas on Interstate 15 between Las Vegas and Salt Lake
City, where an estimated 12,000 cars pass daily. The Players Island Resort will
be marketed as a destination resort for the residents of the Las Vegas area and
Southern Nevada, as well as for tourists from California, Arizona and nearby
Utah.
The initial phase of the Players Island Resort project includes a 40,000
square foot casino; a 500-room hotel with a health spa and swimming pool with
waterfalls; lighted tennis courts; a children's arcade; four detached
three-bedroom villas; and a 50-unit recreational vehicle facility. The Company
also has entered into an agreement to lease additional land near the Players
Island Resort to develop an 18-hole golf course during fiscal 1996 as part of
the budgeted project. The resort also will feature four restaurants, an
estimated 400-seat showroom and 10,000 square feet of banquet/meeting rooms. The
resort complex, which has been master-planned to accommodate further expansion
of the casino, hotel and banquet/meeting space, will feature a fully-contained
island resort environment.
Maryland Heights, Missouri
The Company entered into a letter of intent with Promus on March 3, 1995 to
form a joint venture to co-develop the Maryland Heights Project. The Company and
Promus will each own and operate a separate riverboat casino pursuant to
separate gaming licenses but will share equally in the costs of the development
of, as well as any profit or loss associated with, an estimated 300,000 square
foot shoreside facility. Although the two riverboat casinos are expected to be
similar in theme and decor, each operator will individually manage and market
its own gaming operations with separate staffing. In addition to the
construction of two riverboats, the shoreside facility is anticipated to include
a hotel facility to be managed by Promus, extensive covered parking and a 95,000
square foot entertainment building. The entertainment facility will contain
upscale restaurants, a buffet, bars, an entertainment lounge with nightly live
music, a preferred players lounge and gift shops. The Company and Promus also
are evaluating the development of an outdoor mall containing themed restaurants
and boutique shops similar to the higher end Las Vegas casinos.
Situated close to Interstate 70 in Maryland Heights, the casino
entertainment complex will be strategically located to attract patrons from a
local population base of approximately 2.3 million in the greater St. Louis
metropolitan region. The site will feature easy accessibility, a high level of
drive-by traffic and close proximity to Interstate 70 and Lambert International
Airport, and will be strategically located near the Riverport amphitheater,
which attracts 500,000 visitors per year. The development and operation of the
Maryland Heights Project are conditioned upon the negotiation and execution of
definitive agreements between the Company and Promus. Subject to the receipt of
all necessary gaming and other approvals, the Company has targeted the opening
of the Maryland Heights Project for the Summer of 1996.
7
<PAGE>
SUMMARY OPERATING AND DEVELOPMENT DATA
<TABLE>
<CAPTION>
EXISTING OPERATIONS PROJECTS UNDER DEVELOPMENT
------------------------------------------- ---------------------------
PLAYERS LAKE CHARLES LAKE CHARLES PLAYERS
METROPOLIS LAKE CHARLES STAR SHORESIDE ISLAND
COMPLEX RIVERBOAT RIVERBOAT EXPANSION RESORT
----------- ------------ ------------ ------------ -----------
<S> <C> <C> <C> <C> <C>
Remaining expansion, development and opening
costs....................................... $10 million(1) -- -- $58 million (1) $57 million(1)
Approximate Gaming Area (Square Feet) ....... 20,000 27,500 21,730 -- 40,000
Approximate number of
slots ...................................... 675 869 778 -- 850
Approximate number of
tables...................................... 43 69 45 -- 27
Approximate number of gaming
positions................................... 1,011 1,400 1,135 -- 1,062
Hotel rooms.................................. 120(3) 130 4)(5) 130 4)(5) 275 (6) 500
Approximate parking
capacity.................................... 1,000 1,500 (5) 1,500 (5) 2,500 (6) 1,667
<CAPTION>
MARYLAND
HEIGHTS
PROJECT
------------
Remaining expansion, development and opening
costs....................................... $100 million(1)
Approximate Gaming Area (Square Feet) ....... 50,000(2)
Approximate number of
slots ...................................... 1,500(2)
Approximate number of
tables...................................... 60(2)
Approximate number of gaming
positions................................... 1,860(2)
Hotel rooms.................................. 300(7)
Approximate parking
capacity.................................... 4,500(7)
</TABLE>
- ------------------
(1) Reflects estimated expansion, development and opening costs after December
31, 1994.
(2) For Players' riverboat casino only.
(3) Operated by a joint venture in which the Company owns a 12.5% equity
interest.
(4) The hotel is currently leased and is under contract to be purchased by the
Company.
(5) Reflects total hotel rooms and parking currently available to patrons of the
Players Lake Charles Riverboat and Lake Charles Star Riverboat at the
Company's Lake Charles complex.
(6) Reflects hotel capacity after reconstruction or substantial improvement and
expansion of hotel space and expanded total parking capacity after
construction of parking garage, both of which the Company will own and
operate.
(7) To be operated by a joint venture in which the Company will own a 50% equity
interest.
7
<PAGE>
ISSUANCE OF THE OLD NOTES
The outstanding 10 7/8% Senior Notes due 2005 (the 'Old Notes') were
sold by the Company to Donaldson, Lufkin & Jenrette Securities Corporation
and Salomon Brothers Inc (the 'Initial Purchasers'), on April 17, 1995 (the
'Closing Date') pursuant to a Purchase Agreement, dated April 10, 1995 (the
'Purchase Agreement'), between the Company and the Initial Purchasers. The
Initial Purchasers subsequently resold the Old Notes in reliance on Rule
144A under the Securities Act and other available exemptions under the
Securities Act. The Company and the Initial Purchasers also entered into
the Exchange and Registration Rights Agreement, dated as of April 17, 1995
(the 'Registration Rights Agreement'), between the Company and the Initial
Purchasers, pursuant to which the Company granted certain registration
rights for the benefit of the holders of the Old Notes. The Exchange Offer
(as defined) is intended to satisfy certain of the Company's obligations
under the Registration Rights Agreement with respect to the Old Notes. See
'The Exchange Offer--Purpose and Effect.'
THE EXCHANGE OFFER
<TABLE>
<S> <C>
The Exchange Offer........... The Company is offering upon the terms and subject
to the conditions set forth herein and in the
accompanying letter of transmittal (the 'Letter of
Transmittal'), to exchange $1,000 in principal
amount of its 10 7/8% Senior Notes due 2005 (the
'New Notes') for each $1,000 in principal amount
of the outstanding Old Notes (the Old Notes and
the New Notes are collectively referred to herein
at the 'Notes'). As of the date of this
Prospectus, $150 million in aggregate principal
amount of the Old Notes is outstanding, the
maximum amount authorized by the Indenture for all
Notes. As of the Record Date, there was one
registered holder of the Old Notes, Cede & Co.
('Cede'), which held the Old Notes for __ of its
participants. See 'The Exchange Offer--Terms of
the Exchange Offer.'
Expiration Date.............. 5:00 p.m., New York City time, on ______, 1995 as
the same may be extended. See 'The Exchange
Offer--Expiration Date; Extensions; Amendments.'
Conditions of the Exchange
Offer...................... The Exchange Offer is not conditioned upon any
minimum principal amount of Old Notes being
tendered for exchange. However, the Exchange Offer
is subject to certain customary conditions,
including (i) no legal or governmental action is
pending or threatened with respect to the Exchange
Offer which, in the judgment of the Company, would
make it inadvisable to proceed with the Exchange
Offer, (ii) no statute, rule or regulation with
respect to the Exchange Offer has been enacted
which, in the judgment of the Company, would make
it inadvisable to proceed with the Exchange Offer,
(iii) no banking moratorium or similar event or
international calamity involving the United States
has occurred, and (iv) no governmental approval
deemed necessary by the Company to the Exchange
Offer has been denied. The Company expects that
the foregoing conditions will be satisfied. All
such conditions may be waived by the Company. See
'The Exchange Offer--Conditions of the Exchange
Offer.'
Termination of Certain
Rights..................... Pursuant to the Registration Rights Agreement and
the Old Notes, Eligible Holders (as defined) of
Old Notes (i) have rights to receive the
Liquidated Damages (as defined) and (ii) have
certain
</TABLE>
8
<PAGE>
<TABLE>
<S> <C>
rights intended for the holders of unregistered
securities. Holders of New Notes will not be and,
upon consummation of the Exchange Offer, Eligible
Holders of Old Notes will no longer be, entitled
to (i) the right to receive the Liquidated Damages
or (ii) certain other rights under the
Registration Rights Agreement intended for holders
of unregistered securities; provided, however,
that an Eligible Holder of Old Notes who
reasonably determines and notifies the Company
within 20 business days of the consummation of the
Exchange Offer that (a) such Eligible Holder is
prohibited by applicable law or Commission policy
from participating in the Exchange Offer, or (b)
that such Eligible Holder may not resell the New
Notes acquired by it in the Exchange Offer to the
public without delivering a prospectus and that
this Prospectus is not appropriate or available
for such resales by such Eligible Holder, or (c)
that such Eligible Holder is a broker-dealer
registered under the Exchange Act and holds the
Old Notes acquired directly from the Company or
one of its affiliates, subject to reasonable
verification by the Company, shall have the right
to require the Company to file a shelf
registration statement pursuant to Rule 415 under
the Securities Act solely for the benefit of such
Eligible Holder of Old Notes and will be entitled
to receive the Liquidated Damages following the
occurrence of defined events of default in
connection with such shelf registration statement.
The Exchange Offer shall be deemed consummated
upon the occurrence of the delivery by the Company
to the Registrar under the Indenture of New Notes
in the same aggregate principal amount as the
aggregate principal amount of Old Notes that were
tendered by holders thereof pursuant to the
Exchange Offer. 'Eligible Holder' means the
registered owner of any Old Notes that remain
Transfer Restricted Securities as reflected on the
records of First Fidelity Bank, National
Association, as registrar for the Old Notes (in
such capacity, the 'Registrar'), or any person
whose Old Notes are held of record by the
Depository (as defined) as of the Record Date (as
defined). See 'The Exchange Offer--Termination of
Certain Rights' and '--Procedures for Tendering
Old Notes.'
Accrued Interest on the Old
Notes...................... The New Notes will bear interest at a rate equal
to 10 7/8% per annum from and including their date
of issuance. Eligible Holders whose Old Notes are
accepted for exchange will have the right to
receive interest accrued thereon from the date of
their original issuance or the last Interest
Payment Date, as applicable, to, but not
including, the date of issuance of the New Notes,
such interest to be payable with the first
interest payment on the New Notes. Interest on the
Old Notes accepted for exchange, which accrued at
the rate of 10 7/8% per annum, will cease to
accrue on, the day prior to the issuance of the
New Notes.
Procedures for Tendering Old
Notes...................... Unless a tender of Old Notes is effected pursuant
to the procedures for book-entry transfer as
provided herein, each Eligible Holder desiring to
accept the Exchange Offer must complete and sign
the Letter of Transmittal, have the signature
thereon guaranteed if received by the Letter of
Transmittal, and mail or deliver the Letter of
Transmittal, together with the Old Notes or a
Notice of
</TABLE>
9
<PAGE>
<TABLE>
<S> <C>
Guaranteed Delivery and any other required
documents (such as evidence of authority to act,
if the Letter of Transmittal is signed by someone
acting in a fiduciary or representative capacity),
to the Exchange Agent (as defined) at the address
set forth on the back cover page of this
Prospectus prior to 5:00 p.m., New York City time,
on the Expiration Date. Any Beneficial Owner (as
defined) of the Old Notes whose Old Notes are
registered in the name of a nominee, such as a
broker, dealer, commercial bank or trust company
and who wishes to tender Old Notes in the Exchange
Offer, should instruct such entity or person to
promptly tender on such Beneficial Owner's behalf.
See 'The Exchange Offer-- Procedures for Tendering
Old Notes.'
Guaranteed Delivery
Procedures................. Eligible Holders of Old Notes who wish to tender
their Old Notes and (i) whose Old Notes are not
immediately available or (ii) who cannot deliver
their Old Notes or any other documents required by
the Letter of Transmittal to the Exchange Agent
prior to the Expiration Date (or complete the
procedure for book-entry transfer on a timely
basis), may tender their Old Notes according to
the guaranteed delivery procedures set forth in
the Letter of Transmittal. See 'The Exchange
Offer--Guaranteed Delivery Procedures.'
Acceptance of Old Notes and
Delivery of New Notes...... Upon satisfaction or waiver of all conditions of
the Exchange Offer, the Company will accept any
and all Old Notes that are properly tendered in
the Exchange Offer prior to 5:00 p.m., New York
City time, on the Expiration Date. The New Notes
issued pursuant to the Exchange Offer will be
delivered promptly after acceptance of the Old
Notes. See 'The Exchange Offer-- Acceptance of Old
Notes for Exchange; Delivery of New Notes.'
Withdrawal Rights............ Tenders of Old Notes may be withdrawn at any time
prior to 5:00 p.m., New York City time, on the
Expiration Date. See 'The Exchange
Offer--Withdrawal Rights.'
The Exchange Agent........... First Fidelity Bank, National Association is the
exchange agent (in such capacity, the 'Exchange
Agent'). The address and telephone number of the
Exchange Agent are set forth in 'The Exchange
Offer--The Exchange Agent; Assistance.'
Fees and Expenses............ All expenses incident to the Company's
consummation of the Exchange Offer and compliance
with the Registration Rights Agreement will be
borne by the Company or the Guarantors. The
Company will also pay certain transfer taxes
applicable to the Exchange Offer. See 'The
Exchange Offer--Fees and Expenses.'
Resales of the New Notes..... Based on an interpretation by the staff of the
Commission set forth in no-action letters issued
to third parties, the Company believes that New
Notes issued pursuant to the Exchange Offer to an
Eligible Holder in exchange for Old Notes may be
offered for resale, resold and otherwise
transferred by such Eligible Holder (other than
(i) a broker-dealer who purchased Old Notes
directly from the Company for resale pursuant to
Rule 144A under the Securities Act or any other
available exemption under the
</TABLE>
10
<PAGE>
<TABLE>
<S> <C>
Securities Act, or (ii) a person that is an
affiliate of the Company within the meaning of
Rule 405 under the Securities Act), without
compliance with the registration and prospectus
delivery provisions of the Securities Act,
provided that the Eligible Holder is acquiring the
New Notes in the ordinary course of business and
is not participating, and has no arrangement or
understanding with any person to participate, in a
distribution of the New Notes. Each broker-dealer
that receives New Notes for its own account in
exchange for Old Notes, where such Old Notes were
acquired by such broker as a result of
market-making or other trading activities, must
acknowledge that it will deliver a prospectus in
connection with any resale of such New Notes. See
'The Exchange Offer-- Resales of the New Notes'
and 'Plan of Distribution.'
</TABLE>
DESCRIPTION OF NEW NOTES
The form and terms of the New Notes will be identical in all material
respects to the form and terms of the Old Notes, except that (i) the New Notes
have been registered under the Securities Act and, therefore, will not bear
legends restricting the transfer thereof, (ii) holders of the New Notes will not
be entitled to liquidated damages of $0.10 per week per $1,000 principal amount
of Old Notes constituting Transfer Restricted Securities (as defined) held by
such holders during the period in which a Registration Default (as defined) is
continuing, pursuant to the terms of the Registration Rights Agreement (the
'Liquidated Damages') and (iii) holders of the New Notes will not be, and upon
consummation of the Exchange Offer, Eligible Holders of the Old Notes will no
longer be, entitled to certain rights under the Registration Rights Agreement
intended for the holders of unregistered securities, except in certain limited
circumstances. See 'Exchange Offer--Termination of Certain Rights.' The Exchange
Offer shall be deemed consummated upon the occurrence of the delivery by the
Company to the Registrar under the Indenture of New Notes in the same aggregate
principal amount as the aggregate principal amount of Old Notes that were
tendered by holders thereof pursuant to the Exchange Offer. See 'The Exchange
Offer--Termination of Certain Rights' and '--Procedures for Tendering Old Note;'
and 'Description of New Notes.' 'Transfer Restricted Securities' means each Old
Note until the earliest to occur of (i) the date on which such Old Note has been
exchanged for a New Note in the Exchange Offer, (ii) the date on which such Old
Note has been effectively registered under the Securities Act of 1933, as
amended (the 'Securities Act'), and disposed of in accordance with a shelf
registration statement, or (iii) the date on which such Old Note is distributed
to the public pursuant to Rule 144 under the Securities Act or is saleable
pursuant to Rule 144(k) under the Securities Act.
<TABLE>
<S> <C>
Maturity Date................ April 15, 2005.
Interest..................... 10 7/8% payable in cash semi-annually in arrears,
calculated on the basis of a 360-day year
consisting of twelve 30-day months.
Interest Payment Dates....... April 15 and October 15, commencing October 15,
1995.
Guarantees................... The New Notes will be guaranteed unconditionally
as to principal, premium, if any, and interest, on
a senior unsecured basis (the 'Guarantees'),
jointly and severally, by the Guarantors.
</TABLE>
11
<PAGE>
<TABLE>
<S> <C>
Ranking...................... The New Notes will be senior unsecured obligations
of the Company and will rank pari passu in right
of payment with all existing and future senior
Indebtedness of the Company and senior to all
future Subordinated Indebtedness of the Company.
The Guarantees will be senior unsecured general
obligations of the Guarantors and will rank pari
passu with all existing and future senior
Indebtedness of the Guarantors and senior to all
future Subordinated Indebtedness of the
Guarantors. However, to the extent that any
Indebtedness of the Company or the Guarantors is
secured by liens on any assets of the Company or
the Guarantors, as will be the case with respect
to Indebtedness under the Bank Facility, the
holders of such Indebtedness will have a prior
claim to such assets and will effectively be
senior to the New Notes.
Change of Control............ Upon the occurrence of a Change of Control, the
Company will be required to make an offer to
repurchase the New Notes at a price equal to 101%
of the principal amount thereof, together with
accrued and unpaid interest, if any, to the date
of repurchase.
Optional Redemption.......... The New Notes will not be redeemable, in whole or
in part, prior to April 15, 2000. Thereafter, the
New Notes will be redeemable from time to time at
the Company's option, in whole or in part, at a
premium over the principal amount thereof,
declining ratably to par, together with accrued
interest to the date of redemption.
Regulatory Redemption........ The New Notes are subject to mandatory disposition
and redemption requirements following certain
determinations under the gaming laws and
regulations of the states in which the Company
conducts gaming operations or following certain
determinations by the Board of Directors of the
Company that a person's status as a holder of the
New Notes (a 'Holder') could adversely affect the
Company's gaming operations.
Other Mandatory Redemption... None.
Certain Covenants............ The Indenture will contain certain covenants that,
among other things, limit the Company's ability to
incur other Indebtedness, issue Disqualified
Capital Stock, engage in transactions with
Affiliates, incur liens, make certain Restricted
Payments, make certain asset sales and permit
certain restrictions on the ability of its
Subsidiaries to make distributions.
Transfer Restrictions;
Absence of a Public Market
for the New Notes.......... The New Notes are a new issue of securities with
no established market. Accordingly, there can be
no assurance as to the development or liquidity of
any market for the New Notes. The Initial
Purchasers have advised the Company that they
currently intend to make a market in the New
Notes. However, neither Initial Purchaser is
obligated to do so, and any market making with
respect to the New Notes may be discontinued at
any time without notice. The Company does not
intend to apply for listing of the New Notes on a
securities exchange.
</TABLE>
12
<PAGE>
SUMMARY HISTORICAL CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT RATIOS AND WIN DATA)
The following Summary Historical Consolidated Financial Data of the Company
are derived from the Company's Historical Consolidated Financial Statements and
should be read in conjunction with 'Selected Consolidated Financial Data,'
'Management's Discussion and Analysis of Financial Condition and Results of
Operations' and the Company's Historical Consolidated Financial Statements and
the notes thereto appearing elsewhere in this Prospectus. Operating results
presented below for Lake Charles reflects only the results from the Players Lake
Charles Riverboat.
<TABLE>
<CAPTION>
YEAR NINE MONTHS ENDED TWELVE
ENDED DECEMBER 31,(1) MONTHS ENDED
MARCH 31, ------------------- DECEMBER 31,
1994(1) 1993 1994 1994
--------- ------- -------- ------------
<S> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Casino revenues.............. $ 95,873 $54,912 $155,418 $196,379
Total revenues............... 107,082 61,836 165,849 211,095
Income from continuing
operations before other
income (expense) and
provision for income
taxes...................... 26,888 13,953 53,843 66,778
Net income................... 20,952 (2) 12,865(2) 35,326 43,413
Ratio of earnings to fixed
charges(3)................. 32:1 20:1 112:1 112:1
OTHER DATA:
Adjusted EBITDA(4)........... $ 37,659 (5) $22,150(5) $ 60,051 $ 75,560
Pro forma gross interest
expense(6)................. -- -- -- 16,938
Ratio of Adjusted EBITDA to
pro forma gross interest
expense(4)(6).............. -- -- -- 4.5 x
METROPOLIS OPERATING RESULTS:
Casino revenues.............. $ 65,200 $49,800 $ 55,300 $ 70,700
Daily win/slot machine....... 182 186 203 194
Daily win/table game......... 1,674 1,672 1,683 1,683
LAKE CHARLES OPERATING RESULTS:
Casino revenues.............. $ 30,700 $ 5,100 $100,100 $125,700
Daily win/slot machine....... 194 154 274 257
Daily win/table game......... 2,458 1,939 2,568 2,576
</TABLE>
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1994
-------------------------
AS ADJUSTED FOR
ACTUAL THE OFFERING
-------- ---------------
<S> <C> <C>
BALANCE SHEET DATA:
Cash, cash equivalents and marketable securities... $ 94,398 $ 239,398
Total assets....................................... 183,056 328,056
Long-term debt, including current maturities....... 8,950 158,950
Total stockholders' equity......................... 156,067 156,067
</TABLE>
- ------------------
(1) Information for the fiscal year ended March 31, 1994 includes 12 months and
three months and 24 days of results for the Metropolis Complex and Players
Lake Charles Riverboat, respectively. Information for the nine-months ended
December 31, 1993 includes nine full months of results for the Metropolis
Complex and 24 days of results for the Players Lake Charles Riverboat.
Information for the nine months and twelve months ended December 31, 1994
includes nine full months and twelve full months, respectively, of results
for each of the Metropolis Complex and the Players Lake Charles Riverboat.
(2) Includes cumulative effect of a change in accounting principle of $3.5
million.
(3) For purposes of determining the ratio of earnings to fixed charges, earnings
are defined as income from continuing operations before provision for income
taxes, plus fixed charges. Fixed charges consist of interest expense on all
indebtedness and the portion of operating lease rental expenses that is
representative of the interest factor. The Company previously was engaged in
a line of business that was discontinued in May 1993 and, as a result, the
ratio of earnings to fixed charges is not presented for the periods prior to
fiscal year 1994. See 'Management's Discussion and Analysis of Financial
Condition and Results of Operations--General.'
(4) Represents earnings from continuing operations before interest expense,
provision for income taxes, depreciation and amortization, pre-opening
expenses, one-time non-cash compensation expenses during fiscal 1994 and
other income (expense) ('Adjusted EBITDA'). Adjusted EBITDA is not intended
to represent cash flows for the period, nor has it been presented as an
alternative to income from continuing operations as an indicator of
operating performance and should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with generally
accepted accounting principles. EBITDA-based information is presented solely
as supplemental disclosure because EBITDA is frequently used to analyze
companies on the basis of operating performance, leverage and liquidity.
(5) Adjusted EBITDA calculation excludes $2,868 for the year ended March 31,
1994 and $2,417 for the nine months ended December 31, 1993 related to one-
time non-cash compensation expenses for the grant of stock options to
non-employee directors and the grant of stock to certain officers in
connection with the execution of employment agreements.
(6) Pro forma gross interest expense reflects interest expense on the Notes and
other outstanding indebtedness, without reflecting interest income on
historical cash, cash equivalents and marketable securities and assumes no
return upon the investment of proceeds following the issuance of the Old
Notes. The pro forma calculations have been computed assuming the Notes were
outstanding for the entire period presented.
13
<PAGE>
RISK FACTORS
In addition to the other information contained in this Prospectus, holders
of Notes should consider carefully the following risk factors affecting the
business of the Company.
INVESTMENT AND EXPANSION
The net proceeds of the Old Note offering (the 'Offering') will be invested
in several major projects currently under development by the Company, including
(i) the purchase and opening at Lake Charles, Louisiana of the Lake Charles Star
Riverboat, the purchase (and subsequent reconstruction or substantial
improvement and expansion) of the Players Hotel and additional expansion
projects and improvements at the Lake Charles complex, (ii) the completion of a
new land-based casino and related resort facilities at Mesquite, Nevada, (iii)
the development of a new riverboat casino and related facilities in Maryland
Heights, Missouri and (iv) additional amenities, attractions and riverfront
parking at the Metropolis Complex. Major construction projects entail
significant risks, including shortages of materials or skilled labor,
engineering, environmental or regulatory problems, work stoppages, weather
interferences and unanticipated cost increases. Construction, equipment and
stoppage problems or difficulties in obtaining any of the required permits or
authorizations from regulatory authorities could increase the completion costs
or prohibit construction of any of the facilities contemplated. See
'--Government Regulation and Regulatory Approvals.' In addition, no assurances
can be given that the openings will occur on schedule or that anticipated
construction costs will not be exceeded.
In addition, the Company has had no experience in developing a land-based
casino, such as Players Island Resort, or in commencing operations at a casino
in direct competition with existing casinos, such as will be the case at the
Players Island Resort and at the Maryland Heights Project. Moreover, the Company
has limited experience in the design, development and operation of non-gaming
entertainment facilities. The Company also expects that in the future it will be
necessary for its complexes to offer more amenities in order to attract a
suitable level of patronage as well as to acquire necessary gaming licenses.
There can be no assurance that the entertainment facilities will operate
profitably. Furthermore, in light of the increased competitive conditions and
expense associated with obtaining and developing new gaming sites, including the
projects presently under development, there can be no assurance that, as the
Company expands its gaming operations, it will be able to generate a comparable
percentage increase in gaming win or continue to generate operating income
relative to total revenues at levels comparable to or greater than the levels
during the nine month period ended December 31, 1994 or fiscal 1994 levels.
INCREASED COMPETITION
To date, the Company's casinos have concentrated their marketing efforts on
patrons within a reasonable driving distance from the casinos. A patron's choice
between competing casinos operating in the same primary market area may be
affected significantly by the relative proximity to the patron of the casinos or
other forms of gaming or other casino facilities. These other forms of gaming
include bingo and pull tab games, card clubs, parimutuel betting on horse racing
and dog racing, state-sponsored lotteries and video lottery, video bingo and
video poker terminals. The Company expects that it will experience significant
competition as the emerging casino industry matures.
The Company's riverboat operation in Metropolis currently experiences
limited direct competition in its primary market area. Currently, the closest
legalized gaming casinos are Illinois-based riverboats located approximately 160
miles away to the northwest in the greater St. Louis metropolitan area. Indiana
has approved one riverboat in Evansville, which is approximately 110 miles
northeast of Metropolis and is expected to be the closest Indiana riverboat to
compete with the Metropolis Complex. This boat is expected to open in the Summer
of 1995. Gaming has also been authorized in Missouri, and the closest Missouri
cities in which proposed future gaming facilities are under consideration are
Cape Girardeau and Caruthersville, which are approximately 70 and 120 miles,
respectively, from Metropolis. The Caruthersville project opened in April 1995.
The timing of the opening and licensing of the Cape Girardeau project cannot be
determined.
The closest competitor of the Company's Lake Charles operation is the Grand
Casino Coushatta, which commenced operations on January 16, 1995 ('Coushatta')
and is located approximately 45 minutes away by car. Coushatta offers 45,000
square feet of gaming space, over 1,250 slot machines and 50 table games.
Coushatta is a land-based gaming facility that is located northeast of Lake
Charles, Louisiana on State Highway
14
<PAGE>
165. A casino operated on Indian land, like Coushatta, has certain operating
advantages that are not available to the Company, such as exemptions from taxes
and cruising requirements. The Company may face further competition from a joint
venture of Crown Casinos, Inc., Casino America, Inc. and Louisiana Downs, Inc.,
which has received preliminary approval to operate a riverboat casino in
Westlake, Louisiana, approximately one mile from Lake Charles. The Company
competes to a lesser degree with riverboat operators in Baton Rouge,
approximately 125 miles east of Lake Charles, the New Orleans area, which is
over 200 miles east of Lake Charles, and the Shreveport/Bossier City area,
approximately 180 miles north of Lake Charles. Furthermore, the Louisiana
Riverboat Gaming Commission has the authority to determine the locations of
riverboat casinos. No assurance can be given that a riverboat casino operator
will not seek or receive permission to locate in, or near, the Lake Charles
area. A land-based casino opened, in a temporary location, in New Orleans in May
1995 and such temporary facility and the land-based permanent facility, which is
under construction in New Orleans and will replace the temporary facility, may
produce additional competition.
The primary market area for the Lake Charles riverboat includes the Houston
metropolitan area, other population centers west of the casino such as Beaumont,
Galveston, Orange and Port Arthur, Texas and population centers east of the
casino such as Lafayette and Baton Rouge, Louisiana. Since the Players Lake
Charles Riverboat began operating on December 8, 1993, more than half of its
patrons have come from Texas, with a significant portion coming from the
metropolitan Houston area. Although casino gaming is not currently permitted in
Texas, and the Attorney General of Texas has issued an opinion that gaming in
Texas would require an amendment to the State's Constitution, the Texas
legislature has considered various proposals to authorize casino gaming and two
bills related to gaming were presented in the most recent legislative session
that concluded on May 29, 1995. See 'Business--Lake Charles Operations' and
'Regulatory Matters--Proposed Texas Gaming Legislation.' Additional bills may be
introduced from time to time whenever the legislature is in session. Since the
Texas legislature (which meets every two years in odd-numbered years) did not
pass legislation to amend the Texas State Constitution during the 1995 regular
session, such legislation will have to await the next regular session in 1997,
or a special session of the legislature. Special sessions can only be called by
the Governor for matters that were pending in the regular legislative session.
Governor George Bush has taken a public position against legalized casino
gaming. A constitutional amendment requires a two-thirds vote of those present
and voting in each house of the Texas state legislature and approval by the
electorate at a referendum. If casinos commence operations in Texas in or near
the Company's primary market area, they would be expected to adversely affect
the Company's Lake Charles casino operations. Federal law permits gaming on
cruise ships in international waters under certain circumstances. One such
cruise ship operated out of Galveston, Texas until October of 1994. No
assurances can be given that similar cruise ships will not seek to operate out
of Texas or Louisiana.
The Company believes that the operating revenues and profits generated to
date in its Metropolis and Lake Charles operations are attributable in part to
the limited direct competition that these casinos have experienced historically.
As noted above, the competition in these markets is expected to increase
significantly, which may adversely affect the Company's operating results at
these casinos. The Company also anticipates that its projects under development
in Mesquite, Nevada and Maryland Heights, Missouri will compete with other
nearby gaming establishments. See 'Business--Competition.'
Louisiana and Illinois statutes limit the number of riverboat casino
licenses that may be granted in such states, but the number of authorized
licenses may be increased by future legislation. Under Nevada and Missouri law,
the number of authorized gaming licenses is not limited.
HOLDING COMPANY STRUCTURE AND ABILITY TO SERVICE DEBT; EFFECTIVE SUBORDINATION
The Company is a holding company whose operations are conducted through
subsidiaries. The Company, therefore, will be dependent on the earnings and cash
flow of its subsidiaries to meet its debt obligations, including its obligations
with respect to the Notes. The ability of certain subsidiaries of the Company to
make payments to the Company is governed by the gaming laws of certain
jurisdictions, which place limits on the amount of funds which may be
transferred to the Company and may require prior or subsequent approval for any
such payments. See 'Regulatory Matters.' Accordingly, there can be no assurance
that the subsidiaries will be able to, or will be permitted to, pay to the
Company amounts necessary to service the Notes.
15
<PAGE>
The Guarantees of the Notes may provide a basis for a direct claim against
the Guarantors; however, it is possible that the Guarantees may not be
enforceable. See '--Fraudulent Transfer Considerations' and '-- Government
Regulation and Regulatory Approvals.' If the Guarantees are not enforceable, the
Notes will effectively be subordinate to all Indebtedness, trade payables and
other liabilities of the Guarantors. On February 28, 1995, the Initial
Guarantors had aggregate trade payables of $1.4 million and no Indebtedness.
Obligations under the Company's $120 million bank facility, which is
currently being negotiated (the 'Bank Facility') will be secured by liens on
certain assets of the Company. Subject to compliance with certain tests in the
Indenture that limit the aggregate amount of senior Indebtedness that may be
incurred by the Company, the Company is entitled to increase the amounts
available for borrowings and outstanding Indebtedness under the Bank Facility
above the initial proposed availability of $120 million, up to the aggregate
amount that is so permitted, from time to time, under such tests. In such event,
such additional Indebtedness would likely be secured by liens on certain or all
of the Company's and its Subsidiaries' assets at such time. Upon any
distribution of the assets of the Company or the Guarantors upon liquidation,
reorganization or insolvency, the Bank Facility creditors would be entitled to
payment in full out of the assets securing the Bank Facility prior to payment to
the Holders of the Notes, and the rights of the Holders of the Notes are
therefore effectively subordinate to the rights of such creditors. If Bank
Facility creditors were to foreclose on the collateral securing the Bank
Facility, it is possible that insufficient assets would remain after
satisfaction of such Indebtedness to satisfy fully the claims of the Holders of
the Notes.
GOVERNMENT REGULATION AND REGULATORY APPROVALS
The Company currently holds gaming licenses for the operation of casinos in
Louisiana and Illinois as well as a casino service industry license in New
Jersey and a thoroughbred racetrack license in Kentucky. In addition, the
Company has applied for licenses to operate casinos in Nevada, Missouri and
Indiana.
The Company is subject to the laws of each state in which it conducts
business and to Federal law. In addition to being subject to laws applicable to
businesses generally, the Company is subject to regulations that apply
specifically to the gaming industry. All laws are subject to change and
different interpretations, especially laws regulating the gaming industry, where
in many cases the laws and the regulatory agencies that apply them are new.
Changes in laws or their interpretation may result in the imposition of more
stringent, burdensome or expensive requirements or the outright prohibition of
gaming. For example, legislation is pending in Louisiana which would restrict or
prohibit riverboat gaming and legislation is pending in Illinois which would
authorize additional casino gaming. The Company is required to pay gaming fees
and taxes in jurisdictions in which it operates and in which projects are under
development. Such fees and taxes are subject to change over which the Company
has no control. See 'Regulatory Matters.'
The Company must obtain a gaming license for each location at which it
operates a casino. Generally, such licenses are for a fixed term and are subject
to renewal periodically. The Company and each of its officers, directors,
managers and principal stockholders are subject to strict scrutiny and approval
by the gaming regulatory bodies of each jurisdiction in which the Company
conducts or seeks to conduct gaming operations. The issuance of a gaming license
is considered a privilege, not a right, and gaming licenses are subject to
suspension, limitation or revocation if detailed regulatory requirements are not
met. In addition to licenses from the state gaming regulatory agencies, casino
operations also typically require various local governmental approvals and
riverboats need Federal and state environmental approvals and approvals relating
to operations in navigable waters. See 'Regulatory Matters.'
The Company has submitted an application for a casino license for its
Nevada subsidiary, Players Nevada, Inc. ('Players Nevada'), for the operation of
the Players Island Resort. Applications have also been submitted for licensure
or a finding of suitability under Nevada gaming laws for officers and directors
of the Company and Players Nevada, and for Merv Griffin as a controlling
stockholder of the Company. These applications are now under investigation by
the Nevada Gaming Control Board. In addition, the Guarantee executed by Players
Nevada, as well as any restrictions on transfer or encumbrance of the stock of
Players Nevada, will require approval of the Nevada Gaming Control Board in
connection with its determination of whether to issue a gaming license to
Players Nevada. No assurances can be given that any of the required licenses,
approvals or findings of suitability will be obtained, or will be obtained in a
timely fashion. See 'Regulatory Matters.' In the event that the Nevada Gaming
Commission conditions its approval of the Players Nevada gaming license on the
waiver or
16
<PAGE>
modification of the Players Nevada Guarantee, it is contemplated that the
Company would solicit the consent of the Holders of the Notes to such waiver or
modification. If a waiver is required by the Nevada Gaming Commission and the
Holders consent to such waiver, the Notes would effectively be subordinate to
the Indebtedness, trade payables and other liabilities of Players Nevada. Any
modification required by the Nevada Gaming Commission may adversely affect the
rights of the Holders of the Notes if consented to by the Holders of the Notes.
In the event of any failure to obtain the requisite Holders' consent to any
waiver or modification directed by the Nevada Gaming Commission, Players Nevada
would be prohibited from conducting gaming operations in Nevada. Holders of the
Notes may be required, in the discretion of the Nevada Gaming Commission, to be
investigated and found suitable. No assurances can be given that such a
requirement will not be imposed on any Holder of Notes, or if required, that a
Holder of any Notes will be found suitable under Nevada gaming law. See
'Regulatory Matters--Nevada Gaming Regulation.'
The Missouri Gaming Act does not limit statewide the number of licenses
that may be granted and permits more than one person to be licensed for
operation in any city. Under the Missouri Gaming Act, the number and location of
licensed gaming facilities are determined by the Missouri Gaming Commission,
which has not indicated what number of gaming licenses may be granted statewide
or whether it will limit the number or location of gaming facilities on a
statewide, regional or local basis. See 'Regulatory Matters.' The development
and operation of the Maryland Heights Project requires the receipt of regulatory
approvals from Missouri gaming and other authorities. On May 24, 1995, the
Company's amended application for a gaming license at the Maryland Heights
Project was filed with the Missouri Gaming Commission. The Missouri Gaming
Commission is considering licensing applications for review in selected pools of
three and has chosen the Company's and Promus's applications for consideration
in the next such pool. No assurances can be given when the Missouri Gaming
Commission or any other governmental agency will act on the applications,
whether all approvals will be obtained or whether any unusually burdensome
restrictions may be imposed on the Company or Promus in order to obtain such
approvals. The Company and Promus are currently parties to a non-binding letter
of intent regarding the development and operation of the Maryland Heights
Project. The development and operation of the Maryland Heights Project are
conditioned upon the negotiation and execution of definitive agreements between
the Company and Promus. No assurance can be given that pending litigation will
not have an influence on, or will not delay, the receipt of necessary regulatory
approvals or the commencement or completion of the Maryland Heights Project. See
'Business--Legal Proceedings--Missouri Litigation.'
The Company's license to operate its riverboat casino at the Metropolis
Complex and the Players Lake Charles Riverboat expire in February 1996 and
December 1998, respectively. The license to operate the Players Star Riverboat
will expire in August 1998. The Company also holds a license expiring January
1996 from Kentucky authorizing it to operate a thoroughbred racetrack. The loss
or suspension of the Illinois or Louisiana licenses, or the failure to obtain
any license from a state in which the Company plans to operate a casino in the
future, including Nevada or Missouri, or the failure to obtain the renewal of
any license would have a material adverse effect on the Company's business. In
some circumstances, the loss of a license from one jurisdiction may trigger the
loss of a license in another jurisdiction. See 'Regulatory Matters.'
In addition, Guarantees required to be executed in the future by other
Subsidiaries may also be subject to review and approval or disapproval by Gaming
Authorities in applicable jurisdictions, either in connection with such
Subsidiary's application for a gaming license, or as a separate approval item.
No assurances can be given that approval of such Guarantees will be obtained, or
that the existence of such Guarantees will not hinder, delay or prevent
licensure of such other Subsidiaries. If the Company elects not to deliver a
Guarantee from a given Subsidiary, it would be required to designate such
Subsidiary as an Unrestricted Subsidiary (as defined).
Certain aspects of the Bank Facility will be subject to required disclosure
to, approval of or disapproval by the respective gaming authorities in the
states in which the Company conducts or proposes to conduct gaming operations.
The Bank Facility may be reviewed as part of the Company's application for a
gaming license in a jurisdiction, or if previously licensed, as a separate
review item. The disclosure, review and approval requirements for the Bank
Facility in Illinois, Louisiana, Nevada and Missouri are substantially similar
to the disclosure, review and approval requirements applicable to the Notes and
the Guarantees except that additional disclosure, review and/or approval
requirements may apply with respect to the security for the Bank Facility to be
provided by the Company and its subsidiaries. No assurance can be given that the
Bank Facility and the proposed security for the Bank Facility will receive all
required approvals, that such approvals will be received on a timely
17
<PAGE>
basis or that the failure to obtain all required approvals will not adversely
impact the Bank Facility or the Company's ability to make borrowings thereunder.
See 'Regulatory Matters--Illinois Gaming Regulation,' '-- Louisiana Gaming
Regulation,' '--Nevada Gaming Regulation' and '--Missouri Gaming Regulation.'
Prior to the Company's acquisition of the Interests and relocation of the
Lake Charles Star Riverboat to Lake Charles, the Partnership, while under
control of its prior owners, was the subject of an investigation by the Office
of the District Attorney for Orleans Parish, Louisiana, for failure to cruise
regularly, as required by Louisiana law. Although the Company believes that
prosecution for the Partnership's past failure to cruise while operating on Lake
Pontchartrain is unlikely, no assurances can be given that such prosecution will
not be instituted, or that the Partnership's past failure to cruise would not
constitute a violation of Louisiana law.
LOSS OF RIVERBOAT OR DOCKSIDE FACILITY FROM SERVICE
A riverboat may be lost from service due to many factors, including a
natural disaster. Although the Company maintains insurance it considers adequate
for hull and content damage and liability, the Company does not carry business
interruption insurance. U.S. Coast Guard regulations require that hulls of
vessels of the type being operated by the Company be inspected every five years
at a U.S. Coast Guard approved dry docking facility, which will cause a
temporary loss of service. A flood, hurricane or other severe weather condition
or low water conditions also could damage or preclude excursions by a cruising
riverboat or could cause the Company to lose the use of a riverboat or dockside
facility for an extended period, which could have a material adverse effect on
operations. When excursions by a cruising riverboat are either legally or
physically impossible, various state laws and regulations may restrict or
prohibit the Company from conducting dockside gaming as an alternative.
The Ohio River occasionally overflows its banks at Metropolis, Illinois,
most often during late winter and early spring. Such flooding may cover a
portion of the Company's existing parking area closest to its landing, but is
not expected to impact the additional riverfront parking that is currently
planned for construction. In designing its riverboat landing, the Company
considered typical flood levels and believes that its existing parking
arrangements provide adequate available parking within reasonable walking
distance of its landing during typical flooding periods. If flooding is
especially severe, it may be impractical for passengers to board the riverboat
at its normal dock site. In such circumstances, the Company may seek permission
from the Illinois Gaming Board to dock at an alternate landing it has found,
where access is not expected to be restricted by flooding. However, no assurance
can be given that the Illinois Gaming Board would grant permission to dock at
the alternate landing or that an alternate landing acceptable to the Illinois
Gaming Board could be found. Any use of an alternate landing because of flooding
may result in some loss of service and other adverse effects on operations. See
'Regulatory Matters--Illinois Gaming Regulation.'
The Company believes that flooding does not present a significant risk to
its operations in Lake Charles, Louisiana. Flooding may, however, pose a risk to
Company operations at Maryland Heights, Missouri and future water-based gaming
sites.
ILLINOIS DOCKSIDE GAMING
Although the Illinois Riverboat Gambling Act provides that no gambling may
be conducted while a riverboat is docked, Illinois Gaming Board Rule, Section
3000.510, currently permits dockside gaming if the captain of the riverboat
reasonably determines that cruising is unsafe due to inclement weather,
mechanical or structural problems, or river icing. From the commencement of the
Company's Illinois operations in February 1993 through February 28, 1995,
dockside gaming occurred under Illinois Gaming Board Rules, Section 3000.510,
approximately 34% of the time. Recent pronouncements by the Illinois Gaming
Board indicate that the explanations for failure to cruise pursuant to Illinois
Gaming Board Rule, Section 3000.510 will be scrutinized and that any abuse of
the rule will result in disciplinary actions, which may include, among other
things, any of the following: cancellation of future cruises, penalties, fines,
suspension and/or revocation of license. In addition, since commencement of the
Metropolis operations in February 1993, pursuant to Illinois Gaming Board Rule,
Section 3000.500, dockside gaming operations have occurred during the 30 minute
time periods at the beginning and end of a cruise while passengers are embarking
and disembarking. Any change in the membership of the Illinois Gaming Board may
result in a complete prohibition of dockside gaming, The inability to conduct
dockside gaming would result in a material adverse effect on the Metropolis
operation.
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Furthermore, the Company's Illinois riverboat cruises on the Ohio River,
which is partially in the Commonwealth of Kentucky. Kentucky does not permit
riverboat gaming. In extreme low-water conditions, the Company's Metropolis
riverboat may not be able to safely cruise the Ohio River without crossing into
Kentucky territory for part of the cruise. In such circumstances, either the
riverboat must cease operations, restrict the distance the riverboat cruises or
conduct dockside gaming. No assurances can be given that the Company would be
able to obtain approval from the Illinois Gaming Board to shorten the riverboat
gaming cruise or conduct dockside gaming. See 'Regulatory Matters--Illinois
Gaming Regulation.'
INFLUENCE BY PRINCIPAL STOCKHOLDERS
The directors and officers of the Company and their respective affiliates
and relatives are among the largest stockholders of the Company. As a result,
they have the power to control or influence control of the Company.
As of March 1, 1995, Edward Fishman, the Chairman and Chief Executive
Officer of the Company, and David Fishman, the Vice Chairman of the Company,
respectively, beneficially owned 899,973 and 401,115 shares of common stock of
the Company ('Common Stock') and had the right to acquire 400,000 and 550,000
additional shares of Common Stock through the exercise of options, of which
20,000 and 170,000 options were currently exercisable as of such date or within
60 days thereafter. Edward and David Fishman are brothers and, assuming the
complete exercise of all of their outstanding options, would own, in the
aggregate, 2,251,088 or 10.8% of the outstanding Common Stock.
As of March 1, 1995, The Griffin Group, Inc., a Connecticut corporation
('The Griffin Group'), and its affiliates beneficially owned 2,225,500 shares of
Common Stock and had the right to acquire 1,452,500 additional shares of Common
Stock through the exercise of warrants and options, of which 1,065,000 shares
may be acquired upon exercise presently or within 60 days of such date. Assuming
the complete exercise of all such warrants and options, The Griffin Group and
its affiliates would beneficially own 3,678,000 shares, or 17.3% of the
Company's outstanding Common Stock. Mr. Thomas E. Gallagher, President of The
Griffin Group, is a director of the Company and the beneficial owner of certain
of the securities described above.
Merv Griffin, the Company's public representative for its riverboat
casinos, participates actively in the Company's efforts to acquire new sites and
licenses, advises the Company on entertainment strategy and assists in
promotion. His name and likeness are utilized by the Company under a license
which provides for certain promotional activities to be performed by Mr. Griffin
on behalf of the Company. The Company's rights to Mr. Griffin's services are
exclusive in the riverboat and dockside casino industry, except that Mr. Griffin
has the right to represent casinos of Resorts International Inc. ('Resorts').
Resorts currently has only a land-based casino in Atlantic City, New Jersey, but
may be examining the possibility of developing riverboat casinos and other land-
based casinos. See 'Business--License with Merv Griffin and The Griffin Group.'
The Company has initiated negotiations with The Griffin Group to retain Mr.
Griffin's services as the Company's public representative for the Players Island
Resort, although no assurance can be given that the Company will be successful
in retaining such services. Mr. Griffin is Chairman of the Board and a
significant stockholder of Resorts. Additionally, Thomas E. Gallagher, a
director of the Company, is President, Chief Executive Officer and a director of
Resorts.
FRAUDULENT TRANSFER CONSIDERATIONS
The obligation of each of the Guarantors of the Notes may be subject to
review under state or federal fraudulent transfer laws. Under such laws, if a
court in a lawsuit by an unpaid creditor or representative of creditors of a
subsidiary, such as a trustee in bankruptcy or such Guarantor as
debtor-in-possession, were to find that at the time such obligation was
incurred, such Guarantor, among other things, (a) did not receive fair
consideration or reasonably equivalent value therefor and (b) either (i) was
insolvent, (ii) was rendered insolvent, (iii) was engaged in a business or
transaction for which its remaining unencumbered assets constituted unreasonably
small capital or (iv) intended to incur or believed that it would incur debts
beyond its ability to pay such debts as they matured, such court could avoid
such Guarantor's obligation and direct the return of any payments made under the
Guarantee to such Guarantor or to a fund for the benefit of its creditors.
Moreover, regardless of the factors identified in the foregoing clauses (i)
through (iv), such court could avoid such obligation and direct such repayment,
if it found that the obligation was incurred with intent to hinder, delay or
defraud such Guarantor's creditors. In any such event, the holders of the Notes
would have to seek repayment from other Guarantors whose guarantee obligations
had not been avoided.
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The measure of insolvency for purposes of the foregoing will vary depending
upon the law of the jurisdiction being applied. Generally, however, an entity
would be considered insolvent if the sums of its debts is greater than all of
its property at a fair valuation or if the present fair saleable value of its
assets is less than the amount that will be required to pay its probable
liability on its existing debts as they become absolute and matured.
REGULATORY REDEMPTION
If the ownership of any of the Notes by any person or entity will preclude,
interfere with, threaten or delay the issuance, maintenance, existence or
reinstatement of any gaming or liquor license, permit or approval, or result in
the imposition of burdensome terms or conditions on such license, permit or
approval, as determined by any Governmental Authority or the Board of Directors
of the Company, such Holder shall be required to dispose of such Notes within a
specified time and, if the Holder of the Notes fails to dispose of them within
such time, the Company shall have the right to redeem the Notes at a price,
without accrued interest, if any, equal to the lowest of the Holder's cost, the
principal amount of such Notes or the average of the current market prices of
such Notes. See 'Description of New Notes--Regulatory Redemption.'
LACK OF PUBLIC MARKET
The New Notes are a new issue of securities, have no established trading
market and may not be widely distributed. The Company does not intend to apply
to list the New Notes on any stock exchange. The Initial Purchasers have
informed the Company that they intend to make a market in the New Notes as
permitted by applicable laws and regulations; however, the Initial Purchasers
are not obligated to do so and may discontinue such market making activities at
any time without notice to the holders of the New Notes. Accordingly, there can
be no assurance that a trading market for the New Notes will develop or be
maintained. Moreover, if a market for the New Notes does develop, the price of
the New Notes could fluctuate and liquidity may be limited. If a market for the
New Notes does not develop, holders may not be able to resell the New Notes for
an extended period of time, if at all. If a trading market develops for the New
Notes, future trading prices of such securities will depend on many factors,
including, among other things, prevailing interest rates, the Company's results
of operations and the market for similar securities.
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THE EXCHANGE OFFER
PURPOSE AND EFFECT
The Old Notes were sold by the Company to the Initial Purchasers on April
17, 1995, pursuant to the Purchase Agreement. The Initial Purchasers
subsequently resold the Old Notes in reliance on Rule 144A under the Securities
Act. The Company and the Initial Purchasers also entered into the Registration
Rights Agreement, pursuant to which the Company agreed, with respect to the Old
Notes and subject to the Company's determination that the Exchange Offer is
permitted under applicable law, to (i) cause to be filed, on or prior to June 1,
1995, a registration statement with the Commission under the Securities Act
concerning the Exchange Offer, (ii) use all reasonable efforts (a) to cause such
registration statement to be declared effective by the Commission as soon as
practicable and (b) to cause the Exchange Offer to remain open for a period of
not less than twenty (20) business days. This Exchange Offer is intended to
satisfy the Company's exchange offer obligations under the Registration Rights
Agreement.
TERMS OF THE EXCHANGE OFFER
The Company hereby offers, upon the terms and subject to the conditions set
forth herein and in the accompanying Letter of Transmittal, to exchange $1,000
in principal amount of the New Notes for each $1,000 in principal amount of the
outstanding Old Notes. The Company will accept for exchange any and all Old
Notes that are validly tendered on or prior to 5:00 p.m., New York City time, on
the Expiration Date. Tenders of the Old Notes may be withdrawn at any time prior
to 5:00 p.m., New York City time, on the Expiration Date. The Exchange Offer is
not conditioned upon any minimum principal amount of Old Notes being tendered
for exchange. However, the Exchange Offer is subject to certain customary
conditions which may be waived by the Company, and to the terms and provisions
of the Registration Rights Agreement. See 'Conditions of the Exchange Offer.'
Old Notes may be tendered only in multiples of $1,000. Subject to the
foregoing, Eligible Holders may tender less than the aggregate principal amount
represented by the Old Notes held by them, provided that they appropriately
indicate this fact on the Letter of Transmittal accompanying the tendered Old
Notes (or so indicate pursuant to the procedures for book-entry transfer.).
As of the date of this Prospectus, $150 million in aggregate principal
amount of the Old Notes were outstanding, the maximum amount authorized by the
Indenture for all Notes. As of the Record Date, there was one registered holder
of the Old Notes, Cede, which held the Old Notes for ______ of its participants.
Solely for reasons of administration (and for no other purpose), the Company has
fixed the close of business on June ______, 1995, as the record date (the
'Record Date') for purposes of determining the persons to whom this Prospectus
and the Letter of Transmittal will be mailed initially. Only an Eligible Holder
of the Old Notes (or such Eligible Holder's legal representative or
attorney-in-fact) may participate in the Exchange Offer. There will be no fixed
record date for determining Eligible Holders of the Old Notes entitled to
participate in the Exchange Offer. The Company believes that, as of the date of
this Prospectus, no such Eligible Holder is an affiliate (as defined in Rule 405
under the Securities Act) of the Company.
The Company shall be deemed to have accepted validly tendered Old Notes
when, as and if the Company has given oral or written notice thereof to the
Exchange Agent. The Exchange Agent will act as agent for the tendering Eligible
Holders of Old Notes and for the purposes of receiving the New Notes from the
Company.
If any tendered Old Notes are not accepted for exchange because of an
invalid tender, the occurrence of certain other events set forth herein or
otherwise, certificates for any such unaccepted Old Notes will be returned,
without expense, to the tendering Eligible Holder thereof as promptly as
practicable after the Expiration Date.
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The Expiration Date shall be _____________ , 1995 at 5:00 p.m., New York
City time, unless the Company, in its sole discretion, extends the Exchange
Offer, in which case the Expiration Date shall be the latest date and time to
which the Exchange Offer is extended.
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In order to extend the Exchange Offer, the Company will notify the Exchange
Agent of any extension by oral or written notice and will make a public
announcement thereof, each prior to 10:00 a.m., New York City time, on the next
business day after the previously scheduled Expiration Date.
The Company reserves the right, in its sole discretion, (i) to delay
accepting any Old Notes, (ii) to extend the Exchange Offer, (iii) if any of the
conditions set forth below under 'Conditions of the Exchange Offer' shall not
have been satisfied, to terminate the Exchange Offer, by giving oral or written
notice of such delay, extension, or termination to the Exchange Agent, and (iv)
to amend the terms of the Exchange Offer in any manner. If the Exchange Offer is
amended in a manner determined by the Company to constitute a material change,
the Company will promptly disclose such amendments by means of a prospectus
supplement that will be distributed to the registered holders of the Old Notes.
CONDITIONS OF THE EXCHANGE OFFER
The Exchange Offer is not conditioned upon any minimum principal amount of
the Old Notes being tendered for exchange. However, notwithstanding any other
provisions of the Exchange Offer, the Company shall not be required to accept
for exchange, or to issue the New Notes in exchange for, any Old Notes, if any
of the following events shall occur, which occurrence, in the sole judgment of
the Company and regardless of the circumstances (including any action by the
Company) giving rise to any such events, makes it inadvisable to proceed with
the Exchange Offer:
(i) there shall be threatened, instituted or pending any action or
proceeding before, or any injunction, order or decree shall have been
issued by, any court or governmental agency or other governmental
regulatory or administrative agency or commission (a) seeking to restrain
or prohibit the making or consummation of the Exchange Offer or any other
transaction contemplated by the Exchange Offer, or assessing or seeking any
damages as a result thereof or (b) resulting in a material delay in the
ability of the Company to accept for exchange or exchange some or all of
the Old Notes pursuant to the Exchange Offer or which, in the judgment of
the Company, might result in the holders of the New Notes having
obligations with respect to resales and transfers of New Notes that are
greater than those described in 'The Exchange Offer--Resales of the New
Notes' or which would otherwise in the judgment of the Company make it
inadvisable to proceed with the Exchange Offer; provided, however, that the
Company will use reasonable efforts to modify or amend the Exchange Offer
or to take such other reasonable steps in order to effectuate the Exchange
Offer;
(ii) any statute, rule, regulation, order or injunction shall be
sought, proposed, introduced, enacted, promulgated or deemed applicable to
the Exchange Offer or any of the transactions contemplated by the Exchange
Offer by any domestic or foreign government or governmental authority, or
any action shall have been taken, proposed or threatened by any domestic or
foreign government or governmental authority that. in the judgment of the
Company, might directly or indirectly result in any of the consequences
referred to in clauses (i)(a) or (i)(b) above or which, in the judgment of
the Company, might result in the holders of the New Notes having
obligations with respect to resales and transfers of New Notes that are
greater than those described in 'Resales of the New Notes' or which would
otherwise in the judgment of the Company make it inadvisable to proceed
with the Exchange Offer; provided, however, that the Company will use
reasonable efforts to modify or amend the Exchange Offer or to take such
other reasonable steps in order to effectuate the Exchange Offer;
(iii) there shall have occurred (a) a declaration of a banking
moratorium or any suspension of payments in respect of banks in the United
States or any limitation by any governmental agency or authority which
adversely affects the extension of credit or (b) a commencement of wars,
armed hostilities or other similar international calamity directly or
indirectly involving the United States, or, in the event any of the
foregoing exist at the time of the commencement of the Exchange Offer, a
material acceleration or worsening thereof;
(iv) any governmental approval has not been obtained, which approval
the Company shall, in its sole discretion, deem necessary for the
consummation of the Exchange Offer as contemplated hereby.
If the Company determines in its sole discretion that any of the conditions
set forth above are not satisfied, the Company may (i) refuse to accept any Old
Notes and return all tendered Old Notes to the tendering holders,
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(ii) extend the Exchange Offer and retain all Old Notes tendered prior to the
Expiration Date, subject however, to the rights of Eligible Holders to withdraw
such Old Notes as described in '--Withdrawal Rights,' or (iii) waive such
unsatisfied conditions with respect to the Exchange Offer and accept all validly
tendered Old Notes which have not been withdrawn. If such waiver constitutes a
material change to the Exchange Offer, the Company will promptly disclose such
waiver by means of a public announcement and a prospectus supplement that will
be distributed to the registered holders.
The Company expects that the foregoing conditions will be satisfied. The
foregoing conditions are for the sole benefit of the Company and may be waived
by the Company in whole or in part at any time and from time to time in its sole
discretion. The failure by the Company at any time to exercise any of the
foregoing rights shall not be deemed a waiver of such rights and each such right
shall be deemed an ongoing right which may be asserted at any time and from time
to time. Any determination by the Company concerning the events described above
will be final and binding upon all parties.
TERMINATION OF CERTAIN RIGHTS
The Registration Rights Agreement provides that, subject to certain
expectations, in the event of a Registration Default (as defined below),
Eligible Holders of Old Notes are entitled to receive Liquidated Damages of $.10
per week per $1,000 principal amount of Old Notes held by such holders. A
'Registration Default' with respect to the Exchange Offer shall occur if: (i)
the registration statement concerning the exchange offer (the 'Registration
Statement') has not been filed with the Commission on or prior to June 1, 1995;
or (ii) the Exchange Offer is not consummated by October 14, 1995; or (iii) the
Registration Statement or shelf registration statement required by the
Registration Rights Agreement is filed and declared effective but shall
thereafter cease to be effective without being succeeded within 30 days by an
additional registration statement filed and declared effective under the
Securities Act. Holders of New Notes will not be and, upon consummation of the
Exchange Offer, Eligible Holders of Old Notes will no longer be, entitled to (i)
the right to receive the Liquidated Damages or (ii) certain other rights under
the Registration Rights Agreement intended for holders of Transfer Restricted
Securities; provided, however, that an Eligible Holder of Old Notes who
reasonably determines and notifies the Company within 20 business days of the
consummation of the Exchange Offer that (i) such Eligible Holder is prohibited
by applicable law or Commission policy from participating in the Exchange Offer,
or (ii) that such Eligible Holder may not resell the New Notes acquired by it in
the Exchange Offer to the public without delivering a prospectus and that this
Prospectus is not appropriate or available for such resales by such Eligible
Holder, or (iii) that such Eligible Holder is a broker-dealer registered under
the Exchange Act and holds the Old Notes acquired directly from the Company or
one of its affiliates, subject to reasonable verification by the Company, will
retain the right to require the Company to file a shelf registration statement
pursuant to Rule 415 under the Securities Act solely for the benefit of such
Eligible Holder of Old Notes and will be entitled to receive the Liquidated
Damages following the occurrence of defined events of default in connection with
the filing of such shelf registration statement. The Exchange Offer shall be
deemed consummated upon the occurrence of the delivery by the Company to the
Registrar under the Indenture of New Notes in the same aggregate principal
amount as the aggregate principal amount of Old Notes that were tendered by
holders thereof pursuant to the Exchange Offer.
ACCRUED INTEREST ON THE OLD NOTES
The New Notes will bear interest at a rate equal to 10 7/8% per annum from
and including their date of issuance. Eligible Holders whose Old Notes are
accepted for exchange will have the right to receive interest accrued thereon
from the date of their original issuance or the last Interest Payment Date, as
applicable, to, but not including, the date of issuance of the New Notes, such
interest to be payable with the first interest payment on the New Notes.
Interest on the Old Notes accepted for exchange, which interest accrued at the
rate of 10 7/8% per annum, will cease to accrue on the day prior to the issuance
of the New Notes. See 'Description of New Notes-- Principal, Maturity and
Interest.'
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PROCEDURES FOR TENDERING OLD NOTES
The tender of an Eligible Holder's Old Notes as set forth below and the
acceptance thereof by the Company will constitute a binding agreement between
the tendering Eligible Holder and the Company upon the terms and subject to the
conditions set forth in this Prospectus and in the accompanying Letter of
Transmittal. Except as set forth below, an Eligible Holder who wishes to tender
Old Notes for exchange pursuant to the Exchange Offer must transmit such Old
Notes, together with a properly completed and duly executed Letter of
Transmittal, including all other documents required by such Letter of
Transmittal, to the Exchange Agent at the address set forth on the back cover
page of this Prospectus prior to 5:00 p.m., New York City time, on the
Expiration Date. THE METHOD OF DELIVERY OF OLD NOTES, LETTERS OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK OF THE ELIGIBLE HOLDER.
IF SUCH DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT REGISTERED MAIL, PROPERLY
INSURED, WITH RETURN RECEIPT REQUESTED, BE USED. INSTEAD OF DELIVERY BY MAIL, IT
IS RECOMMENDED THAT THE ELIGIBLE HOLDER USE AN OVERNIGHT OR HAND DELIVERY
SERVICE. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE TIMELY
DELIVERY.
Any financial institution that is a participant in DTC's Book-Entry
Transfer Facility system may make book-entry delivery of the Old Notes by
causing DTC to transfer such Old Notes into the Exchange Agent's account in
accordance with DTC's procedures for such transfer. In connection with a
book-entry transfer, a Letter of Transmittal need not be transmitted to the
Exchange Agent, provided that the book-entry transfer procedure must be complied
with prior to 5:00 p.m., New York City time, on the Expiration Date.
Each signature on a Letter of Transmittal or a notice of withdrawal, as the
case may be, must be guaranteed unless the Old Notes surrendered for exchange
pursuant hereto are tendered (i) by a registered holder of the Old Notes who has
not completed either the box entitled 'Special Exchange Instructions' or the box
entitled 'Special Delivery Instructions' in the Letter of Transmittal, or (ii)
by an Eligible Institution (as defined). In the event that a signature on a
Letter of Transmittal or a notice of withdrawal, as the case may be, is required
to be guaranteed, such guarantee must be by a firm which is a member of a
registered national securities exchange or the National Association of
Securities Dealers, Inc., a commercial bank or trust company having an office or
correspondent in the United States or otherwise be an 'eligible guarantor
institution' within the meaning of Rule 17Ad-15 under the Exchange Act
(collectively, 'Eligible Institutions'). If the Letter of Transmittal is signed
by a person other than the registered holder of the Old Notes, the Old Notes
surrendered for exchange must either (i) be endorsed by the registered holder,
with the signature thereon guaranteed by an Eligible Institution, or (ii) be
accompanied by a bond power, in satisfactory form as determined by the Company
in its sole discretion, duly executed by the registered holder, with the
signature thereon guaranteed by an Eligible Institution. The term 'registered
holder' as used herein with respect to the Old Notes means any person in whose
name the Old Notes are registered on the books of the Registrar.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance and withdrawal of Old Notes tendered for exchange will be
determined by the Company in its sole discretion, which determination shall be
final and binding. The Company reserves the absolute right to reject any and all
Old Notes not properly tendered and to reject any Old Notes the Company's
acceptance of which might, in the judgment of the Company or its counsel, be
unlawful. The Company also reserves the absolute right to waive any defects or
irregularities or conditions of the Exchange Offer as to particular Old Notes
either before or after the Expiration Date (including the right to waive the
ineligibility of any holder who seeks to tender Old Notes in the Exchange
Offer). The interpretation of the terms and Conditions of the Exchange Offer
(including the Letter of Transmittal and the instructions thereto) by the
Company shall be final and binding on all parties. Unless waived, any defects or
irregularities in connection with tenders of Old Notes for exchange must be
cured within such period of time as the Company shall determine. The Company
will use reasonable efforts to give notification of defects or irregularities
with respect to tenders of Old Notes for exchange but shall not incur any
liability for failure to give such notification. Tenders of the Old Notes will
not be deemed to have been made until such irregularities have been cured or
waived.
If any Letter of Transmittal, endorsement, bond power, power of attorney or
any other document required by the Letter of Transmittal is signed by a trustee,
executor, administrator, guardian, attorney-in-fact, officer of a
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corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and, unless waived by the Company,
proper evidence satisfactory to the Company, in its sole discretion, of such
person's authority to so act must be submitted.
Any beneficial owner of the Old Notes (a 'Beneficial Owner') whose Old
Notes are registered in the name of a broker, dealer, commercial bank, trust
company or other nominee and who wishes to tender Old Notes in the Exchange
Offer should contact such registered holder promptly and instruct such
registered holder to tender on such Beneficial Owner's behalf. If such
Beneficial Owner wishes to tender directly, such Beneficial Owner must, prior to
completing and executing the Letter of Transmittal and tendering Old Notes, make
appropriate arrangements to register ownership of the Old Notes in such
Beneficial Owner's name. Beneficial Owners should be aware that the transfer of
registered ownership may take considerable time.
By tendering, each registered holder will represent the to the Company
that, among other things (i) the New Notes to be acquired in connection with the
Exchange Offer by the Eligible Holder and each Beneficial Owner of the Old Notes
are being acquired by the Eligible Holder and each Beneficial Owner in the
ordinary course of business of the Eligible Holder and each Beneficial Owner,
(ii) the Eligible Holder and each Beneficial Owner are not participating, do not
intend to participate, and have no arrangement or understanding with any person
to participate, in the distribution of the New Notes, (iii) the Eligible Holder
and each Beneficial Owner acknowledge and agree that any person participating in
the Exchange Offer for the purpose of distributing the New Notes must comply
with the registration and prospectus delivery requirements of the Securities Act
in connection with a secondary resale transaction of the New Notes acquired by
such person and cannot rely on the position of the staff of the Commission set
forth in no-action letters that are discussed herein under 'Resales of New
Notes,' (iv) that if the Eligible Holder is a broker-dealer that acquired Old
Notes as a result of market-making or other trading activities, it will deliver
a prospectus in connection with any resale of New Notes acquired in the Exchange
Offer, (v) the Eligible Holder and each Beneficial Owner understand that a
secondary resale transaction described in clause (iii) above should be covered
by an effective registration statement containing the selling security holder
information required by Item 507 of Regulation S-K of the Commission, and (vi)
neither the Eligible Holder nor any Beneficial Owner is an 'affiliate,' as
defined under Rule 405 of the Securities Act, of the Company except as otherwise
disclosed to the Company in writing. In connection with a book-entry transfer,
each participant will confirm that it makes the representations and warranties
contained in the Letter of Transmittal.
GUARANTEED DELIVERY PROCEDURES
Eligible Holders who wish to tender their Old Notes and (i) whose Old Notes
are not immediately available or (ii) who cannot deliver their Old Notes or any
other documents required by the Letter of Transmittal to the Exchange Agent
prior to the Expiration Date (or complete the procedure for book-entry transfer
on a timely basis), may tender their Old Notes according to the guaranteed
delivery procedures set forth in the Letter of Transmittal. Pursuant to such
procedures: (i) such tender must be made by or through an Eligible Institution
and a Notice of Guaranteed Delivery (as defined in the Letter of Transmittal)
must be signed by such Eligible Holder, (ii) on or prior to the Expiration Date,
the Exchange Agent must have received from the Eligible Holder and the Eligible
Institution a properly completed and duly executed Notice of Guaranteed Delivery
(by facsimile transmission, mail or hand delivery) setting forth the name and
address of the Eligible Holder, the certificate number or numbers of the
tendered Old Notes, and the principal amount of tendered Old Notes, stating that
the tender is being made thereby and guaranteeing that, within four (4) business
days after the date of delivery of the Notice of Guaranteed Delivery, the
tendered Old Notes, a duly executed Letter of Transmittal and any other required
documents will be deposited by the Eligible Institution with the Exchange Agent,
and (iii) such properly completed and executed documents required by the Letter
of Transmittal and the tendered Old Notes in proper form for transfer (or
confirmation of a book-entry transfer of such Old Notes into the Exchange
Agent's account at DTC) must be received by the Exchange Agent within four (4)
business days after the Expiration Date. Any Eligible Holder who wishes to
tender Old Notes pursuant to the guaranteed delivery procedures described above
must ensure that the Exchange Agent receives the Notice of Guaranteed Delivery
and Letter of Transmittal relating to such Old Notes prior to 5:00 p.m., New
York City time, on the Expiration Date.
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ACCEPTANCE OF OLD NOTES FOR EXCHANGE; DELIVERY OF NEW NOTES
Upon satisfaction or waiver of all the conditions to the Exchange Offer,
the Company will accept any and all Old Notes that are properly tendered in the
Exchange Offer prior to 5:00 p.m., New York City time, on the Expiration Date.
The New Notes issued pursuant to the Exchange Offer will be delivered promptly
after acceptance of the Old Notes. For purposes of the Exchange Offer, the
Company shall be deemed to have accepted validly tendered Old Notes, when, as,
and if the Company has given oral or written notice thereof to the Exchange
Agent.
In all cases, issuances of New Notes for Old Notes that are accepted for
exchange pursuant to the Exchange Offer will be made only after timely receipt
by the Exchange Agent of such Old Notes, a properly completed and duly executed
Letter of Transmittal and all other required documents (or of confirmation of a
book-entry transfer of such Old Notes into the Exchange Agent's account at DTC);
provided, however, that the Company reserves the absolute right to waive any
defects or irregularities in the tender or conditions of the Exchange Offer. If
any tendered Old Notes are not accepted for any reason, such unaccepted Old
Notes will be returned without expense to the tendering Eligible Holder thereof
as promptly as practicable after the expiration or termination of the Exchange
Offer.
WITHDRAWAL RIGHTS
Tenders of the Old Notes may be withdrawn by delivery of a written notice
to the Exchange Agent, at its address set forth on the back cover page of this
Prospectus, at any time prior to 5:00 p.m., New York City time, on the
Expiration Date. Any such notice of withdrawal must (i) specify the name of the
person having deposited the Old Notes to be withdrawn (the 'Depositor'), (ii)
identify the Old Notes to be withdrawn (including the certificate number or
numbers and principal amount of such Old Notes, as applicable), (iii) be signed
by the Eligible Holder in the same manner as the original signature on the
Letter of Transmittal by which such Old Notes were tendered (including any
required signature guarantees) or be accompanied by a bond power in the name of
the person withdrawing the tender, in satisfactory form as determined by the
Company in its sole discretion, duly executed by the registered holder, with the
signature thereon guaranteed by an Eligible Institution together with the other
documents required upon transfer by the Indenture, and (iv) specify the name in
which such Old Notes are to be re-registered, if different from the Depositor,
pursuant to such documents of transfer. All questions as to the validity, form
and eligibility (including time of receipt) of such notices will be determined
by the Company, in its sole discretion. The Old Notes so withdrawn will be
deemed not to have been validly tendered for exchange for purposes of the
Exchange Offer. Any Old Notes which have been tendered for exchange but which
are withdrawn will be returned to the Eligible Holder thereof without cost to
such Eligible Holder as soon as practicable after withdrawal. Properly withdrawn
Old Notes may be retendered by following one of the procedures described under
'The Exchange Offer--Procedures for Tendering Old Notes' at any time on or prior
to the Expiration Date.
THE EXCHANGE AGENT; ASSISTANCE
First Fidelity Bank, National Association is the Exchange Agent. All
tendered Old Notes, executed Letters of Transmittal and other related documents
should be directed to the Exchange Agent. Questions and requests for assistance
and requests for additional copies of the Prospectus, the Letter of Transmittal
and other related documents should be addressed to the Exchange Agent as
follows:
By Hand, Registered or Certified Mail or Overnight Courier:
First Fidelity Bank, National Association
123 South Broad Street, 12th Floor
Philadelpia, Pennsylvania 19109
By Facsimile:
(215) 985-7290
Attention: John H. Clapham
Confirm by Telephone (215) 985-7157
26
<PAGE>
FEES AND EXPENSES
All expenses incident to the Company's consummation of the Exchange Offer
and compliance with the Registration Rights Agreement will be borne by the
Company or the Guarantors, including without limitation: (i) all registration
and filing fees and expenses (including filings made with the National
Association of Securities Dealers, Inc., (including, if applicable, the fees and
expenses of any 'qualified independent underwriter' and its counsel, as may be
required by the rules and regulations of the National Association of Securities
Dealers, Inc.)), (ii) all fees and expenses of compliance with federal
securities or state or other jurisdictions, Blue Sky or securities laws, (iii)
all expenses of printing (including printing certificates for the New Notes and
prospectuses), messenger and delivery services and telephone, (iv) all fees and
disbursements of counsel for the Company and the Guarantors and the fees of one
counsel for the Initial Purchasers with respect to the Registration Statement
and any shelf registration statement, (v) all application and filing fees in the
event the Notes are listed on a national securities exchange or automated
quotation system, and (vi) all fees and disbursements of independent certified
public accountants of the Company and the Guarantors (including the expenses of
any special audit and comfort letters required by or incident to such
performance).
The Company will, in any event, bear its and the Guarantors' internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expense of
any annual audit, and the fees and expenses of any person, including special
experts, retained by the Company.
The Company has not retained any dealer-manager in connection with the
Exchange Offer and will not make any payments to brokers, dealers or others
soliciting acceptance of the Exchange Offer. The Company, however, will pay the
Exchange Agent reasonable and customary fees for its services and will reimburse
it for its reasonable out-of-pocket expenses in connection therewith.
The Company will pay all transfer taxes, if any, applicable to the exchange
of Old Notes pursuant to the Exchange Offer. If, however, a transfer tax is
imposed for any reason other than the exchange of Old Notes pursuant to the
Exchange Offer, then the amount of any such transfer taxes (whether imposed on
the registered holder or any other persons) will be payable by the tendering
holder. If satisfactory evidence of payment of such taxes or exemption is not
submitted with the Letter of Transmittal, the amount of such transfer taxes will
be billed directly to such tendering holder.
ACCOUNTING TREATMENT
The New Notes will be recorded at the same carrying value as the Old Notes,
as reflected in the Company's accounting records on the date of the exchange.
Accordingly, no gain or loss will be recognized by the Company for accounting
purposes. The expenses of the Exchange Offer will be amortized over the term of
the New Notes.
RESALES OF THE NEW NOTES
Based on an interpretation by the staff of the Commission set forth in
no-action letters issued to third parties, the Company believes that the New
Notes issued pursuant to the Exchange Offer to an Eligible Holder in exchange
for Old Notes may be offered for resale, resold and otherwise transferred by
such Eligible Holder (other than (i) a broker-dealer who purchased Old Notes
directly from the Company for resale pursuant to Rule 144A under the Securities
Act or any other available exemption under the Securities Act, or (ii) a person
that is an affiliate of the Company within the meaning of Rule 405 under the
Securities Act) without compliance with the registration and prospectus delivery
provisions of the Securities Act, provided that the Eligible Holder is acquiring
the New Notes in the ordinary course of business and is not participating, and
has no arrangement or understanding with any person to participate, in the
distribution of the New Notes. However, if any Eligible Holder acquires New
Notes in the Exchange Offer for the purpose of distributing or participating in
a distribution of the New Notes, such Eligible Holder cannot rely on the
position of the staff of the Commission enunciated in Morgan Stanley & Co.,
Incorporated (available June 5, 1991) and Exxon Capital Holdings Corporation
(available April 13, 1989), or interpreted in the Commission's letter to
Shearman and Sterling (available July 2, 1993), or similar no-action or
interpretive letters and must comply with the registration and prospectus
delivery requirements of the Securities Act in connection with a secondary
resale transaction, unless an exemption from reason is otherwise available. Each
broker-dealer that receives New Notes for its own amount in exchange for
27
<PAGE>
Old Notes, where such Old Notes were acquired by such broker-dealer as a result
of market-making or other trading activities, must acknowledge that it will
deliver a prospectus in connection with any resale of such New Notes. See 'Plan
of Distribution.'
CAPITALIZATION
The following table sets forth the cash position and capitalization of the
Company at December 31, 1994 as adjusted to reflect the Company's issuance of
the Old Notes.
<TABLE>
<CAPTION>
DECEMBER 31,
1994
--------------
AS ADJUSTED
FOR THE
OFFERING
--------------
(IN THOUSANDS)
<S> <C>
Cash, cash equivalents and marketable securities.................................................. $ 239,398
--------------
--------------
Long-term debt, including current portion:
Existing debt................................................................................... $ 8,950
Old Notes....................................................................................... 150,000
--------------
Total long-term debt, including current portion................................................. 158,950
--------------
Stockholders' equity:
Preferred Stock: no par value; 10,000,000 shares authorized; no Preferred Shares issued and
outstanding at December 31, 1994............................................................. --
Common Stock: $0.005 par value; 60,000,000 shares authorized; 18,182,400 shares issued and
outstanding at December 31, 1994 (1)......................................................... 91
Unrealized loss on marketable securities.......................................................... (804)
Additional paid-in capital........................................................................ 112,476
Retained earnings................................................................................. 44,304
--------------
Total stockholders' equity................................................................... 156,067
--------------
Total capitalization......................................................................... $ 315,017
--------------
--------------
</TABLE>
- ------------------
(1) Does not reflect the effects of a three-for-two common stock split, which
was paid on May 19, 1995.
28
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
The selected consolidated financial data presented below as of March 31,
1993 and 1994 have been derived from the Company's consolidated financial
statements, which have been audited by Arthur Andersen LLP independent public
accountants. The consolidated balance sheets as of March 31, 1993 and 1994 and
the related consolidated statements of operations, stockholders' equity and cash
flows for each of the years in the three-year period ended March 31, 1994 and
the report thereon are included elsewhere in this Prospectus. The selected
consolidated financial data presented below as of and for the nine months ended
December 31, 1993 and 1994, are derived from the Company's unaudited
consolidated financial statements included elsewhere in this Prospectus. In
management's opinion, the Company's unaudited consolidated financial statements
as of and for the nine months ended December 31, 1993 and 1994 include all
adjustments (consisting of normal recurring adjustments) necessary for a fair
presentation. The data presented below should be read in conjunction with
'Management's Discussion and Analysis of Financial Condition and Results of
Operations,' the Historical Consolidated Financial Statements and the notes
thereto and other financial information appearing elsewhere in this Prospectus.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED MARCH 31, DECEMBER 31,
------------------------------ -------------------------
1993 1994 1993 1994
-------------- -------------- --------- --------------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
STATEMENTS OF OPERATIONS DATA:
Revenues:
Casino............................................. $ 4,606 $ 95,873 $ 54,912 $ 155,418
Food and beverage.................................. 546 5,314 3,134 5,848
Other.............................................. 577 5,895 3,790 4,583
-------------- -------------- --------- --------------
Total Revenues................................... 5,729 107,082 61,836 165,849
-------------- -------------- --------- --------------
Costs and Expenses:
Casino............................................. 2,177 35,115 21,043 54,199
Food and beverage.................................. 505 5,076 3,270 5,570
Other gaming related and general costs............. 1,712 23,666 13,259 36,149
Corporate administrative expenses.................. -- 2,675 1,542 5,416
Pre-opening and gaming development costs........... 4,995 7,026 4,727 5,463
Depreciation and amortization...................... 180 3,768 1,625 5,209
Compensation expense in connection with non-
employee director options........................ -- 1,803 1,352 --
Stock compensation in connection with employment
contracts........................................ -- 1,065 1,065 --
-------------- -------------- --------- --------------
Total costs and expenses......................... 9,569 80,194 47,883 112,006
-------------- -------------- --------- --------------
Income (loss) from continuing operations before other
income (expense) and provision for income taxes.... (3,840) 26,888 13,953 53,843
Other Income (Expense):
Interest income.................................... 6 1,623 1,126 2,333
Other income, net.................................. -- 83 78 301
Interest expense................................... (274) (887) (768) (506)
-------------- -------------- --------- --------------
(268) 819 436 2,128
Income (loss) from continuing operations before
provision for income taxes......................... (4,108) 27,707 14,389 55,971
Provision for income taxes........................... 34 10,255 5,024 20,645
Income (loss) from continuing operations............. (4,142) 17,452 9,365 35,326
Loss associated with discontinued operations......... (7,031) -- -- --
Cumulative effect of change in accounting
principle.......................................... -- 3,500 3,500 --
-------------- -------------- --------- --------------
Net income (loss).................................... $ (11,173) $ 20,952 $ 12,865 $ 35,326
-------------- -------------- --------- --------------
-------------- -------------- --------- --------------
AS OF DECEMBER 31, 1994
-------------------------
AS ADJUSTED
AS OF AS OF FOR
MARCH 31, 1993 MARCH 31, 1994 ACTUAL THE OFFERING
-------------- -------------- --------- --------------
BALANCE SHEET DATA:
Cash, cash equivalents and marketable securities... $ 8,791 $ 77,546 $ 94,398 $ 239,398
Total assets....................................... 26,542 138,565 183,056 328,056
Long-term debt, including current portion.......... 17,648 5,865 8,950 158,950
Total stockholders' equity (deficit)............... (86) 114,041 156,057 156,057
</TABLE>
29
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
GENERAL
The Company currently owns and operates one riverboat casino in Metropolis,
Illinois, which commenced operations on February 23, 1993, and two riverboat
casinos in Lake Charles, Louisiana, the Players Riverboat Casino, which
commenced operations on December 8, 1993, and the Lake Charles Star Riverboat,
which commenced operations on April 27, 1995, and has plans to develop future
casino complexes. The Company also operates a horse racetrack in Paducah,
Kentucky. The Company's expansion plans include the Lake Charles Complex
Expansion, which began with the opening of the Lake Charles Star Riverboat, the
Players Island Resort, which is expected to open in the Summer of 1995, and the
Maryland Heights Project, which has a targeted Summer 1996 opening, subject to
receipt of all necessary approvals.
In May 1993, the Board of Directors of the Company approved a plan that
discontinued the marketing of various services and products relating to the
gaming, travel and entertainment industries. The discontinued businesses include
Players Club and its related travel services, Players World Travel, the 900 Game
Show Network ('900 Network') and International Gaming Promotions, which promoted
and marketed tournaments at gaming destinations. As a result, the Company has
restated, effective as of May 1993, the financial statements previously reported
to reclassify the classification of all prior operations, except for those
relating to casino operations and its Kentucky racetrack, as discontinued
operations. Accordingly, a reserve for loss on disposition of discontinued
operations was established to offset any potential losses from these activities.
Management considers the reserve to be adequate in amount. (See Note 2 of the
Notes to Consolidated Financial Statements.)
LIQUIDITY AND CAPITAL RESOURCES
For the nine months ended December 31, 1994, the Company generated $40.6
million in cash from its operating activities as compared to $18.2 million for
the same period of the prior year. The operation of two riverboat facilities for
the entire nine months ended December 31, 1994 as compared to one facility for
the majority of the prior year period accounted for the improvement in cash
generated by operating activities. As of December 31, 1994, the Company had
$94.4 million in cash and cash equivalents and marketable investment grade debt
securities as compared to $77.5 million as of March 31, 1994.
The Company is pursuing the development or acquisition of additional gaming
and entertainment facilities which will require extensive amounts of capital.
Based on the projects currently under development, the Company estimates that it
could spend approximately $250 million over the next twelve months. The Company
expects to fund these expenditures with (i) cash on hand, (ii) net proceeds from
the Offering, (iii) cash flow from operations and, if needed, (iv) drawings
available under the Bank Facility currently being negotiated.
In June 1994, the Company acquired land to construct and operate a new
casino resort in Mesquite, Nevada. The Company acquired approximately 45 acres
of land and an option to acquire an additional 90 acres for total consideration
of $12.5 million, comprised of $5.1 million in cash, $4.2 million of the
Company's Common Stock and a $3.2 million note, which is payable when the
Players Island Resort opens. The estimated cost of the Players Island Resort,
including land acquisition costs and costs of developing a golf course as part
of these facilities, is approximately $75 to $80 million. Through December 31,
1994, including the land acquisition costs described above, the Company had
invested approximately $23 million for the Players Island Resort. The Company
expects to spend up to an additional $57 million, including approximately $17
million during the fourth quarter of fiscal 1995 and up to an additional
approximately $40 million during fiscal 1996, to complete the Players Island
Resort.
In addition to the Players Island Resort, the Company expects to spend
approximately $110 million for the Lake Charles Complex Expansion. Of this $110
million, the Company invested $52 million between December 31, 1994 and March
31, 1995 and expects to spend the remainder of such amount by the Spring of
1996.
The Company entered into a letter of intent with Promus on March 3, 1995 to
co-develop a $200 million riverboat casino entertainment complex in Maryland
Heights, Missouri. The joint venture contemplates that each partner will own and
operate its own riverboat casino pursuant to separate gaming licenses but will
share equally
30
<PAGE>
in the costs of development of, as well as any profit or loss associated with
the operation of the shoreside facility. The Company's share of the Maryland
Heights Project will require an approximately $100 million investment, including
the building of the Company's riverboat casino, investment in independently
owned facilities and investment in the joint venture that will develop the
entertainment complex, parking facility and docking area. Assuming completion of
this project in the Summer of 1996, the Company anticipates investing
approximately $40 million in its riverboat casino and other independently owned
facilities and investing approximately $60 million in the joint venture.
In order to maintain its market position, the Company intends to invest up
to $10 million for additional amenities, attractions and riverfront parking at
the Metropolis Complex. As part of this program, the Company intends to
integrate in the Metropolis Complex the Company's island resort theme which will
be featured at the Players Island Resort. It is anticipated that the amenities
and attractions will be completed prior to the opening of the competing
Evansville, Indiana riverboat in the Summer of 1995.
The Company has obtained from two major banks a commitment letter for the
Bank Facility, a six-year $120 million facility which will be available for
general corporate purposes. The information set forth in the Prospectus relating
to the Bank Facility does not purport to be complete and is qualified in its
entirety by reference to the documents to be entered into in connection
therewith. Certain aspects of the Bank Facility are subject to required gaming
regulatory approval. See 'Regulatory Matters--Certain Required Approvals
Associated with the Bank Facility.' The Bank Facility will be a revolving line
of credit for the first two years after its closing (the 'Bank Closing'). Unless
extended, the Bank Facility will convert to a reducing revolver two years after
the Bank Closing. Upon conversion, availability under the Bank Facility will
decline to zero in eight equal, semi-annual amounts. Obligations outstanding
under the Bank Facility will be secured by a first priority lien on all real and
personal property related to gaming operations conducted at the Company's
Mesquite, Metropolis and Lake Charles operations, including, without limitation,
all vessels, barges, leasehold interests, gaming equipment and fixtures. The
Bank Facility will also contain a negative pledge of all assets of the Company
and its subsidiaries. The Bank Facility will be guaranteed by the Company's
existing subsidiaries and any subsidiary organized or acquired during the term
of the Bank Facility which has a book value or fair market value in excess of $1
million (the 'Bank Guarantors'). The Company also will pledge the stock of each
of the Bank Guarantors.
The Bank Facility will require the ongoing satisfaction of certain
financial performance criteria, including a minimum fixed charge coverage ratio,
minimum EBITDA, minimum consolidated tangible net worth and maximum total
indebtedness, and will contain restrictions on new investments or capital
expenditures in excess of $75 million. Certain covenants that are presently
contemplated for the Bank Facility would limit the Company's incurrence of
indebtedness. After giving effect to the Offering, Company indebtedness at
February 28, 1995 and the operation of such covenants, approximately $66 million
would be available for borrowing under the Bank Facility. The Bank Facility will
also contain covenants and provisions limiting acquisitions, mergers, stock
repurchases, affiliate transactions and asset sales and dispositions, including
(i) a prohibition on outside dividends, distributions, loans or advances by the
Company and the Bank Guarantors, (ii) limitations on repurchases of the
Company's Common Stock, and (iii) limitations on secured indebtedness. The Bank
Facility will be available for general purposes, including development
activities. The consummation of the Bank Facility is subject to the negotiation
of definitive loan documentation, receipt of gaming regulatory approvals and
other customary conditions.
On July 19, 1994, the Company announced that its Board of Directors had
authorized the repurchase of up to $20 million of the Company's Common Stock
from time to time on the open market. Management is authorized to pursue such
repurchases in the event such uses of funds do not interfere with the Company's
ability to undertake future gaming projects. Through the date of this
Memorandum, no such purchases have been made. Any such repurchases would be
subject to the limitations on restricted payments under the Indenture. See
'Description of New Notes--Certain Covenants--Limitation on Restricted
Payments.'
The Company does not expect the impact of inflation to have a material
adverse effect on its operations. In Metropolis, revenues and profits are higher
in the summer months than in the winter months. Various outside factors,
including the construction of the fourth deck on the Players Lake Charles
Riverboat during the third
31
<PAGE>
quarter of fiscal 1994, have prevented the Company from determining seasonal
variations in revenues and profits for that facility.
RESULTS OF CONTINUING OPERATIONS
NINE MONTHS ENDED DECEMBER 31, 1994 AND 1993
Consolidated revenues of $165.8 million for the nine months ended December
31, 1994 increased as compared to $61.8 million for the same period of the prior
year. This increase was due primarily to the Players Lake Charles Riverboat,
which opened on December 8, 1993 and was in operation for nine full months as
compared to only 24 days during the comparable period of the prior year. Net
gaming revenues for the Metropolis riverboat improved to $55.3 million for the
nine months ended December 31, 1994 as compared to $49.8 million for the same
period of the prior year. An improvement in net gaming revenues of 11% for the
nine months ended December 31, 1994 as compared to the prior year more than
offset an expected decline in admission revenues. The Players Lake Charles
Riverboat generated net gaming revenues of $100.1 million for the nine months
ended December 31, 1994 as compared to $5.1 million in revenues for its first 24
days of operation in December 1993.
For the nine months ended December 31, 1994, consolidated operating costs
and expenses increased to $112.0 million as compared to $47.9 million for the
comparable period of the prior year. Increases in operating costs and expenses
reflect the operation of two riverboat facilities for the entire nine months
ended December 31, 1994, as compared to the operation of only the Metropolis
facility for the majority of the time during the prior year period.
For the nine months ended December 31, 1994, the Company recorded corporate
administrative expenses of $5.4 million compared to $1.5 million for the
comparable period of the prior year. The increase for both periods was primarily
related to staff expansion, the reassignment of personnel who were previously
charged to the operating properties, and additional administrative activities
associated with the operation of two riverboat facilities as compared to one
facility for most of the prior year period.
For the nine months ended December 31, 1994, the Company reported
pre-opening expenses of $999,000 as compared to $4.2 million for the comparable
period of the prior year. The figure for the nine months ended December 31, 1994
includes only those pre-opening costs incurred through such date for the Players
Island Resort, while the prior year period included the majority of the Lake
Charles pre-opening costs. Development costs totaled $4.5 million for the nine
months ended December 31, 1994 compared to $572,000 for the nine months ended
December 31, 1993. The increase is primarily the result of the Company's pursuit
of gaming opportunities in new jurisdictions, primarily Evansville, Indiana and
Maryland Heights, Missouri.
For the nine months ended December 31, 1994 and 1993, the Company reported
other income of $2.1 million and $436,000, respectively. The increase in other
income for the period is primarily attributable to an increase in interest from
the Company's investment in marketable investment grade debt securities. The
Company had $73.2 million in marketable investment grade debt securities at
December 31, 1994 and recorded interest income of $2.3 million for the nine
months ended thereon, as compared to interest income of $1.1 million for the
period ended December 31, 1993.
Provision for income taxes for the nine months ended December 31, 1994 was
$20.6 million, an effective net tax rate of 37% covering both state and Federal
taxes.
The Company reported consolidated net income of $35.3 million, or $1.71 per
share ($1.70 per share fully diluted) for the nine months ended December 31,
1994. For the nine months ended December 31, 1993, the Company reported
consolidated net income of $12.9 million, or $.70 per share ($.68 per share
fully diluted).
RESULTS OF CONTINUING OPERATIONS
TWELVE MONTHS ENDED MARCH 31, 1994
The Company had combined casino net gaming revenues of $95.9 million for
fiscal 1994, of which $65.2 million and $30.7 million were attributable to the
Metropolis and Lake Charles operations, respectively.
32
<PAGE>
Food, beverage and other revenues totaled $11.2 million for fiscal 1994.
Included in other revenues for fiscal 1994 were admission revenues, inclusive of
both properties, of $4.1 million.
Casino expenses for fiscal 1994 were $35.1 million, of which $25.1 million
and $10.0 million related to the Metropolis and Lake Charles riverboat
operations, respectively. These expenses include state gaming taxes of $13
million and $5.7 million for the Metropolis and Lake Charles operations,
respectively, and all costs of operating the casino such as gaming and cage
personnel, security and surveillance and complimentaries. Total casino expenses
were 37% of casino revenues and 33% of total revenues.
Food and beverage expenses totaled $5.1 million for fiscal 1994, or 96% of
related food and beverage revenues. These expenses include the cost of food and
beverages sold as well as labor and all costs associated with this line of
business.
Other gaming related costs for fiscal 1994 were $23.7 million. Included in
these costs are admission expenses of $4.1 million. Admission expenses include
certain state and municipal taxes of $2.5 million and $1 million for the
Metropolis and Lake Charles operations, respectively. Also included in this
category are marketing, boat operating and administrative costs.
Corporate administrative expenses totaled $2.7 million for fiscal 1994, and
included the costs of establishing the Company's interim corporate offices in
Lake Charles, Louisiana and staff expansion to support the development of
additional gaming and entertainment operations.
During fiscal 1994, pre-opening costs totaled $4.2 million, primarily
representing costs relating to the opening of the Players Lake Charles Riverboat
facility. Development costs totaled $2.8 million in fiscal 1994 and were
primarily related to the Company's pursuit of gaming opportunities in new
jurisdictions. All pre-opening and gaming development costs are expensed as they
are incurred except for those relating to fixed assets and payments for options
to acquire property, which are capitalized.
Depreciation and amortization for fiscal 1994 was $3.8 million. The Company
commenced its depreciation and amortization of assets employed in its continuing
operations on February 23, 1993.
Compensation expense in connection with non-employee directors' options
reflects the difference between the per share exercise price of $9.375 and the
fair market value per share of $17.50 on August 9, 1993, the date when the
Company's Board of Directors determined that the performance goal of fiscal 1994
had been exceeded by a substantial amount, with respect to 221,918 options held
by non-employee directors. The Company recorded $1.8 million in compensation
expense related to these option grants in fiscal 1994.
Stock compensation in connection with employment contracts is the value of
60,000 shares of Common Stock given to two new senior executives in connection
with the signing of their employment contracts. The value is based on $17.75 per
share, which was the market price on the date of the agreements. The full value
of the shares, $1.1 million, is included in compensation expense in fiscal 1994.
Interest income for fiscal 1994 was $1.6 million, primarily from the
Company's investment in investment grade marketable securities. At March 31,
1994, the Company had $63.6 million invested in these securities.
Interest expense for fiscal 1994 was $887,000. The costs include interest
on the $7.0 million in bank and commercial debt that was repaid in July 1993 and
on $5.9 million of remaining debt which is principally related to the Metropolis
riverboat ship's mortgage.
Provision for income taxes for fiscal 1994 of $10.3 million was recorded
based on an effective net tax rate of 37.0% covering both state and Federal
taxes.
Effective April 1, 1993, the Company adopted FASB Statement No. 109 as
required by the Financial Accounting Standards Board ('FASB'). As a result, the
Company recorded a deferred tax asset, net of reserves, of $3.5 million and a
corresponding credit to income in the same amount. At March 31, 1994, the
Company had a deferred tax asset, net of reserves, of $5 million. During fiscal
1994, the Company realized a benefit of $1.1 million as a result of the deferred
tax asset.
Consolidated net income for fiscal 1994 was $21 million, or $1.10 per share
($1.09 per share fully diluted).
33
<PAGE>
UNAUDITED QUARTERLY RESULTS; SEASONALITY
Set forth below are selected statements of operations data for the last
eight fiscal quarters, which represent all of the periods during which the
Company conducted gaming operations. In management's opinion, the results
depicted below have been prepared on the same basis as the audited financial
statements contained herein and include all adjustments, consisting of normal
recurring adjustments, necessary for a fair presentation of the information for
the periods presented when read in conjunction with the Historical Consolidated
Financial Statements and notes thereto contained elsewhere herein. Results of
operations are somewhat seasonal in nature with relatively greater revenues and
net income earned in the second and third quarters of each fiscal year as
compared to the first and fourth quarters of each fiscal year. Results of
operations for any fiscal quarter are not necessarily indicative of results for
any future period.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
-----------------------------------------------------------------------------------------
MAR. 31,(1) JUNE 30, SEP. 30, DEC. 31, MAR. 31, JUNE 30, SEP. 30,
1993 1993 1993 1993 1994 1994 1994
----------- ----------- ----------- ----------- ----------- ----------- -----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
Net gaming revenue:
Lake Charles, Louisiana....... (2) (2) (2) $ 5,115(2) $ 25,622 $ 27,418 $ 35,449
Metropolis, Illinois.......... $ 4,608 $ 15,709 $ 18,208 $ 15,880 $ 15,339 $ 17,279 $ 19,827
Total Revenues.................. $ 5,729 $ 18,310 $ 20,255 $ 23,271 $ 45,246 $ 48,326 $ 58,858
Adjusted EBITDA(3).............. $ 1,335 $ 7,172 $ 7,552 $ 7,426 $ 15,509 $ 17,509 $ 22,829
Income (loss) from operations
before other income (expense)
and provision for income
taxes......................... $ (3,430) $ 5,256 $ 5,175 $ 3,522 $ 12,935 $ 15,745 $ 20,907
Net income...................... $ (3,732) $ 6,397 $ 3,965 $ 2,503 $ 8,087 $ 10,441 $ 13,310
<CAPTION>
DEC. 31,
1994
-----------
Net gaming revenue:
Lake Charles, Louisiana....... $ 37,262
Metropolis, Illinois.......... $ 18,184
Total Revenues.................. $ 58,665
Adjusted EBITDA(3).............. $ 19,713
Income (loss) from operations
before other income (expense)
and provision for income
taxes......................... $ 17,190
Net income...................... $ 11,575
<CAPTION>
</TABLE>
(1) Includes the first 36 days of results for the Metropolis operation and
excludes results from discontinued operations.
(2) The Players Lake Charles Riverboat did not commence operations until
December 8, 1993.
(3) For an explanation of Adjusted EBITDA, see Note 4 to 'Summary Historical
Consolidated Financial Data.'
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BUSINESS
GENERAL
Players International, Inc. is a multi-jurisdictional gaming company which
owns and operates the Metropolis Complex in Metropolis, Illinois and two
riverboat casinos in Lake Charles, Louisiana, the Players Lake Charles Riverboat
and the Lake Charles Star Riverboat. The Metropolis Complex, which is the only
riverboat operating in Southern Illinois and is one of only ten statutorily
authorized Illinois licensees, commenced operations in February 1993 and has
successfully marketed to patrons of its target markets in Illinois, Indiana,
Kentucky, Missouri and Tennessee. The Players Lake Charles Riverboat, which
serves the large Houston gaming market and is one of the highest revenue
producing riverboat casinos in the United States, commenced operations in
December 1993. The Lake Charles Star Riverboat commenced operations in April
1995. For the latest twelve months ended December 31, 1994, the Company
generated net revenues of $211.1 million and Adjusted EBITDA of $75.6 million.
The Company plans to expand existing operations as well as to develop and
construct two new casino entertainment facilities. The first of these projects
is the Lake Charles Complex Expansion, an approximately $110 million expansion
of its successful Lake Charles operation, which has operated at or near capacity
on weekends and holidays. This multi-phase project includes the recently
completed purchase of the Showboat Star Casino riverboat, which in April 1995
opened in Lake Charles as the Lake Charles Star Riverboat. In addition, the
Company is party to an agreement pursuant to which it expects to purchase
shortly the Players Hotel and related property currently under lease in Lake
Charles. Following such purchase, the Company expects to reconstruct or
substantially improve and expand the hotel and construct an entertainment barge
and a multi-story parking garage. These efforts are being undertaken in order to
offer the equivalent of dockside gaming, expand capacity and strengthen the
Company's market position in Lake Charles in response to and in anticipation of
competition in this market.
In addition to the Lake Charles Complex Expansion, the Company is
completing the construction of the Players Island Resort, its first land-based
casino, in Mesquite, Nevada. This resort will feature a fully contained island
resort environment. The Players Island Resort is scheduled to open in the Summer
of 1995, subject to the receipt of all gaming and other regulatory approvals,
and is expected to cost between $75 and $80 million.
The Company also recently entered into a letter of intent to form a joint
venture with Promus to co-develop a $200 million two riverboat casino
entertainment complex in Maryland Heights, Missouri, which will contain a total
of 100,000 square feet of gaming space. The Company and Promus individually have
been endorsed by the City of Maryland Heights for separate riverboat projects.
The Company and Promus expect to begin construction with an opening targeted for
the Summer of 1996, subject to the receipt of all necessary gaming and other
approvals for the joint development project. The Company also plans a $10
million improvement program for its Metropolis Complex, including integration of
the Company's island resort theme featured at the Players Island Resort, as well
as the expansion of food and entertainment facilities and riverfront parking at
the Metropolis Complex.
The Company's principal executive office is located at 3900 Paradise Road,
Suite 135, Las Vegas, Nevada 89109 (Telephone: 702-792-9998).
BUSINESS STRATEGY
The Company's business strategy, which has been successfully implemented at
its existing operations, emphasizes providing customers with a high quality
entertainment experience, with particular emphasis on customer service. The
Company targets sites that are conveniently located near frequently traveled
interstate highways, and which have easy access and ample parking, in order to
attract local patronage and repeat visitors. The Company's strategy in
developing and constructing facilities is to create a destination complex which
provides a total entertainment experience rather than merely casino gaming.
The Company employs a disciplined development philosophy consisting of the
following principal components: (i) a thorough analysis of demographic,
regulatory, competitive and other factors to identify niche markets or markets
where the Company believes it will have a dominant position; (ii) the
maintenance of
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<PAGE>
adequate financial resources to enable the Company to respond quickly to
development opportunities in existing and new jurisdictions; (iii) the
investment of significant capital and other resources only after a determination
has been made that a project is attractive and (iv) the development of themed
projects with a high entertainment component that can be completed in a
desirable time frame. The successful implementation of this philosophy is
evidenced by the Company's development record and its existing facilities at
Metropolis and Lake Charles, both of which were developed on-time and on-budget.
MARKETING
The Company's marketing strategy at its existing facilities focuses on
middle-income customers who live within a 200 mile radius of each of the
Company's facilities. The Company continuously evaluates the results of its
marketing efforts to focus on programs that maximize the Company's return on its
marketing budget. The Company implements this strategy through the use of
database marketing, on-site marketing and bus programs. Through its proprietary
database of gaming enthusiasts, the Company targets gaming customers through
frequent mailings promoting visits to its casino facilities. In addition, the
Company employs on-site marketing techniques including the use of player
tracking systems, slot clubs and preferred player hosts to identify and service
patrons. To attract additional patronage during non-peak hours, the Company
utilizes bus tours which are organized through the Company's direct relationship
with tour operators.
METROPOLIS OPERATIONS
The Company's Metropolis Complex, which has been operational since February
23, 1993, is the only riverboat operating in Southern Illinois and has one of a
current maximum of ten statutorily authorized gaming licenses in the state. The
Metropolis riverboat is a four deck, air conditioned replica of a turn of the
century side-wheeler riverboat. The fully-equipped Las Vegas style casino
features over 20,000 square feet of gaming space, with 675 slot machines and 43
table games, for a total of approximately 1,011 of the 1,200 gaming positions
authorized by statute. The Metropolis Complex also includes a docking site known
as 'Merv Griffin's Landing,' which features a bar and grill, a restaurant,
meeting rooms and a gift shop. As part of its plan to offer non-gaming amenities
in Metropolis, the Company acquired a 12 1/2% interest in a joint venture that
built a 120-room hotel adjacent to its Metropolis dock site. The hotel was
opened in March 1994. The Company is entitled to a discounted rate for rooms
used for casino guests and employees. The Company also leases, under a ten year
agreement, a 350-seat cabaret style theater adjacent to the hotel, which is not
in active operation but is available for use in special events and promotions.
The rental payment for this lease is $3,000 per month.
To date, the Metropolis operation's closest gaming competitor operates in
the St. Louis, Missouri area, which is approximately three hours away by car.
The Company expects competing riverboat casinos to open in the next 12 months at
two locations in Southern Missouri and at one location in Southern Indiana. In
order to maintain its market position in light of potential increased
competition, the Company intends to invest up to $10 million for additional
amenities, attractions and riverfront parking. As part of this program, the
Company intends to integrate in the Metropolis Complex the Company's island
resort theme which will be featured at the Players Island Resort, and to expand
its food and entertainment facilities at the Metropolis Complex.
The docking site at Metropolis, named 'Merv Griffin's Landing,' consists of
three permanently moored barges and related structures. One barge, with a total
area of approximately 15,000 square feet on three levels, houses Merv Griffin's
Bar and Grill and the Celebrity Buffet restaurant, as well as meeting rooms. The
dining facilities have the capacity to seat 600 people. The second barge is
approximately 12,000 square feet in size and contains the ticketing area, a gift
shop, waiting areas and restrooms. A special VIP lounge was added recently to
this barge. A third barge is approximately 15,000 square feet and is used as a
queuing area for patrons prior to boarding the riverboat casino. A deli and bar
have been added on this barge for patron convenience. The docking site is
approximately three miles from U.S. Interstate 24, a major highway through
Illinois, Kentucky and Tennessee. The landing is within easy walking distance to
over 1,000 free automobile and bus parking spaces provided by the Company.
Although Illinois law requires persons who enter the casino to be at least 21
years of age, the restaurants and gift shop are open to everyone.
Metropolis, Illinois is near the Southern tip of Illinois on the Ohio River
across from Paducah, Kentucky, approximately 40 miles from the junction of the
Ohio and Mississippi Rivers. Metropolis, with an approximate
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<PAGE>
population of 7,000, is approximately 150 miles northwest of Nashville, 160
miles southeast of St. Louis and 160 miles northeast of Memphis. The primary
market area targeted by the Company for its Metropolis riverboat includes
Bowling Green, Louisville and Owensboro, Kentucky; Cape Girardeau, Missouri;
Clarksville, Hopkinsville and Nashville, Tennessee; Evansville, Indiana; and two
military bases in Kentucky, Fort Campbell and Fort Knox. Regional attractions in
the area include Fort Massac State Park, Shawnee National Forest, Cave-In-Rock
State Park, Land Between the Lakes, and Crab Orchard and Rend Lakes.
The Metropolis riverboat departs from its landing for eight cruises daily,
commencing at 9:00 a.m., with an additional midnight cruise on Friday and
Saturday. This schedule may be varied, based on experience and seasonal factors.
The Company adds a midweek midnight cruise during the summer. There is an
admission charge, which ranges from $2 to $5 per cruise. Once passengers board,
they are permitted to game during the half hour prior to the time the riverboat
departs. After the excursion, passengers are permitted to game for another half
hour before new passengers board, for a total of two hours of gaming per cruise.
The Company may permit passengers to remain on board for additional cruises on a
complimentary basis. In addition, Illinois permits dockside gaming if the
riverboat captain reasonably determines that it is unsafe to cruise due to
inclement weather, mechanical or structural problems or river icing, although
there is a possibility that such authorization may be withdrawn. See 'Risk
Factors-- Illinois Dockside Gaming' and 'Regulatory Matters--Illinois Gaming
Regulation.' During dockside gaming, the Metropolis riverboat operates on its
normal schedule and passengers may leave the vessel at any time but may board
only during the half hour prior to the regularly scheduled start of the cruise.
The number of passengers per cruise typically varies, with a higher number
on the weekends than in mid-week. Passenger counts are higher during warmer
weather (from late spring through early fall) than during colder winter months.
The Company anticipates that this trend will continue in the future. The
configuration of the Metropolis riverboat, like the configuration of the Players
Lake Charles Riverboat, is designed to accommodate a maximum number of
passengers comfortably during peak times, recognizing that there may be excess
capacity for the number of passengers during most off-peak cruises. The
Company's goal is to maximize overall gaming win and profit with a relatively
large and well-equipped boat, while providing a pleasurable gaming experience,
and not necessarily to maximize win per slot, win per table or win per square
foot of casino space. Since inception, the Metropolis riverboat typically has
operated at close to full capacity on Friday and Saturday evening cruises and
holidays, with excess capacity on cruises at other times.
LAKE CHARLES OPERATIONS
The Players Lake Charles Riverboat, which was the second to open in the
state of Louisiana, commenced operations on Lake Charles in Southwestern
Louisiana on December 8, 1993. The Players Lake Charles Riverboat, a
fully-equipped Las Vegas style casino, has approximately 27,500 square feet of
gaming space with 869 slot machines and 69 table games, for a total of
approximately 1,400 gaming positions and offers gaming on four air-conditioned
decks.
In order to offer the equivalent of dockside gaming, expand capacity and
strengthen the Company's market position in Lake Charles, the Company in January
1995 initiated the $110 million Lake Charles Complex Expansion. The Company
began the Lake Charles Complex Expansion by acquiring for approximately $52
million all Interests in the Partnership that owns a fully equipped Las Vegas
style riverboat casino which had operated for the past one and one-half years on
Lake Pontchartrain, Louisiana. The Company now holds two of the 15 statutorily
authorized riverboat gaming licenses in Louisiana.
In April 1995, the Company opened the Lake Charles Star Riverboat, which
has 21,730 square feet of gaming space on three air-conditioned decks with 778
slot machines and 45 table games for a total of 1,135 gaming positions. Both the
Players Lake Charles Riverboat and the Lake Charles Star Riverboat are approved
to operate eight three-hour cruises seven days a week. The Lake Charles Star
Riverboat currently operates eight three-hour cruises daily, commencing at 9:00
a.m. The Players Lake Charles Riverboat currently operates five three-hour
cruises Sunday through Thursday and eight three-hour cruises Friday and
Saturday. Cruises on the Players Lake Charles Riverboat commence at 10:30 a.m.
With the two Lake Charles riverboats operating on the above staggered cruise
schedules, the Company offers the equivalent of dockside gaming at all times
except 1:30 a.m. through 10:30 a.m. Sunday through Thursday.
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<PAGE>
As part of the Lake Charles Complex Expansion, approximately $58 million in
additional expansion projects and improvements are budgeted for the development
of a 50,000 square foot themed entertainment center featuring new restaurants, a
sports bar and lounge and banquet facilities; the reconstruction or substantial
improvement and expansion of hotel space; the construction of a new docking
facility and a covered parking facility; public purpose/city infrastructure
contributions; the integration of the Company's island resort theme at the Lake
Charles facility; and additional amenities.
There is an admission charge of $2.00 per cruise on the Players Lake
Charles Riverboat and Lake Charles Star Riverboat, although promotional
discounts may be given. The Company pays a $2.50 per passenger admission tax to
the City of Lake Charles. Once passengers board, they are permitted to game
prior to the riverboat's departure. Passengers are permitted to continue to game
until they disembark. At its discretion, the Company may permit passengers to
remain on board for additional cruises. Louisiana permits dockside gaming if the
riverboat captain reasonably determines that it is unsafe to cruise due to
dangerous weather or water conditions.
The Players Lake Charles Riverboat and Lake Charles Star Riverboat depart
from a docking site adjacent to the Players Hotel, which includes dockside and
support facilities. The Company currently leases the ground floor of the hotel
and adjacent parking areas for the hotel and casino guests. The Company has
completely renovated and expanded the hotel's ground floor into a pavilion that
houses the primary areas for ticketing, waiting, entertainment and retail space,
four bars and additional snack facilities. The space also includes two full
service restaurants, Merv's Bar & Grill and the Celebrity Buffet and Restaurant,
which can seat 125 and 250 people, respectively. Following the closing under an
agreement pursuant to which the Company is a party, the Company will own the
real property on which the Lake Charles landing area and complex, including the
hotel and parking area currently under lease, are situated. See '--Properties;
Lake Charles, Louisiana'.
The Company maintains a permanently docked barge of approximately 10,000
square feet, containing a 3,000 square foot VIP waiting lounge, which allows
special access and priority boarding. The barge also provides areas for employee
needs, offices and mechanical rooms. Passengers enter the Players Lake Charles
Riverboat directly from a barge facility which is connected to the Players Hotel
by a covered walkway. The landing is within easy walking distance of 800
automobile parking spaces (of which 250 spaces are valet parking) and another
700 parking spaces are accessible to the landing by shuttlebus.
The City of Lake Charles and the surrounding area have a population of
160,000 within a 25 mile radius. The City of Lake Charles is an active community
with a cultural heritage and community resources including the symphony, ballet
and numerous art galleries and museums. The area is also host to seasonal
festivals and special events that highlight Cajun food and music, historic
crafts and water sports. Lake Charles hosts the annual 'Contraband Days,' the
biggest promotional event in Lake Charles, spanning over two weeks and
attracting approximately 200,000 visitors to the City. Lake Charles' Contraband
Days is the second largest festival in Louisiana after New Orleans' Mardi Gras
Festival. In addition, the City of Lake Charles has a civic center that offers a
2,000 seat theater and a 50,000 square foot exhibition hall, used for
conventions, sporting events and entertainment. Lake Charles, which exceeds four
square miles, serves as a recreational area for boating and fishing.
The Lake Charles casino's primary market area includes such population
centers as Houston, Beaumont, Galveston, Orange and Port Arthur, Texas and
Lafayette and Baton Rouge, Louisiana. U.S. Interstate 10 connects Houston,
Beaumont and Lake Charles and is adjacent to the Company's dock site. Since
opening, the Company estimates that the Lake Charles casino has drawn over half
of its patrons from Texas, mainly from the greater Houston area, due in large
part to the current absence of legalized casino gaming in Texas. While, to date,
the Company has experienced only limited gaming competition, the Company
anticipates significant new and additional gaming competition in the Lake
Charles market. See 'Risk Factors--Increased Competition' and '--Competition.'
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<PAGE>
PROJECTS UNDER DEVELOPMENT
Mesquite, Nevada
As part of a strategy to diversify revenue sources, the Company expects to
open the Players Island Resort, its first land-based casino entertainment
facility, in Mesquite, Nevada, during the Summer of 1995, subject to the receipt
of all necessary gaming and other approvals. The Players Island Resort will
feature an island resort theme and is estimated to cost between $75 and $80
million to develop and open, approximately $23 million of which had been
invested through December 31, 1994. The majority of the remaining project costs
are covered by fixed price contracts. The Mesquite site is located approximately
70 miles by car from Las Vegas on Interstate 15 between Las Vegas and Salt Lake
City, where an estimated 12,000 cars pass daily. The Players Island Resort will
be marketed as a destination resort for the residents of the Las Vegas area and
Southern Nevada, as well as for tourists from California, Arizona and nearby
Utah.
The initial phase of the Players Island Resort project includes a 40,000
square foot casino; a 500-room hotel with a health spa and swimming pool with
waterfalls; lighted tennis courts; a children's arcade; four detached
three-bedroom villas; and a 50-unit recreational vehicle facility. As part of
the budgeted project, the Company also has entered into an agreement to lease
additional land near the Players Island Resort to develop an 18-hole golf course
during fiscal 1996. The resort also will feature four restaurants, an estimated
400-seat showroom and 10,000 square feet of banquet/meeting rooms. The resort
complex, which has been master-planned to accommodate further expansion of the
casino, hotel and banquet/meeting space, will feature a fully-contained island
resort environment.
DEVELOPMENT OPPORTUNITIES
Maryland Heights, Missouri
The Company entered into a letter of intent with Promus on March 3, 1995
(the 'Promus Letter of Intent') to form a joint venture to co-develop a $200
million riverboat casino entertainment complex in Maryland Heights, Missouri,
which will contain a total of 100,000 square feet of gaming space. The Company
and Promus would each own and operate a separate riverboat casino pursuant to
separate gaming licenses but would share in the costs of the development of, as
well as any profit or loss associated with, an estimated 300,000 square foot
shoreside facility. Although the two riverboat casinos are expected to be
similar in theme and decor, each operator would individually manage and market
its own gaming operations with separate staffing. The Company and Promus
individually have been endorsed by the City of Maryland Heights for separate
riverboat casino projects and have licensing applications under consideration by
the Missouri Gaming Commission. See 'Risk Factors--Government Regulation and
Regulatory Approvals' and 'Regulatory Matters'. The development and operation of
the Maryland Heights Project are conditioned upon the negotiation and execution
of definitive agreements between the Company and Promus.
In addition to the construction of two riverboats, the shoreside facility
is anticipated to include a hotel facility to be managed by Promus, extensive
covered parking and a 95,000 square foot entertainment building. The
entertainment facility is expected to contain upscale restaurants, a buffet,
bars, an entertainment lounge with live music nightly, a preferred players
lounge and gift shops. The Company and Promus also are evaluating the
development of an outdoor mall containing themed restaurants and boutique shops
similar to the higher end Las Vegas casinos. Under the Promus Letter of Intent
(i) Promus and the Company would share each other's development costs (excluding
the costs specified in clause (iii) below, the costs of riverboats to be
separately owned and operated and the costs associated with interior fit-up of
separately controlled space); (ii) Promus would have the right to purchase the
Company's interest in the joint venture upon any 'change of ownership' of
Players, on terms subject to negotiation between the parties; and (iii) as
between Promus and the Company, the owner of the property ultimately chosen for
development would receive percentage rent from the other joint venture party,
based on net gaming revenues. See '--Properties; Maryland Heights, Missouri.'
Situated close to Interstate 70 in Maryland Heights, the casino
entertainment complex will be strategically located to attract patrons from a
local population base of approximately 2.3 million in the greater St. Louis
metropolitan region. The site will feature easy accessibility, a high level of
drive-by traffic and close proximity to Interstate 70 and Lambert International
Airport, and will be strategically located near the Riverport amphitheater,
which attracts 500,000 visitors per year. The Company and Promus expect to begin
construction with an opening
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<PAGE>
targeted for the Summer of 1996, subject to the negotiation and execution of
definitive agreements for the project and the receipt of all necessary gaming
and other approvals.
Although riverboat gaming is currently offered in the metropolitan St.
Louis region, certain patrons of the Metropolis Complex travel approximately
three hours from St. Louis to Metropolis. In recognition of these valued
customers, the Company intends to introduce cross-marketing programs to St.
Louis area residents for the Metropolis and the proposed Maryland Heights
riverboats to increase repeat patronage at the Company's casino entertainment
facilities.
Other Potential Projects
The Company currently is in the early stages of evaluating a number of
other potential opportunities to develop riverboat, dockside or land-based
gaming facilities in jurisdictions that currently permit gaming as well as in
jurisdictions that have not yet legalized gaming.
COMPETITION
The casino gaming industry includes casinos which are either land-based in
jurisdictions such as Nevada and New Jersey, dockside casinos, riverboat casinos
and land-based casinos on Indian reservations. The gaming industry is highly
competitive and is composed of a large number of companies, many of which have
significantly greater resources than the Company. Numerous states have legalized
gaming and several other states are considering the legalization of gaming in
designated areas. As a result of the proliferation of gaming in new
jurisdictional areas as well as the proliferation of Indian gaming on tribal
land, the Company's operations could be adversely affected in instances where
such other gaming operations are conducted close to the Company's operations.
See 'Risk Factors--Increased Competition.'
The Company's Metropolis Complex currently faces indirect competition from
riverboats in certain parts of Missouri and to a much lesser extent from
dockside casinos in Tunica, Mississippi. In addition, the Company believes that
by the Summer of 1995, the Metropolis Complex will be subject to competition
from a riverboat operation in Evansville, Indiana, which is located
approximately 110 miles from Metropolis. Gaming has also been authorized in
Missouri, and the closest Missouri cities in which proposed future gaming
facilities are under consideration are Cape Girardeau and Caruthersville, which
are approximately 70 and 120 miles, respectively, from Metropolis. The
Caruthersville project opened in April 1995. The timing of the opening and
licensing of the Cape Girardeau project cannot be determined. In order to
maintain its market position, the Company has budgeted additional amenities and
attractions for the Metropolis Complex. See 'Management's Discussion and
Analysis of Financial Condition and Results of Operations.'
The Company's Lake Charles operation faces direct competition from the
land-based Coushatta facility in Kinder, Louisiana. The Coushatta facility,
which opened in January of 1995, is a Las Vegas style casino that offers 45,000
square feet of gaming space, with 1,250 slot machines and 50 table games. In its
first week of operation, the Coushatta facility generated revenues of
approximately $3.6 million. In addition to the Coushatta facility, the Company
will also face direct competition from a joint venture of Crown Casinos, Inc.,
Casino America, Inc. and Louisiana Downs, Inc., which expects to open its
riverboat operation in Westlake, Louisiana approximately one mile from the
Company's facility. Eastbound travelers on Interstate 10 can access the Crown
facility prior to reaching the Players facility.
The Players Island Resort in Mesquite, Nevada will compete directly with
two existing properties: the Oasis and the Virgin River, both of which are
located in Mesquite. The larger of the two facilities, the Oasis, has been in
operation for approximately 11 years, and the Virgin River has been in operation
for approximately three years. These two facilities draw a majority of their
patronage from travelers on Interstate 15, the local population base and the
residents of nearby border towns between Utah and Nevada. The Company will
compete directly with these existing properties as well as attempt to expand the
Mesquite market by targeting Las Vegas residents and tour and travel patrons who
otherwise are visiting Las Vegas.
The Company's planned project in Maryland Heights, Missouri will compete
directly with President Riverboats in downtown St. Louis, Alton Belle in Alton,
Illinois, Casino Queen in East St. Louis and St. Charles Station in St. Charles,
Missouri, proposed riverboat casinos in Kimmswick, Missouri and St. Charles
County, Missouri and, potentially, additional riverboats in the St. Louis
metropolitan area.
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EMPLOYEES
At December 31, 1994, the Company had 2,083 employees, including
approximately 1,222 and 740 employed in riverboat operations (including
land-based activities) in Lake Charles and Metropolis, respectively, 51 employed
at Players Bluegrass Downs and 38 employed in the Company's executive office.
The Company believes its relations with its employees are generally good.
PROPERTIES
Metropolis, Illinois: The Company leases its docking facilities in
Metropolis, which cover 1,810 linear feet of riverfront, from the City of
Metropolis pursuant to a 20-year lease with a 20-year renewal option at an
annual rent of approximately $7,000. The Company also owns several parcels of
land in Metropolis, some with buildings, aggregating approximately eight acres,
and it leases an additional two acres. The owned or leased area is used
primarily for free customer parking or as office space. Some of the land is
being held for development, and some of the current parking area may be
developed, in which event the Company believes suitable replacement parking
space could be obtained.
The Ohio River occasionally overflows its banks at Metropolis, most often
during late winter and early spring. Such flooding may cover a portion of the
Company's closest parking location, although the Company believes that it will
still have adequate available parking within reasonable walking distance of its
landing during typical flooding periods. Although the Ohio River did not
overflow its banks at Metropolis during the flooding that occurred during the
Summer of 1993, there can be no assurance that it will not do so in the future.
If flooding is especially severe, it may be impractical for passengers to board
the riverboat at its normal dock site. The Company has developed an emergency
plan that would permit gaming activities to continue in such circumstances. Any
use of an alternate landing because of flooding may result in some loss of
service. See 'Risk Factors--Loss of Riverboat or Dockside Facility from
Service.'
Lake Charles, Louisiana: On January 25, 1995, the Company entered into a
preliminary agreement (the 'Beeber Agreement') with The Beeber Corporation
('Beeber') to purchase Players Hotel and approximately 15 acres of real estate
comprising the landside facility for the Players Lake Charles Riverboat and the
Lake Charles Star Riverboat (collectively, the 'Property'). Under this
arrangement, the Company has agreed to pay a total purchase price of $6.7
million for the Property consisting of (i) $5.5 million in cash, Common Stock
based upon the per share closing price of Common Stock on January 25, 1995
($12.17 per share, post-split adjusted) or a combination of cash and Common
Stock to be determined by Beeber on or prior to July 25, 1995 and (ii) the
Company's assumption of Beeber indebtedness secured by the Property in an amount
not to exceed $1.25 million. In the event Beeber chooses to receive any portion
of the purchase price in Common Stock, Beeber shall have the right for up to 36
months after the date of closing under the Beeber Agreement to require the
Company to repurchase the Common Stock at a price equal to the closing price of
the Common Stock on January 25, 1995 ($12.17 per share, post-split adjusted). In
addition, Beeber has been granted certain piggyback registration rights to
register the resale of Common Stock received as part of the purchase price. As
additional consideration, the Company is required to continue making certain
payments under a lease agreement dated May 19, 1993 between the Company and
Beeber, as amended (the 'Lake Charles Lease'). Currently, the Company is
obligated to pay $2.50 per passenger for the first 800,000 passengers per year
and $3.00 for each passenger in excess of 800,000 per year subject to certain
exceptions for passengers who remain on board for more than one cruise and
passengers who are given complimentary admissions, subject to certain limits
('Continuing Lease Payments'). Either party may terminate the Beeber Agreement
if a definitive Purchase Agreement has not been executed by June 23, 1995.
The Company has obtained a commitment for a title insurance policy with
respect to the Property. Such policy contains an exception with respect to a
small strip of lakefront land which was previously under water and may be
subject, under certain circumstances, to a claim of ownership by the State of
Louisiana by virtue of certain riparian claims (the 'Lakefront Strip'). The
Company is in the process of obtaining whatever rights the State of Louisiana
may have in or to the Lakefront Strip, by negotiating a long-term lease with the
State of Louisiana for the Lakefront Strip and certain waterbottoms (i.e.,
riparian rights). The Company has obtained written notification from the State
of Louisiana concerning the State's affirmative intention to enter into such
lease with the Company, and the Company has had preliminary discussions with the
State of Louisiana concerning the terms of such lease. As a result, the Company
does not anticipate any difficulty in executing such lease or any significant
annual payments in connection therewith.
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Pending closing under the Beeber Agreement, the Company's use of the
property is subject to the Lake Charles Lease, which relates to the portions of
the Players Hotel the Company currently uses and expires in December 2003. The
Company has the right to extend the term of the lease for up to 20 additional
years by the exercise of four consecutive five year options. The Company also
has the right to terminate the lease five years after its commencement. The
annual rent is the greater of (i) an amount equal to the Continuing Lease
Payment or (ii) a minimum rent for each of the 30 years, which varies from a low
of $650,000 annually for the first five years of the lease to a high of $750,000
annually for the 26th through 30th years of the lease, assuming that the Company
exercises its options to extend the lease.
The Company's purchase of the Property, and the Continuing Lease Payments,
are the subjects of litigation (the 'Jebaco Litigation') recently filed by
Jebaco, Inc., a corporation which by agreement with Beeber shares in the rent
payable under the Lake Charles Lease ('Jebaco'). See '--Legal
Proceedings--Jebaco Litigation'. The Jebaco Litigation involves a dispute
concerning, among other things, the amount, manner of payment and manner of
computation of the Continuing Lease Payments and whether the Continuing Lease
Payments calculation must include gaming passengers on the Lake Charles Star
Riverboat. The Company is currently in negotiations with Jebaco and Beeber to
settle all issues involved in the Jebaco Litigation, but intends to proceed with
its purchase of the Property notwithstanding the Jebaco Litigation or such
negotiations. Based upon the outcome of the Jebaco Litigation or the settlement
negotiations, the Company may be required to make Continuing Lease Payments
based on gaming passengers on both the Players Lake Charles Riverboat and the
Lake Charles Star Riverboat. The Company does not believe that inclusion of all
such passengers in computation of the Continuing Lease Payments, as described
above, will have a material adverse effect on the Company or its business.
Mesquite, Nevada: In June 1994, the Company acquired a 45-acre site in
Mesquite, Nevada from Gem Gaming, Inc. ('Gem Gaming'). The site is located just
off Interstate 15 near the Nevada-Utah border, approximately 70 miles northeast
of Las Vegas. The Company also acquired an option to purchase all or part of an
adjacent 90-acre parcel (the '90 Acre Mesquite Option'). As total consideration,
the Company paid approximately $12.5 million to Gem Gaming, comprised of $5
million in cash, approximately $4.2 million in Company Common Stock and a $3.2
million note. The Company also granted Gem Gaming a five year warrant to
purchase up to 100,000 shares of the Company's Common Stock at an exercise price
of $23.70 per share. The Company has closed an agreement to (i) exercise the 90
Acre Mesquite Option in part to acquire 17 acres of the 23 acre portion of the
subject property that is zoned for casino development (the '17 Acre Parcel') for
approximately $2.6 million, (ii) terminate the option for the remaining 73 acres
of the subject property (the '73 Acre Parcel'), consisting of 67 acres that are
not zoned for casino development and six acres that are zoned for casino
development, (iii) subject the 73 Acre Parcel to a ten-year restriction against
casino development or use and (iv) grant rights to the owner of the 73 Acre
Parcel to, under certain circumstances, (A) participate (for up to a 40% equity
interest) in a joint venture with the Company or its affiliates in any
development of the 17 Acre Parcel by the Company or its affiliates, (B) acquire
the 17 Acre Parcel for an amount equal to the Company's original purchase price,
plus interest on such price at a rate of 8% per annum, if the Company, or its
affiliates, fails to commence the development of such property within five years
of the date of purchase (in which event the 17 Acre Parcel would be subject to a
five-year restriction against casino-related development or use), and (C) so
long as the Company has not yet commenced development of the 17 Acre Parcel, to
require the Company to contribute the 17 Acre Parcel and participate as a joint
venture party in the development of the entire 90 acre property by the owner of
the 73 Acre Parcel, subject to the Company's reasonable consent, and with
percentage interests based on fair market valuation of the relative
contributions to the joint venture.
The Company has also closed an agreement to lease additional land adjacent
to the Players Island Resort, together with irrigation water rights for such
land, to commence the development during fiscal 1996 of an 18-hole golf course,
upon which the landlord has retained rights to develop a golf community housing
development. The Company has leased the golf course property and related
irrigation rights for 99 years at a starting annual rent of $216,000, subject to
increase every five years based on the consumer price index. During fiscal 1996,
the Company intends to invest approximately $7.5 million in leasehold
improvements related to the development of the golf course; however, all such
proposed expenditures have been included in the Company's $75-80 million
construction budget.
Maryland Heights, Missouri: The Company and Promus are evaluating two
sites for purposes of developing the Maryland Heights Project, one site which
Promus owns (the 'Promus Site') and a separate site in which the Company has
certain real property interests (described below). The two sites are not
contiguous. Therefore, if the Maryland Heights Project is developed, only one of
the sites will be utilized.
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The Company has acquired options, for which it paid cash of approximately
$1,400,000, to lease and/or purchase and develop two parcels of real estate (the
'Players Option Parcels') aggregating 218 acres located on the Missouri River in
Maryland Heights, Missouri. On March 15, 1995, the Company exercised its option
to lease one of the Players Option Parcels consisting of approximately 132 acres
(the '132 Acre Parcel') at an exercise price of $780,000. By doing so, the
Company became the tenant under an existing lease for the 132 Acre Parcel which
provides, among other things, for maximum annual basic rent of $250,000, maximum
annual percentage rent of $100,000, a 15-year term with four ten-year renewal
options, and an option to purchase the 132 Acre Parcel (the '132 Acre Purchase
Option') for a purchase price of $2,500,000 if exercised during the first lease
year, or $3,000,000 if exercised during the second lease year. On March 17,
1995, the Company exercised the 132 Acre Purchase Option and thereby acquired
title to such property. The owner of the Players Option Parcels recently
instituted litigation against, among others, the Company. See '--Legal
Proceedings--Missouri Litigation.' The option to lease the other Players Option
Parcel (the 'Remaining Parcel') expires on July 1, 1995. If the Company decides
to exercise the option to lease the Remaining Parcel, basic annual rent will be
approximately $175,000, plus percentage rent not to exceed $70,000 per year.
Such lease would have a term of 15 years, with four ten-year renewal options.
Basic rent and percentage rent increase to specified levels during the renewal
terms. The lease for the Remaining Parcel would also give the Company the option
to purchase the Remaining Parcel for $1,800,000 if exercised during the first
lease year or $2,200,000 if exercised during the second lease year.
While no definitive agreement has been reached, the Company presently
expects that it and Promus will develop the Maryland Heights Project at the
Promus Site. In such event, the Promus Letter of Intent contemplates that
Players would make annual lease payments to Promus concerning the Promus Site
equal to 2% of the first $50 million of net gaming revenue, as defined by the
Missouri regulatory authorities, at the Company's Maryland Heights riverboat
(the 'Missouri Net Gaming Revenue'); 3% of the Missouri Net Gaming Revenue
between $50 and $100 million; and 4% of the Missouri Net Gaming Revenue in
excess of $100 million.
Bluegrass Downs, Kentucky: In November 1993, the Company acquired
Bluegrass Downs racetrack (currently known as Players Bluegrass Downs), located
in Paducah, Kentucky, in anticipation that the Kentucky legislature would enact
legislation to authorize casino-type gaming, such as slot machines and table
games, at licensed racetracks. If any legislation is adopted permitting
additional forms of gaming at racetracks, the Company currently plans to develop
its track into a facility that would offer all permitted forms of gaming. There
can be no assurance that such legislation will be adopted. The racetrack is
approximately ten miles from the Company's Metropolis docking site. The next
closest Kentucky racetrack to Metropolis is Ellis Park, which is approximately
100 miles from each of Paducah and Metropolis. Bluegrass Downs is on a 70 acre
tract that includes a 5/8 mile oval racetrack; an enclosed 17,000 square foot
clubhouse housing dining, wagering facilities and administrative areas; barns
and related buildings that can accommodate 725 horses; and a parking area for
more than 1,400 cars.
Evansville, Indiana: The Company has entered into agreements with private
parties that give it options to acquire sites in Evansville, Indiana. Evansville
is near the Southwest corner of Indiana on the Ohio River. One license was
approved for issuance to a third party for a riverboat based in Evansville.
Although more than one license is permitted by statute to be awarded for
Evansville, it is unlikely that the Company will pursue such a license, if it
should ever become available, or that it will exercise its Evansville real
estate options for development of a riverboat facility.
LICENSE WITH MERV GRIFFIN AND THE GRIFFIN GROUP
The Company is a party to a license (the 'Griffin License') with The
Griffin Group, which is a company controlled by Mr. Merv Griffin and a major
stockholder of the Company, under which Mr. Griffin acts as the public
representative for all of the Company's riverboat and dockside casinos. In
addition, Mr. Griffin provides other services, principally of a promotional
nature. This relationship with Mr. Griffin is designed to develop, on the
Company's behalf, a high profile in new markets and access to national media.
The Company features Mr. Griffin in print, radio and television advertisements.
The Company's right to Mr. Griffin's services are exclusive in the riverboat and
dockside casino industry, except that Mr. Griffin has the right to represent
casinos of Resorts. Resorts currently has only one land-based casino in Atlantic
City, New Jersey but may be examining the possibility of developing riverboat
and other land-based casinos. In consideration of Mr. Griffin's services under
the Griffin License, the Company, in 1992, issued to The Griffin Group a warrant
to purchase 1.4 million shares of Common Stock an exercise price of $4.00 per
share. The warrant currently is outstanding and has not been
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exercised. In addition, the Griffin License requires the Company to pay annual
fees to The Griffin Group for each riverboat casino complex equal to the greater
of (i) $50,000 or (ii) an amount based upon a percentage of the respective
casino's earnings per fiscal year before depreciation, interest and taxes
('EBDIT') for the year.
The Griffin License has an initial four-year term expiring December 31,
1996; provided, however, the fee payable under clauses (i) or (ii) is not
payable with respect to the Metropolis Complex and the Players Lake Charles
Riverboat through December 31, 1996. The EBDIT fee payable to The Griffin Group
is payable in the following cumulative amounts: to the extent that EBDIT per
complex is $15 million or less, the payment is two-thirds of 1% of EBDIT
(against which any minimum $50,000 payment for the particular riverboat will be
credited); to the extent that EBDIT per complex is more than $15 million but not
more than $30 million, the additional payment is 1% of EBDIT in excess of $15
million; and to the extent that EBDIT per complex is more than $30 million, the
additional payments will be 1 1/2% of EBDIT in excess of $30 million. The
Griffin Group also is entitled to reimbursement of certain expenses and
indemnification against certain claims. Mr. Griffin will be entitled to
additional compensation, as negotiated in good faith, if he hosts, produces or
performs in any shows at a Company casino. The Company has the right to renew
the Griffin License indefinitely from year-to-year thereafter.
The Company has initiated discussions with The Griffin Group concerning the
extension of the Griffin License to the Company's development projects and to
the Lake Charles Star Riverboat.
LEGAL PROCEEDINGS
Ornstein and Mississippi Gold, Inc. Litigation
On June 7, 1994, Marvin Ornstein and Mississippi Gold, Inc. ('MGI') filed a
lawsuit in the United States District Court for the Southern District of
Illinois against the Company, PCI, Inc. (a subsidiary of the Company), Morton
Friedman, individually and as Chairman-Director of the Illinois Gaming Board,
the Illinois Gaming Board and the Illinois State Police. The complaint alleges
that the Company and PCI, Inc. defamed Mr. Ornstein and MGI as a result of the
publication of certain statements made by the Illinois Gaming Board in 1990
concerning the licensability of Mr. Ornstein. The complaint further alleges that
the defendants conspired to prohibit Mr. Ornstein and MGI from being licensed
for riverboat gaming in Illinois. The complaint requests an unspecified amount
for compensatory damages and punitive damages and seeks recovery of attorneys'
fees and costs. Previous litigation between the Company and Mr. Ornstein and MGI
in New Jersey state court, involving substantially similar factual matters, was
settled by the Company's payment of $10,000 to Mr. Ornstein and MGI.
Missouri Litigation
The Company has been sued by Roy W. Fischer, Jr., the owner of the
Company's proposed site in Maryland Heights, in both state and federal court in
St. Louis, Missouri. The suits allege that the Company has breached its
obligations under certain agreements the Company allegedly entered into directly
or indirectly with Mr. Fischer and claim actual and punitive damages that in the
aggregate exceed $30,000,000. See '-- Properties--Maryland Heights, Missouri.'
One of the state court actions also names Promus as a co-defendant. The Company
believes these lawsuits to be without merit and is vigorously defending them in
all respects. In addition, on March 13, 1995, Mr. Fischer filed suit in Missouri
state court against the Missouri Gaming Commission, and its members
individually, seeking to effectively prohibit the issuance of a gaming license
to Harrah's Maryland Heights Corporation (a Promus affiliate) for its site in
Maryland Heights, and for fees and costs of suit.
Poulos and Ahern Litigation
The Company, certain suppliers and distributors of video poker and
electronic slot machines and over forty other casino operators have been named
as defendants in a class action suit filed April 26, 1994 in the United States
District Court, Middle District of Florida, by William Ahern and William H.
Poulos. The plaintiffs allege common law fraud and deceit, mail fraud, wire
fraud and Racketeer Influenced and Corrupt Organizations Act violations in the
marketing and operation of video poker games and electronic slot machines. The
suit seeks unspecified damages and recovery of attorneys' fees and costs. On
December 9, 1994, an Order was entered by the District Court in Florida
transferring the consolidated action to the United States District Court for the
District of Nevada. Motions for class certification and motions to dismiss are
pending. Although discovery is in the preliminary stages, the Company believes
that the claims are wholly without merit and does not expect that the lawsuit
will have a material adverse effect on the Company's financial position or
results of operations.
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Jebaco Litigation
On May 12, 1995, Jebaco, a corporation, filed suit in Louisiana State Court
for, among other things: injunctive relief to prevent the Company's purchase of
the Property from Beeber; judicial dissolution of the Company's original
acquisition (from Jebaco) of the Company's option to enter into the Lake Charles
Lease; a judicial determination of the amount, manner of computation and manner
of payment of the Continuing Lease Payments; an accounting; and monetary
damages. See '--Properties--Lake Charles, Louisiana'. Although a temporary
restraining order was originally issued against the Company's purchase of the
Property, the Lousiana State Court on May 24, 1995 dissolved the temporary
restraining order and refused to issue a preliminary injunction, thereby
permitting the purchase of the Property to proceed. The Company believes that
this litigation represents a dispute primarily between Jebaco and Beeber. The
Company is prepared to compute and pay the Continuing Lease Payments in the
manner required under all applicable agreements, as determined by the Court, and
does not anticipate that such required payments would have a material adverse
effect on the Company or its business. The Company, Beeber and Jebaco are
engaged in settlement negotiations to resolve all issues raised in such
litigation.
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REGULATORY MATTERS
The Company is subject to state and Federal laws which regulate businesses
generally and the gaming business specifically. Below is a brief description of
some of the more significant regulation to which the Company is subject. All
laws are subject to change and different interpretations. This is especially
true with respect to current laws regulating the gaming industry, since in many
cases these laws and the regulatory agencies that apply them are new. Changes in
laws or their interpretation may result in the imposition of more stringent,
burdensome, or expensive requirements, or the outright prohibition of an
activity.
ILLINOIS GAMING REGULATION
The Riverboat Gambling Act of Illinois (the 'Illinois Riverboat Act')
currently authorizes a five-member Illinois Gaming Board to issue up to ten
riverboat gaming licenses. The Illinois Gaming Board issued an owner's license
to a wholly-owned subsidiary of the Company, for its Metropolis operations in
February 1993. This license is subject to renewal, unless revoked, in February
1996 and annually thereafter. As of the date of this Prospectus, the Illinois
Gaming Board has granted licenses to nine other riverboat owners, some with
multiple boats, with dock sites based in Alton, Aurora, East Peoria, East St.
Louis, Elgin, Rock Island, Joliet (two licensees have a dock site based in
Joliet) and East Dubuque.
Each owner's license granted entitles the licensee to own and operate up to
two riverboats (with a combined maximum of 1,200 gaming participants) and
equipment thereon from a specified dock site. The duration of the license
initially runs for a period of three years. Thereafter, the license is subject
to renewal on an annual basis upon, among other things, a determination by the
Illinois Gaming Board that the licensee continues to meet all of the
requirements of the Illinois Riverboat Act and the Illinois Gaming Board's
Rules. All licensees have a continuing duty to maintain suitability for
licensure. There can be no assurance that the Company's license will be renewed,
although the Company is not aware of any reason why it would not be. A license
does not create a property right, but is a revocable privilege granted by the
State of Illinois contingent upon continuing suitability for licensure. The
licensee bears the burden of rebutting by clear and convincing evidence any
charges raised by the Illinois Gaming Board.
The Illinois Riverboat Act grants the Illinois Gaming Board extensive
jurisdiction, specific powers and duties for the purposes of administering,
regulating and enforcing the system of riverboat gaming. Any riverboat operation
not conducted in compliance with the Illinois Riverboat Act may constitute an
illegal gaming place and consequently may be subject to criminal penalties,
including possible seizure, confiscation and destruction of illegal gaming
devices and seizure and sale of riverboats and dock facilities. The Illinois
Riverboat Act also provides for civil penalties, equal to the amount of gross
receipts derived from wagering on the gaming, whether unauthorized or
authorized, conducted on the date of any violation. The Illinois Gaming Board
may revoke or suspend licenses as the Board may see fit and in compliance with
applicable laws of the State of Illinois regarding administrative procedures and
may suspend an owner's license, without notice or hearing, upon a determination
that the safety or health of patrons or employees is jeopardized by continuing a
riverboat's operation. The suspension may remain in effect until the Illinois
Gaming Board determines that the cause for suspension has been abated and it may
revoke the owner's license upon a determination that the owner has not made
satisfactory progress toward abating the hazard.
A holder of an owner's license is required to obtain all licenses from the
Illinois Gaming Board necessary for the operation of a riverboat, including a
liquor license and a license to prepare and serve food and all other necessary
licenses. All sales, use, occupation and excise taxes which apply to food and
beverages apply to sales aboard riverboats.
All riverboats must be accessible to disabled persons, must be either a
replica of a 19th century Illinois riverboat or be of a casino cruise ship
design, and must comply with applicable Federal and state laws, including U.S.
Coast Guard regulations.
A person employed at a riverboat gaming operation must hold an occupation
license from the Illinois Gaming Board which permits the holder to perform only
activities included within such holder's level of occupation license or any
lower level of occupation license. The Illinois Gaming Board also requires that
officers, directors and other key persons of a gaming operation be licensed. In
addition, a riverboat licensee can
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purchase or lease gaming equipment or supplies only from a supplier who has been
issued a supplier's license by the Illinois Gaming Board.
As a condition to maintaining an owner's license, the licensee must, among
other things, submit detailed financial information and other information to the
Illinois Gaming Board including an annual audit by an independent certified
public accountant, selected by the Administrator of the Illinois Gaming Board,
of the financial transactions and conditions of the total operations of a holder
of an owner's license including the condition of the licensee and its internal
control system. The holder of an owner's license must prepare and send to the
Administrator and the independent certified public accountant selected by the
Administrator a written response to issues raised by such accountant's reports
on (i) the procedures required to be performed by such accountant on a quarterly
basis with respect to certain aspects of the licensee's operations and (ii) the
annual audit referred to in the previous sentence. Among other continuing
obligations, the holder of an owner's license has a duty to promptly disclose
any material changes in the information it provides to the Illinois Gaming
Board. The holder of an owner's license must report promptly to the
Administrator of the Illinois Gaming Board any facts which the holder has
reasonable grounds to believe indicate a violation of law (other than minor
traffic violations) or Illinois Gaming Board Rule or a holder's internal
controls committed by suppliers or licensed employees including, without
limitation the performance of licensed activities different than those permitted
under their license. The duty to disclose to the Illinois Gaming Board changes
in information continues throughout the period of licensure. A duty exists to
promptly disclose the identity of a compensated agent acting on behalf of the
holder of an owner's license with regard to action by the Illinois Gaming Board.
A holder of an owner's license is subject to the imposition of fines,
suspension or revocation of its license for any act or failure to act on the
part of the licensee or its agents or employees that is injurious to the public
health, safety, morals, good order or general welfare of the people of the State
of Illinois or that would discredit or tend to discredit the Illinois gaming
industry or the State of Illinois, including, without limitation, (i) failing to
comply with or make provision for compliance with applicable legal requirements
including the Illinois Riverboat Act, the rules promulgated thereunder or any
other applicable Federal, state or local law or regulation or order or failure
by the holder of an owner's license to comply with or make provisions for
complying with the holder's internal controls; (ii) failing to comply with any
rule, order or ruling of the Illinois Gaming Board or its agents pertaining to
gaming; (iii) receiving goods or services from a person or business entity which
does not hold any required supplier's license; (iv) being suspended or ruled
ineligible for a gaming license or having a gaming license revoked or suspended
in any state or gaming jurisdiction; (v) associating with, either socially or in
business affairs, or employing persons of notorious or unsavory reputation or
who have extensive police records or who have failed to cooperate with any
officially constituted investigatory or administrative body if public confidence
and trust in gaming would thereby be adversely affected; and (vi) employing in
any Illinois riverboat's gaming operations any person known to have been found
guilty of cheating or using any improper device in connection with any game.
Minimum and maximum wagers on games are not established by regulation but
are left to the discretion of the licensee; however, wagering may not be
conducted with money or other negotiable currency. Riverboat cruises are limited
to a duration of four hours, and pursuant to the language of the Illinois
Riverboat Act, no gaming may be conducted while the riverboat is docked.
Illinois Gaming Board Rule, Section 3000.500, currently permits gaming during
the 30-minute time periods at the beginning and end of a cruise while the
passengers are embarking and disembarking (total gaming time per cruise is
limited to four hours, however, including the pre- and post-docking periods). In
addition, pursuant to Illinois Gaming Board Rule, Section 3000.510, dockside
gaming is permitted if the captain of the riverboat reasonably determines that
it is unsafe to cruise due to inclement weather, mechanical or structural
problems or river icing. Recent pronouncements by the Illinois Gaming Board
indicate that the explanations for failure to cruise pursuant to Illinois Gaming
Board Rule, Section 3000.510 will be scrutinized and that any abuse of the rule
will result in disciplinary actions, which may include, among other things, any
of the following: cancellation of future cruises, penalties, fines and
suspensions or revocation of license. In such event, the riverboat must be
cleared at least once every four hours, at which time a new gaming session may
commence; patrons may leave the vessel at any time but may only board the vessel
during the first 30 minutes of the gaming session. No person under the age of 21
is permitted to wager, and wagers may only be taken from a person present on a
licensed riverboat. With respect to electronic gaming devices, the payout
percentage may not be less than 80% nor more than 100%.
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The Illinois Riverboat Act imposes a 20% wagering tax on adjusted gross
receipts from gaming. The tax imposed is to be paid by the licensed owner to the
Illinois Gaming Board on the day after the gaming day when the wagers were made.
The Illinois legislation also requires that licensees pay a $2.00 admission tax
for each person admitted to a gaming cruise.
An ownership interest in a business entity (other than a publicly traded
corporation) which has an interest in a holder of an owner's license may only be
transferred or pledged as collateral with leave of the Illinois Gaming Board.
Any person or entity who or which, individually or in association with others,
acquires directly or indirectly, beneficial ownership of more than 5% of any
class of voting securities or non-voting securities convertible into voting
securities of a publicly traded corporation which holds an ownership interest or
a beneficial interest in the holder of an owner's license is required to file a
Personal Disclosure Form 1. (The Illinois Gaming Board, however, takes the
position that it can require any individual or entity seeking a transfer of an
ownership interest in an owner's license to file a personal disclosure Form 1.)
The Personal Disclosure Form 1 forms the basis of investigation by the Illinois
Gaming Board to determine suitability of the person or entity seeking transfer
of an ownership interest. If the Illinois Gaming Board denies an application for
such a transfer, commencing as of the date the Illinois Gaming Board issues a
notice that it denies such application, it will be unlawful for such applicant
to receive any dividends or interest on his shares, to exercise, directly or
indirectly, any right conferred by such shares, or to receive any remuneration
from any person or entity holding any license under the Illinois Riverboat Act
for services rendered. If the Illinois Gaming Board denies an application for
such a transfer and if no hearing is requested or if the Illinois Gaming Board
issues a final order of disqualification, the holder of an owner's license shall
purchase all of the disqualified person's or entity's shares at the lesser of
either the market price or the purchase price for such shares.
A holder of an owner's license can only make distributions to stockholders
to the extent such distributions would not impair the financial viability of the
gaming operation. Factors to be considered should include but not be limited to
the following: (i) working capital requirements, (ii) debt service requirements,
(iii) repairs and maintenance requirements and (iv) capital expenditure
requirements.
Holders of an owner's license must immediately inform the Illinois Gaming
Board and obtain formal approval from the Illinois Gaming Board whenever a
change is proposed in the following areas: key persons; type of entity; equity
and debt capitalization of entity; investors and/or debt holders; sources of
funds; applicant's economic development plan; riverboat capacity or significant
design change; gaming positions; anticipated economic impact; or pro forma
budgets and financial statements.
The Company is subject to certain risks associated with the promulgation of
new or revised rules that could adversely affect the Company's operations. The
Illinois Riverboat Act may be amended, and new or revised rules may be
promulgated, changing the number of available licenses or gaming locations in
Illinois, or otherwise changing Illinois gaming regulations. Although no new or
revised rules have been promulgated in the last 20 months, no assurance can be
given that no such rules would be promulgated, and the Company has no control
over such developments. In addition, uncertainty exists from time to time
regarding the Illinois gaming regulatory environment due to the limited
experience in interpreting the Illinois Riverboat Act and the rules promulgated
thereunder. For example, changes in membership of the Illinois Gaming Board
resulted in a vote being taken to prohibit any dockside gambling which was
narrowly defeated by a vote of three to two. Due to the relative novelty of this
regulatory environment, there can be no assurance that adverse regulatory
developments will not occur in the future or that adverse interpretations of
rules will not be issued.
LOUISIANA GAMING REGULATION
In July 1991, the Louisiana legislature adopted legislation permitting
certain types of gaming activity on certain rivers and waterways in Louisiana.
The legislation granted authority to supervise riverboat gaming activities to
the Louisiana Riverboat Gaming Commission and the Riverboat Gaming Enforcement
Division of the Louisiana State Police (the 'Louisiana Enforcement Division').
The Louisiana Riverboat Gaming Commission is authorized to hear and determine
all appeals relative to the granting, suspension, revocation, condition or
renewal of all licenses, permits and applications. In addition, the Louisiana
Riverboat Gaming Commission must establish regulations concerning authorized
routes, duration of excursions, minimum levels of insurance, construction of
riverboats and periodic inspections. The Louisiana Enforcement Division is
authorized
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to investigate applicants and issue licenses, investigate violations of the
statute and conduct continuing reviews of gaming activities.
The statute authorizes issuance of up to 15 licenses to conduct gaming
activities on a riverboat of new construction in accordance with applicable law.
However, no more than six licenses may be granted to riverboats operating from
any one parish.
In issuing a license, the Louisiana Enforcement Division must find that the
applicant is a person of good character, honesty and integrity and a person
whose prior activities, criminal record, if any, reputation, habits, and
associations do not pose a threat to the public interest of the State of
Louisiana or to the effective regulation and control of gaming, or create or
enhance the dangers of unsuitable, unfair or illegal practices, methods and
activities in the conduct of gaming or the carrying on of business and financial
arrangements in connection therewith. The Louisiana Enforcement Division will
not grant a license unless it finds that: (i) the applicant is capable of
conducting gaming operations, which means that the applicant can demonstrate the
capability, either through training, education, business experience, or a
combination of the above, to operate a gaming casino; (ii) the proposed
financing of the riverboat and the gaming operations is adequate for the nature
of the proposed operation and from a source suitable and acceptable to the
Louisiana Enforcement Division; (iii) the applicant demonstrates a proven
ability to operate a vessel of comparable size, capacity and complexity to a
riverboat so as to ensure the safety of its passengers; (iv) the applicant
submits a detailed plan of design of the riverboat in its application for a
license; (v) the applicant designates the docking facilities to be used by the
riverboat; (vi) the applicant shows adequate financial ability to construct and
maintain a riverboat; and (vii) the applicant has a good faith plan to recruit,
train and upgrade minorities in all employment classifications.
Certain persons affiliated with a riverboat gaming licensee, including
directors and officers of the licensee, directors and officers of any holding
company of the licensee involved in gaming operations, persons holding five
percent or greater interests in the licensee, and persons exercising influence
over a licensee ('Affiliated Gaming Persons'), are subject to the application
and suitability requirements of the Louisiana gaming law.
The Louisiana gaming law specifies certain restrictions and conditions
relating to the operation of riverboat gaming, including the following: (i)
gaming is not permitted while a riverboat is docked, other than the forty-five
minutes between excursions, and during times when dangerous weather or water
conditions exist; (ii) each round-trip riverboat cruise may not be less than
three nor more than eight hours in duration, subject to specified exceptions;
(iii) agents of the Louisiana Enforcement Division are permitted on board at any
time during gaming operations; (iv) gaming devices, equipment and supplies may
only be purchased or leased from permitted suppliers; (v) gaming may only take
place in the designated gaming area while the riverboat is upon a designated
river or waterway; (vi) gaming equipment may not be possessed, maintained or
exhibited by any person on a riverboat except in the specifically designated
gaming area, or a secure area used for inspection, repair or storage of such
equipment; (vii) wagers may be received only from a person present on a licensed
riverboat; (viii) persons under 21 are not permitted in designated gaming areas;
(ix) except for slot machine play, wagers may be made only with tokens, chips or
electronic cards purchased from the licensee aboard a riverboat; (x) licensees
may only use docking facilities and routes for which they are licensed and may
only board and discharge passengers at the riverboat's licensed berth; (xi)
licensees must have adequate protection and indemnity insurance; (xii) licensees
must have all necessary Federal and state licenses, certificates and other
regulatory approvals prior to operating a riverboat; and (xiii) gaming may only
be conducted in accordance with the terms of the license and the rules and
regulations adopted by the Louisiana Enforcement Division.
An initial license to conduct riverboat gaming operations is valid for a
term of five years. The Company was issued an initial operator's license by the
Louisiana Enforcement Division on December 6, 1993. The Louisiana gaming law
provides that a renewal application for the period succeeding the initial five
year term of the operator's license must be made to the Louisiana Enforcement
Division. The application for renewal consists of a statement under oath of any
and all changes in information, including financial information, provided in the
previous application.
The transfer of a license or permit or an interest in a license or permit
is prohibited. The sale, purchase, assignment, transfer, pledge or other
hypothecation, lease, disposition or acquisition (a 'Transfer') by any person of
securities which represent 5% or more of the total outstanding shares issued by
a corporation that holds a license is subject to Louisiana Enforcement Division
disapproval. A security issued by a corporation that holds a license must
generally disclose these restrictions. Prior Louisiana Enforcement Division
approval is required for
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the Transfer of any ownership interest of 5% or more in any non-corporate
licensee or for the Transfer of any 'economic interest' of 5% or more in any
licensee or Affiliated Gaming Person. An 'economic interest' is defined for
purposes of a Transfer as any interest whereby a person receives or is entitled
to receive, by agreement or otherwise, a profit, gain, thing of value, loan,
credit, security interest, ownership interest or other economic benefit.
A licensee must notify the Louisiana Enforcement Division of any
withdrawals of capital, loans, advances or distributions in excess of 5% of
retained earnings for a corporate licensee, or of capital accounts for a
partnership or limited liability company licensee, upon completion of any such
transaction. No prior approval of any such withdrawal, loan, advance or
distribution is required, but any such transaction is ineffective if disapproved
by the Louisiana Enforcement Division within 120 days after the required
notification. In addition, the Louisiana Enforcement Division may issue an
emergency order for not more than 10 days prohibiting payment of profits, income
or accruals by, or investments in, a licensee.
Riverboat gaming licensees and their Affiliated Gaming Persons are required
to notify the Louisiana Enforcement Division within thirty days after the
receipt by any such persons of any loans or extensions of credit. The Louisiana
Enforcement Division is required to investigate the reported loan or extension
of credit, and to either approve or disapprove the transaction. If disapproved,
the loan or extension of credit must be rescinded by the licensee or Affiliated
Gaming Person. The Company is an Affiliated Gaming Person of its Louisiana
subsidiary that is the licensee of the Players Lake Charles Riverboat and the
Players Star Riverboat. On March 23, 1995, the Company received from the
Louisiana Enforcement Division approval of the sale and issuance of the Notes,
the execution and delivery of a Guarantee by the Company's Louisiana
subsidiaries, and the making and repayment of loans from the Company to its
Louisiana subsidiaries, in amounts up to the amount of the Offering. Any other
advances by the Company to its Louisiana subsidiaries in the form of loans or
other intercompany indebtedness are subject to the disapproval power of the
Louisiana Enforcement Division.
Fees for conducting gaming activities on a riverboat include (i) $50,000
per riverboat for the first year of operation and $100,000 per year per
riverboat thereafter plus (ii) 18 1/2% of net gaming proceeds.
In July 1991, Louisiana also authorized operation of VLTs at various types
of facilities in the state, including bars, truckstops, racetracks and off-track
betting parlors.
Proposals to amend or supplement Louisiana's riverboat gaming statute are
frequently introduced in the Louisiana state legislature. No assurances can be
given that changes in Louisiana gaming law will not occur, or that such changes
will not have an adverse impact on the Company's business in Louisiana.
NEVADA GAMING REGULATION
The ownership and operation of casino gaming facilities in Nevada are
subject to: (i) the Nevada Gaming Control Act and the regulations promulgated
thereunder (collectively, the 'Nevada Act'); and (ii) various local ordinances
and regulations. Gaming operations in Nevada are subject to the licensing and
regulatory control of the Nevada Gaming Commission ('Nevada Commission'), the
Nevada State Gaming Control Board ('Nevada Board') and various other county and
city regulatory agencies, including the City of Mesquite, collectively referred
to as the 'Nevada Gaming Authorities.'
The Company is required to be registered with the Nevada Commission as a
publicly traded corporation (a 'Registered Corporation') and to be found
suitable to own the stock of Players Nevada. Players Nevada is required to be
licensed by the Nevada Gaming Authorities in order to conduct nonrestricted
gaming operations at the Players Island Resort. The Company and Players Nevada
have filed all necessary applications with the Nevada Board to obtain these
approvals and intend to file shortly all other necessary applications with the
City of Mesquite. In addition, each of the officers and directors of the Company
and Players Nevada, and Merv Griffin as a controlling shareholder of the
Company, has submitted an application to be licensed or found suitable under
Nevada gaming laws. These applications are currently under investigation by the
Nevada Board and it is currently anticipated that such applications will be
acted upon in June 1995, although no assurances can be given in that regard. If
Players Nevada is licensed, it will be a corporate licensee (a 'Corporate
Licensee') under the terms of the Nevada Act. The following regulatory
requirements will be applicable to the Company and Players Nevada upon their
receipt of all necessary approvals from the Nevada Gaming Authorities in
connection with their applications for registration or licensing, as applicable.
Neither the Company or Players Nevada has the
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necessary registration or gaming license to conduct gaming operations in Nevada
and no assurance can be given that the necessary registration or gaming license
will be obtained, or that they will be obtained on a timely basis. There also
can be no assurance that each such officer and director or controlling
stockholder will be licensed or found suitable by the Nevada Commission.
As a Registered Corporation, the Company will be required periodically to
submit detailed financial and operating reports to the Nevada Commission and
furnish any other information which the Nevada Commission may require. No person
may become a stockholder of, or receive, any percentage of profits from a
Corporate Licensee without first obtaining licenses and approvals from the
Nevada Gaming Authorities.
The Nevada Gaming Authorities may investigate any individual who has a
material relationship to, or material involvement with, the Company or Players
Nevada in order to determine whether such individual is suitable or should be
licensed as a business associate of a Corporate Licensee. Officers, directors
and certain key employees of Players Nevada have been required to file
applications with the Nevada Gaming Authorities and will be required to be
licensed or found suitable by the Nevada Gaming Authorities. Officers, directors
and key employees of the Company who are actively and directly involved in the
activities of the Corporate Licensee will be required to be licensed or found
suitable by the Nevada Gaming Authorities. The Nevada Gaming Authorities may
deny an application for licensing for any cause which they deem reasonable. A
finding of suitability is comparable to licensing, and both require submission
of detailed personal and financial information followed by a thorough
investigation. The applicant for licensing or a finding of suitability must pay
all the costs of the investigation. Changes in licensed positions must be
reported to the Nevada Gaming Authorities and in addition to their authority to
deny an application for a finding of suitability or licensure, the Nevada Gaming
Authorities have jurisdiction to disapprove a change in a corporate position.
The Company and Players Nevada will be required to submit detailed
financial and operating reports to the Nevada Commission. Substantially all
material loans, leases, sales of securities and similar financing transactions
by Players Nevada will be required to be reported to or approved by the Nevada
Commission. If Players Nevada is licensed by the Nevada Commission, its guaranty
of the Notes, any restrictions on the transfer of its stock, or any agreement
not to encumber such stock, are ineffective unless approved by the Nevada
Commission. There can be no assurance that such approvals will be obtained.
If it were determined that the Nevada Act was violated by Players Nevada,
the licenses it holds could be limited, conditioned, suspended or revoked,
subject to compliance with certain statutory and regulatory procedures. In
addition, the Company, Players Nevada and the persons involved could be subject
to substantial fines for each separate violation of the Nevada Act at the
discretion of the Nevada Commission. Limitation, conditioning or suspension of
the licenses of Players Nevada could (and revocation of any license of Players
Nevada would) materially adversely affect the Company.
Any beneficial holder of a Registered Corporation's voting securities,
regardless of the number of shares owned, may be required to file an
application, be investigated, and have his suitability as a beneficial holder of
the Registered Corporation's voting securities determined if the Nevada
Commission has reason to believe that such ownership would otherwise be
inconsistent with the declared policies of the State of Nevada. The applicant
must pay all costs of investigation incurred by the Nevada Gaming Authorities in
conducting any such investigation.
The Nevada Act requires any person who acquires more than 5% of a
Registered Corporation's voting securities to report the acquisition to the
Nevada Commission. The Nevada Act requires that beneficial owners of more than
10% of a Registered Corporation's voting securities apply to the Nevada
Commission for a finding of suitability within thirty days after the Chairman of
the Nevada Board mails the written notice requiring such filing. Under certain
circumstances, an 'institutional investor,' as defined in the Nevada Act, which
acquires more than 10%, but not more than 15%, of a Registered Corporation's
voting securities may apply to the Nevada Commission for a waiver of such
finding of suitability if such institutional investor holds the voting
securities for investment purposes only. An institutional investor shall not be
deemed to hold voting securities for investment purposes unless the voting
securities were acquired and are held in the ordinary course of business as an
institutional investor and not for the purpose of causing, directly or
indirectly, the election of a majority of the members of the board of directors
of the Registered Corporation, any change in the Registered Corporation's
corporate charter, bylaws, management, policies or operations of the Registered
Corporation, or any of its gaming
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affiliates, or any other action which the Nevada Commission finds to be
inconsistent with holding the Registered Corporation's voting securities for
investment purposes only. Activities which are not deemed to be inconsistent
with holding voting securities for investment purposes only include: (i) voting
on all matters voted on by stockholders; (ii) making financial and other
inquiries of management of the type normally made by securities analysts for
informational purposes and not to cause a change in its management, policies or
operations; and (iii) such other activities as the Nevada Commission may
determine to be consistent with such investment intent. If the beneficial holder
of voting securities who must be found suitable is a corporation, partnership or
trust, it must submit detailed business and financial information including a
list of beneficial owners. The applicant is required to pay all costs of
investigation.
Any person who fails or refuses to apply for a finding of suitability or a
license within thirty days after being ordered to do so by the Nevada Commission
or the Chairman of the Nevada Board, may be found unsuitable. The same
restrictions apply to a record owner if the record owner, after request, fails
to identify the beneficial owner. Any stockholder found unsuitable and who
holds, directly or indirectly, any beneficial ownership of the voting securities
of the Company beyond such period of time as may be prescribed by the Nevada
Commission may be guilty of a criminal offense. The Company will be subject to
disciplinary action if, after it receives notice that a person is unsuitable to
be a stockholder or to have any other relationship with them, it (i) pays that
person any dividend or interest upon voting securities of the Company, (ii)
allows that person to exercise, directly or indirectly, any voting right
conferred through securities held by that person, (iii) pays remuneration in any
form to that person for services rendered or otherwise, or (iv) fails to pursue
all lawful efforts to require such unsuitable person to relinquish his voting
securities including, necessary, the immediate purchase of said voting
securities for cash at fair market value.
The Nevada Commission may, in its discretion, require the holder of any
debt security of a Registered Corporation, such as the holders of the Notes, to
file applications, be investigated and be found suitable to own the debt
security of a Registered Corporation. If the Nevada Commission determines that a
person is unsuitable to own such security, then pursuant to the Nevada Act, the
Registered Corporation can be sanctioned, including the loss of its approvals,
if without the prior approval of the Nevada Commission, it: (i) pays the
unsuitable person any dividend, interest, or any distribution whatsoever; (ii)
recognizes any voting right by such unsuitable person in connection with such
securities; (iii) pays the unsuitable person remuneration in any form; or (iv)
makes any payment to the unsuitable person by pay of principal, redemption,
conversion, exchange, liquidation, or similar transaction.
The Company will be required to maintain a current stock ledger in Nevada
which may be examined by the Nevada Gaming Authorities at any time. If any
securities are held in trust by an agent or by a nominee, the record holder may
be required to disclose the identity of the beneficial owner of the Nevada
Gaming Authorities. A failure to make such disclosure may be grounds for finding
the record holder unsuitable. The Company will also be required to render
maximum assistance in determining the identity of the beneficial owner. The
Company may also be required to disclose to the Nevada Commission, upon its
request, the identities of any of its securityholders. The Nevada Commission has
the power to require the stock certificates of the Company to bear a legend
indicating that the securities are subject to the Nevada Act. It is unknown
whether the Nevada Commission will impose such a requirement on the Company.
After becoming a Registered Corporation, the Company may not make a public
offering of its securities without the prior approval of the Nevada Commission
if the securities or proceeds therefrom are intended to be used to construct,
acquire or finance gaming facilities in Nevada, or to retire or extend
obligations incurred for such purposes. Approval of a public offering does not
constitute a finding, recommendation or approval by the Nevada Commission or the
Nevada Board as to the accuracy or adequacy of the Prospectus or the investment
merits of the securities offered. Any representation to the contrary is
unlawful.
The regulations of the Nevada Board and the Nevada Commission also provide
that any entity which is not an 'affiliated company,' as such term is defined in
the Nevada Act, or which is not otherwise subject to the provisions of the
Nevada Act or such regulations, such as the Company, which plans to make a
public offering of the securities intending to use such securities, or the
proceeds from the sale thereof for the construction or operation of gaming
facilities of Nevada, or to retire or extend obligation incurred for such
purposes, may apply to the Nevada Commission for prior approval of such
offering. The Nevada Commission may find an applicant
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unsuitable to be a holding company based solely on the fact that it did not
submit such an application, unless upon a written request for a ruling, the
Nevada Board Chairman has ruled that it is not necessary to submit an
application. The exchange of the New Notes for the Old Notes (the 'Exchange')
will qualify as a public offering (as such term is defined in the Nevada Act).
On March 6, 1995, the Company filed a written request (the 'Ruling Request')
with the Nevada Board Chairman for a ruling that it is not necessary to submit
the Exchange for prior approval. On March 15, 1995, the Nevada Board Chairman
issued a written ruling that it is not necessary for the Company to submit an
application for approval of the Exchange, provided that the Exchange occurs
prior to the time that the Company is registered by the Nevada Commission. The
Company anticipates that it will be registered by the Nevada Commission prior to
the Exchange occurring and that Nevada Commission approval of the Exchange will
be required. Accordingly, as an alternative to the Ruling Request, the Company
has also filed an application for approval of the Exchange so that such
application can be considered at the same time that the Company's application
for registration is considered. No assurance can be given that approval of the
Exchange will be granted. In addition, (i) a Corporate Licensee may not
guarantee a security issued by a Registered Corporation pursuant to a public
offering without the prior approval of the Nevada Commission; and (ii)
restrictions on the transfer of the stock of a Corporate Licensee and agreements
not to encumber such stock (collectively, 'Stock Restrictions') are ineffective
without approval of the Nevada Commission. Consequently, approval of the
guarantee by Players Nevada and of the Stock Restrictions has been applied for
and will be required prior to the time Players Nevada is licensed. No assurance
can be given that approvals of the guarantee by Players Nevada and the Stock
Restrictions will be granted.
Changes in the control of a Registered Corporation through merger,
consolidation, stock or asset acquisitions, management or consulting agreements,
or any act or conduct by a person whereby he obtains control, may not occur
without the prior approval of the Nevada Commission. Entities seeking to acquire
control of a Registered Corporation must satisfy the Nevada Board and Nevada
Commission in a variety of stringent standards prior to assuming control of such
Registered Corporation. The Nevada Commission may also require controlling
stockholders, officers, directors and other persons having a material
relationship or involvement with the entity proposing to acquire control, to be
investigated and licensed as part of the approval process relating to the
transaction.
The Nevada legislature has declared that some corporate acquisitions
opposed by management, repurchases of voting securities and corporate defense
tactics affecting Nevada corporate gaming licensees, and Registered Corporations
that are affiliated with those operations, may be injurious to stable and
productive corporate gaming. Approvals are, in certain circumstances, required
from the Nevada Commission before the Registered Corporation can make
exceptional repurchases of voting securities above the current market price
thereof and before a corporate acquisition opposed by management can be
consummated. The Nevada Act also requires prior approval of a plan of
recapitalization proposed by the Registered Corporation's stockholders for the
purposes of acquiring control of the Registered Corporation.
License fees and taxes, computed in various ways depending on the type of
gaming or activity involved, are payable to the state of Nevada and to the
counties and cities in which the Corporate Licensee's operations are conducted.
Depending upon the particular fee or tax involved, these fees and taxes are
payable either monthly, quarterly or annually and are based upon either: (i) a
percentage of the gross revenues received up to a maximum of 6.25%; (ii) the
number of gaming devices operated; or (iii) the number of table games operated.
A casino entertainment tax is also paid by casino operations where entertainment
is furnished in connection with the selling of food or refreshments.
Any person who is licensed, required to be licensed, registered, required
to be registered, or is under common control with such persons (collectively,
'Licensees'), and who proposes to become involved in a gaming venture outside of
Nevada, is required to deposit with the Nevada Board, and thereafter maintain, a
revolving fund in the amount of $10,000 to pay the expenses of investigation by
the Nevada Board of their participation in such foreign gaming. The revolving
fund is subject to increase or decrease in the discretion of the Nevada
Commission. Thereafter, Licensees are required to comply with certain reporting
requirements imposed by the Nevada Act. Licensees are also subject to
disciplinary action by the Nevada Commission if they knowingly violate any laws
of the foreign jurisdiction pertaining to the foreign gaming operation, fail to
conduct the foreign gaming operation in accordance with the standards of honesty
and integrity required of Nevada gaming operations, engage in activities that
are harmful to the state of Nevada or its ability to collect gaming
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taxes and fees, or employ a person in the foreign operation who has been denied
a license or finding of suitability in Nevada on the ground of personal
unsuitability.
MISSOURI GAMING REGULATION
In November 1992, the voters of Missouri approved a referendum authorizing
riverboat gaming in Missouri. In 1993, the Missouri Legislature enacted
legislation which substantially revised the referendum legislation regarding
riverboat gaming and its regulation (the 'Missouri Gaming Act'). The Missouri
Gaming Act established the Missouri Gaming Commission, which has broad
jurisdiction over and supervisory powers concerning gaming operations conducted
under the Missouri Gaming Act. Following a challenge to legislation authorizing
riverboat casino gaming, a January 1994 Missouri Supreme Court ruling created
uncertainties regarding the extent to which casino gaming is constitutional in
Missouri. In February 1994, the Missouri legislature passed legislation which
would permit the voters to amend the State Constitution to permit legislation
reauthorizing riverboat casino gaming consistent with the State Constitution.
The vote on the proposed State Constitutional amendment was held in April 1994
to permit games of chance on riverboat casinos. In the April 1994 vote, the
State Constitutional amendment was narrowly defeated. As a result of the
Missouri legislature's actions in February 1994, several municipalities in
Missouri which had previously approved local ordinances permitting gaming,
including the City of Maryland Heights resubmitted the local gaming activities
ordinances to the voters in April 1994 as well. The Maryland Heights ordinance
was approved by municipal voters in the April 1994 vote. Subsequently, at the
statewide general election held November 8, 1994, a second proposal to amend the
Missouri Constitution to permit games of chance on riverboats and floating
facilities on the Missouri and Mississippi Rivers was adopted. As a result
thereof, effective December 8, 1994, reel slot machines and other games of
chance were authorized for use in Missouri casinos.
Under the Missouri Gaming Act, gaming is permitted in Missouri only on the
Missouri and Mississippi Rivers. The Missouri Gaming Act calls for licensure of
owners (Class A license), operators (Class B license), suppliers and
gaming-related occupations. There is no statewide numerical limit to the number
of licenses which may be granted. As a result of the Missouri legislature's May
1994 amendments to the Missouri Gaming Act, prior uncertainty regarding whether
any city or county outside of the two major metropolitan areas of Missouri (St.
Louis/St. Louis County and the Kansas City metropolitan area) may be granted
more than one license has been removed. Under the May 1994 amendments to the
Missouri Gaming Act, any city or county may be granted more than one license if
the 'home dock' city or county has authorized more than one excursion gaming
boat. However, within all cities and counties in Missouri the Missouri Gaming
Commission has the ultimate responsibility for setting the number, location and
type of licensed boats. As noted above, excursion gaming boats also must be
authorized by the local home dock city or county.
On May 24, 1995, the Company's amended application for a gaming license at
the Maryland Heights Project was filed with the Missouri Gaming Commission. The
Missouri Gaming Commission is considering licensing applications for review in
selected pools of three and has chosen the Company's and Promus's applications
for consideration in the next such pool. As of the date of this Prospectus, five
gaming licenses have been issued by the Missouri Gaming Commission, two for the
metropolitan St. Louis area in the eastern part of the state, two for the Kansas
City area (approximately 250 miles west of St. Louis), and one for St. Joseph,
in the northwestern part of Missouri. The two licenses in the St. Louis area are
based in the City of St. Louis, approximately 20 miles east of the Company's
proposed development in Maryland Heights, and in St. Charles, across the
Missouri River and approximately five miles from the Company's proposed Maryland
Heights development. The City of Maryland Heights previously passed ordinances
permitting two riverboat casinos to be based within its city limits and giving
preliminary local approval to the proposed projects of both the Company and
Promus. The Missouri Gaming Act does not limit the statewide number of licenses
that may be granted. Under the Missouri Gaming Act, as amended by the Missouri
Legislature in May 1994 and as signed into law by the Missouri Governor shortly
thereafter (the 'Amended Missouri Gaming Act'), multiple riverboat casinos can
be licensed for operation in Maryland Heights. No assurance can be given,
however, that the Company's gaming application will be approved for its proposed
Maryland Heights operations, nor can any assurance be given that the Missouri
Gaming Commission will not limit the number of licenses granted to Maryland
Heights, to the St. Louis metropolitan area in which Maryland Heights is
located, or on a statewide basis.
The Missouri Gaming Act provides a maximum loss limit of $500 per
individual player per gaming excursion. Gaming excursions are required by
regulation to be no less than two hours and no more than four
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hours in duration. Excursion gaming boats are required to cruise, unless the
Missouri Gaming Commission determines under applicable criteria to permit gaming
at a continuously docked boat. Such criteria include, among other items, danger
to the boat's passengers because of the location of the dock or excursion
cruising conditions, disruption of interstate commerce, violation of another
state's laws or Federal law, or possible interference with railway or barge
transportation.
The U.S. Coast Guard has previously advised the Missouri Gaming Commission
that circumstances generally prevailing on the Missouri River, on which the
Company's excursion gaming boat facility will be located if its application is
granted, militate against cruising riverboats. While the Coast Guard has refused
to instruct the Missouri Gaming Commission that all Missouri River operations be
continuously docked riverboats, the U.S. Coast Guard has made clear its need to
be advised of all plans to deal with risk factors from riverboat cruising
operations. The U.S. Coast Guard, through the U.S. Army Corps of Engineers
permit process, can veto a cruising riverboat gaming project for failing to meet
its safety requirements. Additionally, Missouri Gaming Commission regulations
provide for dockside operation even for a cruising riverboat under circumstances
of inclement weather, mechanical difficulty or declaration by the U.S. Army
Corps of Engineers that navigation on the Missouri River is unsafe.
Traditionally, between the months of December and April the U.S. Army Corps of
Engineers has 'closed' the Missouri River by failing to warrant the navigational
channel due to low water levels. The Missouri Gaming Commission has indicated
that dockside operation is expected during this period.
Licensees must establish financial responsibility sufficient to meet
adequately the requirements of the proposed enterprise. Additionally, the
Missouri Gaming Commission's regulations require that if the Company's
application is granted, the Company's licensed subsidiary would be prohibited
from allowing withdrawals of capital by, or making loans, advances, or
distributions of any type of assets to, its owner(s), in excess of 5% of such
entity's accumulated earnings without Missouri Gaming Commission approval.
The Missouri Gaming Act also requires that the excursion gaming boat
resemble historic Missouri riverboats, encourages use of Missouri resources,
goods and services in the operation of the boat, and requires that the boat
provide for nongaming areas, food service and a Missouri theme gift shop. Use of
the space on any vessel and operating criteria are determined in accordance with
rules and regulations of the U.S. Coast Guard. There is no size limit on
Missouri gaming boats and no minimum or maximum space prescribed for gaming
areas.
The Missouri Gaming Act directly subjects the gaming enterprises to various
Missouri taxes. An admission fee of $2.00 per ticket per excursion must be paid
to the Missouri Gaming Commission. Licensees may charge any admission fee above
the $2.00 amount that they desire. Gaming enterprises in Missouri are also
subject to an 'adjusted gross receipts tax' equal to 20 percent of the gross
receipts from licensed gaming games and devices less winnings paid to wagerers.
Owners/operators are subject to all other income taxes, sales taxes, earnings
taxes, use taxes, property taxes or any other tax or fee levied by local, state
or Federal governments.
Transfer of a Class A or Class B gaming license (the type of licenses
applied for in connection with the Maryland Heights application) is not
permitted without approval of the Missouri Gaming Commission, nor may such
interests be pledged as collateral to other than a regulated bank or savings and
loan association without the approval of the Missouri Gaming Commission. No
transfer of an interest of 5% or greater, directly or indirectly, in a publicly
traded company holding a Class A or Class B license shall occur without the
Missouri Gaming Commission's approval. Additionally, the Missouri Gaming
Commission may require a licensee to maintain cash or cash equivalents, in an
amount sufficient to protect patrons against defaults in gaming debts owed by
the licensee.
Application fees are based upon costs of investigation and approval of
licenses. The minimum nonrefundable application fee is $50,000. The initial
owner's Class A license granted and the first subsequent license renewal of an
excursion gaming boat operator is for a period of one year. Thereafter, license
renewal periods are every two years. The annual fee for licensure is $25,000.
KENTUCKY GAMING REGULATION
The Company presently owns and operates Players Bluegrass Downs, a
thoroughbred race track located in Paducah, Kentucky. Pursuant to the Kentucky
statutes governing horseracing, the Kentucky Racing Commission (the 'Racing
Commission') has plenary power to promulgate administrative regulations
prescribing conditions under which all legitimate horse racing and wagering
thereon is conducted. The Racing Commission issues race track licenses on an
annual basis and awards racing dates subsequent to an annual application
required to be filed
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with the Racing Commission. The Racing Commission may revoke or suspend a
license if the Racing Commission has reason to believe that any provision of the
Kentucky statutes, administrative regulations, or conditions established by the
Racing Commission, has not been satisfied.
PROPOSED TEXAS GAMING LEGISLATION
Since the Players Lake Charles Riverboat began operating on December 8,
1993, more than half of its patrons have come from Texas, with a significant
portion coming from the metropolitan Houston area. Although casino gaming is not
currently permitted in Texas, and the Attorney General of Texas has issued an
opinion that gaming in Texas would require an amendment to the State's
Constitution, the Texas legislature has considered various proposals to
authorize casino gaming and two bills related to gaming were presented in the
most recent legislative session that concluded on May 29, 1995. See
'Business--Lake Charles Operations.' Additional bills may be introduced from
time to time whenever the legislature is in session. Since the Texas legislature
(which meets every two years in odd-numbered years) did not pass legislation to
amend the Texas State Constitution during the 1995 regular session, such
legislation will have to await the next regular session in 1997, or a special
session of the legislature. Special sessions can only be called by the Governor
for matters that were pending in the regular legislative session. Governor
George Bush has taken a public position against legalized casino gaming. A
constitutional amendment requires a two-thirds vote of those present and voting
in each house of the Texas state legislature and approval by the electorate at a
referendum.
CERTAIN REQUIRED APPROVALS ASSOCIATED WITH THE BANK FACILITY
Certain aspects of the Bank Facility will be subject to required disclosure
to, approval of or disapproval by the respective Gaming Authorities in the
states in which the Company conducts or proposes to conduct gaming operations.
The Bank Facility may be reviewed as part of the Company's application for a
gaming license in a jurisdiction, or if previously licensed, as a separate
review item. The disclosure, review and approval requirements for the Bank
Facility in Illinois, Louisiana, Nevada and Missouri are substantially similar
to the disclosure, review and approval requirements applicable to the Notes and
the Guarantees except that additional disclosure, review and/or approval
requirements may apply with respect to the security for the Bank Facility to be
provided by the Company and its subsidiaries. No assurance can be given that the
Bank Facility and the proposed security for the Bank Facility will receive all
required approvals, that such approvals will be received on a timely basis or
that the failure to obtain all required approvals will not adversely impact the
Bank Facility or the Company's ability to make borrowings thereunder. See
'--Illinois Gaming Regulation,' '--Louisiana Gaming Regulation,' '--Nevada
Gaming Regulation' and '--Missouri Gaming Regulation.'
U.S. COAST GUARD
Each cruising riverboat also is regulated by the U.S. Coast Guard, whose
regulations affect boat design and stipulate on-board facilities, equipment and
personnel (including requirements that each vessel be operated by a minimum
complement of licensed personnel) in addition to restricting the number of
persons who can be aboard the boat at any one time. All vessels operated by the
Company must hold a Certificate of Inspection. Loss of the Certificate of
Inspection of a vessel would preclude its use as an operating riverboat. The
vessel must be drydocked periodically for inspection of the hull, which will
result in a loss of service that can have an adverse effect on the Company. For
vessels of the Company's type, the inspection cycle is every five years. Less
stringent rules apply to permanently moored vessels such as the dockside barges
used by the Company. The Company believes that these regulations, and the
requirements of operating and managing cruising gaming vessels generally, make
it more difficult to conduct riverboat gaming than to operate land-based
casinos.
All shipboard employees of the Company employed on U.S. Coast Guard
regulated vessels, even those who have nothing to do with the actual operation
of the vessel, such as dealers, cocktail hostesses and security personnel, may
be subject to the Jones Act which, among other things, exempts those employees
from state limits on workers' compensation awards. The Company believes that it
has adequate insurance to cover employee claims.
SHIPPING ACT OF 1916
In order for the Company's vessels to have United States flag registry, the
Company must maintain 'United States citizenship' as defined in the Shipping Act
of 1916, as amended (the 'Shipping Act'), and other applicable statutes. A
corporation operating any vessel in the coastwise trade, such as the Company, is
not considered a United States citizen unless, among other things, United States
citizens own 75% of its outstanding capital stock.
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<PAGE>
REQUIRED DIVESTITURE OF COMMON STOCK
As noted above, there are various state and Federal regulations on the
ownership of the Company's Common Stock. The Company's Articles of Incorporation
and By-laws provide that if any governmental commission, regulatory authority,
entity, agency or instrumentality (collectively, an 'Authority') having
jurisdiction over the Company or any affiliate of the Company or that has
granted a license, certificate of authority, franchise or similar approval
(collectively, a 'License') to the Company or any affiliate of the Company
orders or requires any stockholder to divest any or all of the shares owned by
such stockholder (a 'Divestiture Order') and the stockholder fails to do so by
the date required by the Divestiture Order (unless the Divestiture Order is
stayed), the Company will have the right to acquire the shares from the
stockholder that the stockholder failed to divest as required by such
Divestiture Order. If, after reasonable notice and an opportunity for affected
parties to be heard, any Authority determines that continued ownership of the
Company's Common Stock by any stockholder shall be grounds for the revocation,
cancellation, non-renewal, restriction or withholding of any License granted to
or applied for by the Company or any affiliate of the Company, such stockholder
shall divest the shares that provide the basis for such determination, and if
such stockholder fails to divest shares within 10 days after the date the
Authority's determination becomes effective (unless the determination is
stayed), the Company shall have the right to acquire such shares from the
stockholder. If the Company determines that persons who are not citizens of the
United States as determined under the Shipping Act or other applicable statutes
(the 'Foreign Citizens') own more than 25% of the Company's outstanding Common
Stock, the Company may require the Foreign Citizen(s) who most recently acquired
the shares that bring total Foreign Citizen ownership to more than 25% of the
outstanding Common Stock (the 'Excess Shares') to divest the Excess Shares to
persons who are United States citizens. If the Foreign Citizen(s) so directed
fail to divest the Excess Shares to United States citizens within 30 days after
the date on which the Company gives a written notice to the Foreign Citizen(s)
to divest the Excess Shares, the Company shall have the right to acquire the
shares that the Foreign Citizen failed to divest as required by the Company's
notice.
Whenever the Company has the right to acquire shares from a stockholder
pursuant to the provisions described in the preceding paragraph, the Company
will pay the stockholder $.10 per share or such higher price as may be required
by applicable legal requirements. Some state gaming regulations require a
purchase price equal to the fair market value of the shares under certain
circumstances described above. If there is no other applicable legal
requirement, any amount payable to the stockholder in excess of $.10 per share
will be paid in five equal annual installments with interest at the lower of the
prime rate or the LIBOR rate, as published from time to time in the Wall Street
Journal.
When any Divestiture Order is entered or when the Company tenders the
consideration for which it may acquire shares, as described above, the shares in
question shall no longer be entitled to any voting, dividend or other rights
until such time as they have been appropriately divested. The foregoing
provisions of the Company's Articles of Incorporation and By-laws relating to
required divestiture are in addition to, and not in replacement of, any
applicable legal requirements.
The provisions of the Articles of Incorporation and By-laws described above
are uncommon and no controlling precedent has been found to determine how they
would be enforced or whether they are enforceable.
The terms of the Notes feature certain analogous provisions which could
give rise to the obligation of the holder to sell such Notes or the right of the
Company to repurchase the Notes at a price equal to the lowest of the holder's
cost, the principal amount or then current market prices. See 'Description of
New Notes--Regulatory Redemption.'
PAID ADVERTISING AND MARKETING
The Federal Communications Commission ('FCC') prohibits broadcasters from
accepting advertising that actively promotes gaming, although the FCC does not
ban all advertising for casinos. Federal regulation also restricts the
circulation of certain materials related to gaming through the United States
mail.
DISCOURAGEMENT OF SHARE ACCUMULATIONS
Various state limits requiring approvals of shareholdings over certain
thresholds may discourage accumulations over such limits and therefore may
discourage changes in control of the Company. The Federal laws referred to above
may also discourage ownership by stockholders who are not United States
citizens.
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MANAGEMENT
The Company's directors and executive officers are as follows:
<TABLE>
<CAPTION>
DIRECTOR PRESENT POSITION
NAME AGE SINCE WITH THE COMPANY
- --------------------------- ----------- ----------- ------------------------------------------------------------
<S> <C> <C> <C>
Edward Fishman............. 51 1985 Chairman of the Board of Directors and Chief Executive
Officer
David Fishman.............. 47 1985 Vice Chairman of the Board of Directors
Howard Goldberg............ 49 1986 President, Chief Operating Officer and Director
Thomas E. Gallagher........ 50 1992 Director
Marshall S. Geller......... 56 1989 Director
Lee Seidler................ 60 1987 Director
Steven P. Perskie.......... 50 1994 Executive Vice President, General Counsel and Director
Peter J. Aranow............ 48 -- Executive Vice President, Chief Financial Officer and
Secretary
</TABLE>
Edward Fishman has served as Chairman of the Board and Chief Executive
Officer of the Company since 1985 and as President during May 1993. In addition,
he has 16 years of marketing experience in the casino industry, and he has
served as a marketing consultant to Resorts International Casino/Hotel in
Atlantic City and Harrah's East Hotel/Casino.
David Fishman has served as the Company's Vice Chairman of the Board since
1985 and he served as Secretary from 1985 until May 1993. His principal
activities relate to overall supervision of individual casino development and
operations. Since inception, he has also served as President of the Company's
subsidiaries that conduct the Metropolis and Lake Charles operations,
respectively, and he is responsible for the development of such riverboat
operations.
Howard Goldberg became President of the Company in May 1993 and Chief
Operating Officer shortly thereafter. Mr. Goldberg's duties are principally
related to long-range development and strategic planning. Prior to joining the
Company, he was the managing shareholder practicing law in the Atlantic City,
New Jersey law firm of Horn, Goldberg, Gorny, Daniels, Plackter & Weiss, which
is outside general counsel to the Company and has represented the Company since
its inception. Since the advent of casino gaming in Atlantic City, Mr. Goldberg
specialized in representing casinos in New Jersey and other jurisdictions for
development and regulatory matters. He remains associated with the law firm, but
he does not currently engage in any firm-related activities other than on an
occasional and incidental basis. The amount of the payments due to him from the
firm are not affected by fees paid by the Company to the firm.
Thomas E. Gallagher has been President and Chief Executive Officer of The
Griffin Group since April 1, 1992. For the preceding 15 years, he was a partner
of the law firm of Gibson, Dunn & Crutcher. Since November 1993, he has served
as a director, and since May 1995, he has served as President and Chief
Executive Officer of Resorts International Inc.
Marshall S. Geller is a Senior Managing Partner of Golenberg & Geller,
Inc., a merchant banking firm. He served as the Company's interim President from
November 1992 through April 1993. Mr. Geller served as Vice Chairman of Gruntal
& Co., Inc., an investment banking firm, from 1988 to 1990. From 1967 until
1988, he was a Senior Managing Director of Bear, Stearns & Co., Inc., an
investment banking firm ('Bear Stearns'). He is currently interim President and
Chief Executive Officer of Lottery Enterprises, Inc. and interim co-chairman of
Hexcel Corporation. He also serves as a director of Amerihost Properties, Inc.
(with which the Company developed a hotel in Metropolis), Las Vegas Major League
Sports, Inc., Sports-Tech, Inc., Value Vision International, Inc. and various
privately-held corporations and charitable organizations.
Lee Seidler is a private investor. He is affiliated with Bear Stearns as
Managing Director Emeritus. From 1981 to 1989, he was a Senior Managing Director
of Bear Stearns. He is a director of Synthetic Industries, Inc., The Shubert
Organization, Inc. and The Shubert Foundation.
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<PAGE>
Steven P. Perskie joined the Company's Board of Directors and became a Vice
President and its General Counsel in May 1994 and became Executive Vice
President on March 13, 1995. His responsibilities include the development of
opportunities for the Company in new and emerging gaming jurisdictions and
strategic planning. From 1990 to May 1994, he served as Chairman of the New
Jersey Casino Control Commission (the 'NJCCC'). During his tenure as Chairman of
the NJCCC, Mr. Perskie oversaw the restructuring of the composition and focus of
the NJCCC. Prior to joining the NJCCC, he served from January to October 1990 as
Chief of Staff to Governor Jim Florio of the State of New Jersey. From October
1989 to January 1990, he was the Director of Transition for Governor-Elect
Florio. For several years prior to October 1989, he was a presiding judge in the
Superior Court of the State of New Jersey. He also served for eleven years
through 1982 in the New Jersey Legislature, first as a member of the General
Assembly and then as a member of the Senate. As a state legislator, he was the
author and principal sponsor of the New Jersey Casino Control Act in 1977.
Peter J. Aranow joined the Company as an Executive Vice President in May
1993, and he became the Company's Chief Financial Officer and Secretary shortly
thereafter. From 1977 to May 1993, he was employed in the Investment Banking
Department of Bear Stearns in progressively more responsible positions,
including Senior Managing Director. During his tenure with Bear Stearns, one of
Mr. Aranow's specialties was the gaming industry.
Edward and David Fishman are brothers. Howard Goldberg and Lee Seidler are
brothers-in-law.
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<PAGE>
DESCRIPTION OF NEW NOTES
The New Notes will be issued pursuant to an Indenture (the 'Indenture')
among the Company, the Guarantors and First Fidelity Bank, National Association
(the 'Trustee'). Except as otherwise indicated below, the following summary
applies to both the Old Notes and the New Notes. As used herein, the term
'Notes' shall mean the Old Notes and the New Notes, unless otherwise indicated.
The terms of the Notes include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended (the 'Trust Indenture Act'). The Notes are subject to all such terms,
and holders of the Notes are referred to the Indenture and the Trust Indenture
Act for a statement thereof.
The form and terms of the New Notes are substantially identical to the form
and terms of the Old Notes, except that the New Notes (i) will be registered
under the Securities Act of 1933, as amended, (ii) will not provide for payment
of penalty interest as Liquidated Damages, which terminate upon consummation of
the Exchange Offer, and (iii) will not bear any legends restricting transfer
thereof. The New Notes will be issued solely in exchange for an equal principal
amount of Old Notes. As of the date hereof, $150 million aggregate principal
amount of Old Notes is outstanding. See 'The Exchange Offer.'
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, including the definitions therein of certain terms used below. A copy of
the Indenture has been filed with the Commission as an exhibit to the
Registration Statement of which this Prospectus is a part. Capitalized terms
used in this section and not otherwise defined below have the respective
meanings assigned to them in the Indenture.
Definitions relating to certain terms are set forth under '--Certain
Definitions' and throughout this description. Capitalized terms used herein
without definition have the meanings ascribed to them in the Indenture. Wherever
particular provisions of the Indenture are referred to in this summary, such
provisions are incorporated by reference as a part of the statements made and
such statements are qualified in their entirety by such reference.
GENERAL
The New Notes will be senior unsecured obligations of the Company, limited
in aggregate principal amount to $150 million, and will rank pari passu in right
of payment with all present and future senior Indebtedness of the Company and
senior to all future Subordinated Indebtedness of the Company. The New Notes
will be jointly and severally guaranteed on a senior unsecured basis by the
Initial Guarantors and all future Subsidiaries of the Company. Upon receipt of
all necessary regulatory approvals and development of the Maryland Heights
Project, the New Notes will also be guaranteed on the same basis by the Maryland
Heights Operating Subsidiary and the Maryland Heights Investment Subsidiary but
not the Maryland Heights Joint Venture Entity. The New Notes and the Guarantees
will effectively be subordinated in right of payment to all secured Indebtedness
of the Company and the Guarantors, such as the Indebtedness under the Credit
Agreement, to the extent of the value of the assets securing such Indebtedness.
The term 'Subsidiaries' does not include Unrestricted Subsidiaries.
The New Notes will be issued only in fully registered form, without
coupons, in denominations of $1,000 and integral multiples thereof. Initially,
the New Notes will be issued in global form. See '--Book-Entry; Delivery and
Form.'
The New Notes will mature on April 15, 2005. The New Notes will bear
interest at 10 7/8% per annum from and including the date of issuance or from
the most recent Interest Payment Date for which interest has been paid or
provided for, payable semi-annually on April 15 and October 15 of each year to
the persons in whose names such New Notes are registered at the close of
business on the April 1 or October 1 immediately preceding such Interest Payment
Date. Interest will be calculated on the basis of a 360-day year consisting of
twelve 30-day months.
Principal of, premium, if any, and interest on the New Notes will be
payable, and the Notes may be presented for registration of transfer or
exchange, at the office or agency of the Company maintained for such purpose,
which office or agency shall be maintained in the Borough of Manhattan, The City
of New York. At the option of the Company, payment of interest may be made by
check mailed to the Holders of the New Notes at the addresses set forth upon the
registry books of the Company. No service charge will be made for any
registration of transfer or exchange of Notes, but the Company may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith. Until otherwise designated by the Company, the
Company's office or agency will be the corporate trust office of the Trustee.
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<PAGE>
OPTIONAL REDEMPTION
The New Notes will be redeemable at the option of the Company, in whole or
in part, at any time on or after April 15, 2000 upon not less than 30 nor more
than 60 days' notice to each Holder of the New Notes, at the following
redemption prices (expressed as percentages of the principal amount) if redeemed
during the 12-month period commencing April 15 of the years indicated below, in
each case together with accrued interest thereon to the redemption date:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
- -------------------------------------------------------------- -----------
<S> <C>
2000.......................................................... 104.078%
2001.......................................................... 102.719%
2002.......................................................... 101.359%
2003 and thereafter........................................... 100.000%
</TABLE>
The New Notes will not be subject to redemption pursuant to any mandatory
sinking fund.
Notice of any redemption will be sent by first-class mail at least 30 days
and not more than 60 days prior to the date fixed for redemption, to the Holder
of each New Note to be redeemed at such Holder's last address as then shown upon
the registry books. The notice of redemption must state the date fixed for
redemption, the redemption price and the amount of accrued but unpaid interest
to be paid. Any notice that relates to a New Note to be redeemed in part only
must state the portion of the principal amount equal to the unredeemed portion
thereof and must state that on and after the date fixed for redemption, upon
surrender of such New Note, a new New Note or New Notes in principal amount
equal to the unredeemed portion thereof will be issued. On and after the date
fixed for redemption, interest will cease to accrue on the New Notes or portions
thereof called for redemption so long as the Company has deposited with the
Paying Agent funds in satisfaction of the redemption price pursuant to the
Indenture.
REGULATORY REDEMPTION
The Indenture will provide that if the ownership of any of the New Notes by
any person or entity will preclude, interfere with, threaten or delay the
issuance, maintenance, existence or reinstatement of any gaming or liquor
license, permit or approval, or result in the imposition of burdensome terms or
conditions on such license, permit or approval, as determined by any
Governmental Authority or the Board of Directors of the Company, the Holder
shall be obligated to dispose of such Holder's New Notes (in which event the
Company shall have no obligation to pay any interest to such Holder), and, if
such New Notes are not so disposed of within the required period, the Company
shall have the right to redeem such Holder's New Notes at a redemption price
equal to the lowest of (i) the price at which such Holder or beneficial owner
acquired such New Notes, without accrued interest, if any, (ii) the principal
amount of such New Notes, without accrued interest, if any, and (iii) the
Current Market Price of such New Notes on such redemption date, without accrued
interest, if any. The Indenture will provide that any Holder or beneficial owner
of a New Note required to qualify or be found suitable under applicable Gaming
Laws must pay all investigative fees and costs of the Gaming Authorities in
connection with such application therefor.
CERTAIN COVENANTS
Repurchase of New Notes at the Option of the Holder Upon a Change of Control
In the event that a Change of Control (as defined below) has occurred, each
Holder of New Notes will have the right, at such Holder's option, pursuant to an
irrevocable and unconditional offer by the Company (the 'Change of Control
Offer'), to require the Company to repurchase all or any part of such Holder's
New Notes on the date that is no later than 30 Business Days after the
occurrence of such Change of Control, at a cash price (the 'Change of Control
Offer Price') equal to 101% of the principal amount thereof, together with
accrued interest to the purchase date. The Change of Control Offer shall remain
open for 20 Business Days following its commencement and no longer, except to
the extent that a longer period is required by applicable law (the 'Change of
Control Offer Period'). Upon expiration of the Change of Control Offer Period,
the Company shall purchase all New Notes tendered in response to the Change of
Control Offer.
Except as described above with respect to a Change of Control, the
Indenture does not contain provisions that permit the Holders of the New Notes
to require the Company to repurchase or redeem the New Notes in the event of a
takeover, recapitalization or similar restructuring.
As used herein, a 'Change of Control' means (i) any merger or consolidation
of the Company with or into any person or any sale, transfer or other
conveyance, whether direct or indirect, of all or substantially all of the
assets of the Company, on a consolidated basis, in one transaction or a series
of related transactions, if, immediately after giving effect to such transaction
or transactions, any 'person' or 'group' (as such terms are used for purposes of
Sections 13(d) and 14(d) of the Exchange Act, whether or not applicable) is or
becomes the
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<PAGE>
Beneficial Owner, directly or indirectly, of more than 40% of the total voting
power in the aggregate normally entitled to vote in the election of directors,
managers or trustees, as applicable, of the transferee or surviving entity, (ii)
the time that the Company first determines or reasonably should have known that
any 'person' or 'group' (as such terms are used for purposes of Sections 13(d)
and 14(d) of the Exchange Act, whether or not applicable) is or becomes the
Beneficial Owner, directly or indirectly, of more than 40% of the total voting
power in the aggregate of all classes of Capital Stock then outstanding of the
Company normally entitled to vote in the election of directors, or (iii) during
any period of 12 consecutive months after the Issue Date, individuals who at the
beginning of any such 12-month period constituted the Board of Directors of the
Company (together with any new directors whose election by such Board or whose
nomination for election by the shareholders of the Company was approved by a
vote of a majority of the directors 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 of the Company then in office; provided,
however, that a 'Change of Control' shall not be deemed to occur under clauses
(i) or (ii) above if the 'person' referred to in either such clause is an
Excluded Person, or the 'group' referred to in either such clause consists
exclusively of two or more 'Excluded Persons' who engages or engage in any
transaction or series of transactions or announces or announce any intention to
effect any transaction or series of transactions referred to in clauses (i) or
(ii), unless (y) such transaction or series of transactions is subject to Rule
13e-3 under the Exchange Act, or any similar or successor rule, and (z)
immediately prior to and during the 180-day period following (1) such
transaction or series of related transactions referred to in clause (i), or (2)
the time that the Company first determines or reasonably should have known that
any such Excluded Person or any such 'group' consisting exclusively of two or
more Excluded Persons, is or becomes the Beneficial Owner, directly or
indirectly, of more than 40% of such total voting power, as referred to in
clause (ii), the New Notes are or become rated, in the case of either clause (1)
or (2), 'B+' or below by Standard & Poor's Corporation and 'B1' or below by
Moody's Investors Service, or if either such service or both such services shall
no longer make a rating of the New Notes publicly available, another nationally
recognized securities agency or agencies, as the case may be, selected by the
Company, which shall be substituted for Standard & Poor's Corporation or Moody's
Investors Service or both, as the case may be; provided, further, that the
180-day period referred to in clause (z) shall be extended for so long as the
rating of the New Notes is under publicly announced consideration for possible
downgrade by any such rating agency. On or before the Change of Control Purchase
Date, the Company will (i) accept for payment New Notes or portions thereof
properly tendered pursuant to the Change of Control Offer, (ii) deposit with the
Paying Agent U. S. Legal Tender or Cash Equivalents sufficient to pay the Change
of Control Offer Price (together with accrued and unpaid interest) of all New
Notes so tendered and (iii) deliver to the Trustee New Notes so accepted
together with an Officers' Certificate listing the New Notes or portions thereof
being purchased by the Company. The Paying Agent will promptly mail to the
Holders of New Notes so accepted payment in an amount equal to the Change of
Control Offer Price (together with accrued and unpaid interest), and the Trustee
will promptly authenticate and mail or deliver to such Holders a new New Note
equal in principal amount to any unpurchased portion of the New Note
surrendered. Any New Notes not so accepted will be promptly mailed or delivered
by the Company to the Holder thereof. The Company will publicly announce the
results of the Change of Control Offer on or as soon as practicable after the
Change of Control Offer Period expires.
The Change of Control purchase feature of the New Notes may make more
difficult or discourage a takeover of the Company, and, thus, the removal of
incumbent management. The Change of Control purchase feature resulted from
negotiations between the Company and the Initial Purchasers.
The phrase 'all or substantially all' of the assets of the Company as used
in the Indenture has no clearly established meaning under New York law (which
governs the Indenture), has been the subject of limited judicial interpretation
in few jurisdictions and will be interpreted based upon the particular facts and
circumstances. As a result, there may be a degree of uncertainty in ascertaining
whether a sale or transfer of 'all or substantially all' of the assets of the
Company has occurred and therefore whether a Change of Control has occurred. Any
Change of Control Offer will be made in compliance with all applicable laws,
rules and regulations, including, if applicable, Regulation 14E under the
Exchange Act and the rules thereunder and all other applicable Federal and state
securities laws.
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<PAGE>
The repurchase by the Company of the New Notes upon a Change of Control
could violate and result in a default under the Credit Agreement or other
Indebtedness of the Company or its Subsidiaries, even if a Change of Control, in
and of itself, would not cause a default. Any such default would likely give the
lenders under the Credit Agreement the right to proceed against any collateral
securing the Indebtedness thereunder. In any event, such lenders would likely
have the right to seek repayment of such Indebtedness at least on a pari passu
basis with the New Notes. There can be no assurance that the Company will have
sufficient financial resources to effect a repurchase pursuant to a Change of
Control Offer.
Limitation on Sale of Assets and Subsidiary Stock; Event of Loss
The Indenture will provide that, other than upon an Event of Loss, neither
the Company nor any of its Subsidiaries will, in one or a series of related
transactions, convey, sell, transfer, assign or otherwise dispose of, directly
or indirectly, any of its property, business or assets, including, without
limitation, upon any sale or other transfer or issuance of any Capital Stock of
any Subsidiary or any sale and leaseback transaction, whether by the Company or
any such Subsidiary, or through the issuance, sale or transfer of Capital Stock
by a Subsidiary (an 'Asset Sale'), with an aggregate fair market value in excess
of $7.5 million unless (1) within 310 days after the date of such Asset Sale,
the Asset Sale Offer Amount (as defined below), or so much thereof as is
required pursuant to the provisions described below, is applied to the
repurchase of the New Notes with U.S. Legal Tender pursuant to an irrevocable,
unconditional offer (an 'Asset Sale Offer') to repurchase New Notes at a
purchase price (the 'Asset Sale Offer Price') of 100% of principal amount,
together with accrued interest to the date of payment, (2) at least 80% of the
consideration for such conveyance, sale, transfer or other disposition or
issuance (other than assumption of trade indebtedness) consists of U.S. Legal
Tender or Cash Equivalents; provided, however, that for purposes of this clause
(2), the assumption of Indebtedness of the Company or a Subsidiary that is pari
passu with the New Notes shall be deemed to be Cash Equivalents if the Company,
such Subsidiary and all other Subsidiaries of the Company, to the extent any of
the foregoing are liable with respect to such Indebtedness, are expressly
released from all liability for such Indebtedness by the holder thereof in
connection with such Asset Sale, and any securities or notes received by the
Company or such Subsidiary from such transferee that are converted by the
Company or such Subsidiary into U.S. Legal Tender or Cash Equivalents within 10
Business Days of the date of such Asset Sale shall be deemed to be Cash
Equivalents, (3) no Default or Event of Default shall have occurred and be
continuing at the time of, or would occur after giving effect, on a pro forma
basis, to, such Asset Sale and (4) the Board of Directors of the Company
determines in good faith that the Company or such Subsidiary, as applicable,
receives not less than fair market value for such Asset Sale. The 'Asset Sale
Offer Amount' shall mean, with respect to any Asset Sale, the product of (A) (1)
the Net Cash Proceeds of such Asset Sale, minus (2) the sum of the amounts that,
within 270 days of such Asset Sale, are (i) invested in assets or property that
is part of a Related Business of the Company or one of its Subsidiaries, (ii)
used to retire Indebtedness outstanding under the Credit Agreement if,
concurrently therewith, the amount of such Indebtedness permitted pursuant to
paragraph (f) of the covenant '--Limitation on Incurrence of Additional
Indebtedness and Disqualified Capital Stock' is permanently reduced by the
amount so retired (and any related revolving or multiple advance arrangement is
permanently reduced by a corresponding amount), or (iii) used to retire
Indebtedness secured by the assets sold (if required by its terms as a result of
the applicable Asset Sale) and any related revolving or multiple advance
arrangement is permanently reduced by a corresponding amount, and pay related
fees and reasonable expenses, multiplied by (B) a fraction, the numerator of
which is the aggregate principal amount of the New Notes outstanding on the date
of such Asset Sale and the denominator of which is the sum of (1) the aggregate
principal amount of the New Notes outstanding on the date of such Asset Sale,
plus (2) the aggregate principal amount of any other Indebtedness of the Company
or its Subsidiaries existing on the date of such Asset Sale that (w) is not
retired under clause (A) (2) (ii) or (iii) of this sentence, (x) is pari passu
with the New Notes, (y) is not assumed by the transferee in such Asset Sale with
a concurrent release in full of the Company and its Subsidiaries therefrom, and
(z) pursuant to the instruments relating thereto, is required to be repaid with
the proceeds of such Asset Sale. The Indenture will provide that an Asset Sale
Offer may be deferred until the accumulated Asset Sale Offer Amounts from Asset
Sales exceed $10.0 million. The Company will be required to keep each Asset Sale
Offer open for 20 Business Days following its commencement and no longer, except
to the extent that a longer period is required by applicable law (the 'Asset
Sale Offer Period'). Upon expiration of the Asset Sale Offer Period, the Company
shall apply the Asset Sale Offer Amount, plus an amount equal to accrued
interest, to the purchase of all New Notes properly tendered (on a pro rata
basis if the Asset Sale Offer Amount is insufficient to purchase all New Notes
so tendered) at the Asset Sale Offer Price or, if New
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<PAGE>
Notes are tendered in an amount less than the Asset Sale Offer Amount, to the
purchase of all New Notes tendered.
Notwithstanding the foregoing provisions of the prior paragraph:
(i) the Company and its Subsidiaries may in the ordinary course of
business, convey, sell, lease, transfer, assign or otherwise dispose of
assets acquired and held for resale in the ordinary course of business;
(ii) the Company and its Subsidiaries may convey, sell, lease,
transfer or otherwise dispose of assets pursuant to and in accordance with
the provisions of the covenant '--Limitation on Mergers, Consolidations and
Sales of Assets;'
(iii) the Company and its Subsidiaries may sell or dispose of damaged,
worn out or other obsolete property in the ordinary course of business so
long as such property is no longer necessary for the proper conduct of the
business of the Company or such Subsidiary, as applicable; and
(iv) the Company and its Subsidiaries may convey, sell, transfer,
assign or otherwise dispose of assets to the Company or any of its
wholly-owned Subsidiaries.
The Indenture will also provide that upon an Event of Loss incurred by the
Company or any of its Subsidiaries resulting in Net Cash Proceeds of more than
$7.5 million, the Company shall make an offer, within 310 days after such Event
of Loss, to purchase (an 'Event of Loss Offer') for U.S. Legal Tender at a
purchase price (the 'Event of Loss Offer Price') of 100% of principal amount
(together with accrued interest to the date of payment) that principal amount of
New Notes equal to the 'Event of Loss Offer Amount' (as defined below). The
'Event of Loss Offer Amount' shall mean, with respect to any Event of Loss, the
product of (A)(1) the Net Cash Proceeds of such Event of Loss, minus (2) the sum
of the amounts that, within 270 days after such Event of Loss, are (i) invested
in assets or property that is part of a Related Business of the Company or one
of its Subsidiaries, (ii) used to retire Indebtedness outstanding under the
Credit Agreement if, concurrently therewith, the amount of such Indebtedness
permitted pursuant to paragraph (f) of the covenant '--Limitation on Incurrence
of Additional Indebtedness and Disqualified Capital Stock' is permanently
reduced by the amount so retired, (and any related revolving or multiple advance
arrangement is permanently reduced by a corresponding amount), or (iii) used to
retire Indebtedness secured by the assets to which such Event of Loss relates
(if required by its terms as a result of the applicable Event of Loss) and any
related revolving or multiple advance arrangement is permanently reduced by a
corresponding amount, and pay related fees and reasonable expenses, multiplied
by (B) a fraction, the numerator of which is the aggregate principal amount of
the New Notes outstanding on the date of such Event of Loss and the denominator
of which is the sum of (1) the aggregate principal amount of the New Notes
outstanding on the date of such Event of Loss, plus (2) the aggregate principal
amount of any other Indebtedness of the Company or its Subsidiaries existing on
the date of such Event of Loss that is not retired under clause (A) (2) (ii) or
(iii) of this sentence, (x) is pari passu with the New Notes and, pursuant to
the instruments relating thereto, is required to be repaid with the proceeds of
such Event of Loss. The Indenture will provide that an Event of Loss Offer may
be deferred until the accumulated Event of Loss Offer Amounts of all Events of
Loss exceeds $10.0 million. The Company will be required to keep each Event of
Loss Offer open for 20 Business Days following its commencement and no longer,
except to the extent that a longer period is required by applicable law (the
'Event of Loss Offer Period'). Upon the expiration of each Event of Loss Offer
Period, the Company shall apply the Event of Loss Offer Amount, plus an amount
equal to accrued interest, to the purchase of all New Notes properly tendered
(on a pro rata basis if the Event of Loss Amount is insufficient to purchase all
New Notes so tendered) or, if New Notes are tendered in an amount less than the
Event of Loss Amount, to the purchase of all the New Notes tendered.
Limitation on Restricted Payments
The Indenture will provide that the Company will not, and will not permit
any of its Subsidiaries to, directly or indirectly, make any Restricted Payment
if, immediately prior thereto and after giving effect thereto on a pro forma
basis, (1) a Default or an Event of Default shall have occurred and be
continuing, (2) the Company could not incur at least $1.00 of additional
Subordinated Indebtedness pursuant to clause (ii) of paragraph (a) of the
covenant described under '--Limitation on Incurrence of Additional Indebtedness
and Disqualified Capital Stock,' or (3) the aggregate amount of all Restricted
Payments made by the Company and its Subsidiaries, including after giving pro
forma effect to such proposed Restricted Payment, from and after the Issue Date,
would exceed the sum of (a) 50% of the aggregate Adjusted Consolidated Net
Income of the Company for the
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period (taken as one accounting period) commencing on the first day of the first
full fiscal quarter that preceded the Issue Date, to and including the last day
of the latest fiscal quarter ended immediately prior to the date of each such
calculation for which financial statements are available (or, in the event
Adjusted Consolidated Net Income for such period is a deficit, then minus 100%
of such deficit), plus (b) the aggregate Net Cash Proceeds received by the
Company as a capital contribution after the Issue Date or from the sale of the
Company's Qualified Capital Stock (other than to a Subsidiary of the Company and
other than in connection with a Qualified Exchange) after the Issue Date.
The foregoing clauses (2) and (3) of the immediately preceding paragraph
will not prohibit (t) Investments in a Maryland Heights Joint Venture Entity in
an amount not in excess of $65.0 million, (u) Investments in one or more persons
in an amount not in excess of $45.0 million in the aggregate at any one time
outstanding for all such Investments made in any one or more persons in reliance
upon this clause (u), for the purpose of developing, constructing or acquiring
(i) a Casino or Casinos or, if applicable, any Related Businesses in connection
with such Casino or Casinos, or (ii) a Related Business to be used primarily in
connection with an existing Casino or Casinos in which the Company or its
Subsidiaries have at least a fifty percent (50%) ownership interest, (v) in the
case of any Subsidiary, pro rata distributions on its Capital Stock, (w) the
payment of any dividend on or redemption of Qualified Capital Stock within 60
days after the date of its declaration or authorization, respectively, if such
dividend or redemption could have been made on the date of such declaration or
authorization, respectively, in compliance with the foregoing provisions, (x)
the redemption or repurchase of any Capital Stock or Indebtedness of the Company
or any of its Subsidiaries (other than any Capital Stock or Indebtedness that is
held or beneficially owned by any Excluded Person) required by the Regulatory
Redemption provisions of the Indenture (or any substantially comparable
provision governing other Indebtedness), or by any Governmental Authority or the
Board of Directors of the Company if, in any such case, the ownership of such
Capital Stock or Indebtedness by the holder thereof will preclude, interfere
with, threaten or delay the issuaance, maintenance, existence or reinstatement
of any gaming or liquor license, permit or approval, or result in the imposition
of burdensome terms or conditions on such license, permit or approval, (y) a
Qualified Exchange or (z) other Restricted Payments which in the aggregate do
not exceed $10.0 million for all such Restricted Payments permitted by this
clause (z) taken together. The full amount of any Restricted Payment made
pursuant to clause (w) or (x), however, will be deducted in the calculation of
the aggregate amount of Restricted Payments available to be made referred to in
clause (3) of the immediately preceding paragraph.
Maintenance of Insurance
The Company will maintain and cause its Subsidiaries to maintain customary
property and comprehensive general liability insurance and (as applicable)
brownwater coverage, in each case on terms and in an amount reasonably
sufficient (taking into account, among other factors, the creditworthiness of
the insurer) to avoid a material adverse change in the financial condition or
results of operation of the Company and its Subsidiaries, taken as a whole.
Limitation on Transactions with Affiliates
The Indenture will provide that neither the Company nor any of its
Subsidiaries or Unrestricted Subsidiaries will be permitted after the Issue Date
to enter into any contract, arrangement, understanding or transaction with an
Affiliate (an 'Affiliate Transaction') or series of related Affiliate
Transactions involving consideration to either party in excess of $5.0 million
except for transactions approved by a majority of the disinterested (as to such
transaction) directors of the Company and evidenced by an Officers' Certificate
addressed and delivered to the Trustee stating that such Affiliate Transaction
has been so approved and is made in good faith and that the terms of such
Affiliate Transaction are fair and reasonable to the Company and such
Subsidiaries and Unrestricted Subsidiaries, as the case may be; provided,
however, that with respect to any Affiliate Transaction (including any series of
related transactions) involving consideration to either party in excess of $10.0
million the Company also must, prior to the consummation thereof, obtain a
written favorable opinion as to the fairness of such transaction to the Company
and such Subsidiaries and Unrestricted Subsidiaries, as the case may be, from a
financial point of view from an independent investment banking firm of national
reputation. Notwithstanding the foregoing, 'Affiliate Transaction,' shall not
include: (a) payments of reasonable and customary compensation, directors' fees
and indemnities of directors, officers and employees, (b) payments under the
Griffin License as in effect on the Issue Date, (c) related party transactions
described under 'Certain Transactions' in the Company's Proxy Statement for its
1994 Annual Meeting of Stockholders as in effect on the Issue Date, (d)
Restricted
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Payments permitted under the covenant '--Limitation on Restricted Payments'
described above, (e) transactions solely between or among the Company and one or
more wholly-owned Guarantors or between or among one or more wholly-owned
Guarantors, and (f) any employment agreement entered into by the Company or any
of its Subsidiaries in the ordinary course of business and consistent with the
past practice of the Company or such Subsidiary.
Limitation on Incurrence of Additional Indebtedness and Disqualified Capital
Stock
The Indenture will provide that, except as set forth below, neither the
Company nor any of its Subsidiaries will, directly or indirectly, issue, assume,
guarantee, incur, become directly or indirectly liable with respect to
(including as a result of an acquisition, merger or consolidation), extend the
maturity of, or otherwise become responsible for, contingently or otherwise
(individually and collectively, to 'incur' or, as appropriate, an 'incurrence'),
any Indebtedness or any Disqualified Capital Stock from and after the Issue
Date. Notwithstanding the foregoing:
(a) The Company and the Guarantors may incur Indebtedness or
Disqualified Capital Stock if (i) no Default or Event of Default shall have
occurred and be continuing at the time of, or would occur after giving
effect on a pro forma basis to, such incurrence of Indebtedness or
Disqualified Capital Stock and (ii) on the date of such incurrence (the
'Incurrence Date'), the Consolidated Coverage Ratio of the Company for the
Reference Period immediately preceding the Incurrence Date, after giving
effect on a pro forma basis to such incurrence of such Indebtedness or
Disqualified Capital Stock, would be at least 3.0 to 1 (or 2.5 to 1 in the
case of the incurrence of Subordinated Indebtedness or Disqualified Capital
Stock);
(b) The Company and the Guarantors may incur Indebtedness evidenced by
the Notes and represented by the Indenture up to the amounts specified
therein as of the Issue Date and the Guarantees thereof;
(c) The Company and its Subsidiaries may incur Purchase Money
Indebtedness to finance the purchase of land, buildings, furnitures,
fixtures or equipment for any Casino owned and operated by the Company that
has at least 200 slot machines and 10 table games; provided, however, that
the aggregate amount of such Indebtedness outstanding at any time pursuant
to this paragraph (c) (including any Indebtedness issued to refinance,
replace or refund such Indebtedness) with respect to any such Casino shall
not exceed $15.0 million.
(d) The Company and its Subsidiaries may incur Refinancing
Indebtedness with respect to any Indebtedness or Disqualified Capital
Stock, as applicable, described in clauses (a), (b) and (c) of this
covenant; provided, however, that in the case of the refinancing of
Indebtedness described in clause (c), such Refinancing Indebtedness is
Non-recourse Indebtedness as to any assets other than with respect to the
assets acquired with the Indebtedness refinanced, replaced or refunded;
(e) The Company and the Guarantors may incur Indebtedness (in addition
to any Indebtedness incurred in accordance with any other provision of this
covenant) in an aggregate amount outstanding at any time (including any
Indebtedness issued to refinance, replace, or refund such Indebtedness) of
up to an aggregate of $10.0 million for the Company and all of its
Subsidiaries taken together, minus the amount of any Indebtedness incurred
pursuant to this clause (e) retired with Net Cash Proceeds from any Asset
Sale or Event of Loss or assumed by a transferee in an Asset Sale;
(f) The Company and its Subsidiaries may incur Indebtedness pursuant
to the Credit Agreement on or after the Issue Date up to an aggregate
amount outstanding (including any Indebtedness issued to refinance, refund
or replace such Indebtedness) at any time equal to the sum of (i) $120.0
million minus the amount of any Indebtedness incurred pursuant to this
clause (f) retired with the Net Cash Proceeds from any Asset Sale or Event
of Loss or assumed by a transferee in an Asset Sale, plus (ii) such
additional amounts as may be deemed to be outstanding in the form of
Interest Swap and Hedging Obligations with lenders party to the Credit
Agreement; provided, however, that the maximum aggregate amount permitted
to be outstanding under this paragraph (f) shall not be deemed to limit
additional Indebtedness under the Credit Agreement to the extent such
additional Indebtedness is permitted pursuant to paragraph (a) hereof; and
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(g) Permitted Indebtedness.
In the event that the Company incurs Indebtedness, or any Subsidiary incurs
Indebtedness or Disqualified Capital Stock, to any wholly-owned Subsidiary
pursuant to clause (b) of the definition of Permitted Indebtedness, and such
latter Subsidiary thereafter ceases to remain a 'Subsidiary' as defined in the
Indenture, the aggregate outstanding amount of such Indebtedness incurred by the
Company, or of such Indebtedness or Disqualified Capital Stock incurred by such
Subsidiary, to the Subsidiary that ceases to so remain a 'Subsidiary' shall be
deemed to be Indebtedness incurred by the Company or such Subsidiary at the time
of such change in Subsidiary status. Indebtedness and Disqualified Capital Stock
issued by any person that is not a Subsidiary, which Indebtedness or
Disqualified Capital Stock is outstanding at the time such person becomes a
Subsidiary of the Company, or is merged into or consolidated with the Company or
a Subsidiary of the Company, shall be deemed to have been incurred at the time
such person becomes a Subsidiary of the Company, or is merged into or
consolidated with the Company or a Subsidiary of the Company. A guarantee by the
Company or a Subsidiary of the Company of Indebtedness incurred by the Company
or a Subsidiary is not considered a separate incurrence for purposes of this
covenant.
Limitation on Dividends and Other Payment Restrictions Affecting Subsidiaries
The Indenture will provide that neither the Company nor any of its
Subsidiaries will, directly or indirectly, create, assume or suffer to exist any
consensual encumbrance or restriction on the ability of any Subsidiary to pay
dividends or make other distributions to, or to pay any obligation (including,
without limitation, in respect of a Guarantee) to, or to otherwise transfer
assets or make or pay loans or advances to, the Company or any of its
Subsidiaries, except (a) reasonable and customary provisions restricting
subletting or assignment of any lease entered into in the ordinary course of
business, consistent with industry practices, (b) restrictions imposed by
applicable law, (c) restrictions under any Acquired Indebtedness or any
agreement relating to any property, asset or business acquired by the Company or
any of its Subsidiaries, which restrictions existed at the time of acquisition,
were not put in place in connection with or in anticipation of such acquisition
and are not applicable to any person, other than the person acquired or to any
property, asset or business other than the property, assets and business so
acquired, (d) restrictions with respect solely to a Subsidiary of the Company
imposed pursuant to a binding agreement (subject only to reasonable and
customary closing conditions and termination provisions) that has been entered
into for the sale or disposition of all or substantially all of the Capital
Stock or assets to be sold of such Subsidiary, provided such restrictions apply
solely to the Capital Stock or assets to be sold of such Subsidiary, and such
sale or disposition is permitted under the covenant '--Limitation on Sale of
Assets and Subsidiary Stock; Event of Loss,' (e) reasonable and customary
restrictions on transfers of collateral imposed in connection with Liens
securing Indebtedness, to the extent such Liens are permitted by the covenant
'--Liens' and to the extent such Indebtedness is permitted by the covenant
'--Limitation on Incurrence of Additional Indebtedness and Disqualified Capital
Stock,' and (f) replacements of restrictions imposed pursuant to clause (c) and
this clause (f) that are not more restrictive than those being replaced and do
not apply to any additional property or assets.
Liens
The Indenture will provide that neither the Company nor any of its
Subsidiaries, directly or indirectly, create, grant, assume, incur or suffer to
exist any Lien upon any of its property or assets, whether now owned or
hereafter acquired, or any income or profits therefrom, securing Indebtedness,
other than: (i) Permitted Liens; (ii) Liens securing Indebtedness incurred in
accordance with clause (c) of the covenant '--Limitation on Incurrence of
Additional Indebtedness and Disqualified Capital Stock;' (iii) Liens securing
Refinancing Indebtedness in accordance with clause (d) of the covenant
'--Limitation on Incurrence of Additional Indebtedness and Disqualified Capital
Stock' but only if such Liens have the same relative priority and do not extend
to property or assets permitted to be subject to the Liens securing the
Indebtedness being refinanced; (iv) Liens securing Indebtedness incurred in
accordance with clause (f) of the covenant '--Limitation on Incurrence of
Additional Indebtedness and Disqualified Capital Stock' and Liens securing any
increases in the amount of Indebtedness under the Credit Agreement above the
amount of Indebtedness permitted under such clause (f), but only to the extent
that the increase in such Indebtedness is permitted under clause (a) of the
covenant '--Limitation on Incurrence of Additional Indebtedness and Disqualified
Capital Stock' at the time of the incurrence of such additional Indebtedness;
(v) a Lien on the Lake Charles Star Riverboat to secure
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Indebtedness to the seller of the Interests in connection with the purchase of
such Interests by the Company's Subsidiaries in a principal amount not to exceed
$10.0 million and a maturity date no later than December 31, 1995; and (vi)
Liens in favor of the Company. Notwithstanding the foregoing, the Company may
not and may not permit any Subsidiary to, directly or indirectly, create, grant,
assume, incur or suffer to exist any Lien (other than Permitted Liens) upon any
of its property or assets, whether now owned or hereafter acquired, securing
Subordinated Indebtedness.
Limitation on Consolidation, Merger and Sale of Assets
The Indenture will provide that neither the Company nor any Subsidiary may
consolidate with or merge with or into another person or, directly or
indirectly, sell, lease or convey all or substantially all of its assets,
whether in a single transaction or a series of related transactions, to another
Person or group of affiliated Persons, unless (i)if the transaction involves the
Company or a Guarantor, either (a) the Company or such Guarantor, as the case
may be, is the continuing entity, and in the case of a Guarantor, (1) such
Guarantor remains a Subsidiary of the Company, and (2) such Guarantor's
Guarantee remains in full force and effect and the rights of the Holders
thereunder and under the New Notes and the Indenture are not be adversely
affected as a result thereof, or (b) the resulting, surviving or transferee
entity is a corporation organized under the laws of the United States, any state
thereof or the District of Columbia and expressly assumes by supplemental
indenture all of the Obligations of the Company or such Guarantor, as the case
may be, in connection with the New Notes, the Indenture and any applicable
Guarantee, and the rights of the Holders under the New Notes, the Indenture and
any such Guarantee are not adversely affected as a result thereof; (ii) no
Default or Event of Default shall exist or shall occur immediately after giving
effect on a pro forma basis to such transaction; (iii) other than in the case of
a transaction between the Company and a wholly-owned Subsidiary or between
wholly-owned Subsidiaries of the Company, immediately after giving effect to
such transaction on a pro forma basis, the Consolidated Net Worth of the
consolidated surviving or transferee entity is at least equal to the
Consolidated Net Worth of the Company or such Subsidiary, as the case may be,
immediately prior to such transaction; (iv) other than in the case of a
transaction solely between the Company and any wholly-owned Subsidiary or
between wholly-owned Subsidiaries of the Company, the consolidated surviving or
transferee entity would, immediately after giving effect to such transaction on
a pro forma basis, be permitted to incur at least $1.00 of additional
Subordinated Indebtedness pursuant to clause (ii) of paragraph (a) under the
caption '--Limitation on Incurrence of Additional Indebtedness and Disqualified
Capital Stock;' and (v) such transaction will not result in the loss of any
material Gaming License. For purposes of this covenant, the Consolidated
Coverage Ratio shall be determined on a pro forma consolidated basis (giving pro
forma effect to the transaction and any related incurrence of Indebtedness or
Disqualified Capital Stock) for the four fiscal quarters that ended immediately
preceding such transaction for which financial statements are available.
Notwithstanding the foregoing, a Subsidiary shall not be subject to the
foregoing restrictions in circumstances involving the disposition by the Company
of such Subsidiary or a disposition of all or substantially all of the assets of
such Subsidiary in a transaction that is not prohibited by the covenant
'--Limitation on Sale of Assets and Subsidiary Stock; Event of Loss.'
Upon any consolidation or merger or any transfer of all or substantially
all of the assets of the Company or a Guarantor that is subject to the foregoing
restrictions, the successor corporation formed by such consolidation or into
which the Company or such Guarantor, as the case may be, is merged or to which
such transfer is made, shall succeed to, and be substituted for, and may
exercise every right and power of, the Company or such Guarantor, as the case
may be, under the Indenture and the New Notes (including, without limitation,
any Guarantee) with the same effect as if such successor corporation had been
named therein as the Company, or such Guarantor, as the case may be, and the
Company or such Guarantor, as applicable, will be released from its obligations
under the Indenture, the New Notes and any applicable Guarantee, except as to
any obligations that arise from or as a result of such transaction.
Limitation on Lines of Business
The Indenture will provide that neither the Company nor any of its
Subsidiaries or Unrestricted Subsidiaries shall directly or indirectly engage to
any substantial extent in any line or lines of business activity other than in a
Related Business.
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Limitation on Status as Investment Company
The Indenture will prohibit the Company and its Subsidiaries from being
required to register as an 'investment company' (as that term is defined in the
Investment Company Act of 1940, as amended), or from otherwise becoming subject
to regulation under the Investment Company Act.
Restriction on Issuance or Sale of Subsidiary Stock
The Indenture will provide that the Company will not sell, and will not
permit any of its Subsidiaries to issue or sell, any shares of Capital Stock of
any Subsidiary, other than common stock with no special rights and no
preferences, privileges, or redemption or prepayment provisions, to any Person
other than the Company or a wholly-owned Subsidiary. The Indenture will also
provide that all of the Capital Stock of a Subsidiary may be sold in a
transaction that complies with the covenant '--Limitation on Sale of Assets and
Subsidiary Stock; Event of Loss.'
Guarantee by Maryland Heights Investment Subsidiary and Maryland Heights
Operating Subsidiary
The Indenture provides that the Company shall cause the Maryland Heights
Investment Subsidiary and the Maryland Heights Operating Subsidiary, which may
be the same Subsidiary of the Company, to become Guarantors on the same basis as
the Initial Guarantors and to execute supplemental indentures, in the form
prescribed by the Indenture, and a Guarantee evidencing such obligations in the
same form as the Guarantee executed by the Initial Guarantors with respect to
the New Notes, and deliver such executed supplemental indentures and Guarantees
to the Trustee within five Business Days after they become Subsidiaries, subject
to the receipt of any approval required by any Gaming Authority, which the
Company, the Maryland Heights Investment Subsidiary and the Maryland Heights
Operating Subsidiary shall use their best efforts to obtain. The Indenture
further provides that the Company shall cause the Maryland Heights Investment
Subsidiary and the Maryland Heights Operating Subsidiary to be and remain
wholly-owned Subsidiaries of the Company. Under the Indenture, the Company does
not have any obligation to cause the Maryland Heights Joint Venture Entity to
become a Guarantor or execute such a supplemental indenture or Guarantee.
Additional Subsidiary Guarantors
The Indenture provides that the Company shall cause each of its
Subsidiaries created or acquired after the Issue Date to execute a Guarantee and
a supplemental indenture, in the form prescribed by the Indenture, and to
deliver copies thereof to the Trustee, subject to the receipt of any approval
required by any Gaming Authority, which the Company and its Subsidiaries shall
use their best efforts to obtain.
RELEASE OF GUARANTORS
The Indenture provides that if all the Capital Stock of a Guarantor is sold
by the Company or any Subsidiary or upon the consolidation or merger of a
Guarantor with or into any other person other than the Company or a Subsidiary,
in circumstances where such sale, consolidation or merger is not prohibited
under the covenant '--Limitation on Sale of Assets and Subsidiary Stock; Event
of Loss,' such Guarantor shall be deemed automatically and unconditionally
released and discharged from all obligations under its Guarantee and the
Indenture without any further action required on the part of the Trustee or any
Holder.
REPORTS
Whether or not the Company is subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act, the Company shall deliver to the
Trustee and each Holder, within 15 days after it is or would have been required
to file such with the SEC, annual and quarterly consolidated financial
statements substantially equivalent to financial statements that would have been
included in reports filed with the SEC if the Company was subject to the
requirements of Section 13 or 15(d) of the Exchange Act, including, with respect
to annual information only, a report thereon by the Company's certified
independent public accountants as such would be required in such reports to the
SEC and, in each case, together with a management's discussion and analysis of
financial condition and results of operations as such would be so required.
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EVENTS OF DEFAULT AND REMEDIES
The Indenture defines an Event of Default as (i) the failure by the Company
to pay any installment of interest on the New Notes as and when due and payable
and the continuance of any such failure for 30 days, (ii) the failure by the
Company to pay all or any part of the principal, or premium, if any, on the New
Notes when and as the same become due and payable at maturity, redemption, by
acceleration or otherwise, including, without limitation, pursuant to any Offer
to Purchase, or otherwise, (iii) the failure by the Company or any Guarantor to
observe or perform any other covenant or agreement contained in the New Notes,
the Indenture or any Guarantee and, subject to certain exceptions, the
continuance of such failure for a period of 30 days after written notice is
given to the Company by the Trustee or to the Company and the Trustee by the
Holders of at least 25% in aggregate principal amount of the New Notes
outstanding, (iv) certain events of bankruptcy, insolvency or reorganization in
respect of the Company, any of its Subsidiaries that individually or as a group
constitute a Significant Subsidiary, (v) a default in the payment of principal,
premium or interest when due which extends beyond any stated period of grace
applicable thereto or an acceleration for any other reason of the maturity of
any Indebtedness of the Company or any of the its Subsidiaries with an aggregate
principal amount in excess of $10.0 million, (vi) final, non-appealable,
unsatisfied judgments not covered by insurance aggregating in excess of $10.0
million, at any one time being rendered against the Company or any of its
Subsidiaries and not stayed, bonded or discharged within 60 days, and (vii) the
loss of the legal right to operate any Casino by the Company or any of its
Subsidiaries and such loss continuing for more than 90 days. The Indenture
provides that if a Default occurs and is continuing, the Trustee must, within 90
days after the occurrence of such default, give to the Holders notice of such
default. Except in the case of a Default in payment of principal of or interest
on any New Note, 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 interest of the Holders.
If an Event of Default occurs and is continuing (other than an Event of
Default specified in clause (iv) of the preceding paragraph), then in every such
case, unless the principal of all of the New Notes shall have already become due
and payable, either the Trustee or the Holders of 25% in aggregate principal
amount of the New Notes then outstanding, by notice in writing to the Company
(and to the Trustee if given by Holders) (an 'Acceleration Notice'), may declare
all principal and accrued interest thereon to be due and payable immediately. If
an Event of Default specified in clause (iv) in the preceding paragraph occurs,
all principal and accrued interest thereon will be immediately due and payable
on all outstanding New Notes without any declaration or other act on the part of
Trustee or the Holders. The Holders of no less than a majority in aggregate
principal amount of the New Notes at the time outstanding generally are
authorized to rescind such acceleration if all existing Events of Default, other
than the non-payment of the principal of, premium, if any, and interest on the
New Notes which have become due solely by such acceleration, have been cured or
waived.
Prior to the declaration of acceleration of the maturity of the New Notes,
the Holders of a majority in aggregate principal amount of the New Notes at the
time outstanding may waive on behalf of all the Holders any default, except a
default in the payment of principal of or interest on any New Note not yet
cured, or a default with respect to any covenant or provision that cannot be
modified or amended without the consent of the Holder of each outstanding New
Note affected. Subject to the provisions of the Indenture relating to the duties
of the Trustee, the Trustee will be under no obligation to exercise any of its
rights or powers under the Indenture at the request, order or direction of any
of the Holders, unless such Holders have offered to the Trustee reasonable
security or indemnity. Subject to all provisions of the Indenture and applicable
law, the Holders of a majority in aggregate principal amount of the New Notes at
the time outstanding will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee. The Indenture will provide that the
Company will be required to file annually with the Trustee a certificate as to
the performance by the Company and the Guarantors of certain of their
obligations under the Indenture and as to any default in such performances.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
The Company may, at its option at any time elect to have the obligations of
the Company and the Guarantors discharged with respect to the outstanding New
Notes ('Legal Defeasance'). Such Legal Defeasance means that the Company shall
be deemed to have paid and discharged the entire indebtedness represented, and
the Indenture shall cease to be of further effect as to all outstanding New
Notes and Guarantees except as to (i) rights of Holders to receive payments in
respect of the principal of, premium, if any, and interest on such New
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Notes when such payments are due, from the funds in the defeasance trust; (ii)
the Company's obligations with respect to such New Notes concerning issuing
temporary New Notes, registration of New Notes, mutilated, destroyed, lost or
stolen New Notes, and the maintenance of an office or agency for payment and
money for security payments held in trust; (iii) the rights, powers, trust,
duties and immunities of the Trustee, and the Company's obligations in
connection therewith; and (iv) the Legal Defeasance provisions of the Indenture.
In addition, the Company may, at its option and at any time, elect to have the
obligations of the Company and the Guarantors released with respect to certain
covenants that are described in the Indenture ('Covenant Defeasance') and
thereafter any omission to comply with such obligations shall not constitute a
Default or Event of Default with respect to the New Notes. In the event Covenant
Defeasance occurs, certain events (not including non-payment, bankruptcy,
receivership, rehabilitation and insolvency events) described under 'Events of
Default' will no longer constitute an Event of Default with respect to the New
Notes.
In order to exercise either Legal Defeasance or Covenant Defeasance, (i)
the Company must irrevocably deposit with the Trustee, in trust, for the benefit
of the Holders of the New Notes, U.S. Legal Tender, U.S. Government Obligations
or a combination thereof, in such amounts as will be sufficient, in the opinion
of a nationally recognized firm of independent public accountants, to pay the
principal of, premium, if any, and interest on such New Notes on the stated date
for payment thereof or on the redemption date of such principal or installment
of principal of, premium, if any, or interest on such New Notes, and the Trustee
on behalf of the Holders must have a valid, perfected, exclusive security
interest in such trust; (ii) in the case of Legal Defeasance, the Company shall
have delivered to the Trustee an opinion of counsel in the United States
reasonably acceptable to Trustee confirming that (A) the Company has received
from, or there has been published by, the Internal Revenue Service a ruling or
(B) since the date of the 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 Holders of such New Notes will
not recognize income, gain or loss for federal income tax purposes as a result
of such Legal Defeasance and will be subject to federal income tax in the same
amounts, in the same manner and at the same times as would have been the case if
such Legal Defeasance had not occurred; (iii) in the case of Covenant
Defeasance, the Company shall have delivered to the Trustee an opinion of
counsel in the United States reasonably acceptable to such Trustee confirming
that the Holders of such New Notes will not recognize income, gain or loss for
federal income tax purposes as a result of such Covenant Defeasance and will be
subject to federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such Covenant Defeasance had not
occurred; (iv) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or insofar as Events of Default from
bankruptcy or insolvency events are concerned, at any time in the period ending
on the 91st day after the date of deposit; (v) such Legal Defeasance or Covenant
Defeasance shall not result in a breach or violation of, or constitute a default
under, the Indenture or any other material agreement or instrument to which the
Company or any of its Subsidiaries is a party or by which the Company or any of
its Subsidiaries is bound; (vi) the Company shall have delivered to the Trustee
an Officers' Certificate stating that the deposit was not made by the Company
with the intent of preferring the Holders of such New Notes over any other
creditors of the Company or with the intent of defeating, hindering, delaying or
defrauding any other creditors of the Company or others; and (vii) the Company
shall have delivered to the Trustee an Officers' Certificate and an opinion of
counsel, each stating that all conditions precedent provided for or relating to
the Legal Defeasance or the Covenant Defeasance have been met.
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AMENDMENTS AND SUPPLEMENTS
Except as provided below, with the consent of the Holders of not less than
a majority in aggregate principal amount of the New Notes at the time
outstanding (including consents obtained in connection with a tender offer or
exchange offer for New Notes), the Company, the Guarantors and the Trustee are
permitted to amend or supplement the Indenture or any supplemental indenture or
any Guarantee or modify the rights of the Holders. Notwithstanding the
foregoing, without the consent of the Holders of not less than two-thirds in
aggregate principal amount of the New Notes at any time outstanding, no
amendment or waiver of the Indenture may change any provision relating to (i)
events of default or remedies, (ii) the Guarantees, or (iii) the maturity of any
New Note (except for changes relating to the Stated Maturity, which require the
consent of each Holder). Without the consent of each Holder affected thereby, no
amendment or waiver of the Indenture may: (i) change the Stated Maturity of any
New Note, or reduce the principal amount thereof or the rate (or extend the time
for payment) of interest thereon or alter the redemption thereof (including any
price to be paid by the Company upon any redemption) in a manner adverse to any
Holder, or change the place of payment where, or the coin or currency in which,
any New Note or any premium or the interest thereon is payable, or impair the
right to institute suit for the enforcement of any such payment on or after the
Stated Maturity thereof (or, in the case of redemption, on or after the
Redemption Date), (ii) reduce the percentage in principal amount of the
outstanding New Notes, the consent of whose Holders is required for any such
amendment, supplemental indenture or waiver provided for in the Indenture, (iii)
change the provisions described above under the caption 'Repurchase of New Notes
at the Option of the Holder Upon a Change of Control' in a manner that adversely
affects the rights of any Holder of New Notes, or (iv) change the terms of any
Asset Sale Offer (including, without limitation, the Asset Sale Offer Amount or
Asset Sale Offer Price) or any Event of Loss Offer (including, without
limitation, the Event of Loss Offer Amount or Event of Loss Offer Price) in a
manner that adversely affects the rights of any Holder of New Notes.
Notwithstanding the foregoing, without the consent of any Holder of New
Notes, the Company and the Trustee may amend or supplement the Indenture or the
New Notes for, among other purposes, to cure any ambiguity, defect or
inconsistency, to provide for uncertificated New Notes in addition to or in
place of certificated New Notes, to provide for the assumption of the Company's
Obligations to Holders of the New Notes in the case of a merger or
consolidation, to make any change that would provide any additional rights or
benefits to the Holders of the New Notes or that does not adversely affect the
legal rights under the Indenture of any Holder, to comply with the Trust
Indenture Act, or to set forth such other matters as may be necessary or
desirable in connection with the Exchange Offer.
SATISFACTION AND DISCHARGE
The Indenture will cease to be of further effect when either (a) all such
outstanding New Notes theretofore authenticated and delivered (except lost,
stolen or destroyed New Notes which have been replaced or paid) have been
delivered to the Trustee for cancellation or (b) all such New Notes not
theretofore delivered to the Trustee for cancellation have become due and
payable and the Company has irrevocably deposited or caused to be deposited with
the Trustee funds in an amount sufficient to pay and discharge the entire
indebtedness on the New Notes not theretofore delivered to the Trustee for
cancellation, for principal of, premium, if any, and interest to the Stated
Maturity of the New Notes; (ii) the Company has paid all other sums payable
under the Indenture; and (iii) the Company has delivered to the Trustee an
officers' certificate and an opinion of counsel each stating that all conditions
precedent under the Indenture relating to the satisfaction and discharge of the
Indenture have been complied with.
NO PERSONAL LIABILITY OF STOCKHOLDERS, EMPLOYEES, OFFICERS OR DIRECTORS
The Indenture will provide that no direct or indirect stockholder,
incorporator, employee, officer or director, as such, past, present or future of
the Company, the Guarantors or any successor entity shall have any personal
liability in respect of the Obligations of the Company or the Guarantors under
the Indenture or the New Notes by reason of his, her or its status as such
stockholder, incorporator, employee, officer or director.
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CERTAIN DEFINITIONS
'Acquired Indebtedness' with respect to a person means Indebtedness of
another person existing at the time such person becomes a Subsidiary of the
subject person or is merged or consolidated into or with the subject person or
one of its Subsidiaries, and not incurred in connection with or in anticipation
of, such merger or consolidation or such other person becoming a Subsidiary of
such subject person.
'Acquisition' means the purchase or other acquisition of any person or
substantially all the assets of any person by any other person, whether by
purchase, merger, consolidation or other transfer, and whether or not for
consideration.
'Adjusted Consolidated Net Income' means, with respect to any period,
Consolidated Net Income for such period, minus 100% of the amount of any
writedowns, writeoffs or negative extraordinary charges not otherwise reflected
in Consolidated Net Income during such period.
'Affiliate' means (i) any person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company or any
of its Subsidiaries, (ii) any spouse, immediate family member or other relative
who has the same principal residence of any person described in clause (i)
above, and (iii) any trust in which any person described in clause (i) or (ii)
above has a beneficial interest. For purposes of this definition, the term
'control' means (a) the power to direct the management and policies of a person,
directly or through one or more intermediaries, whether through the ownership of
voting securities, by contract, or otherwise, or (b) the beneficial ownership of
10% or more of any class of voting Capital Stock of a person (on a fully diluted
basis) or of warrants or other rights to acquire such class of Capital Stock
(whether or not presently exercisable).
'Average Life' means, as of the date of determination, with respect to any
security or instrument, the quotient obtained by dividing (i) the sum of the
products of the number of years from the date of determination to the date of
each successive scheduled principal (or redemption) payment of such security or
instrument multiplied by the amount of each such respective principal (or
redemption) payment by (ii) the sum of all such principal (or redemption)
payments.
'Beneficial Owner' for purposes of the definition of Change of Control has
the meaning attributed to it in Rules 13d-3 and 13d-5 under the Exchange Act,
whether or not applicable, 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.
'Business Day' means each Monday, Tuesday, Wednesday, Thursday and Friday
that is not a day on which banking institutions in New York, New York are
authorized or obligated by law or executive order to close.
'Capital Stock' means, with respect to any corporation, any and all shares,
interests, rights to purchase (other than convertible or exchangeable
Indebtedness), warrants, options, participations or other equivalents of or
interests (however designated) in stock issued by that corporation.
'Capitalized Lease Obligation' means rental obligations under a lease that
are required to be capitalized for financial reporting purposes in accordance
with GAAP, and the amount of Indebtedness represented by such obligations shall
be the capitalized amount of such obligations, as determined in accordance with
GAAP.
'Cash Equivalent' means (i) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof), (ii) time deposits and
certificates of deposit having a maturity not greater than one year of any
domestic commercial bank, or U.S. branch of a foreign bank, of recognized
standing having capital and surplus in excess of $500,000,000, and time deposits
and certificates of deposit having a maturity not greater than one year of other
banks located in jurisdictions where the Company and its Subsidiaries do
business; provided, however, the aggregate amount of all time deposits and
certificates of deposit of such other banks may not exceed $5.0 million, (iii)
commercial paper rated at least A-2 or the equivalent thereof by Standard &
Poor's Corporation or at least P-2 or the equivalent thereof by Moody's
Investors Service, Inc. and maturing within one year after the date of
acquisition, (iv) repurchase obligations with a term of not more than ten days
for underlying securities of the types described in clause (i) above entered
into with any bank meeting the qualifications specified in clause (ii) above,
(v) marketable obligations issued by any state of the United States of America
or any political subdivision of any such state or any public instrumentality
thereof
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maturing, or payable at the demand of the holder thereof, within one year from
the date of acquisition thereof and, at the time of acquisition, having one of
the three highest ratings obtainable from either Standard & Poor's Corporation
or Moody's Investors Service, Inc.; and (vi) investments in money market funds
substantially all of whose assets comprise securities of the types described in
clauses (i) through (v) above.
'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.
'Consolidated Coverage Ratio' of any person on any date of determination
(the 'Transaction Date') means, the ratio, on a pro forma basis, of (a) the
aggregate amount of Consolidated EBITDA of such person attributable to
continuing operations and businesses (exclusive of amounts attributable to
operations and businesses permanently discontinued or disposed of prior to the
Transaction Date) to (b) the aggregate Consolidated Fixed Charges of such person
(exclusive of amounts attributable to operations and businesses permanently
discontinued or disposed of prior to the Transaction Date but only to the extent
that the obligations giving rise to such Consolidated Fixed Charges would no
longer be obligations contributing to such person's Consolidated Fixed Charges
subsequent to the Transaction Date) during the Reference Period; provided,
however, that for purposes of such calculation, (i) Acquisitions which occurred
during the Reference Period or subsequent to the Reference Period and on or
prior to the Transaction Date shall be assumed to have occurred on the first day
of the Reference Period, (ii) transactions giving rise to the need to calculate
the Consolidated Coverage Ratio shall be assumed to have occurred on the first
day of the Reference Period, (iii) the incurrence of any Indebtedness or
issuance of any Disqualified Capital Stock during the Reference Period or
subsequent to the Reference Period and on or prior to the Transaction Date (and
the application of the proceeds therefrom to the extent used to refinance or
retire other Indebtedness) shall be assumed to have occurred on the first day of
such Reference Period, and (iv) the Consolidated Fixed Charges of such person
attributable to interest on any Indebtedness or dividends on any Disqualified
Capital Stock bearing a floating interest (or dividend) rate shall be computed
on a pro forma basis as if the average rate in effect from the beginning of the
Reference Period to the Transaction Date had been the applicable rate for the
entire period, unless such person or any of its Subsidiaries is a party to an
Interest Swap and Hedging Obligation (which shall remain in effect for the
12-month period immediately following the Transaction Date) that has the effect
of fixing the interest rate on the date of computation, in which case such rate
(whether higher or lower) shall be used.
'Consolidated Debt' means, with respect to any person, as of a specific
date, all Indebtedness of such person and its Consolidated Subsidiaries as of
such date, determined in accordance with GAAP.
'Consolidated EBITDA' means, with respect to any person, for any period,
the Consolidated Net Income of such person for such period adjusted to add
thereto (to the extent deducted from net revenues in determining Consolidated
Net Income), without duplication, the sum of (i) consolidated income tax
expense, (ii) consolidated depreciation and amortization expense, (iii)
Consolidated Fixed Charges, and (iv) consolidated preopening expenses.
'Consolidated Fixed Charges' of any person means, for any period, the
aggregate amount (without duplication and determined in each case in accordance
with GAAP) of (a) interest expense of such person for such period, whether paid
or accrued (including, in accordance with the following sentence, interest
attributable to Capitalized Lease Obligations), of such person and its
Consolidated Subsidiaries during such period, including, without limitation, to
the extent such expense was deducted in computing Consolidated Net Income for
such period (i) amortization of original issue discount and non-cash interest
payments or accruals on any Indebtedness, (ii) the interest portion of all
deferred payment obligations that constitute Indebtedness, and (iii) all
commissions, discounts and other fees and charges owed with respect to bankers'
acceptances and letters of credit financings and currency and Interest Swap and
Hedging Obligations, (b) one-third of rental expense for such period
attributable to operating leases of such person and its Consolidated
Subsidiaries, and (c) the amount of dividends payable by such person or any of
its Consolidated Subsidiaries in respect of Disqualified Capital Stock (other
than by Subsidiaries of such person to such person or such person's wholly-owned
Subsidiaries). For purposes of this definition, (x) interest on a Capitalized
Lease Obligation shall be deemed to accrue at an interest rate reasonably
determined by the Company to be the rate of interest implicit in such
Capitalized Lease Obligation in accordance with GAAP and (y) interest expense
attributable to any Indebtedness represented by the guarantee by such person or
a Subsidiary of such person of an obligation of another person shall be deemed
to be the interest expense attributable to the Indebtedness guaranteed.
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'Consolidated Net Income' means, with respect to any person for any period,
the net income (or loss) of such person and its Consolidated Subsidiaries
(determined in accordance with GAAP) for such period, adjusted to exclude (only
to the extent included in computing such net income (or loss) and without
duplication): (a) all gains (but not losses) which are either extraordinary (as
determined in accordance with GAAP) or are either unusual or nonrecurring
(including, without limitation, from the sale of assets outside of the ordinary
course of business or from the issuance or sale of any Capital Stock), (b) the
net income, if positive, of any person, other than a Consolidated Subsidiary, in
which such person or any of its Consolidated Subsidiaries has an interest,
except to the extent of the amount of any dividends or distributions actually
paid in cash to such person or a Consolidated Subsidiary of such person during
such period, but not in excess of such person's pro rata share of such person's
net income for such period, (c) the net income (or loss) of any person acquired
in a pooling of interests transaction for any period prior to the date of such
acquisition, (d) the net income, if positive, of any of such person's
Consolidated Subsidiaries to the extent that the declaration or payment of
dividends or similar distributions is not at the time permitted by operation of
the terms of its charter or bylaws or any other agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation (other than any Gaming
Law that is generally applicable to all persons operating Casinos through
Subsidiaries in any jurisdiction in which the Company or such Subsidiary is
conducting business so long as there is in effect no specific order, decree or
other prohibition pursuant to such Gaming Law in such jurisdiction limiting the
payment of a dividend or similar distribution by such a Consolidated Subsidiary)
applicable to such Consolidated Subsidiary and (e) the cumulative effect of a
change in accounting principles.
'Consolidated Net Worth' of any person at any date means the aggregate of
capital, surplus and retained earnings of such person and its Consolidated
Subsidiaries, as would be shown on the consolidated balance sheet of such person
prepared in accordance with GAAP adjusted to exclude (to the extent included in
calculating such equity), (a) the amount of capital, surplus and accrued but
unpaid dividends attributable to any Disqualified Capital Stock or treasury
stock of such person or any of its Consolidated Subsidiaries, (b) all upward
revaluations and other write-ups in the book value of any asset of such person
or a Consolidated Subsidiary of such person subsequent to the Issue Date and (c)
all investments in Subsidiaries that are not Consolidated Subsidiaries and in
persons that are not Subsidiaries.
'Consolidated Subsidiary' means, for any person, each Subsidiary of such
person (whether now existing or hereafter created or acquired) the financial
statements of which shall be (or should have been) consolidated for financial
statement reporting purposes with the financial statements of such person in
accordance with GAAP.
'Credit Agreement' means the credit agreement contemplated by that certain
letter dated March 15, 1995 to the Company from First Interstate Bank of Nevada,
N.A. and Bankers Trust Company, providing for an aggregate of $120.0 million
revolving credit facility or any substitute therefor, including any related
notes, guarantees, collateral documents, instruments and agreements executed in
connection therewith, as such credit agreement and/or related documents may be
amended, restated, supplemented, renewed, replaced or otherwise modified from
time to time whether or not with the same agent, trustee, representative lenders
or holders, and, subject to the proviso to the next succeeding sentence,
irrespective of any changes in the terms and conditions thereof. Without
limiting the generality of the foregoing, the term 'Credit Agreement' shall
include agreements in respect of Interest Swap and Hedging Obligations with
lenders party to the Credit Agreement and shall also include any amendment,
amendment and restatement, renewal, extension, restructuring, supplement or
modification to any Credit Agreement and all refundings, refinancings and
replacements of the Credit Agreement, and all refundings, refinancings and
replacements thereafter, including any agreement (i) extending the maturity of
any Indebtedness incurred thereunder or contemplated thereby, (ii) adding or
deleting borrowers, issuers or guarantors thereunder, so long as such borrowers,
issuers and guarantors include one or more of the Company and its Subsidiaries
and their respective successors and assigns, (iii) increasing the amount of
Indebtedness incurred thereunder or available to be borrowed thereunder,
provided, however, that on the date such additional Indebtedness is incurred the
incurrence thereof is permitted pursuant to paragraph (a) of the covenant
'--Limitation on Incurrence of Additional Indebtedness and Disqualified Capital
Stock,' or (iv) otherwise altering the terms and conditions thereof in a manner
not prohibited by the terms hereof.
'Current Market Price' on any date means the arithmetic mean of the Quoted
Price of the New Notes for the 20 consecutive trading days commencing 30 days
before such date.
'Disqualified Capital Stock' means (a) except as provided in (b), with
respect to any person, Capital Stock of such person that, by its terms or by the
terms of any security into which it is convertible, exercisable or
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exchangeable, is, or upon the happening of an event or the passage of time would
be, required to be redeemed or repurchased (including at the option of the
holder thereof) by such person or any of its Subsidiaries, in whole or in part,
on or prior to the Stated Maturity of the New Notes and (b) with respect to any
Subsidiary of such person (including any Subsidiary of the Company), any Capital
Stock other than any common stock with no special rights and no preferences,
privileges, or redemption or repayment provisions; provided, however, that the
Common Stock issued pursuant to, and subject to, the terms of the Beeber
Agreement shall not constitute Disqualified Capital Stock.
'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.
'Excluded Person' means (a) the Company or any wholly-owned Guarantor, (b)
any employee benefit plan of the Company or any wholly-owned Guarantor or any
trustee or similar fiduciary holding Capital Stock of the Company for or
pursuant to the terms of any such plan, (c) Merv Griffin, (d) Edward Fishman,
(e) David Fishman, (f) Howard Goldberg, (g) Thomas E. Gallagher, (h) Marshall S.
Geller, (i) Lee Seidler, (j) Steven P. Perskie, (k) Peter J. Aranow and (l)
members of the immediate families and Affiliates (where the determination of
whether a person is an Affiliate is made without reference to clause (b) of the
definition of such term) of the foregoing persons.
'GAAP' means United States generally accepted accounting principles 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 as in effect on the Issue Date.
'Gaming Authority' means any Governmental Authority with the power to
regulate gaming in any Gaming Jurisdiction, and the corresponding Governmental
Authorities with the responsibility to interpret and enforce the laws and
regulations applicable to gaming in any Gaming Jurisdiction.
'Gaming Jurisdiction' means any Federal, state or local jurisdiction in
which any entity in which the Company has a direct or indirect beneficial, legal
or voting interest conducts casino gaming, now or in the future.
'Gaming Law' means any law, rule, regulation or ordinance governing gaming
activities (including, without limitation, The Riverboat Gambling Act of
Illinois, The Louisiana Riverboat Economic Development and Gaming Control Act,
the Missouri Riverboat Gaming Act, Mo. Rev. Stat. Section 313.800 et seq. and
the Nevada Gaming Control Act, in each case including all amendments or
modifications thereof), any administrative rules or regulations promulgated
thereunder, and any of the corresponding statutes, rules and regulations in each
Gaming Jurisdiction.
'Gaming Licenses' means every material license, material franchise or other
material authorization required to own, lease, operate or otherwise conduct or
manage riverboat, dockside or land-based gaming in any state or jurisdiction in
which the Company or any of the Guarantors conduct business now or in the future
and any applicable liquor licenses.
'Governmental Authority' means any agency, authority, board, bureau,
commission, department, office or instrumentality of any nature whatsoever of
the United States or foreign government, any state, any province or any city or
other political subdivision or otherwise and whether now or hereafter in
existence, or any officer or official thereof, and any maritime authority.
'Guarantors' means (1) the Initial Guarantors and (2) all future
Subsidiaries of the Company.
'Guarantees' means the guarantees in favor of the Holders executed by the
Initial Guarantors and to be executed by all future Subsidiaries of the Company.
'Indebtedness' of any person means, without duplication, (a) all
liabilities and obligations, contingent or otherwise, of such person, (i) in
respect of borrowed money (whether or not the recourse of the lender is to the
whole of the assets of such person or only to a portion thereof), (ii) evidenced
by bonds, notes, debentures or similar instruments, (iii) representing the
balance deferred and unpaid of the purchase price of any property or services,
except (other than accounts payable or other obligations to trade creditors
which have remained unpaid
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for greater than 90 days past their original due date or that are being
contested in good faith and for which adequate reserves have been made) those
incurred in the ordinary course of its business that would constitute ordinarily
a trade payable to trade creditors, (iv) evidenced by bankers' acceptances or
similar instruments issued or accepted by banks, (v) for the payment of money
relating to a Capitalized Lease Obligation, or (vi) evidenced by a letter of
credit or a reimbursement obligation of such person with respect to any letter
of credit; (b) all net obligations of such person under Interest and Hedging
Swap Obligations; (c) all liabilities of others of the kind described in the
preceding clause (a) or (b) that such person has guaranteed or that is otherwise
its legal liability and all obligations to purchase, redeem or acquire any
Capital Stock; (d) all obligations secured by a Lien to which the property or
assets (including, without limitation, leasehold interests and any other
tangible or intangible property rights) of such person are subject, whether or
not the obligations secured thereby shall have been assumed by or shall
otherwise be such person's legal liability, provided, however, that the amount
of such obligations shall be limited to the lesser of the fair market value of
the assets or property to which such Lien attaches and the amount of the
obligation so secured; and (e) any and all deferrals renewals, extensions,
refinancings and refundings (whether direct or indirect) of, or amendments,
modifications or supplements to, any liability of the kind described in any of
the preceding clauses (a), (b), (c) or (d), or this clause (e), whether or not
between or among the same parties.
'Initial Guarantors' means Players Lake Charles, Inc., a Louisiana
corporation; Players Riverboat Management, Inc., a Nevada corporation; Players
Riverboat, Inc., a Nevada corporation; Players Mesquite Golf Club, Inc., a
Nevada corporation; Players Indiana, Inc., an Indiana corporation; Players
Michigan City, Inc., an Indiana corporation; Players Riverboat, LLC, a Louisiana
limited liability company; Players Nevada, Inc., a Nevada corporation; Players
Bluegrass Downs, Inc., a Kentucky corporation; Players Mesquite Land, Inc., a
Nevada corporation; Players Michigan City Management, Inc., an Indiana
corporation; Players Maryland Heights, Inc., a Missouri corporation; River
Bottom, Inc., a Missouri corporation; Showboat Star Partnership, a Louisiana
general partnership; and Southern Illinois Riverboat/Casino Cruises, Inc., an
Illinois corporation.
'Interest Swap and Hedging Obligation' means any obligation of any person
pursuant to any interest rate swap agreement, interest rate cap agreement,
interest rate collar agreement, interest rate exchange agreement, currency
exchange agreement or any other agreement or arrangement designed to protect
against fluctuations in interest rates or currency values, including, without
limitation, any arrangement whereby, directly or indirectly, such person is
entitled to receive from time to time periodic payments calculated by applying
either a fixed or floating rate of interest on a stated notional amount in
exchange for periodic payments made by such person calculated by applying a
fixed or floating rate of interest on the same notional amount.
'Investment' by any person in any other person means (without duplication)
(a) the acquisition by such person (whether for cash, property, services,
securities or otherwise) of capital stock, bonds, notes, debentures, partnership
or other ownership interests or other securities, including any options or
warrants, of such other person or any agreement to make any such acquisition;
(b) the making by such person of any deposit with, or advance, loan or other
extension of credit to, such other person (including the purchase of property
from another person subject to an understanding or agreement, contingent or
otherwise, to resell such property to such other person) or any commitment to
make any such advance, loan or extension (but excluding accounts receivable
arising in the ordinary course of business); (c) other than the Guarantees of
the New Notes and guarantees of other Indebtedness of the Company or any
Subsidiary to the extent permitted by the covenant described under '--Limitation
on Incurrence of Additional Indebtedness and Disqualified Capital Stock,' the
entering into by such person of any guarantee of, or other credit support or
contingent obligation with respect to, Indebtedness or other liability of such
other person; (d) the making of any capital contribution by such person to
another person, other than to the Company or a wholly-owned Subsidiary; or (e)
the designation by the Board of Directors of the Company of a person to be an
Unrestricted Subsidiary in accordance with the definition of 'Unrestricted
Subsidiary.' The Company shall be deemed to make an 'Investment' in an amount
equal to the fair market value of the net assets of any person, determined by
the Board of Directors of the Company in good faith at the time that such person
is designated an Unrestricted Subsidiary, and any property transferred to an
Unrestricted Subsidiary from the Company or one of its Subsidiaries, shall be
deemed an Investment valued at its fair market value, determined by the Board of
Directors of the Company in good faith at the time of such transfer.
'Issue Date' means the date of first issuance of the New Notes under the
Indenture.
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'Maryland Heights Investment Subsidiary' means the wholly-owned Subsidiary
of the Company (which may be the Maryland Heights Operating Subsidiary) that
will make the Investment in the Maryland Heights Joint Venture Entity.
'Maryland Heights Joint Venture' means the joint venture and business
operations proposed to be conducted by the Company and its Subsidiaries, as
contemplated by that certain Letter of Intent dated March 3, 1995, among the
Company, The Promus Companies Incorporated and Harrah's Club.
'Maryland Heights Joint Venture Entity' means the entity to be formed
jointly by the Company (or any wholly-owned Subsidiary thereof) and The Promus
Companies Incorporated or any successor thereto (or any Affiliate thereof) to
develop and operate certain shoreside facilities in connection with the Maryland
Heights Joint Venture.
'Maryland Heights Operating Subsidiary' means the wholly-owned Subsidiary
of the Company that will operate a Casino and certain Related Business Assets in
connection with the Maryland Heights Joint Venture.
'Net Cash Proceeds' means the aggregate amount of U.S. Legal Tender or Cash
Equivalents received by the Company, in the case of a sale of Qualified Capital
Stock, and by the Company and its Subsidiaries in respect of an Asset Sale or an
Event of Loss, plus, in the case of an issuance of Qualified Capital Stock upon
any exercise, exchange or conversion of securities (including options, warrants,
rights and convertible or exchangeable debt) of the Company that were issued for
cash on or after the Issue Date, the amount of cash originally received by the
Company upon the issuance of such securities (including options, warrants,
rights and convertible or exchangeable debt), less, in each case, the sum of all
fees, commissions and other expenses incurred in connection with such Asset Sale
or an Event of Loss, and, in the case of an Asset Sale or an Event of Loss only,
less the amount (estimated reasonably and in good faith by the Company) of
income, franchise, sales and other applicable taxes required to be paid by the
Company or any of its Subsidiaries in connection with such Asset Sale or Event
of Loss.
'Non-recourse Indebtedness' means Indebtedness of a person to the extent
that under the terms thereof (including any related instruments, documents or
filings) (i) no personal recourse shall be had against such person for the
payment of the principal of or interest or premium on such Indebtedness, and
(ii) enforcement of obligations on such Indebtedness is limited only to recourse
against interests in property and assets purchased with the proceeds of the
incurrence of such Indebtedness or the Indebtedness refinanced by such
Indebtedness and as to which neither the Company nor any Subsidiary provides any
credit support.
'Obligation' means any principal, premium, interest, penalties, fees,
reimbursements, damages, indemnification and other liabilities relating to
obligations of the Company or any Guarantor under the New Notes, the Guarantees
or the Indenture, including any liquidated damages pursuant to the Exchange and
Registration Rights Agreement.
'Offer to Purchase' means any Change of Control Offer, Asset Sale Offer or
Event of Loss Offer.
'Paying Agent' means First Fidelity Bank, National Association or any
successor as paying agent under the Indenture.
'Permitted Indebtedness' means any of the following:
(a) The Company and each of its Subsidiaries may incur Indebtedness
solely in respect of bankers acceptances, letters of credit and performance
bonds (to the extent that such incurrence does not result in the incurrence
of any obligation for the payment of borrowed money of any person other
than the Company or such Subsidiary), all in the ordinary course of
business, in amounts and for the purposes customary in the Company's
industry for gaming operations similar to those of the Company and its
Subsidiaries; provided, however, that the aggregate principal amount
outstanding of such Indebtedness (including any Indebtedness issued to
refinance, refund or replace such Indebtedness) for the Company and its
Subsidiaries shall at no time exceed $5.0 million;
(b) The Company may incur Indebtedness to any wholly-owned Subsidiary,
and any wholly-owned Subsidiary may incur Indebtedness, or issue
Disqualified Capital Stock, to any other wholly-owned Subsidiary or the
Company; provided, however, that such obligations, in any case where the
Company or a Guarantor is the obligor, shall be subordinated in all
respects to the Company's Obligations pursuant to the
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New Notes and each Guarantor's Obligations pursuant to its Guarantee of the
Company's Obligations pursuant to the New Notes, as the case may be; and
(c) The Company and any Subsidiary may post a bond or surety
obligation (or incur an indemnity or similar obligation) in order to
prevent the impairment or loss of or to obtain a Gaming License, to the
extent required by applicable law and consistent in character and amount
with customary industry practice.
'Permitted Liens' means any of the following:
(a) Liens for taxes, assessments or other governmental charges not yet
due or which are being contested in good faith and by appropriate
proceedings by the Company or one or more of its Subsidiaries if adequate
reserves with respect thereto are maintained on the books of the Company or
such Subsidiary or Subsidiaries, as the case may be, in accordance with
GAAP;
(b) Liens of carriers, warehousemen, mechanics, landlords,
materialmen, repairmen and for crew wages or salvage or other like Liens
arising by operation of law in the ordinary course of business and
consistent with industry practices and Liens on deposits made to obtain the
release of such Liens if (i) the underlying obligations are not overdue for
a period of more than 60 days or (ii) such Liens are being contested in
good faith and by appropriate proceedings by the Company or its Subsidiary
and adequate reserves with respect thereto are maintained on the books of
the Company or such Subsidiary, as the case may be, in accordance with
GAAP;
(c) easements, rights-of-way, zoning and similar restrictions and
other similar encumbrances or title defects incurred or imposed, as
applicable, in the ordinary course of business and consistent with industry
practices which, in the aggregate, are not substantial in amount, and which
do not in any case materially detract from the value of the property
subject thereto (as such property is used by the Company or its Subsidiary)
or interfere with the ordinary conduct of the business of the Company or
such Subsidiary; provided, however, that any such Liens are not incurred in
connection with any borrowing of money or any commitment to loan any money
or to extend any credit;
(d) Liens disclosed on a schedule to the Indenture;
(e) Liens that secure Acquired Indebtedness of the Company or any of
its Subsidiaries, provided, however, in each case, that such Liens do not
secure any other property or assets and were not put in place in connection
with or in anticipation of such acquisition, merger or consolidation;
(f) customary Liens (other than any Lien imposed by ERISA) incurred or
deposits made in the ordinary course of business in connection with
worker's compensation, unemployment insurance and other types of social
security legislation;
(g) judgment and attachment Liens with respect to judgments and
attachments not giving rise to an Event of Default; and
(h) any Lien in favor of the Company or any wholly-owned Subsidiary
thereof.
'Person' or 'person' means an individual, corporation, partnership,
association, limited liability company, limited liability partnership, trust,
estate or other entity.
'Purchase Money Indebtedness' means any Non-recourse Indebtedness of such
person owed to any seller or other person incurred to finance the acquisition of
any Related Business Assets and incurred substantially concurrently with or
within 30 days following such acquisition.
'Qualified Capital Stock' means any Capital Stock of the Company that is
not Disqualified Capital Stock.
'Qualified Exchange' means any defeasance, redemption, repurchase or other
acquisition of Capital Stock or Subordinated Indebtedness of the Company with
the Net Cash Proceeds received by the Company from the substantially concurrent
sale of Qualified Capital Stock of the Company or in exchange for Qualified
Capital Stock of the Company.
'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 New Notes are listed or
admitted to trading, or if the New Notes are not listed or admitted to trading
on any national securities exchange, but are traded in the over the
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counter market, the closing sale price of the New Notes 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.
'Reference Period' with regard to any person means the four full fiscal
quarters (or such lesser period during which such person has been in existence)
for which financial information is available ended immediately preceding any
date upon which any determination is to be made pursuant to the terms of the New
Notes or the Indenture.
'Refinancing Indebtedness' means Indebtedness or Disqualified Capital Stock
(a) issued in exchange for, or the proceeds from the issuance and sale of which
are used substantially concurrently to repay, redeem, defease, refund,
refinance, discharge or otherwise retire for value, in whole or in part, or (b)
constituting an amendment, modification or supplement to, or a deferral or
renewal of ((a) and (b) above are, collectively, a 'Refinancing'), any
Indebtedness or Disqualified Capital Stock in a principal amount or, in the case
of Disqualified Capital Stock, liquidation preference, not to exceed (after
deduction of reasonable and customary fees and expenses incurred in connection
with the Refinancing) the lesser of (i) the principal amount or, in the case of
Disqualified Capital Stock, liquidation preference, of the Indebtedness or
Disqualified Capital Stock refinanced and (ii) if such Indebtedness being
refinanced was issued with an original issue discount, the accreted value
thereof (as determined in accordance with GAAP) at the time of such Refinancing;
provided, however, that (A) Refinancing Indebtedness of any Guarantor shall only
be used to refinance outstanding Indebtedness or Disqualified Capital Stock of
such Guarantor, (B) Refinancing Indebtedness shall (x) not have an Average Life
shorter than the Indebtedness or Disqualified Capital Stock to be so refinanced
at the time of such Refinancing and (y) in all respects, be no less
subordinated, if applicable, to the rights of holders of the New Notes than was
the Indebtedness or Disqualified Capital Stock to be refinanced and (C) such
Refinancing Indebtedness shall have no installment of principal (or redemption)
scheduled to come due earlier than the scheduled maturity of any installment of
principal of the Indebtedness (or Disqualified Capital Stock) to be so
refinanced which was scheduled to come due prior to the Stated Maturity.
'Regulatory Redemption' means (i) a disposition by the Holder of any New
Notes required by any Governmental Authority or the Board of Directors of the
Company or (ii) a redemption or repurchase by the Company of any New Notes
required by any Governmental Authority or the Board of Directors of the Company
if, in either case, the ownership of any of the New Notes by the Holder thereof
will preclude, interfere with, threaten or delay the issuance, maintenance,
existence or reinstatement of any gaming or liquor license, permit or approval,
or result in the imposition of burdensome terms or conditions on such license,
permit or approval.
'Related Business' means the gaming (including parimutuel betting) business
conducted (or proposed to be conducted) by the Company and its Subsidiaries as
of the Issue Date 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.
'Related Business Asset' means property, goods or services pertaining to a
Related Business, other than debt or securities of any other person.
'Restricted Investment' means, in one or a series of related transactions,
any Investment other than in Cash Equivalents and in Investments of the type set
forth in clause (v) of the definition of Cash Equivalents that have a maturity
longer than one year so long as the Average Life of all such Investments does
not exceed 15 months; provided, however, that the extension of credit to
customers of Casinos consistent with industry practice in the ordinary course of
business shall not be a Restricted Investment.
'Restricted Payment' means, with respect to any person, (a) the declaration
or payment of any dividend or other distribution in respect of Capital Stock of
such person or any Subsidiary of such person, (b) any payment on account of the
purchase, redemption or other acquisition or retirement for value of Capital
Stock of such person, or any Subsidiary of such person, (c) any purchase,
redemption or other acquisition or retirement for value of, or any defeasance
of, any Subordinated Indebtedness, directly or indirectly, by such person or a
Subsidiary of such person, prior to the scheduled maturity, any scheduled
repayment of principal or any scheduled sinking fund payment, as the case may
be, of such Subordinated Indebtedness (including any payment in respect of any
amendment of the terms of any such Subordinated Indebtedness, which amendment is
sought in connection with any such acquisition of such Indebtedness or seeks to
shorten any such due date), and (d) any Restricted
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Investment (including, in any case, the designation of a person as an
Unrestricted Subsidiary) by such person; provided, however, that the term
'Restricted Payment' does not include (i) any dividend, distribution or other
payment on or with respect to Capital Stock of an issuer to the extent payable
solely in shares of Qualified Capital Stock of such issuer; (ii) any dividend,
distribution or other payment to the Company, or to any of its wholly-owned
Subsidiaries, by any of its Subsidiaries; (iii) Investments in or loans to a
wholly-owned Subsidiary the proceeds of which are used by such Subsidiary in a
Related Business activity of such Subsidiary; (iv) loans or advances to officers
or employees of the Company or any of its Subsidiaries to pay business related
expenses or relocation costs of such officers or employees in connection with
their employment by the Company or any of its Subsidiaries in an aggregate
amount outstanding at any time not exceeding $5.0 million for all such officers
and employers; (v) any Investment received as consideration for any Asset Sale
to the extent that the Company or any of its Subsidiaries is permitted to
receive such Investment without violating the provisions of the covenant
'--Limitation on Sale of Assets and Subsidiary Stock; Event of Loss'; and (vi)
Investments received as part of the settlement of litigation or in satisfaction
of extensions of credit to any Person otherwise permitted under the Indenture
pursuant to the reorganization, bankruptcy or liquidation of such Person.
'Significant Subsidiary' means any Subsidiary that would be a 'significant
subsidiary' as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act of 1933, as amended, as such regulation is in
effect on the date hereof.
'SIRCC' means Southern Illinois Riverboat/Casino Cruises, Inc., an Illinois
corporation.
'Stated Maturity,' when used with respect to the principal of any New Note,
means April 15, 2005 and, with respect to interest on any New Note, means the
scheduled date for payment of such interest.
'Subordinated Indebtedness' means Indebtedness of the Company or a
Guarantor, as applicable, that is subordinated by its express terms in right of
payment to the New Notes or any Guarantee, as applicable, in all respects and
has no scheduled installment of principal due, by maturity, redemption, sinking
fund payment or otherwise, on or prior to the Stated Maturity of the New Notes.
'Subsidiary,' with respect to any person, means (i) a corporation a
majority of whose Capital Stock with voting power, under ordinary circumstances,
to elect directors is at the time, directly or indirectly, owned by such person,
by such person and one or more Subsidiaries of such person or by one or more
Subsidiaries of such person or (ii) any other person (other than a corporation)
in which such person, one or more Subsidiaries of such person, or such person
and one or more Subsidiaries of such person, directly or indirectly, at the date
of determination thereof has at least a majority ownership interest. When used
with respect to the Company, Subsidiary shall be deemed to include any direct
Subsidiary of the Company and each indirect Subsidiary that is a direct
Subsidiary of the Company or one or more of its direct or indirect Subsidiaries.
Notwithstanding the foregoing, no Unrestricted Subsidiary shall be a Subsidiary
of the Company or any of its Subsidiaries.
'Unrestricted Subsidiary' means any person that, at the time of
determination, shall be an Unrestricted Subsidiary (as designated by the Board
of Directors of the Company, as provided below) provided that such person shall
not engage, to any substantial extent, in any line or lines of business activity
other than a Related Business. The Board of Directors of the Company may
designate any person (including any newly acquired or newly formed Subsidiary at
or prior to the time it is so formed or acquired) to be an Unrestricted
Subsidiary if (a) such Restricted Payment is not prohibited by the terms of the
covenant '--Limitation on Restricted Payments;' provided, however, that the
determination of whether a Restricted Payment is prohibited under such covenant
may be made without reference to clause (3) of the first paragraph thereof in
the case of an Investment in any person that would be a Subsidiary but for the
designation as an Unrestricted Subsidiary (except that the definition of
'Subsidiary,' solely for purposes of this proviso, shall be modified by
substituting '50% or more' for the words 'a majority' in clause (i) of such
definition and the word 'majority' in clause (ii) of such definition) engaged
solely in, or being formed solely for the purposes of engaging in, the business
of developing, constructing, expanding or acquiring (y) a Casino or Casinos and,
if applicable, any Related Businesses in connection with such Casino or Casinos,
or (z) a Related Business to be used primarily in connection with an existing
Casino or Casinos in which the Company or its Subsidiaries have at least a fifty
percent (50%) ownership interest, if (A) the Consolidated Coverage Ratio of the
Company for the Reference Period immediately preceding the date of such
designation is not less than 3.25 to 1; or (B) the ratio of the Consolidated
Debt of the Company as of the date of such designation to Consolidated EBITDA of
the Company for such Reference Period is less than 3.25 to 1; provided, further,
that the full amount of any Restricted Payment pursuant
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to the foregoing proviso shall be deducted in the calculation of the aggregate
amount of Restricted Payments available to be made pursuant to clause (3) of the
covenant '--Limitation on Restricted Payments;' (b) such person does not own any
Capital Stock of, or own or hold any Lien on any property of, or hold any debt
of, the Company or any Guarantor and (c) such person does not, at the time of
designation, and does not thereafter, create, incur, issue, assume, guarantee or
otherwise become directly or indirectly liable with respect to any Indebtedness
pursuant to which the holder of such Indebtedness has recourse to any of the
assets of the Company or any of its Subsidiaries. Any such designation also
constitutes a Restricted Payment for purposes of the covenant '--Limitation on
Restricted Payments.' The Board of Directors of the Company may designate any
Unrestricted Subsidiary to be a Subsidiary, provided, however, that (i) no
Default or Event of Default is existing or will occur as a consequence thereof
and (ii) immediately after giving effect to such designation, on a pro forma
basis, the Company could incur at least $1.00 of additional Subordinated
Indebtedness pursuant to clause (ii) of paragraph (a) of the covenant described
under '--Limitation on Incurrence of Additional Indebtedness and Disqualified
Capital Stock.' Each such designation shall be evidenced by filing with the
Trustee a certified copy of the resolution giving effect to such designation and
an Officers' Certificate certifying that such designation complied with the
foregoing conditions. Notwithstanding anything to the contrary, no Initial
Guarantor may be designated an Unrestricted Subsidiary.
'U.S. Government Obligations' means direct non-callable obligations of, or
non-callable obligations guaranteed by, the United States of America for the
payment of which obligation or guarantee the full faith and credit of the United
States of America is pledged.
'U.S. Legal Tender' means such coin or currency of the United States of
America as at the time of payment is legal tender for the payment of public and
private debts.
BOOK-ENTRY; DELIVERY AND FORM
Except as set forth below, the New Notes will initially be issued in the
form of one or more registered notes in global form (the 'Global New Notes').
Each Global New Note will be deposited on the Expiration Date with, or on behalf
of, The Depository Trust Company (the 'Depository') and registered in the name
of Cede & Co., as nominee of the Depository.
DTC has advised the Company that it is (i) a limited purpose trust company
organized under the laws of the State of New York, (ii) a member of the Federal
Reserve System, (iii) a 'clearing corporation' within the meaning of the Uniform
Commercial Code, as amended, and (iv) a 'Clearing Agency' registered pursuant to
Section 17A of the Exchange Act. DTC was created to hold securities for its
participants (collectively, the 'Participants') and facilitates the clearance
and settlement of securities transactions between Participants through
electronic book-entry changes to the accounts of its Participants, thereby
eliminating the need for physical transfer and delivery of certificates. The
Depository's Participants include securities brokers and dealers (including the
Initial Purchasers), banks and trust companies, clearing corporations and
certain other organizations. Access to the Depository's system is also available
to other entities such as banks, brokers, dealers and trust companies
(collectively, the 'Indirect Participants') that clear through or maintain a
custodial relationship with a Participant, either directly or indirectly.
Holders of Notes that are Participants may elect to hold Notes through the
Depository. Holders of Notes who are not Participants may beneficially own
securities held by or on behalf of the Depository only through Participants or
Indirect Participants.
The Company expects that pursuant to procedures established by the
Depository (i) upon deposit of the Global New Notes, the Depository will credit
the accounts of Participants which have elected to receive New Notes pursuant to
the Exchange Offer with an interest in the Global New Note and (ii) ownership of
New Notes will be shown on, and the transfer of ownership thereof will be
effected through, records maintained by the Depository (with respect to the
interests of Participants), the Participants and the Indirect Participants. The
laws of some states require that certain persons take physical delivery in
definitive form of securities that they own and that security interests in
negotiable instruments can only be perfected by delivery of certificates
representing the instruments. As a result, the ability of a person having a
beneficial interest in New Notes represented by a Global New Note to pledge such
interest to persons or entities that do not participate in the Depository's
system or to otherwise take actions with respect to such interest, may be
affected by the lack of a physical certificate evidencing such interest.
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So long as the Depository or its nominee is the registered owner of a
Global New Note, the Depository or such nominee, as the case may be, will be
considered the sole owner or Holder of the New Notes represented by the Global
New Note for all purposes under the Indenture. Except as provided below, owners
of beneficial interests in a Global New Note will not be entitled to have New
Notes represented by such Global New Note registered in their names, will not
receive or be entitled to receive physical delivery of Certificated Securities,
and will not be considered the owners or holders thereof under the Indenture for
any purpose, including with respect to the giving of any directions,
instructions or approvals to the Trustee thereunder.
Payments with respect to the principal of, premium, if any, and interest on
any New Notes represented by a Global New Note registered in the name of the
Depository or its nominee on the applicable record date will be payable by the
Trustee to or at the direction of the Depository or its nominee in its capacity
as the registered holder of the Global New Note representing such New Notes
under the Indenture. Under the terms of the Indenture, the Company and the
Trustee may treat the persons in whose names the New Notes, including the Global
New Notes, are registered as the owners thereof for the purpose of receiving
such payments and for any and all other purposes whatsoever. Consequently,
neither the Company nor the Trustee has or will have any responsibility or
liability for the payment of such amounts to beneficial owners of New Notes
(including principal, premium, if any, and interest), or to immediately credit
the accounts of the relevant Participants with such payment, in amounts
proportionate to their respective holdings in principal amount of beneficial
interest in the Global New Note as shown on the records of the Depository.
Payments by the Participants and the Indirect Participants to the beneficial
owners of New Notes will be governed by standing instructions and customary
practice and will be the responsibility of the Participants or the Indirect
Participants.
CERTIFICATED SECURITIES
Any person having a beneficial interest in a Global New Note may, upon
request to the Trustee, exchange such beneficial interest for Certificated
Securities. Upon any such issuance, the Trustee is required to register such
Certificated Securities in the name of such person or persons (or the nominee of
any thereof), and cause the same to be delivered thereto. In addition, if (i)
the Company notifies the Trustee in writing that the Depository is no longer
willing or able to act as a depository and the Company is unable to locate a
qualified successor with 90 days or (ii) the Company, at its option, notifies
the Trustee in writing that it elects to cause the issuance of New Notes in
definitive form under the Indenture, then, upon surrender by the Depository of
its Global New Note, Certificated Securities will be issued to each person that
the Depository identifies as the beneficial owner of the New Notes represented
by the Global New Note.
Neither the Company nor the Trustee shall be liable for any delay by the
Depository or any Participant or Indirect Participant in identifying the
beneficial owners of the related New Notes and each such person may conclusively
rely on, and shall be protected in relying on, instructions from the Depository
for all purposes (including with respect to the registration and delivery, and
the respective principal amounts, of the New Notes to be issued).
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company incorporates herein by reference, the following documents filed
with the Commission under the Exchange Act:
<TABLE>
<S> <C>
(a) The Company's Annual Report on Form 10-K for the year ended March 31, 1994, and the Company's
Quarterly Reports on Form 10-Q for the periods ended June 30, 1994, September 30, 1994 and December
31, 1994;
(b) The description of the Company's Common Stock contained in the Company's General Form for
Registration of Securities (Form 10) dated August 13, 1986, File No. 0-14897, filed by the Company to
register such securities under the Exchange Act, including all amendments and reports filed for the
purpose of updating such description prior to the termination of the Exchange Offer;
(c) The information under the caption entitled 'Certain Transactions' on pages 13-16 of the Company's
Proxy Statement dated August 30, 1994 relating to its 1994 Annual Meeting of Stockholders;
(d) The Company's Current Reports on Form 8-K dated June 16, 1994 (concerning the Mesquite Project), July
19, 1994 (concerning authorized Common Stock repurchases), December 31, 1994 (concerning a change in
auditors); and March 31, 1995 (concerning the acquisition of Interests and the Offering) and
(e) All documents and reports subsequently filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to termination of the Exchange
Offer, shall be deemed to be incorporated by reference in this Prospectus and to be a part hereof
from the date of filing of such documents or reports.
</TABLE>
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded, except as so modified or superseded, shall
not be deemed to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom a copy of
this Prospectus has been delivered, on the written or oral request of such
person, a copy of any or all of the documents incorporated herein by reference,
other than exhibits to such documents unless they are specifically incorporated
by reference into such documents. Requests for such copies should be directed
to: Peter J. Aranow, Executive Vice President, Chief Financial Officer and
Secretary, Players International, Inc., 800 Bilbo Street, Lake Charles,
Louisiana 70601, (518) 387-1560.
LEGAL MATTERS
The validity of the New Notes will be passed upon for the Company by
Morgan, Lewis & Bockius, Philadelphia, Pennsylvania.
EXPERTS
The financial statements and schedules of the Company as of and for the
years ended March 31, 1992, 1993 and 1994 included or incorporated by reference
in this Prospectus and elsewhere in the Registration Statement have been audited
by Arthur Andersen LLP, independent public accountants, as indicated in their
reports with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in giving said reports.
84
<PAGE>
PLAYERS INTERNATIONAL, INC. AND SUBSIDIARIES
INDEX TO FINANCIAL STATEMENTS
NINE MONTHS ENDED DECEMBER 31, 1994 AND 1993
YEARS ENDED MARCH 31, 1994, 1993 AND 1992
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
Report of Independent Public Accountants................................................................ F-2
Audited Financial Statements:
Consolidated Balance Sheets........................................................................... F-3
Consolidated Statements of Operations................................................................. F-4
Consolidated Statements of Stockholders' Equity....................................................... F-5
Consolidated Statements of Cash Flows................................................................. F-6
Notes to Consolidated Financial Statements............................................................ F-7
The financial statements as of December 31, 1994 and for the nine month periods ended December 31, 1993 and 1994
are unaudited.
Unaudited Financial Statements:
Condensed Consolidated Balance Sheets................................................................. F-21
Condensed Consolidated Statements of Operations....................................................... F-22
Condensed Consolidated Statements of Cash Flows....................................................... F-23
Notes to Condensed Consolidated Financial Statements.................................................. F-24
</TABLE>
F-1
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Stockholders and Board of Directors of Players International, Inc.:
We have audited the accompanying consolidated balance sheets of PLAYERS
INTERNATIONAL, INC. (a Nevada corporation) and subsidiaries as of March 31, 1994
and 1993, and the related consolidated statements of operations, stockholders'
equity and cash flows for each of the three years in the period ended March 31,
1994. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Players International, Inc.
and subsidiaries as of March 31, 1994 and 1993, and the results of their
operations and their cash flows for each of the three years in the period ended
March 31, 1994 in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Las Vegas, Nevada
May 24, 1994
F-2
<PAGE>
PLAYERS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
MARCH 31, MARCH 31,
1993 1994
------------- --------------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents.................................................... $ 8,791,200 $ 13,957,100
Marketable securities........................................................ -- 63,588,600
Accounts receivable, net of allowance for doubtful accounts of $42,800 at
March 31, 1994............................................................ 19,200 948,700
Notes receivable............................................................. -- 1,320,000
Inventories.................................................................. 135,500 494,500
Deferred tax (Note 4)........................................................ -- 1,773,400
Prepaid and other current assets............................................. 334,800 1,414,500
------------- --------------
Total current assets...................................................... 9,280,700 83,496,800
------------- --------------
PROPERTY AND EQUIPMENT, net of accumulated depreciation and amortization of
$180,000 at March 31, 1993 and $3,618,700 at March 31, 1994 (Note 3)......... 16,441,400 46,899,400
------------- --------------
DEFERRED TAX--long term (Note 4)............................................... -- 3,179,800
------------- --------------
OTHER ASSETS................................................................... 819,800 4,988,600
------------- --------------
$ 26,541,900 $ 138,564,600
------------- --------------
------------- --------------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt (Note 5)................................... $ 2,562,400 $ 154,300
Accounts payable............................................................. 1,459,500 2,669,300
Accrued interest............................................................. 880,400 --
Accrued liabilities.......................................................... 1,320,300 9,266,000
Other liabilities............................................................ 200,000 547,800
Income tax payable (Note 4).................................................. -- 2,892,700
Net liabilities of discontinued operations (Note 2).......................... 5,119,900 2,414,500
------------- --------------
Total current liabilities................................................. 11,542,500 17,944,600
------------- --------------
OTHER LONG-TERM LIABILITIES.................................................... -- 868,600
------------- --------------
LONG-TERM DEBT, net of current portion (Note 5)................................ 15,085,400 5,710,700
------------- --------------
COMMITMENTS AND CONTINGENCIES (Note 8)
STOCKHOLDERS' EQUITY:
Preferred stock, no par value, Authorized--10,000,000 shares, Issued and
outstanding--none......................................................... -- --
Common stock, $.005 par value,
Authorized--60,000,000 shares,
Issued and outstanding--10,660,800 shares at March 31, 1993 and 17,571,400
shares at March 31, 1994................................................ 53,300 87,900
Additional paid-in capital................................................... 11,834,100 105,124,700
Unrealized loss on marketable securities..................................... -- (150,400)
Retained earnings (accumulated deficit)...................................... (11,973,400) 8,978,500
------------- --------------
Total stockholders' equity................................................... (86,000) 114,040,700
------------- --------------
$ 26,541,900 $ 138,564,600
------------- --------------
------------- --------------
</TABLE>
The accompanying notes are an integral part of these consolidated balance
sheets.
F-3
<PAGE>
PLAYERS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
------------------------------------------
1992 1993 1994
------------ ------------ --------------
<S> <C> <C> <C>
REVENUES:
Casino............................................................. $ -- $ 4,605,500 $ 95,872,600
Food and beverage.................................................. -- 545,900 5,314,300
Other.............................................................. -- 577,400 5,894,600
------------ ------------ --------------
-- 5,728,800 107,081,500
COSTS AND EXPENSES:
Casino............................................................. -- 2,176,500 35,114,800
Food and beverage.................................................. -- 504,700 5,075,600
Other gaming related and general costs............................. -- 1,712,500 23,666,000
Corporate administrative expenses.................................. -- -- 2,674,800
Pre-opening and gaming development costs........................... 54,500 4,994,700 7,026,100
Depreciation and amortization...................................... -- 180,000 3,767,900
Compensation expense in connection with non-employee director
options.......................................................... -- -- 1,803,100
Stock compensation in connection with employment contracts......... -- -- 1,065,000
------------ ------------ --------------
54,500 9,568,400 80,193,300
Income (loss) from continuing operations before other income
(expense) and provision (benefit) for income taxes............... (54,500) (3,839,600) 26,888,200
OTHER INCOME (EXPENSE):
Interest income.................................................... 1,200 5,900 1,622,700
Other income, net.................................................. -- -- 83,200
Interest expense................................................... (300) (273,900) (887,100)
------------ ------------ --------------
900 (268,000) 818,800
Income (loss) from continuing operations before provision for
income taxes..................................................... (53,600) (4,107,600) 27,707,000
PROVISION FOR INCOME TAXES........................................... -- 34,100 10,255,100
------------ ------------ --------------
Income (loss) from continuing operations........................... (53,600) (4,141,700) 17,451,900
DISCONTINUED OPERATIONS (Note 2):
Income (loss) from discontinued operations (net of applicable
income tax benefits of $2,020,300 in 1992)....................... (4,206,100) (6,071,100) --
Loss on disposition of discontinued operations, including a
provision of $748,000 for operating losses during phase out
period........................................................... -- (960,000) --
------------ ------------ --------------
(4,206,100) (7,031,100) --
Cumulative effect of change in accounting principle.................. -- -- 3,500,000
------------ ------------ --------------
NET INCOME (LOSS).................................................... $ (4,259,700) $(11,172,800) $ 20,951,900
------------ ------------ --------------
------------ ------------ --------------
WEIGHTED AVERAGE NUMBER OF SHARES OF COMMON STOCK AND COMMON STOCK
EQUIVALENTS OUTSTANDING............................................ 8,263,800 8,695,000 18,957,700
------------ ------------ --------------
------------ ------------ --------------
WEIGHTED AVERAGE NUMBER OF SHARES OF COMMON STOCK AND COMMON STOCK
EQUIVALENTS OUTSTANDING ASSUMING FULL DILUTION..................... -- -- 19,324,800
------------ ------------ --------------
------------ ------------ --------------
EARNINGS (LOSS) PER COMMON SHARE:
From continuing operations......................................... $ (.01) $ (.47) $ .92
From change in accounting principle................................ -- -- .18
From discontinued operations....................................... (.51) (.81) --
------------ ------------ --------------
$ (.52) $ (1.28) $ 1.10
------------ ------------ --------------
------------ ------------ --------------
EARNINGS PER COMMON SHARE ASSUMING FULL DILUTION:
From continuing operations......................................... $ -- $ -- $ .91
From change in accounting principle................................ -- -- .18
------------ ------------ --------------
$ -- $ -- $ 1.09
------------ ------------ --------------
------------ ------------ --------------
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
F-4
<PAGE>
PLAYERS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED MARCH 31, 1994
<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL UNREALIZED ACCUMULATED
----------------------- PAID-IN GAIN/ EARNINGS
SHARES AMOUNT CAPITAL (LOSS) (DEFICIT)
------------ --------- -------------- ----------- -------------
<S> <C> <C> <C> <C> <C>
BALANCE, March 31, 1991...................... 8,193,300 $ 41,000 $ 2,687,100 $ -- $ 3,459,100
Shares issued under stock option
plans................................... 74,300 300 57,400 -- --
Shares issued for warrants exercised....... 10,500 100 4,200 -- --
Net loss................................... -- -- -- -- (4,259,700)
------------ --------- -------------- ----------- -------------
BALANCE, March 31, 1992...................... 8,278,100 41,400 2,748,700 -- (800,600)
Shares issued for contract settlement...... 351,400 1,700 2,282,600 -- --
Shares issued under stock option
plans................................... 282,400 1,400 323,000 -- --
Shares issued for warrants exercised....... 1,434,800 7,200 5,160,400 -- --
Shares issued in exchange of
debentures.............................. 264,100 1,300 862,400 -- --
Shares issued for services................. 50,000 300 199,700 -- --
Proceeds allocated to warrants issued in
conjunction with sale of 15 percent
series A&B exchangeable debentures (Note
7)...................................... -- -- 257,300 -- --
Net Loss................................... -- -- -- -- (11,172,800)
------------ --------- -------------- ----------- -------------
BALANCE, March 31, 1993...................... 10,660,800 53,300 11,834,100 -- (11,973,400)
Shares issued under stock option
plans................................... 335,200 1,700 949,400 -- --
Shares issued for warrants exercised....... 163,400 800 911,900 -- --
Shares issued in exchange for debentures... 1,352,500 6,800 4,416,400 -- --
Shares sold in public offering and
subsequent registration costs........... 4,999,500 25,000 85,948,200 -- --
Shares issued in connection with employment
contracts............................... 60,000 300 1,064,700 -- --
Unrealized loss on marketable securities,
net of tax.............................. -- -- -- (150,400) --
Net income................................. -- -- -- -- 20,951,900
------------ --------- -------------- ----------- -------------
BALANCE, March 31, 1994...................... 17,571,400 $ 87,900 $ 105,124,700 $ (150,400) $ 8,978,500
------------ --------- -------------- ----------- -------------
------------ --------- -------------- ----------- -------------
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
F-5
<PAGE>
PLAYERS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
--------------------------------------
1992 1993 1994
----------- ----------- ------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) from continuing operations.......................... $ (53,600) $(4,141,700) $ 20,951,900
Adjustments to reconcile net income (loss) from continuing operations
to net cash provided by (used in) operating activities:
Depreciation and amortization....................................... -- 180,000 3,767,900
Issuance of common stock for services............................... 57,700 524,400 1,601,100
Compensation expense in connection with non-employee
director options.................................................. -- -- 1,803,100
Stock compensation in connection with employment contracts.......... -- -- 1,065,000
Cumulative effect of change in accounting principle................. -- -- (3,500,000)
Net benefit realized from deferred tax asset........................ -- -- (1,298,800)
Other............................................................... -- -- 141,200
Changes in assets and liabilities, net of effects of discontinued
operations:
Accounts and notes receivable....................................... -- (19,200) (2,292,300)
Inventories......................................................... -- (135,500) (348,900)
Prepaid and other current assets.................................... -- (334,800) (1,079,700)
Other assets........................................................ -- (593,300) (2,802,300)
Accounts payable.................................................... -- 1,459,500 1,210,700
Accrued interest.................................................... 300 880,400 (880,400)
Accrued liabilities................................................. -- 1,320,300 8,871,000
Other liabilities................................................... (1,969,700) 150,000 1,080,800
Net effect of discontinued operations................................. 3,363,100 (2,871,500) (2,822,000)
----------- ----------- ------------
Net cash provided by (used in) operating activities................. 1,397,800 (3,581,400) 25,468,300
----------- ----------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment................................... (110,400) (5,194,700) (35,639,300)
Proceeds of sale of property and equipment............................ -- -- 39,600
Purchases of marketable securities.................................... -- -- (63,922,200)
Other assets--pre-opening costs--riverboat............................ (355,900) 549,500 --
Net effect of discontinued operations................................. 135,600 281,200 423,000
----------- ----------- ------------
Net cash used in investing activities................................. (330,700) (4,364,000) (99,098,900)
----------- ----------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Additions to long-term debt, net of debt issuance costs............... 5,000 6,991,200 --
Payments of long-term debt............................................ -- (27,500) (7,133,100)
Proceeds allocated to warrants issued in conjunction with sale of 15
percent series A&B exchangeable debentures (Note 7)................. -- 257,300 --
Issuance of common stock for warrants exercised....................... 4,300 5,167,600 262,700
Proceeds from sale of common stock, net of all issuance and subsequent
registration costs.................................................. -- -- 85,973,200
Net effect of discontinued operations................................. (170,000) (219,200) (306,300)
----------- ----------- ------------
Net cash provided by (used in) financing activities................... (160,700) 12,169,400 78,796,500
----------- ----------- ------------
NET INCREASE IN CASH AND CASH EQUIVALENTS............................... 906,400 4,224,000 5,165,900
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD........................ 3,660,800 4,567,200 8,791,200
----------- ----------- ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD.............................. $ 4,567,200 $ 8,791,200 $ 13,957,100
----------- ----------- ------------
----------- ----------- ------------
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
F-6
<PAGE>
PLAYERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
Wholly-owned subsidiaries of Players International, Inc. ('The Company'),
operate the Lake Charles, Louisiana riverboat casino, (Players Lake Charles,
Inc.--'PLC'), which commenced operation on December 8, 1993, the Metropolis,
Illinois riverboat casino (Southern Illinois Riverboat Casino Cruises,
Inc.--'SIRCC'), which opened on February 23, 1993 and the Paducah, Kentucky
racetrack facility (Players Bluegrass Downs, Inc.-- 'BGD'), which was acquired
in November 1993. All operations include food and beverage facilities. A retail
gift shop is included in the operations of each riverboat casino.
The accompanying consolidated financial statements include the accounts of
the Company and its wholly-owned subsidiaries. All significant intercompany
balances and transactions have been eliminated in consolidation.
Certain reclassifications have been made to the financial statements as
previously presented to conform to the current classifications.
Revenues and Promotional Allowances
In accordance with industry practice, casino revenues are the net of gaming
wins less losses. Revenues exclude the retail value of complimentary admissions,
food and beverage and other items furnished to customers, which totaled
approximately $141,300 and $3,384,900 for the years ended March 31, 1993 and
1994, respectively.
The estimated costs of providing departmental promotional allowances are
included in casino costs and expenses as follows:
<TABLE>
<CAPTION>
1993 1994
---------- ------------
<S> <C> <C>
Food and beverage................................................... $ 70,500 $ 1,397,700
Admissions.......................................................... -- 1,548,100
Other............................................................... 48,800 218,000
---------- ------------
$ 119,300 $ 3,163,800
---------- ------------
---------- ------------
</TABLE>
Pre-opening and Gaming Development Costs
The Company is currently pursuing expansion opportunities in new gaming
jurisdictions. All pre-opening and gaming development costs are expensed as they
are incurred except for the cost of property and equipment which are
capitalized.
Inventories
Inventories consisting of food, beverage and gift items are stated at the
lower of cost (first-in, first-out) or market.
Depreciation and Amortization
The Company computes depreciation for property and equipment using
primarily the straight-line method over the estimated useful life of the assets.
Amortization of leasehold and land improvements is computed using the
straight-line method over the lesser of the estimated useful life or lease term.
The following estimated useful lives are used:
<TABLE>
<S> <C>
Riverboat..................................... 10 years
Furniture, fixtures and equipment............. 5 to 7 years
Building and improvements..................... Lesser of useful life or lease term
(10 to 20 years)
</TABLE>
F-7
<PAGE>
PLAYERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)
The Company follows the policy of capitalizing expenditures that materially
increase asset lives and charging ordinary maintenance and repairs to operations
as incurred. When properties are disposed of, the costs and related accumulated
depreciation are removed from the accounts, and any resulting gain or loss is
included in operations. For the years ended March 31, 1992, 1993 and 1994, the
Company incurred repairs and maintenance expense as follows:
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
---------------------------------
1992 1993 1994
--------- ---------- ----------
<S> <C> <C> <C>
Continuing operations...................................... $ -- $ 136,000 $ 493,000
Discontinued operations.................................... 69,100 60,000 49,600
--------- ---------- ----------
$ 69,100 $ 196,000 $ 542,600
--------- ---------- ----------
--------- ---------- ----------
</TABLE>
Chips, Tokens and Uniforms
Costs incurred to purchase gaming chips, tokens and uniforms have been
capitalized in the accompanying consolidated balance sheets at March 31, 1993
and 1994. These costs are being expensed over three years under the
straight-line method.
Goodwill
Cost in excess of net assets of acquired businesses is recorded as goodwill
and is included in other assets in the accompanying consolidated balance sheets.
Goodwill relating to the purchase of Players Bluegrass Downs, Inc. of $1,755,300
at March 31, 1994 is being amortized using the straight-line method over 15
years. The related amortization for the year ended March 31, 1994, is $39,000.
Per Share Amounts
Per share amounts have been computed based on the weighted average number
of outstanding shares and common stock equivalents, if dilutive, during each
period. During the years ended March 31, 1992 and 1993, the effect of options
and warrants was not considered since they were antidilutive. A summary of the
number of shares used in computing primary earnings per share follows:
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
------------------------------------
1992 1993 1994
---------- ---------- ------------
<S> <C> <C> <C>
Weighted average number of shares outstanding......... 8,263,800 8,695,000 15,779,600
Dilutive effect of options and warrants............... -- -- 3,178,100
---------- ---------- ------------
Shares used in computing primary earnings per share... 8,263,800 8,695,000 18,957,700
---------- ---------- ------------
---------- ---------- ------------
</TABLE>
The number of shares used in computing fully diluted earnings per share for
the year ended March 31, 1994 includes the conversion of convertible debentures
as of April 1, 1993. Also, net income includes the elimination
F-8
<PAGE>
PLAYERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)
of interest expense on the convertible debentures of $116,000, net of tax. As a
result, the number of shares used in computing fully diluted earnings per share
is as follows:
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
------------------------------------
1992 1993 1994
---------- ---------- ------------
<S> <C> <C> <C>
Shares used in computing primary earnings per share... -- -- 18,957,700
Dilutive effect of exchangeable debentures............ -- -- 367,100
---------- ---------- ------------
Shares used in computing fully diluted earnings per
share............................................... -- -- 19,324,800
---------- ---------- ------------
---------- ---------- ------------
</TABLE>
2. DISCONTINUED OPERATIONS
In fiscal year 1993 the Board of Directors of the Company approved a plan
to concentrate its efforts on the marketing and operation of riverboat casinos
(see Note 1) and to discontinue its marketing of various services and products
relating to the gaming, travel and entertainment industries. These services and
products include Players Club International, International Gaming Promotions,
Players World Travel, the 900 Game Show Network and its cash advance services.
In July 1993, the Company sold substantially all of the assets relating to
(i) its Players Club membership club, which provides discount and other benefits
to individuals who participate in recreational gaming, and (ii) its Players
World Travel agency, to Privilege Players Club Group, Inc. ('Privilege
Players'), as assignee of Winners Entertainment Group, Inc. In consideration of
the sale of the Players Club and Players World Travel assets the Company
received $350,000 cash and Privilege Players assumed certain liabilities
relating to such assets (although the Company remains obligated if Privilege
Players does not discharge the assumed liabilities). The Company retained the
remaining liabilities relating to such assets, none of which the Company
believes are material to its business as a whole.
The identifiable assets and liabilities of the discontinued operations have
been reclassified on the accompanying balance sheets from their historic
classification to separately identify them as net liabilities of discontinued
operations. The net liabilities of discontinued operations consist of the
following at March 31, 1993 and 1994:
<TABLE>
<CAPTION>
1993 1994
------------- -------------
<S> <C> <C>
ASSETS OF DISCONTINUED OPERATIONS:
Accounts receivable, net...................................... $ 342,400 $ 90,200
Prepaid expenses.............................................. 315,600 46,600
Furniture, equipment and improvements, net.................... 788,800 --
------------- -------------
1,446,800 136,800
------------- -------------
LIABILITIES OF DISCONTINUED OPERATIONS:
Accounts payable.............................................. (2,719,400) (636,900)
Accrued liabilities........................................... (406,600) (71,600)
Membership advance payments................................... (2,009,700) --
Allowance for membership cancellations........................ (18,000) --
Other liabilities............................................. (151,500) --
Reserve for loss on disposition of discontinued
operations................................................. (960,000) (1,842,800)
Long-term debt................................................ (301,500) --
------------- -------------
(6,566,700) (2,551,300)
------------- -------------
$ (5,119,900) $ (2,414,500)
------------- -------------
------------- -------------
</TABLE>
F-9
<PAGE>
PLAYERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
2. DISCONTINUED OPERATIONS--(CONTINUED)
The identifiable revenues and expenses of the discontinued operations have
been reclassified on the accompanying statements of operations from their
historic classification to separately identify them as the net results of
discontinued operations. The loss from discontinued operations consists of the
following:
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
-------------------------------------------
1992 1993 1994
------------- ------------- -------------
<S> <C> <C> <C>
REVENUES FROM DISCONTINUED OPERATIONS............... $ 23,555,700 $ 14,639,600 $ 3,360,400
OPERATING COSTS AND OTHER ITEMS FROM DISCONTINUED
OPERATIONS:
Direct operating expenses......................... 7,960,800 6,590,700 797,800
Membership services and marketing
expenses....................................... 13,088,700 8,132,400 2,053,500
General and administrative........................ 3,604,500 3,715,100 1,336,500
Income from joint venture......................... (15,100) -- --
Interest and other (income) expense, net.......... (134,300) (61,800) 188,900
Change in accounting estimate..................... 5,792,500 -- --
Reversal of previously provided reserves.......... (515,000) -- --
Reduction of disputed receivable.................. -- 200,000 --
Contract settlement............................... -- 2,134,300 --
------------- ------------- -------------
29,782,100 20,710,700 4,376,700
Loss before benefit for income taxes
and loss on disposition of
discontinued operations........................ (6,226,400) (6,071,100) (1,016,300)
BENEFIT FOR INCOME TAXES............................ (2,020,300) -- --
Loss before loss on disposition of discontinued
operations..................................... (4,206,100) (6,071,100) (1,016,300)
LOSS ON DISPOSITION OF DISCONTINUED OPERATIONS...... -- (960,000) --
------------- ------------- -------------
Net Loss.......................................... $ (4,206,100) $ (7,031,100) $ (1,016,300)
------------- ------------- -------------
------------- ------------- -------------
</TABLE>
The following details the components of the reserve for loss on disposition
of discontinued operations of $960,000 at March 31, 1993 as shown above:
<TABLE>
<S> <C>
Anticipated operating costs of all discontinued operations to 9/30/93
and providing travel services for discontinued operations to
3/31/94............................................................. $ (748,000)
Lease expense to end of term (10/6/94)(i)............................. (750,000)
Write off fixed assets at net book value, $825,000, less $200,000
realizable on sale.................................................. (625,000)
Write off of prepaid expenses......................................... (80,000)
Termination pay--net of prior vacation accrual........................ (767,000)
------------
Provision for operating losses during phase out period................ (2,970,000)
Recognition of deferred membership income received in cash............ 2,010,000
------------
Reserve for loss on disposition of discontinued operations at March
31, 1993............................................................ $ (960,000)
------------
------------
</TABLE>
- ------------------
(i) Calculated on a worst case basis assuming the Company was unable to
sublease, buyout or terminate the lease.
F-10
<PAGE>
PLAYERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
2. DISCONTINUED OPERATIONS--(CONTINUED)
The accompanying statements of cash flows have been restated from their
historic presentation to reflect the net effects of discontinued operations on
cash flows from operating, investing and financing activities as follows:
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
----------------------------------------
1992 1993 1994
------------ ------------ ------------
<S> <C> <C> <C>
NET EFFECT OF DISCONTINUED OPERATIONS ON CASH FLOWS
FROM OPERATIONS:
Net loss........................................... $ (4,206,100) $ (7,031,100) $ (1,016,300)
Depreciation and amortization...................... 457,600 389,200 --
Reduction of disputed receivable................... -- 200,000 --
Issuance of common stock under contract
settlement....................................... -- 2,284,300 --
Change in accounting estimate...................... 5,792,500 -- --
Amortization of deferred membership acquisition
costs............................................ 6,793,600 5,755,900 --
Payment of deferred membership acquisition costs... (6,518,100) (3,873,900) --
(Gain) loss on retirement of furniture, equipment
and improvements................................. 76,000 (39,400) 162,600
Changes in assets and liabilities:
Accounts receivable.............................. 246,700 560,100 216,400
Prepaid expenses................................. (128,000) 140,800 195,600
Other assets..................................... (14,700) 2,000 --
Accounts payable................................. 1,160,200 (1,333,900) (1,863,300)
Accrued liabilities.............................. 173,200 (158,500) (290,000)
Membership advance payments...................... (470,700) (768,400) (75,500)
Allowance for membership cancellations........... (57,000) (35,000) --
Other liabilities................................ 57,900 76,400 (151,500)
Reserve for loss on disposition of discontinued
operations.................................... -- 960,000 --
------------ ------------ ------------
$ 3,363,100 $ (2,871,500) $ (2,822,000)
------------ ------------ ------------
------------ ------------ ------------
NET EFFECT OF DISCONTINUED OPERATIONS ON CASH FLOWS
FROM INVESTING ACTIVITIES:
Purchases of furniture, equipment and
improvements..................................... $ (94,900) $ (32,700) $ (8,800)
Proceeds from retirement of furniture, equipment
and improvements................................. 35,600 313,900 81,800
Investment in and receivables from joint venture... 30,500 -- --
Cash balances from newly consolidated subsidiary... 164,400 -- --
Proceeds from sale of discontinued operations...... -- -- 350,000
------------ ------------ ------------
$ 135,600 $ 281,200 $ 423,000
------------ ------------ ------------
------------ ------------ ------------
NET EFFECT OF DISCONTINUED OPERATIONS ON CASH FLOWS
FROM FINANCING ACTIVITIES:
Additions to long-term debt........................ $ 47,500 $ -- $ --
Payments of long-term debt......................... (217,500) (219,200) (306,300)
------------ ------------ ------------
$ (170,000) $ (219,200) $ (306,300)
------------ ------------ ------------
------------ ------------ ------------
</TABLE>
F-11
<PAGE>
3. PROPERTY AND EQUIPMENT
A summary of property and equipment is as follows:
<TABLE>
<CAPTION>
MARCH 31,
----------------------------
1993 1994
------------- -------------
<S> <C> <C>
PROPERTY AND EQUIPMENT FROM CONTINUING OPERATIONS:
Land......................................................... $ 424,500 $ 1,133,100
Riverboat and barges......................................... 9,571,100 22,797,900
Furniture, fixtures and equipment............................ 5,790,400 16,270,300
Leasehold and land improvements.............................. 774,600 10,063,100
Construction-in-progress..................................... 60,800 253,700
Less--accumulated depreciation and amortization.............. (180,000) (3,618,700)
------------- -------------
$ 16,441,400 $ 46,899,400
------------- -------------
------------- -------------
FURNITURE, EQUIPMENT AND IMPROVEMENTS FROM DISCONTINUED
OPERATIONS:
Cost......................................................... $ 1,894,300 $ --
Less--accumulated depreciation and amortization.............. (1,105,500) --
------------- -------------
$ 788,800 $ --
------------- -------------
------------- -------------
</TABLE>
4. INCOME TAXES
Effective April 1, 1993, the Company changed its method of accounting for
income taxes from the deferred method to the liability method required by FASB
Statement No. 109, 'Accounting for Income Taxes'. As permitted under the new
rules, prior years' financial statements have not been restated.
The cumulative effect of adopting Statement 109 as of April 1, 1993 was to
increase net income by $3,500,000.
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amount of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of
the Company's deferred tax assets and liabilities as of March 31, 1994 are as
follows:
<TABLE>
<S> <C>
Deferred tax assets:
Reserve for discontinued operations................................. $ 688,700
Pre-opening, development and other costs............................ 3,695,800
Unrealized loss on marketable securities............................ 95,300
Deferred revenue.................................................... 422,000
Accrual of directors' option expense................................ 673,900
------------
Total deferred tax assets........................................ 5,575,700
Deferred tax liabilities:
Tax over book depreciation.......................................... 615,800
Other............................................................... 6,700
------------
Total deferred tax liabilities................................... 622,500
------------
Net deferred tax assets............................................... $ 4,953,200
------------
------------
</TABLE>
F-12
<PAGE>
PLAYERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
4. INCOME TAXES--(CONTINUED)
Significant components of the provision for income taxes attributable to
continuing operations are as follows:
<TABLE>
<CAPTION>
DEFERRED LIABILITY
METHOD METHOD
MARCH 31, 1993 MARCH 31, 1994
----------------- -----------------
<S> <C> <C>
Current:
Federal.............................................. $ -- $ 9,323,900
State................................................ 34,200 2,003,800
----------------- -----------------
Total current........................................ 34,200 11,327,700
Deferred:
Federal.............................................. -- (873,100)
State................................................ (100) (199,500)
----------------- -----------------
Total deferred....................................... (100) (1,072,600)
----------------- -----------------
$ 34,100 $ 10,255,100
----------------- -----------------
----------------- -----------------
</TABLE>
The provision for income taxes from discontinued operations is reported in
the financial statements as follows:
<TABLE>
<CAPTION>
DEFERRED
METHOD
MARCH 31, 1992
-----------------
<S> <C>
Current:
Federal........................................................ $ 4,500
State.......................................................... 35,800
-----------------
Total current.................................................. 40,300
Deferred:
Federal........................................................ (1,646,200)
State.......................................................... (414,400)
-----------------
Total deferred................................................. (2,060,600)
-----------------
$ (2,020,300)
-----------------
-----------------
</TABLE>
The reconciliation of income tax attributable to continuing operations
computed at the Federal statutory rates to income tax expense is:
<TABLE>
<CAPTION>
DEFERRED LIABILITY
METHOD METHOD
MARCH 31, 1993 MARCH 31, 1994
--------------------- -----------------------
<S> <C> <C>
Federal statutory rate................................. (34%) 35%
State taxes on income, net of Federal income tax
benefit.............................................. 1 4
Losses producing no current tax benefit................ 32 --
Tax exempt interest income from municipal bonds........ -- (2)
--
---
Financial statement provision rate..................... (1%) 37%
--
--
---
---
</TABLE>
The reconciliation of income tax attributable to discontinued operations
computed at the Federal statutory rates to income tax expense is:
<TABLE>
<CAPTION>
DEFERRED
METHOD
MARCH 31, 1992
---------------------
<S> <C>
Federal statutory rate........................................... (34%)
State taxes on income, net of Federal income tax benefit......... --
Other............................................................ 2
---
(32%)
---
---
</TABLE>
F-13
<PAGE>
5. LONG-TERM DEBT
A summary of long-term debt is as follows:
<TABLE>
<CAPTION>
MARCH 31,
---------------------------
1993 1994
------------- ------------
<S> <C> <C>
DEBT FROM CONTINUING OPERATIONS:
15 percent series A and B exchangeable debentures, unsecured,
payable interest only until maturity, effective interest
rate of 15.69 percent, due April 1997, called for redemption
(see Note 7)................................................ $ 4,649,700 $ --
Senior Note payable to a bank, secured by equipment, payable in
monthly installments of $9,800, interest at prime plus 4
percent (10 percent at March 31, 1993) adjusted quarterly,
due April 1995.............................................. 213,100 --
Senior Note payable to a bank, secured by land, payable in 35
monthly installments of $11,700 with a final payment of
$479,000, interest at prime plus 2 percent (8 percent at
March 31, 1993), due June 1996.............................. 750,200 --
Senior Note payable to a bank, secured by riverboat, payable in
monthly installments of $66,300, interest at prime plus 2.75
percent (8.75 percent at March 31, 1993), due April 1996.... 2,090,000 --
Installment purchase contract, secured by gaming equipment,
payable in monthly principal installments of $164,300,
interest at 9 percent due at maturity, due June 1995........ 3,944,000 --
First Ships Mortgage, secured by riverboat, interest at prime
plus 2 percent (8 percent at March 31, 1993 and 1994)
adjusted every 60 months, payable in monthly installments of
$49,400 due 2013............................................ 5,905,800 5,802,500
Other.......................................................... 95,000 62,500
------------- ------------
17,647,800 5,865,000
Less--current portion.......................................... (2,562,400) (154,300)
------------- ------------
$ 15,085,400 $ 5,710,700
------------- ------------
------------- ------------
DEBT FROM DISCONTINUED OPERATIONS:
Capitalized lease obligations due in varying amounts through
September 1994, interest at 6.95 percent to 9.3 percent..... $ 301,500 $ --
Less--current portion.......................................... (207,100) --
------------- ------------
$ 94,400 $ --
------------- ------------
------------- ------------
</TABLE>
F-14
<PAGE>
PLAYERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
5. LONG-TERM DEBT--(CONTINUED)
The aggregate annual maturities of long-term debt at March 31, 1994 are as
follows:
<TABLE>
<S> <C>
1995........................................................ $154,300
1996........................................................ 169,800
1997........................................................ 163,400
1998........................................................ 169,500
1999........................................................ 183,500
Thereafter.................................................. 5,024,500
------------
$5,865,000
------------
------------
</TABLE>
On June 28, 1993, all outstanding exchangeable debentures were exchanged
for shares of the Company's common stock (see Note 7).
The cost of equipment securing the capitalized lease obligations and the
related accumulated depreciation at March 31, 1994 was $92,400 and $19,800,
respectively.
The future minimum lease payments for capitalized leases at March 31, 1994
are as follows:
<TABLE>
<S> <C>
1995........................................................... $37,100
1996........................................................... 27,600
1997........................................................... 6,900
Thereafter..................................................... --
---------
Total minimum lease payments................................... 71,600
Amounts representing interest.................................. (7,000)
---------
Present value of future minimum lease payments................. $64,600
---------
---------
</TABLE>
6. SHAREHOLDERS' EQUITY
In July 1993, the Company issued 4,999,500 shares of its $.005 par value
common stock in a public offering. The price to the public was $18.75 per share.
Net proceeds of the offering, after deducting all associated costs, were
$86,238,400, or $17.25 per newly issued share. Proceeds of the offering were
used primarily for funding the Lake Charles casino, expansion of the Metropolis
facilities, repayment of debt incurred in connection with the Metropolis casino,
future expansion and general corporate purposes.
7. COMMON STOCK OPTIONS AND WARRANTS
The Company has three stock option plans, the 1985 Incentive Stock Option
Plan ('1985 Plan') for employees covering 400,000 shares of common stock, the
1990 Incentive Stock Option and Non-Qualified Option Plan covering 800,000
shares of common stock ('1990 Plan') and the 1993 Incentive Stock Option and
Non-Qualified Option Plan covering 2,000,000 shares of common stock ('1993
Plan'). As of March 31, 1994, the Company had 12,791, 350,332 and 1,516,000
shares available for issuance in connection with future options that may be
granted under the 1985 Plan, 1990 Plan and 1993 Plan, respectively. Options
granted are generally exercisable between three and ten years from date of
grant.
F-15
<PAGE>
PLAYERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
7. COMMON STOCK OPTIONS AND WARRANTS--(CONTINUED)
The following is a summary of the 1985 Plan activity since March 31, 1991:
<TABLE>
<CAPTION>
NUMBER OPTION PRICE
OF SHARES RANGE PER SHARE
--------- -----------------
<S> <C> <C>
Outstanding March 31, 1991................... 229,677 $1.00-$4.00
Granted.................................... 109,750 $2.88-$4.25
Exercised.................................. (36,677) $1.00
Expired or canceled........................ (23,500) $2.88-$4.125
---------
Outstanding March 31, 1992................... 279,250 $1.00-$4.25
Granted.................................... 10,000 $3.60
Exercised.................................. (50,000) $1.00-$3.60
Expired or canceled........................ (64,250) $2.125-$3.60
---------
Outstanding March 31, 1993................... 175,000 $1.19-$4.25
Granted.................................... 60,000 $17.125
Exercised.................................. (138,114) $1.19-$4.25
Expired or canceled........................ (6,468) $2.88-$3.25
---------
Outstanding March 31, 1994................... 90,418 $2.88-$17.125
---------
---------
</TABLE>
The following is a summary of the 1990 Plan activity since its approval on
September 27, 1991:
<TABLE>
<CAPTION>
NUMBER OPTION PRICE
OF SHARES RANGE PER SHARE
--------- ------------------
<S> <C> <C>
Granted................................... 512,500 $2.875-$4.375
Expired or canceled....................... (512,500) $2.875-$4.375
---------
Outstanding March 31, 1992.................. 0
Granted................................... 624,250 $3.44-$10.375
Exercised................................. (8,000) $3.60
Expired or canceled....................... (480,000) $3.44-$3.60
---------
Outstanding March 31, 1993.................. 136,250 $3.60-$10.375
Granted................................... 306,918 $9.375-$18.375
Exercised................................. (32,150) $3.60-$5.00
Expired or canceled....................... (1,500) $16.75
---------
Outstanding March 31, 1994.................. 409,518 $3.60-$18.375
---------
---------
</TABLE>
The following is a summary of the 1993 Plan activity since its approval on
September 22, 1993:
<TABLE>
<CAPTION>
NUMBER OPTION PRICE
OF SHARES RANGE PER SHARE
--------- -----------------
<S> <C> <C>
Granted.................................... 424,000 $17.75-$25.00
Exercised.................................. --
---------
Outstanding March 31, 1994................... 424,000 $17.75-$25.00
---------
---------
</TABLE>
F-16
<PAGE>
PLAYERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
7. COMMON STOCK OPTIONS AND WARRANTS--(CONTINUED)
The following is a summary of other stock option activity (including grants
for various business services and to directors under no formal plan) since March
31, 1991:
<TABLE>
<CAPTION>
NUMBER OPTION PRICE
OF SHARES RANGE PER SHARE
----------- ---------------
<S> <C> <C>
Outstanding March 31, 1991................... 952,542 $0.50-$4.19
Granted.................................... 133,469 $2.06-$3.88
Exercised.................................. (37,648) $0.50-$1.25
Expired or canceled........................ (26,805) $1.00-$3.75
-----------
Outstanding March 31, 1992................... 1,021,558 $0.50-$4.19
Granted.................................... 107,696 $1.78-$9.375
Exercised.................................. (224,430) $0.50-$3.50
Expired or canceled........................ (493,528) $0.50-$3.75
-----------
Outstanding March 31, 1993................... 411,296 $0.50-$9.375
Exercised.................................. (164,898) $0.50-$4.19
Expired or canceled........................ (988) $1.25
-----------
Outstanding March 31, 1994................... 245,410 $0.50-$9.375
-----------
-----------
</TABLE>
On June 23, 1992, SIRCC sold to accredited investors 15 percent series A&B
exchangeable debentures with a face value of $5,815,000, due April 14, 1997. In
addition, 3,167,100 warrants to purchase common stock of the Company were
issued. The debentures were exchangeable for common stock of the Company at the
rate of 278 shares of common stock per $1,000 face value of debt. The Company
called all outstanding debentures for redemption on June 28, 1993. All remaining
debenture holders have exchanged their debentures for common stock. Outstanding
debentures at March 31, 1993 totaled $4,649,700. These debentures were exchanged
for 1,352,500 shares of the Company's common stock. The warrants, which expire
on February 23, 1995, are currently exercisable at $4.50 per warrant. The number
of warrants may be increased based on certain anti-dilution provisions of the
agreement.
Under a contract with a spokesperson for the riverboat through December 31,
1996, the Company issued 1,400,000 warrants to purchase common stock of the
Company. The warrants, which vest at 25 percent per year beginning January 1,
1993, are exercisable at $4.00 per warrant. The contract, as amended, expires on
December 31, 1996. The Company has the option to renew it independently year to
year thereafter.
The following is a summary of warrant activity since the initial issuance
on June 23, 1992:
<TABLE>
<CAPTION>
NUMBER OF OPTION PRICE
WARRANTS RANGE PER SHARE
------------- ---------------
<S> <C> <C>
Issued................................... 4,825,042 $3.60-$8.50
Exercised................................ (1,434,774) $3.60-$4.50
-------------
Outstanding March 31, 1993................. 3,390,268 $4.00-$8.50
Exercised................................ (163,392) $4.50-$6.19
-------------
Outstanding March 31, 1994................. 3,226,876 $4.00-$8.50
-------------
-------------
</TABLE>
As of March 31, 1994, 2,526,876 of these warrants were fully vested and
exercisable.
The Company had a total of 4,112,814 and 4,396,222 shares reserved for
future issuance at March 31, 1993 and 1994, respectively, for outstanding stock
options, warrants and exchangeable debentures in addition to shares
F-17
<PAGE>
PLAYERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
7. COMMON STOCK OPTIONS AND WARRANTS--(CONTINUED)
available for issuance in connection with future options that may be granted
under the Company's three stock option plans.
8. COMMITMENTS AND CONTINGENCIES
The Company leases office space, land and equipment under operating leases
expiring at various dates through December 2011.
The minimum annual payments under these lease agreements at March 31, 1994
are as follows:
<TABLE>
<S> <C>
1995........................................................ $ 981,800
1996........................................................ 927,400
1997........................................................ 885,900
1998........................................................ 868,800
1999........................................................ 584,900
Thereafter.................................................. 86,400
------------
$ 4,335,200
------------
------------
</TABLE>
In management's opinion, all commitments relating to discontinued
operations have been provided for in the loss on disposition of discontinued
operations in the accompanying statements of operations. Therefore, the
commitments related to discontinued operations are not included above.
Rent expense for all operating leases was as follows:
<TABLE>
<CAPTION>
YEARS ENDED MARCH 31,
------------------------------------
1992 1993 1994
---------- ---------- ------------
<S> <C> <C> <C>
Continuing operations.................................. $ -- $ 33,400 $ 1,304,200
Discontinued operations................................ 381,500 572,500 226,900
---------- ---------- ------------
$ 381,500 $ 605,900 $ 1,531,100
---------- ---------- ------------
---------- ---------- ------------
</TABLE>
For the fiscal years ended March 31, 1993 and 1994, $247,990 and $203,200,
respectively, of rent expense from continuing operations is included in
pre-opening and gaming development costs in the accompanying consolidated
statements of operations.
In May 1993, the Company entered into an agreement to become a 12.5 percent
special limited partner in a venture to construct a 120-room hotel adjacent to
the Company's riverboat operations in Metropolis, Illinois. In exchange for its
12.5 percent interest, the Company contributed approximately four acres of land
adjacent to its riverboat site. Under the terms of the agreement, the Company is
obligated to perform various marketing functions in conjunction with the
marketing of its riverboat. The Company's risk of loss is limited to its
contribution of land.
Effective February 1993, for the Metropolis operation and September 1993,
for the Lake Charles operation, the Company entered into service agreements with
a company to provide reservations, ticketing, communications and mailing
services. The minimum annual payments under these agreements, which both expire
on January 31, 1996, total $225,000 per year. Payments are subject to increase
based on passengers booked and traveled and levels of equipment, software,
personnel, and expenses necessary to fulfill agreement obligations. The expenses
recorded under these agreements were $200,000 and $1,389,600 during the years
ended March 31, 1993 and 1994, respectively.
The Company is a defendant in various lawsuits. In the opinion of
management, the outcome of these matters will not have a material adverse effect
on the Company's business or results of operations.
F-18
<PAGE>
PLAYERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
9. TRANSACTIONS WITH RELATED PARTIES
The law firm of Horn, Goldberg, Gorny, Daniels, Paarz, Plackter and Weiss
performed legal services for the Company during the fiscal years ended March 31,
1992, 1993 and 1994, for which it was paid fees in the aggregate amount of
$194,800, $240,000 and $955,000, respectively. Mr. Howard Goldberg was an active
member of the firm through May 1993, when he became President of the Company.
The Company purchases materials for fulfillment kits and other promotional
items from a company owned by certain directors and stockholders of the Company.
During the years ended March 31, 1992, 1993 and 1994, the Company paid $151,600,
$97,700 and $79,100, respectively for such materials.
During the year ended March 31, 1993, the Company sold $1,000,000 face
value of 15 percent series B exchangeable debentures (see Notes 5 and 7) to
various directors and officers.
In June 1992, the Company sold $2,250,000 face value of the 15 percent
series A exchangeable debentures to The Griffin Group, Inc. (Griffin) (see Notes
5 and 7). Subsequent to this purchase, affiliates of Griffin acquired $150,000
face value of debentures and 519,400 of the detachable warrants from Griffin.
Subsequent to this purchase, one of the affiliates, a representative of Griffin,
became a member of the board of directors of the Company. In December 1992,
Griffin entered into a contract to become the spokesperson for the Company's
riverboats (see Note 7). In February 1993, Griffin and its affiliates exercised
415,300 and 71,700 respectively, of the warrants attached to the debentures and
became shareholders of the Company.
During the year ended March 31, 1993, the Company advanced an officer of
the Company $39,000. This amount was outstanding at March 31, 1993 and was
included in accounts receivable in the accompanying balance sheets. The
receivable was fully collected during the year ended March 31, 1994.
10. STATEMENTS OF CASH FLOWS
For purposes of the statements of cash flows, the Company considers all
highly liquid investments with an original maturity of the three months or less
to be cash equivalents.
Supplemental cash flows disclosures are as follows:
<TABLE>
<CAPTION>
YEARS ENDED MARCH 31,
----------------------------------------
1992 1993 1994
---------- ------------- -------------
<S> <C> <C> <C>
CONTINUING OPERATIONS:
Interest paid, including amount capitalized................ $ -- $ 249,000 $ 2,049,700
Income taxes paid.......................................... -- -- 8,760,800
Debt incurred to purchase property and equipment........... 803,800 10,512,500 --
Senior Notes exchanged for common stock.................... -- 908,000 4,649,700
Senior Note loan costs amortized into additional paid-in
capital................................................. -- 44,300 226,500
Land transferred to joint venture.......................... -- -- 166,800
Unrealized loss on marketable securities................... -- -- 150,400
DISCONTINUED OPERATIONS:
Interest paid.............................................. 39,700 73,200 26,700
Taxes paid................................................. 25,100 34,200 100
Debt incurred to purchase property and equipment........... 529,300 57,300 --
Asset and liability balances acquired from newly
consolidated subsidiary................................. 540,200 -- --
</TABLE>
F-19
<PAGE>
PLAYERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
11. SUBSEQUENT EVENTS (UNAUDITED)
In June 1994, the Company, through a wholly-owned subsidiary, acquired land
to construct and operate a new casino resort in Mesquite, Nevada. The Company
acquired approximately 45 acres of land for $12.5 million, comprised of $5.1
million in cash, $4.2 million of the Company's common stock and a $3.2 million
note from the seller. The complex is anticipated to be developed as a
destination resort. The total cost of the project, including land acquisition
costs, is approximately $65 million.
On July 19, 1994, the Board of Directors authorized the repurchase of up to
$20 million of the Company's Common Stock, from time to time on the open market.
Through March 1, 1995, no such purchases have been effected.
F-20
<PAGE>
PLAYERS INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
MARCH 31, 1994 DECEMBER 31, 1994
-------------- -----------------
(UNAUDITED)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents................................................... $ 13,957 $ 21,221
Marketable securities....................................................... 63,589 73,177
Accounts receivable, net of allowance for doubtful accounts of $43 at March
31, 1994 and $116 at December 31, 1994................................... 949 1,652
Notes receivable............................................................ 1,320 1,276
Inventories................................................................. 494 808
Deferred tax................................................................ 1,773 2,147
Prepaid expenses and other current assets................................... 1,415 1,714
-------------- -----------------
Total current assets..................................................... 83,497 101,995
PROPERTY AND EQUIPMENT, net of accumulated depreciation and amortization of
$3,619 at March 31, 1994 and $8,469 at December 31, 1994.................... 46,899 72,725
DEFERRED TAX--long-term....................................................... 3,180 3,180
OTHER ASSETS.................................................................. 4,989 5,156
-------------- -----------------
TOTAL ASSETS................................................................ $ 138,565 $ 183,056
-------------- -----------------
-------------- -----------------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt........................................... $ 154 $ 173
Accounts payable............................................................ 2,669 2,260
Accrued expenses............................................................ 4,389 6,676
Accrued payroll and payroll-related......................................... 4,877 5,513
Other liabilities........................................................... 548 581
Income tax payable.......................................................... 2,893 250
Net liabilities of discontinued operations.................................. 2,414 2,198
-------------- -----------------
Total current liabilities................................................ 17,944 17,651
OTHER LONG-TERM LIABILITIES................................................... 869 561
LONG-TERM DEBT, net of current portion........................................ 5,711 8,777
STOCKHOLDERS' EQUITY:
Preferred stock, no par value
Authorized--10,000,000 shares, Issued and outstanding--none.............. -- --
Common stock, $.005 par value Authorized--60,000,000 shares, Issued and
outstanding--17,571,400 at March 31, 1994, 18,182,400 at December 31,
1994..................................................................... 88 91
Additional paid-in capital.................................................. 105,125 112,476
Unrealized loss on marketable securities.................................... (150) (804)
Retained earnings........................................................... 8,978 44,304
-------------- -----------------
TOTAL STOCKHOLDERS' EQUITY.................................................. 114,041 156,067
-------------- -----------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY.................................. $ 138,565 $ 183,056
-------------- -----------------
-------------- -----------------
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
F-21
<PAGE>
PLAYERS INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE NINE MONTHS
ENDED DECEMBER 31,
----------------------------
1993 1994
------------- -------------
<S> <C> <C>
REVENUES:
Casino........................................................................... $ 54,912 $ 155,418
Food and beverage................................................................ 3,134 5,848
Other............................................................................ 3,790 4,583
------------- -------------
61,836 165,849
------------- -------------
COSTS AND EXPENSES:
Casino........................................................................... 21,043 54,199
Food and beverage................................................................ 3,270 5,570
Other gaming related costs....................................................... 13,259 36,149
Corporate administrative expenses................................................ 1,542 5,416
Pre-opening and gaming development costs......................................... 4,727 5,463
Depreciation and amortization.................................................... 1,625 5,209
Stock compensation in connection with employment contracts....................... 1,065 --
Compensation expense in connection with non-employee director options............ 1,352 --
------------- -------------
Total costs and expenses...................................................... 47,883 112,006
------------- -------------
Income from operations before other income (expense) and provision for income
taxes......................................................................... 13,953 53,843
------------- -------------
OTHER INCOME (EXPENSE):
Interest income.................................................................. 1,126 2,333
Other income, net................................................................ 78 301
Interest expense................................................................. (768) (506)
------------- -------------
Total other income............................................................ 436 2,128
------------- -------------
Income from operations before provision for income taxes......................... 14,389 55,971
PROVISION FOR INCOME TAXES: 5,024 20,645
------------- -------------
Income from operations before cumulative effect of change in accounting
principle..................................................................... 9,365 35,326
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE................................ 3,500 --
------------- -------------
NET INCOME......................................................................... $ 12,865 $ 35,326
------------- -------------
------------- -------------
EARNINGS PER COMMON SHARE AND COMMON SHARE EQUIVALENT:
Income from operations before cumulative effect of change in accounting
principle..................................................................... $ 0.51 $ 1.71
Cumulative effect of change in accounting principle.............................. 0.19 --
------------- -------------
Net Income....................................................................... $ 0.70 $ 1.71
Weighted average number of common shares and common share equivalents............ 18,333,100 20,661,400
EARNINGS PER COMMON SHARE ASSUMING FULL DILUTION:
Income from operations before cumulative effect of change in accounting
principle..................................................................... $ 0.50 $ 1.70
Cumulative effect of change in accounting principle.............................. 0.18 --
------------- -------------
Net Income....................................................................... $ 0.68 $ 1.70
Weighted average number of common shares and common share equivalents, assuming
full dilution................................................................. 19,077,000 20,806,200
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
F-22
<PAGE>
PLAYERS INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED DECEMBER 31,
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
1993 1994
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income from operations................................................................ $ 12,865 $ 35,326
Adjustments to reconcile net income from operations to net cash provided by (used in)
operating activities:
Depreciation and amortization.......................................................... 1,708 5,230
Compensation expense in connection with non-employee director options.................. 1,352 --
Stock compensation in connection with employment contracts............................. 1,065 --
Cumulative effect of change in accounting principle.................................... (3,500) --
Net benefit realized from deferred tax asset........................................... 2,131 --
Other.................................................................................. 87 246
Changes in assets and liabilities, net of effects of discontinued operations:
Accounts and notes receivable.......................................................... (521) (733)
Inventories, prepaid expenses and other current assets................................. (4,637) (557)
Other assets........................................................................... (1,763) (355)
Accounts payable and accrued expenses.................................................. 10,048 4,318
Other liabilities...................................................................... 31 (275)
Income tax payable..................................................................... (50) (2,357)
Deferred income........................................................................ 1,232 --
Net effect of discontinued operations.................................................. (1,820) (217)
--------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES................................................... 18,228 40,626
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment.................................................... (31,480) (23,477)
Purchases of marketable securities..................................................... (16,106) (18,290)
Proceeds of sale of marketable securities.............................................. -- 7,500
Proceeds of sale of property and equipment............................................. 39 --
Net effect of discontinued operations.................................................. 343 --
--------- ---------
NET CASH USED IN INVESTING ACTIVITIES....................................................... (47,204) (34,267)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of long-term debt............................................................. (7,091) (123)
Issuance of common stock for warrants exercised........................................ 263 --
Registration costs of common stock..................................................... -- (256)
Proceeds from exercise of stock options................................................ 1,225 1,284
Net effect of discontinued operations.................................................. (155) --
Proceeds from sale of common stock, net of related cost................................ 86,238 --
--------- ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES................................................... 80,480 905
--------- ---------
NET INCREASE OF CASH AND CASH EQUIVALENTS................................................... 51,504 7,264
CASH AND CASH EQUIVALENTS, AT BEGINNING OF PERIOD........................................... 8,791 13,957
--------- ---------
CASH AND CASH EQUIVALENTS, AT END OF PERIOD................................................. $ 60,295 $ 21,221
--------- ---------
--------- ---------
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
F-23
<PAGE>
PLAYERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1--BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have
been prepared pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and note disclosures normally included
in annual financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to those rules and
regulations. It is suggested that these condensed financial statements be read
in conjunction with the audited financial statements and the notes thereto
included elsewhere in this Prospectus. In the opinion of management, all
adjustments (which include normal recurring adjustments) necessary to present
fairly the financial position, results of operations and cash flows of all
periods presented have been made.
The results of operations for the nine month period ended December 31,
1994, are not necessarily indicative of the operating results for the full year.
Certain reclassifications have been made to the financial statements as
previously presented to conform to the current classifications.
NOTE 2--CASINO REVENUES AND PROMOTIONAL ALLOWANCES
In accordance with industry practice, casino revenues are the net of gaming
wins less losses. Revenues exclude the retail value of complimentary admissions,
food and beverage and other items furnished to customers, which totaled
approximately $1,961,000 and $6,380,000 for the nine months ended December 31,
1993 and 1994, respectively.
The estimated costs of providing departmental promotional allowances are
included in casino costs and expenses at December 31, 1993 and 1994, as follows
(dollars in thousands):
<TABLE>
<CAPTION>
FOR THE NINE MONTHS
ENDED DECEMBER 31,
------------------------
1993 1994
----------- -----------
<S> <C> <C>
Food and beverage..................................................... $ 654 $ 3,545
Admissions and other.................................................. 1,046 $ 2,489
----------- -----------
1,700 $ 6,034
----------- -----------
----------- -----------
</TABLE>
NOTE 3--PREOPENING AND DEVELOPMENT COSTS
All costs in connection with the identification and development of new
gaming jurisdictions and sites are being expensed as incurred except for the
cost of property and equipment, which is capitalized.
NOTE 4--PRIMARY AND FULLY DILUTED SHARES
Per share amounts have been based on the weighted average number of
outstanding shares and common stock equivalents, if dilutive, during each
period. A summary of the number of shares used in computing primary earnings per
share follows:
<TABLE>
<CAPTION>
FOR THE NINE MONTHS
ENDED DECEMBER 31,
--------------------------
1993 1994
------------ ------------
<S> <C> <C>
Weighted average number of shares outstanding..................... 15,195,500 17,925,800
Dilutive effect of options and warrants........................... 3,137,600 2,735,600
------------ ------------
Shares used in computing primary earnings per share............... 18,333,100 20,661,400
------------ ------------
------------ ------------
</TABLE>
F-24
<PAGE>
PLAYERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(UNAUDITED)
NOTE 4--PRIMARY AND FULLY DILUTED SHARES--(CONTINUED)
The number of shares used in computing fully diluted earnings per share is
as follows:
<TABLE>
<CAPTION>
FOR THE NINE MONTHS
ENDED DECEMBER 31,
--------------------------
1993 1994
------------ ------------
<S> <C> <C>
Shares used in computing primary earnings per share............... 18,333,100 20,661,400
Dilutive effect of options and warrants........................... 256,600 144,800
Dilutive effect of exchangeable debentures........................ 487,300 --
------------ ------------
Shares used in computing fully diluted earnings per share......... 19,077,000 20,806,200
------------ ------------
------------ ------------
</TABLE>
NOTE 5--SUPPLEMENTAL CASH FLOW DISCLOSURE
For purposes of the statement of cash flows, the Company considers all
highly liquid investments with a remaining maturity of three months or less to
be cash equivalents.
Supplemental cash flow disclosures are as follows for the nine months ended
December 31, 1993 and 1994 (dollars in thousands):
<TABLE>
<CAPTION>
1993 1994
--------- ---------
<S> <C> <C>
Interest paid............................................................ $ 1,965 $ 506
Income taxes paid........................................................ 5,826 22,399
Debt incurred to purchase land and equipment............................. -- 3,211
Senior Notes exchanged for common stock.................................. 4,650 --
Senior Note loan costs amortized into additional paid-in capital......... 227 --
Stock issued to purchase land............................................ -- 4,238
Unrealized loss on marketable securities................................. -- 1,028
Land transferred to joint venture........................................ 167 --
</TABLE>
NOTE 6--DISCONTINUED OPERATIONS
In fiscal year 1993, the Board of Directors of the Company approved a plan
that discontinued the marketing of various services and products relating to the
gaming, travel and entertainment industries. The discontinued businesses include
Players Club and its related travel services, Players World Travel, the 900 Game
Show Network ('900 Network') and International Gaming Promotions, which promoted
and marketed tournaments at gaming destinations. As a result, in fiscal year
1993, the Company established a reserve for loss on the disposition of
discontinued operations. Subsequently, all income and expense items relating to
discontinued operations have been offset against this reserve.
The net liabilities of discontinued operations consist of the following at
March 31, 1994 and December 31, 1994 (dollars in thousands):
The number of shares used in computing fully diluted earnings per share is
as follows:
<TABLE>
<CAPTION>
MARCH 31, 1994 DECEMBER 31, 1994
-------------- -----------------
<S> <C> <C>
ASSETS OF DISCONTINUED OPERATIONS:........................ $ 137 $ 123
-------------- --------
LIABILITIES OF DISCONTINUED OPERATIONS:
Accounts payable and accrued expenses..................... (708) (654)
Reserve for loss on disposition of discontinued
operations.............................................. (1,843) (1,667)
-------------- --------
(2,551) (2,321)
-------------- --------
$ (2,414) $ (2,198)
-------------- --------
-------------- --------
</TABLE>
F-25
<PAGE>
PLAYERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(UNAUDITED)
NOTE 7--AUTHORIZED STOCK REPURCHASE PROGRAM
On July 19, 1994, the Board of Directors authorized the repurchase of up to
$20 million of the Company's Common Stock, from time to time on the open market.
NOTE 8--SUBSEQUENT EVENTS
Approvals were received on February 8, 1995 and March 13, 1995 from the
Louisiana Riverboat Gaming Commission and the Louisiana State Police, Riverboat
Gaming Enforcement Division, respectively, for the Company to acquire the
Showboat Star Riverboat Casino, which was thereafter acquired for approximately
$52 million.
After the receipt of necessary approvals, the Company intends to invest
approximately $58 million in additional expansion projects and improvements at
the Lake Charles facility, including the purchase, and subsequent reconstruction
or substantial improvement and expansion, of hotel space, the development of a
50,000 square foot themed entertainment center, a new docking facility,
increased covered parking capacity, public purpose infrastructure contributions
and additional amenities.
On April 26, 1995, the Company declared a 3-for-2 common stock split, which
was paid on May 19, 1995 to stockholders of record as of the close of business
on May 8, 1995.
F-26
<PAGE>
===============================================================================
All tendered Old Notes, executed Letters of Transmittal and other related
documents should be directed to the Exchange Agent. Questions and requests for
assistance and requests for additional copies of the Prospectus, the Letter of
Transmittal and other related documents should be addressed to the Exchange
Agent as follows:
By Hand, Registered or Certified Mail
or Overnight Carrier:
First Fidelity Bank, National Association
123 South Broad Street, 12th Floor
Philadelphia, Pennsylvania 19109
By Facsimile:
(215) 985-7290
Attention: John H. Clapham
Confirm by telephone: (215) 985-7157
(Originals of all documents submitted by facsimile should be sent promptly by
hand, overnight courier, or registered or certified mail)
No person has been authorized to give any information or to make any
representation other than those contained in this Prospectus and the
accompanying Letter of Transmittal, and, if given or made, such information or
representation must not be relied upon as having been authorized. Neither this
Prospectus nor the accompanying Letter of Transmittal nor both together
constitute an offer to sell at the solicitation of an offer to buy any
securities other than the securities to which such offer or solicitation is
unlawful. Neither the delivery of this Prospectus or the Letter of Transmittal
or both together nor any exchange made hereunder shall, under any circumstances,
create any implication that there has been no change in the affairs of the
Company since the date hereof or that the information contained herein is
correct as of anytime subsequent to its date.
Until ________________, 1995 (25 days after the date of this Exchange
Offer), all dealers effecting transactions in the New Notes, whether or not
participation in this Exchange Offer, may be required to deliver a Prospectus.
10 7/8% SENIOR NOTES DUE 2005
($150,000,000 PRINCIPAL AMOUNT)
PAYMENT OF PRINCIPAL AND
INTEREST UNCONDITIONALLY
GUARANTEED BY CERTAIN
OF ITS SUBSIDIARIES
-------------------------------
PROSPECTUS
-------------------------------
JUNE __, 1995
===============================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses of the sale and
distribution of the securities being registered, all of which are being borne by
the Company.
<TABLE>
<S> <C>
Securities and Exchange Commission filing fee.............. $ 51,724.15
Trustee's fees and expenses................................ 5,000.00
Printing and engraving fees and expenses................... 75,000.00
Accounting fees and expenses............................... 50,000.00
Legal fees and expenses.................................... 75,000.00
Blue Sky fees and expenses................................. 10,000.00
Miscellaneous.............................................. 15,000.00
-------------
Total................................................. $ 281,724.15
-------------
-------------
</TABLE>
All of the amounts shown are estimates except for the fees payable to the
Securities and Exchange Commission.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
For information regarding provisions under which a director or officer of
the Company may be insured or indemnified in any manner against liability which
he may incur in his capacity as such, reference is made to Section 78.751 of the
Nevada General Corporation Law, as amended, which provides in its entirety as
follows:
'1. A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative,
except an action by or in the right of the corporation, by reason of the fact
that he is or was a director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses, including attorneys' fees, judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with the action, suit or proceeding if he acted in good faith and in
a manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, has no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, does not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and that, with respect to any criminal action or
proceeding, he had reasonable cause to believe that his conduct was unlawful.
2. A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses, including amounts paid in
settlement and attorneys' fees actually and reasonably incurred by him in
connection with the defense or settlement of the action or suit if he acted in
good faith and in a manner which he reasonably believed to be in or not opposed
to the best interests of the corporation. Indemnification may not be made for
any claim, issue or matter as to which such a person has been adjudged by a
court of competent jurisdiction, after exhaustion of all appeals therefrom, to
be liable to the corporation or for amounts paid in settlement to the
corporation, unless and only to the extent that the court in which the action or
suit was brought or other court of competent jurisdiction determines upon
application that in view of all the circumstances of the case, the person is
fairly and reasonably entitled to indemnity for such expenses as the court deems
proper.
II-1
<PAGE>
3. To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections 1 and 2, or in defense of
any claim, issue or matter therein, he must be indemnified by the corporation
against expenses, including attorneys' fees, actually and reasonably incurred by
him in connection with the defense.
4. Any indemnification under subsections 1 and 2, unless ordered by a court
or advanced pursuant to subsection 5, must be made by the corporation only as
authorized in the specific case upon a determination that indemnification of the
director, officer, employee or agent is proper in the circumstances. The
determination must be made:
(a) By the stockholders;
(b) By the board of directors by majority vote of a quorum consisting of
directors who were not parties to the act, suit or proceeding;
(c) If a majority vote of a quorum consisting of directors who were not
parties to the act, suit or proceeding so orders, by independent legal counsel
in a written opinion; or
(d) If a quorum consisting of directors who were not parties to the act,
suit or proceeding cannot be obtained, by independent legal counsel in a written
opinion.
5. The articles of incorporation, the bylaws or an agreement made by the
corporation may provide that the expenses of officers and directors incurred in
defending a civil or criminal action, suit or proceeding must be paid by the
corporation as they are incurred and in advance of the final disposition of the
action, suit or proceeding, upon receipt of an undertaking by or on behalf of
the director or officer to repay the amount if it is ultimately determined by a
court of competent jurisdiction that he is not entitled to be indemnified by the
corporation. The provisions of this subsection do not affect any rights to
advancement of expenses to which corporate personnel other than directors or
officers may be entitled under any contract or otherwise by law.
6. The indemnification and advancement of expenses authorized in or ordered
by a court pursuant to this section:
(a) Does not exclude any other rights to which a person seeking
indemnification or advancement of expenses may be entitled under the articles of
incorporation or any bylaw, agreement, vote of stockholders or disinterested
directors or otherwise, for either an action in his official capacity or an
action in another capacity while holding his office, except that
indemnification, unless ordered by a court pursuant to subsection 2 or for the
advancement of expenses made pursuant to subsection 5, may not be made to or on
behalf of any director or officer if a final adjudication establishes that his
acts or omissions involved intentional misconduct, fraud or a knowing violation
of the law and was material to the cause of action.
(b) Continues for a person who has ceased to be a director, officer,
employee or agent and inures to the benefit of the heirs, executors and
administrators of such a person.'
ARTICLE IX OF THE COMPANY'S BY-LAWS PROVIDES:
'Section 1--Right to Indemnification:
Each Indemnitee (as defined below) shall be indemnified and held harmless
by the Corporation for all actions taken by him and for all failures to take
action (regardless of the date of any such action or failure to take action) to
the fullest extent permitted by the Nevada General Corporation Law, as the same
exists or may hereafter be amended (but, in the case of any such amendment, the
rights of indemnification provided hereby shall continue as theretofore to the
maximum extent permitted by law notwithstanding such amendment unless such
amendment permits the Corporation to provide broader indemnification rights than
the law permitted the Corporation to provide prior to such amendment), against
all expense, liability and loss (including attorneys' fees, judgments, fines,
Employee Retirement Income Security Act excise taxes or penalties and amounts
paid or to be paid in settlement) actually and reasonably incurred or suffered
by the Indemnitee in connection with any proceeding (as defined below). The
right to indemnification conferred in this Article shall be a contract right and
shall include the right to be paid by the Corporation the expenses incurred by
an Indemnitee in defending a civil or criminal action, suit or proceeding as
they are incurred and in advance of the final disposition of such action,
II-2
<PAGE>
suit or proceeding; provided, however, that, if the Nevada General Corporation
Law continues so to require, the payment of such expenses incurred by an
Indemnitee in advance of the final disposition of such action, suit or
proceeding, shall be made only upon delivery to the Corporation of an
undertaking, by or on behalf of such Indemnitee, to repay all amounts so
advanced if it shall ultimately be determined by a court of competent
jurisdiction that such Indemnitee is not entitled to be indemnified by the
Corporation under this Article or otherwise.
(ii) Indemnification pursuant to this Section shall continue as to an
Indemnitee who has ceased to be a director or officer and shall inure to the
benefit of his or her heirs, executors and administrators.
(iii) For purpose of this Article, (A), 'Indemnitee' shall mean each
director or officer of the Corporation who was or is a party or is threatened to
be made a party to any Proceeding, by reason of the fact that he is or was a
director or officer of the Corporation, or is or was serving at the request of
the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, including
service with respect to employee benefit plans; and (B) 'Proceeding' shall mean
any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative.
SECTION 2--INDEMNIFICATION OF EMPLOYEES AND AGENTS:
The Corporation may, by action of its Board of Directors, provide
indemnification to employees and agents of the Corporation with the same scope
and effect as of the foregoing indemnification of directors and officers.
SECTION 3--NON-EXCLUSIVITY OF RIGHTS:
The rights to indemnification and to the advancement of expenses provided
in this Article shall not be exclusive of any other rights that any person may
have or hereafter acquire under any statute, provision of the Articles of
Incorporation or By-laws, agreement, vote of stockholders or disinterested
directors or otherwise for either an action in his official capacity or an
action in another capacity while holding his office; provided, however, that if
the Nevada General Corporation Law so requires, indemnification, unless ordered
by a court (with respect to a proceeding by or in the right of the Corporation)
or for the advancement of expenses as set forth in Section 1 above, may not be
made to or on behalf of any director or officer if a final adjudication
establishes that his acts or omissions involved intentional misconduct, fraud or
a knowing violation of the law and was material to the cause of action.
SECTION 4--INSURANCE:
The Corporation may purchase and maintain insurance or make any other
financial arrangements permitted by applicable law on behalf of any person who
is or was a director, officer, employee or agent of the Corporation, or is or
was serving at the request of the Corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise for any liability asserted against him and liability and expenses
incurred by him in his capacity as a director, officer, employee or agent, or
arising out of his status as such, whether or not the Corporation has the
authority to indemnify him against such liability and expenses.'
The Company has purchased directors' and officers' liability insurance.
ITEM 16. EXHIBITS
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- --------- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1 -- Purchase Agreement by Players International, Inc. and certain subsidiaries to Donaldson Lufkin &
Jenrette Securities Corporation and Salomon Brothers Inc.
3.1* -- Articles of Incorporation of Players International, Inc.
3.2(1) -- By-laws of Players International, Inc.
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- --------- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
4.1 -- Indenture among Players International, Inc., certain subsidiaries and First Fidelity Bank, National
Association, as Trustee, including form of Note.
4.2 -- Exchange and Registration Rights Agreement among Players International, Inc., certain subsidiaries,
Donaldson, Lufkin & Jenrette Securities Corporation and Salomon Brothers Inc.
5* -- Opinion of Morgan, Lewis & Bockius regarding validity of Notes.
10.1(1) -- Vessel Construction Agreement dated as of April 8, 1993 between Leevac Shipyards, Inc. and Players
Lake Charles, Inc.
10.2(2) -- The Company's 1985 Incentive Stock Option Plan.
10.3(3) -- Amendment No. 1 to the Company's 1985 Stock Option Plan.
10.4(4) -- The Company's 1990 Incentive Stock Option and Non-Qualified Option Plan, as amended.
10.5(1) -- The Company's 1993 Stock Incentive Plan.
10.6(1) -- Agreement dated as of December 8, 1992 between PCI, Inc. and Comdata Network, Inc.
10.7(5) -- Loan Agreement dated March 26, 1992 between the Company and Mercedes-Benz Credit Corporation.
10.8(1) -- Agreement dated March 1, 1993 by and among the Company, PCI, Inc., Allwyn Pictures Corporation, Inc.,
Telly Savalas, Charles Stern, Philip Mamos and Robert Morgan.
10.9(1) -- Form of Registration Rights Agreement dated as of June 23, 1992 by and among the Company, Southern
Illinois Riverboat/Casino Cruises, Inc., and the purchasers named therein.
10.10(1) -- Agreement dated February 12, 1993 by and between Jebaco, Inc. and the Company with respect to the
assignment of an option agreement relating to the Downtowner Hotel.
10.11(1) -- Forms of Series A, B and C Warrants issued to Jebaco, Inc.
10.12(1) -- Form of Registration Rights Agreement with Jebaco, Inc.
10.13(1) -- Option Agreement dated December 24, 1991 by and among The Beeber Corporation and Elisabeth S.
Woodward and Jebaco, Inc. with respect to the Downtowner Hotel.
10.14(1) -- Amendment to Option Agreement dated March 9, 1993 by and among The Beeber Corporation and Elisabeth
S. Woodward and Players Lake Charles, Inc., a subsidiary of the Company, with respect to the
Downtowner Hotel.
10.15(1) -- License and Services Agreement dated December 8, 1992 by and among The Griffin Group, Inc., the
Company and Southern Illinois Riverboat/Casino Cruises, Inc., as amended.
10.16(1) -- Agreement dated April 20, 1993 with B.B. Riverboat, Inc.
10.17(1) -- Joint Venture Agreement dated May 1993 between Amerihost and a subsidiary of the Company with respect
to the construction of a hotel in Metropolis, Illinois.
10.18(1) -- Form of Employment Agreement with Howard A. Goldberg dated May 19, 1993.
10.19(1) -- Employment Agreement with Peter J. Aranow effective May 26, 1993.
10.20(1) -- Termination Agreement with Stanley Harfenist dated as of March 28, 1993.
10.21(1) -- Termination Agreement with Harvey Goldberg dated June 8, 1993.
10.22(6) -- Lease dated March 19, 1993 by and among the Beeber Corporation and Players Lake Charles, Inc., a
subsidiary of the Company.
10.23(6) -- Option Agreement dated July 15, 1993 by and between Evansville Federal Savings Bank and the Company.
10.24(6) -- Option Agreement dated July 30, 1993 by and between Earl Harp and the Company.
10.25(6) -- Agreement dated October 15, 1993 by and between Carnival Casino Corporation and the Company.
10.26(6) -- Agreement dated December 30, 1993 by and between the Company and Roy W. Fischer.
10.27(6) -- Preferred Mortgage dated April 13, 1993 by SIRCC in favor of Mercedes-Benz Credit Corporation.
10.28(6) -- Promissory Note dated April 14, 1993 by SIRCC in favor of Mercedes-Benz Credit Corporation.
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- --------- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
10.29(6) -- Continuing Guaranty of the Company to Mercedes-Benz Credit Corporation dated March 26, 1992, as
amended.
10.30(6) -- Building Loan Note dated March 26, 1992 by SIRCC in favor of Mercedes-Benz Credit Corporation.
10.31* -- Commitment Letter among Players International, Inc. and certain of its subsidiaries, First Interstate
Bank and certain other financial institutions.
12* -- Calculation of Ratios.
21* -- Subsidiaries of Players International, Inc.
23.1* -- Consent of Morgan, Lewis & Bockius (included in Exhibit 5).
23.2* -- Consent of Arthur Andersen LLP
24 -- Powers of Attorney (included on pages II-6 through II-21).
25 -- Statement of Eligibility of First Fidelity Bank, National Association on Form T-1.
</TABLE>
* To be filed by amendment
- ------------------
(1) Filed as an exhibit to the Company's Registration Statement on Form S-3,
File No. 33-61026 and incorporated herein by reference.
(2) Filed as an exhibit to the Company's Registration Statement on Form 10 filed
on August 13, 1986, File No. 0-14897, as amended on Form 8 filed October 17,
1987, and incorporated herein by reference.
(3) Filed as an exhibit to the Company's Annual Report on Form 10-K for the
fiscal year ended March 31, 1988 and incorporated herein by reference.
(4) Filed as an exhibit to the Company's Annual Report on Form 10-K for the
fiscal year ended March 31, 1991 and incorporated herein by reference.
(5) Filed as an exhibit to the Company's Annual Report on Form 10-K for the
fiscal year ended March 31, 1992 and incorporated herein by reference.
(6) Filed as an exhibit to the Company's Registration Statement on Form S-3
filed on February 4, 1994, as amended by Form S-3, File No. 33-75006, and
incorporated herein by reference.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
II-5
<PAGE>
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to the
be the initial bona fide offering thereof.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-4 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Lake Charles, State of Louisiana on April 25, 1995.
PLAYERS INTERNATIONAL, INC.
By: /S/__EDWARD FISHMAN_______________
Edward Fishman,
Chairman of the Board
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Howard Goldberg, Edward Fishman and Peter J.
Aranow, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution for him and in his name, place and stead, in any
and all capacities, to sign any and all registration statements filed by Players
International, Inc., a Nevada corporation, in which the undersigned holds
offices, and any amendments to the registration statement, and to file any and
all of the same, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents or any of them full power and authority to do and
perform each and every act and thing requisite and necessary to be done in and
about the premises, as fully to all intents and purposes as he might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or their substitute or substitutes, may lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- -------------------------------------------- -------------------------------------------- ----------------
<S> <C> <C>
/S/EDWARD FISHMAN Chairman, Chief Executive Officer and April 25, 1995
Edward Fishman Director (Principal Executive Officer)
/S/DAVID FISHMAN Vice Chairman and Director April 25, 1995
David Fishman
/S/MARSHALL GELLER Director April 25, 1995
Marshall Geller
/S/HOWARD GOLDBERG President, Chief Operating Officer and April 25, 1995
Howard Goldberg Director
/S/LEE SEIDLER Director April 25, 1995
Lee Seidler
/S/THOMAS E. GALLAGHER Director April 25, 1995
Thomas E. Gallagher
/S/STEVEN P. PERSKIE Executive Vice President, General Counsel April 25, 1995
Steven P. Perskie and Director
/S/PETER J. ARANOW Executive Vice President and Chief Financial April 25, 1995
Peter J. Aranow Officer (Principal Financial Officer)
/S/STEPEHN RADUSCH Controller (Principal Accounting Officer) April 25, 1995
Stephen Radusch
</TABLE>
II-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-4 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Lake Charles, State of Louisiana on April 25, 1995.
PLAYERS RIVERBOAT MANAGEMENT, INC.
By: /S/__EDWARD FISHMAN_______________
Edward Fishman,
Chairman of the Board
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Howard Goldberg, Edward Fishman and Peter J.
Aranow, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution for him and in his name, place and stead, in any
and all capacities, to sign any and all registration statements filed by Players
Riverboat Managament, Inc., a Nevada corporation, in which the undersigned holds
offices, and any amendments to the registration statement, and to file any and
all of the same, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents or any of them full power and authority to do and
perform each and every act and thing requisite and necessary to be done in and
about the premises, as fully to all intents and purposes as he might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or their substitute or substitutes, may lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- -------------------------------------------- -------------------------------------------- ----------------
<S> <C> <C>
/S/EDWARD FISHMAN Chairman and Director April 25, 1995
Edward Fishman
/S/DAVID FISHMAN Vice Chairman and Director April 25, 1995
David Fishman
/S/HOWARD GOLDBERG President (Principal Executive Officer) and April 25, 1995
Howard Goldberg Director
/S/PETER J. ARANOW Treasurer (Principal Financial Officer) April 25, 1995
Peter J. Aranow
/S/STEPHEN RADUSCH Controller (Principal Accounting Officer) April 25, 1995
Stephen Radusch
</TABLE>
II-8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-4 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Lake Charles, State of Louisiana on April 25, 1995.
PLAYERS RIVERBOAT, INC.
By: /S/__EDWARD FISHMAN_______________
Edward Fishman,
Chairman of the Board
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Howard Goldberg, Edward Fishman and Peter J.
Aranow, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution for him and in his name, place and stead, in any
and all capacities, to sign any and all registration statements filed by Players
Riverboat, Inc., a Nevada corporation, in which the undersigned holds offices,
and any amendments to the registration statement, and to file any and all of the
same, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents or any of them full power and authority to do and
perform each and every act and thing requisite and necessary to be done in and
about the premises, as fully to all intents and purposes as he might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or their substitute or substitutes, may lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- -------------------------------------------- -------------------------------------------- ----------------
<S> <C> <C>
/S/EDWARD FISHMAN Chairman and Director April 25, 1995
Edward Fishman
/S/DAVID FISHMAN Vice Chairman and Director April 25, 1995
David Fishman
/S/HOWARD GOLDBERG President (Principal Executive Officer) and April 25, 1995
Howard Goldberg Director
/S/PETER J. ARANOW Treasurer (Principal Financial Officer) April 25, 1995
Peter J. Aranow
/S/STEPHEN RADUSCH Controller (Principal Accounting Officer) April 25, 1995
Stephen Radusch
</TABLE>
II-9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-4 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Lake Charles, State of Louisiana on April 25, 1995.
PLAYERS RIVERBOAT, LLC
By: PLAYERS RIVERBOAT MANAGEMENT, INC.
By: /S/__EDWARD FISHMAN_______________
Edward Fishman,
Chairman of the Board
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below, in the capacity designated on behalf of Players Riverboat Management,
Inc., constitutes and appoints Howard Goldberg, Edward Fishman and Peter J.
Aranow, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution for him and in his name, place and stead, in any
and all capacities, to sign any and all registration statements filed by Players
Riverboat, LLC, a Louisiana limited liability company, in which the undersigned
holds offices, and any amendments to the registration statement, and to file any
and all of the same, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents or any of them full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or their substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the following
capacities on behalf of Players Riverboat Management, Inc. and on the dates
indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- -------------------------------------------- -------------------------------------------- ----------------
<S> <C> <C>
/S/EDWARD FISHMAN Chairman and Director April 25, 1995
Edward Fishman
/S/DAVID FISHMAN Vice Chairman and Director April 25, 1995
David Fishman
/S/HOWARD GOLDBERG President (Principal Executive Officer) and April 25, 1995
Howard Goldberg Director
/S/PETER J. ARANOW Treasurer (Principal Financial Officer) April 25, 1995
Peter J. Aranow
/S/STEPHEN RADUSCH Controller (Principal Accounting Officer) April 25, 1995
Stephen Radusch
</TABLE>
II-10
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-4 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Lake Charles, State of Louisiana on April 25, 1995.
SHOWBOAT STAR PARTNERSHIP
By: PLAYERS RIVERBOAT, LLC
By: PLAYERS RIVERBOAT MANAGEMENT, INC.
By: /S/__EDWARD FISHMAN_______________
Edward Fishman,
Chairman of the Board
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below, in the capacity designated on behalf of Players Riverboat Management,
Inc., constitutes and appoints Howard Goldberg, Edward Fishman and Peter J.
Aranow, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution for him and in his name, place and stead, in any
and all capacities, to sign any and all registration statements filed by
Showboat Star Partnership, a Louisiana general partnership, in which the
undersigned holds offices, and any amendments to the registration statement, and
to file any and all of the same, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents or any of them full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or their substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the following
capacities on behalf of Players Riverboat Management, Inc. and on the dates
indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- -------------------------------------------- -------------------------------------------- ----------------
<S> <C> <C>
/S/EDWARD FISHMAN Chairman and Director April 25, 1995
Edward Fishman
/S/DAVID FISHMAN Vice Chairman and Director April 25, 1995
David Fishman
/S/HOWARD GOLDBERG President (Principal Executive Officer) and April 25, 1995
Howard Goldberg Director
/S/PETER J. ARANOW Treasurer (Principal Financial Officer) April 25, 1995
Peter J. Aranow
/S/STEPHEN RADUSCH Controller (Principal Accounting Officer) April 25, 1995
Stephen Radusch
</TABLE>
II-11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-4 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Lake Charles, State of Louisiana on April 25, 1995.
PLAYERS NEVADA, INC.
By: /S/__EDWARD FISHMAN_______________
Edward Fishman,
Chairman of the Board
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Howard Goldberg, Edward Fishman and Peter J.
Aranow, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution for him and in his name, place and stead, in any
and all capacities, to sign any and all registration statements filed by Players
Nevada, Inc., a Nevada corporation, in which the undersigned holds offices, and
any amendments to the registration statement, and to file any and all of the
same, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents or any of them full power and authority to do and
perform each and every act and thing requisite and necessary to be done in and
about the premises, as fully to all intents and purposes as he might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or their substitute or substitutes, may lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- -------------------------------------------- -------------------------------------------- ----------------
<S> <C> <C>
/S/EDWARD FISHMAN Chairman and Director April 25, 1995
Edward Fishman
/S/DAVID FISHMAN Treasurer (Principal Financial Officer) April 25, 1995
David Fishman
/S/HOWARD GOLDBERG President (Principal Executive Officer) April 25, 1995
Howard Goldberg
/S/STEPHEN RADUSCH Controller (Principal Accounting Officer) April 25, 1995
Stephen Radusch
</TABLE>
II-12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-4 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Lake Charles, State of Louisiana on April 25, 1995.
PLAYERS MESQUITE GOLF CLUB, INC.
By: /S/__EDWARD FISHMAN_______________
Edward Fishman,
Vice President, Secretary and
Director
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Howard Goldberg and Peter J. Aranow, his true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution for him and in his name, place and stead, in any and all
capacities, to sign any and all registration statements filed by Players
Mesquite Golf Club, Inc., a Nevada corporation, in which the undersigned holds
offices, and any amendments to the registration statement, and to file any and
all of the same, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents or any of them full power and authority to do and
perform each and every act and thing requisite and necessary to be done in and
about the premises, as fully to all intents and purposes as he might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or their substitute or substitutes, may lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- -------------------------------------------- -------------------------------------------- ----------------
<S> <C> <C>
/S/EDWARD FISHMAN Vice President, Secretary and Director April 25, 1995
Edward Fishman
/S/DAVID FISHMAN President, Treasurer and Director (Principal April 25, 1995
David Fishman Executive and Financial Officer)
/S/STEPHEN RADUSCH Controller (Principal Accounting Officer) April 25, 1995
Stephen Radusch
</TABLE>
II-13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-4 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Lake Charles, State of Louisiana on April 25, 1995.
PLAYERS MESQUITE LAND, INC.
By: /S/__EDWARD FISHMAN_______________
Edward Fishman,
Chairman of the Board
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Howard Goldberg, Edward Fishman and Peter J.
Aranow, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution for him and in his name, place and stead, in any
and all capacities, to sign any and all registration statements filed by Players
Mesquite Land, Inc., a Nevada corporation, in which the undersigned holds
offices, and any amendments to the registration statement, and to file any and
all of the same, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents or any of them full power and authority to do and
perform each and every act and thing requisite and necessary to be done in and
about the premises, as fully to all intents and purposes as he might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or their substitute or substitutes, may lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- -------------------------------------------- -------------------------------------------- ----------------
<S> <C> <C>
/S/EDWARD FISHMAN Chairman and Director April 25, 1995
Edward Fishman
/S/DAVID FISHMAN Director April 25, 1995
David Fishman
/S/HOWARD GOLDBERG President (Principal Executive Officer) and April 25, 1995
Howard Goldberg Director
/S/PETER J. ARANOW Treasurer (Principal Financial Officer) April 25, 1995
Peter J. Aranow
/S/STEPHEN RADUSCH Controller (Principal Accounting Officer) April 25, 1995
Stephen Radusch
</TABLE>
II-14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-4 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Lake Charles, State of Louisiana on April 25, 1995.
PLAYERS INDIANA, INC.
By: /S/__EDWARD FISHMAN_______________
Edward Fishman,
Chairman of the Board
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Howard Goldberg, Edward Fishman and Peter J.
Aranow, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution for him and in his name, place and stead, in any
and all capacities, to sign any and all registration statements filed by Players
Indiana, Inc., an Indiana corporation, in which the undersigned holds offices,
and any amendments to the registration statement, and to file any and all of the
same, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents or any of them full power and authority to do and
perform each and every act and thing requisite and necessary to be done in and
about the premises, as fully to all intents and purposes as he might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or their substitute or substitutes, may lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- -------------------------------------------- -------------------------------------------- ----------------
<S> <C> <C>
/S/EDWARD FISHMAN Chairman and Director April 25, 1995
Edward Fishman
/S/DAVID FISHMAN Treasurer (Principal Financial Officer) and April 25, 1995
David Fishman Director
/S/HOWARD GOLDBERG President (Principal Executive Officer) and April 25, 1995
Howard Goldberg Director
/S/STEPHEN RADUSCH Controller (Principal Accounting Officer) April 25, 1995
Stephen Radusch
</TABLE>
II-15
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-4 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Lake Charles, State of Louisiana on April 25, 1995.
PLAYERS MICHIGAN CITY, INC.
By: /S/__EDWARD FISHMAN_______________
Edward Fishman,
Chairman of the Board
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Howard Goldberg, Edward Fishman and Peter J.
Aranow, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution for him and in his name, place and stead, in any
and all capacities, to sign any and all registration statements filed by Players
Michigan City, Inc., an Indiana corporation, in which the undersigned holds
offices, and any amendments to the registration statement, and to file any and
all of the same, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents or any of them full power and authority to do and
perform each and every act and thing requisite and necessary to be done in and
about the premises, as fully to all intents and purposes as he might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or their substitute or substitutes, may lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- -------------------------------------------- -------------------------------------------- ----------------
<S> <C> <C>
/S/EDWARD FISHMAN Chairman and Director April 25, 1995
Edward Fishman
/S/DAVID FISHMAN Vice Chairman and Director April 25, 1995
David Fishman
/S/HOWARD GOLDBERG President (Principal Executive Officer) and April 25, 1995
Howard Goldberg Director
/S/PETER J. ARANOW Treasurer (Principal Financial Officer) April 25, 1995
Peter J. Aranow
/S/STEPHEN RADUSCH Controller (Principal Accounting Officer) April 25, 1995
Stephen Radusch
</TABLE>
II-16
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-4 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Lake Charles, State of Louisiana on April 25, 1995.
PLAYERS MICHIGAN CITY MANAGEMENT, INC.
By: /S/__EDWARD FISHMAN_______________
Edward Fishman,
Chairman of the Board
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Howard Goldberg, Edward Fishman and Peter J.
Aranow, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution for him and in his name, place and stead, in any
and all capacities, to sign any and all registration statements filed by Players
Michigan City Management, Inc., an Indiana corporation, in which the undersigned
holds offices, and any amendments to the registration statement, and to file any
and all of the same, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents or any of them full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or their substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- -------------------------------------------- -------------------------------------------- ----------------
<S> <C> <C>
/S/EDWARD FISHMAN Director April 25, 1995
Edward Fishman
/S/DAVID FISHMAN Director April 25, 1995
David Fishman
/S/HOWARD GOLDBERG President (Principal Executive Officer) and April 25, 1995
Howard Goldberg Director
/S/PETER J. ARANOW Treasurer (Principal Financial Officer) April 25, 1995
Peter J. Aranow
/S/STEPHEN RADUSCH Controller (Principal Accounting Officer) April 25, 1995
Stephen Radusch
</TABLE>
II-17
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-4 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Lake Charles, State of Louisiana on April 25, 1995.
PLAYERS BLUEGRASS DOWNS, INC.
By: /S/__HOWARD GOLDBERG______________
Howard Goldberg,
President
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David Fishman and Edward Fishman, his true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution for him and in his name, place and stead, in any and all
capacities, to sign any and all registration statements filed by Players
Bluegrass Downs, Inc., a Kentucky corporation, in which the undersigned holds
offices, and any amendments to the registration statement, and to file any and
all of the same, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents or any of them full power and authority to do and
perform each and every act and thing requisite and necessary to be done in and
about the premises, as fully to all intents and purposes as he might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or their substitute or substitutes, may lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- -------------------------------------------- -------------------------------------------- ----------------
<S> <C> <C>
/S/HOWARD GOLDBERG President (Principal Executive Officer), April 25, 1995
Howard Goldberg Treasurer (Principal Financial Officer) and
Director
/S/PETER J. ARANOW Director April 25, 1995
Peter J. Aranow
/S/STEPHEN RADUSCH Controller (Principal Accounting Officer) April 25, 1995
Stephen Radusch
</TABLE>
II-18
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-4 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Lake Charles, State of Louisiana on April 25, 1995.
RIVER BOTTOM, INC.
By: /S/__EDWARD FISHMAN_______________
Edward Fishman,
Chairman of the Board
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Howard Goldberg, Edward Fishman and Peter J.
Aranow, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution for him and in his name, place and stead, in any
and all capacities, to sign any and all registration statements filed by River
Bottom, Inc., a Missouri corporation, in which the undersigned holds offices,
and any amendments to the registration statement, and to file any and all of the
same, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents or any of them full power and authority to do and
perform each and every act and thing requisite and necessary to be done in and
about the premises, as fully to all intents and purposes as he might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or their substitute or substitutes, may lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- -------------------------------------------- -------------------------------------------- ----------------
<S> <C> <C>
/S/EDWARD FISHMAN Chairman and Director April 25, 1995
Edward Fishman
/S/DAVID FISHMAN Director April 25, 1995
David Fishman
/S/HOWARD GOLDBERG President (Principal Executive Officer) and April 25, 1995
Howard Goldberg Director
/S/PETER J. ARANOW Treasurer (Principal Financial Officer) April 25, 1995
Peter J. Aranow
/S/STEPHEN RADUSCH Controller (Principal Accounting Officer) April 25, 1995
Stephen Radusch
</TABLE>
II-19
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-4 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Lake Charles, State of Louisiana on April 25, 1995.
PLAYERS MARYLAND HEIGHTS, INC.
By: /S/__EDWARD FISHMAN_______________
Edward Fishman,
Chairman of the Board
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Howard Goldberg, Edward Fishman and Peter J.
Aranow, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution for him and in his name, place and stead, in any
and all capacities, to sign any and all registration statements filed by Players
Maryland Heights, Inc., a Missouri corporation, in which the undersigned holds
offices, and any amendments to the registration statement, and to file any and
all of the same, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents or any of them full power and authority to do and
perform each and every act and thing requisite and necessary to be done in and
about the premises, as fully to all intents and purposes as he might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or their substitute or substitutes, may lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- -------------------------------------------- -------------------------------------------- ----------------
<S> <C> <C>
/S/EDWARD FISHMAN Chairman and Director April 25, 1995
Edward Fishman
/S/DAVID FISHMAN Vice Chairman and Director April 25, 1995
David Fishman
/S/HOWARD GOLDBERG President (Principal Executive Officer) and April 25, 1995
Howard Goldberg Director
/S/PETER J. ARANOW Treasurer (Principal Financial Officer) April 25, 1995
Peter J. Aranow
/S/STEPHEN RADUSCH Controller (Principal Accounting Officer) April 25, 1995
Stephen Radusch
</TABLE>
II-20
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-4 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Lake Charles, State of Louisiana on April 25, 1995.
SOUTHERN ILLINOIS RIVERBOAT/CASINO
CRUISES, INC.
By: /S/__EDWARD FISHMAN_______________
Edward Fishman,
Secretary and Director
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Howard Goldberg, Edward Fishman and Peter J.
Aranow, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution for him and in his name, place and stead, in any
and all capacities, to sign any and all registration statements filed by
Southern Illinois Riverboat/Casino Cruises, Inc., an Illinois corporation, in
which the undersigned holds offices, and any amendments to the registration
statement, and to file any and all of the same, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents or any of them full
power and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- -------------------------------------------- -------------------------------------------- ----------------
<S> <C> <C>
/S/EDWARD FISHMAN Director April 25, 1995
Edward Fishman
/S/DAVID FISHMAN President (Principal Executive Officer), April 25, 1995
David Fishman Treasurer (Principal Financial Officer) and
Director
/S/STEPHEN RADUSCH Controller (Principal Accounting Officer) April 25, 1995
Stephen Radusch
</TABLE>
II-21
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-4 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Lake Charles, State of Louisiana on April 25, 1995.
PLAYERS LAKE CHARLES, INC.
By: /S/__EDWARD FISHMAN_______________
Edward Fishman,
Chairman of the Board
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Edward Fishman and Peter J. Aranow, his true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution for him and in his name, place and stead, in any and all
capacities, to sign any and all registration statements filed by Players Lake
Charles, Inc., a Louisiana corporation, in which the undersigned holds offices,
and any amendments to the registration statement, and to file any and all of the
same, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents or any of them full power and authority to do and
perform each and every act and thing requisite and necessary to be done in and
about the premises, as fully to all intents and purposes as he might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or their substitute or substitutes, may lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- -------------------------------------------- -------------------------------------------- ----------------
<S> <C> <C>
/S/EDWARD FISHMAN Chairman and Director April 25, 1995
Edward Fishman
/S/DAVID FISHMAN President (Principal Executive Officer) and April 25, 1995
David Fishman Director
/S/PETER J. ARANOW Treasurer (Principal Financial Officer) April 25, 1995
Peter J. Aranow
/S/STEPHEN RADUSCH Controller (Principal Accounting Officer) April 25, 1995
Stephen Radusch
</TABLE>
II-22
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
PAGE NUMBER
EXHIBIT IN MANUALLY
NUMBER DESCRIPTION SIGNED COPY
- --------- ----------------------------------------------------------------------------------------------- --------------
<S> <C> <C> <C>
1 -- Purchase Agreement by Players International, Inc. and certain subsidiaries to
Donaldson Lufkin & Jenrette Securities Corporation and Salomon Brothers Inc.
3.1* -- Articles of Incorporation of Players International, Inc.
4.1 -- Indenture among Players International, Inc., certain subsidiaries and First Fidelity
Bank, National Association, as Trustee, including form of Note.
4.2 -- Exchange and Registration Rights Agreement among Players International, Inc.,
certain subsidiaries, Donaldson, Lufkin & Jenrette Securities Corporation and
Salomon Brothers Inc.
5* -- Opinion of Morgan, Lewis & Bockius regarding validity of Notes.
10.31* -- Commitment Letter among Players International, Inc. and certain of its subsidiaries,
First Interstate Bank and certain other financial institutions.
12* -- Calculation of Ratios.
21* -- Subsidiaries of Players International, Inc.
23.1* -- Consent of Morgan, Lewis & Bockius (included in Exhibit 5).
23.2* -- Consent of Arthur Andersen LLP
24 -- Powers of Attorney (included on pages II-6 through II-21).
25 -- Statement of Eligibility of First Fidelity Bank, National Association on Form T-1.
</TABLE>
* To be filed by amendment
PLAYERS INTERNATIONAL, INC.
10 7/8% Senior Notes Due 2005
PURCHASE AGREEMENT
April 10, 1995
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
SALOMON BROTHERS INC
c/o Donaldson, Lufkin & Jenrette
Securities Corporation
140 Broadway
New York, New York 10005
Ladies & Gentlemen:
Each of Players International, Inc., a Nevada corporation (the
"Company"), and Players Lake Charles, Inc., a Louisiana corporation, Players
Riverboat Management, Inc., a Nevada corporation, Players Riverboat, Inc., a
Nevada corporation, Players Riverboat, LLC, a Louisiana limited liability
company, Showboat Star Partnership, a Louisiana general partnership, Players
Nevada Inc., a Nevada corporation, Players Mesquite Golf Course, Inc., a Nevada
corporation, Players Mesquite Land, Inc., a Nevada corporation, Players Indiana,
Inc., an Indiana corporation, Players Michigan City, Inc., an Indiana
corporation, Players Michigan City Management, Inc., an Indiana corporation,
Players Blue Grass Downs, Inc., a Kentucky corporation, River Bottom, Inc., a
Missouri corporation, and Players Maryland Heights, Inc., a Missouri corporation
(collectively, the "Guarantors"), agrees with you as follows:
1. Issuance of Securities. The Company proposes to issue and
sell to Donaldson, Lufkin & Jenrette Securities Corporation and Salomon Brothers
Inc (each, a "Purchaser" and collectively the "Purchasers") an aggregate of One
Hundred Fifty Million Dollars ($150,000,000) principal amount of 10 7/8% Senior
Notes Due 2005 (the "Series A Notes"). The Series A Notes are to be issued
pursuant to an indenture (the "Indenture") to be dated as of April 10, 1995
among the Company, the Guarantors and First Fidelity Bank, National Association,
as trustee (the "Trustee"). The Series A Notes and the Series B Notes (as
defined below) (the Series A Notes
71458.4
<PAGE>
and the Series B Notes being collectively referred to as the "Securities") will
be guaranteed (the "Guarantees") on an unconditional basis by each of the
Guarantors. As used herein, the term "Securities" shall include the Guarantees
thereof whenever the context permits.
Capitalized terms used but not defined herein shall have the
meanings given to such terms in the Indenture.
The Series A Notes will be offered and sold to you pursuant to
an exemption from the registration requirements under the Securities Act of
1933, as amended (the "Act"). The Company and the Guarantors have prepared a
preliminary offering memorandum, dated March 24, 1995 (the "Preliminary Offering
Memorandum"), and a final offering memorandum, dated April 10, 1995 (the
"Offering Memorandum"), relating to the Company and the Guarantors and the
Series A Notes.
Upon original issuance thereof, and until such time as the
same is no longer required under the applicable requirements of the Act, the
Series A Notes (and all securities issued in exchange therefor or in
substitution thereof) shall bear the following legend:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE
UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THE
SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS
HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM
THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE
BENEFIT OF THE ISSUERS THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED, ONLY (1)(a) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144, OR IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF
COUNSEL IF THE COMPANY SO REQUESTS), (b) TO THE COMPANY, (c) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR (d)
TO A FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
904 UNDER THE SECURITIES ACT, AND (2) IN EACH CASE, IN ACCORDANCE WITH
ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH
71458.4
2
<PAGE>
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY
PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF
THE RESALE RESTRICTIONS SET FORTH ABOVE."
You have advised the Company that you will make offers (the
"Exempt Resales") of the Series A Notes purchased hereunder on the terms set
forth in the Offering Memorandum, as amended or supplemented, solely to persons
whom you reasonably believe, after satisfying the applicable standards of Rule
144A(d)(1), to be "qualified institutional buyers," as defined in Rule 144A
under the Act ("QIBs"), and to no more than 35 institutional "Accredited
Investors" referred to in Rule 501(a)(1), (2), (3) or (7) under the Act (each,
an "Accredited Investor"). The QIBs and the Accredited Investors are referred to
herein as the "Eligible Purchasers." You will offer the Series A Notes to such
QIBs and Accredited Investors initially at a price equal to 100% of the
principal amount thereof. After the initial offering, such price may be changed
at any time without notice.
Holders (including subsequent transferees) of the Series A
Notes will have the registration rights set forth in the exchange and
registration rights agreement relating thereto (the "Registration Rights
Agreement"), to be dated the Closing Date, in substantially the form of Exhibit
A hereto. Pursuant to the Registration Rights Agreement, the Company and the
Guarantors will agree to file with the Securities and Exchange Commission (the
"Commission"), under the circumstances set forth therein, (i) a registration
statement under the Act (the "Exchange Offer Registration Statement") relating
to the 10 7/8% Series B Senior Notes due 2005 (the "Series B Notes") to be
offered in exchange for the Series A Notes (the "Exchange Offer"), and (ii) a
shelf registration statement pursuant to Rule 415 under the Act (the "Shelf
Registration Statement") relating to the resale by certain holders of the Series
A Notes, and to use their best efforts to cause the Exchange Offer Registration
Statement to be declared effective. This Purchase Agreement (this "Agreement"),
the Securities, the Guarantees, the Indenture and the Registration Rights
Agreement are hereinafter sometimes referred to collectively as the "Operative
Documents."
2. Agreements to Sell and Purchase. On the basis of the
representations and warranties contained in this Agreement, and subject to its
terms and conditions, the Company agrees to issue and sell to you, and each of
the Purchasers, severally but not jointly, agrees to purchase from the Company,
Series A Notes in the respective principal amount set forth opposite its name on
Schedule I hereto. The purchase price for the Series A Notes shall be 100% of
their principal amount.
3. Delivery and Payment. Delivery to the Purchasers of and
payment for the Series A Notes shall be made at 9:00 a.m., New York City time,
on April 17, 1995 (the "Closing Date") at the offices of Gibson, Dunn &
Crutcher, New York, New York, or such other time or place as you and the Company
shall designate.
One or more of the Series A Notes in definitive form,
registered in the name of Cede & Co., as nominee of The Depository Trust Company
("DTC"), having
71458.4
3
<PAGE>
an aggregate principal amount corresponding to the aggregate principal amount of
the Series A Notes sold pursuant to Exempt Resales to QIBs (collectively, the
"Master Note") and one or more Series A Notes in definitive form registered in
such other names as you may request upon at least two full business days' notice
to the Company (the "Definitive Securities"), having an aggregate principal
amount corresponding to the aggregate principal amount of the Series A Notes
sold pursuant to Exempt Resales to Accredited Investors, shall be delivered by
the Company to you (or as you direct), against payment by you of the purchase
price therefor by same day wire transfer as the Company may direct. The Master
Note and Definitive Securities shall be made available to you for inspection not
later than 9:30 a.m. on the business day immediately preceding the Closing Date.
4. Agreements of the Company and the Guarantors. The Company
and each of the Guarantors, jointly and severally, agrees with each of you as
follows:
(a) To advise you promptly and, if requested by the
Purchasers, confirm such advice in writing, (i) of the issuance by any state
securities commission of any stop order suspending the qualification or
exemption from qualification of any of the Series A Notes for offering or sale
in any jurisdiction, or the initiation of any proceeding for such purpose by any
state securities commission or other regulatory authority, and (ii) of the
happening of any event as a result of which the Offering Memorandum, as then
amended or supplemented, would 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 are made, not misleading. The
Company and the Guarantors shall use their best efforts to prevent the issuance
of any stop order or order suspending the qualification or exemption of any of
the Series A Notes under any state securities or Blue Sky laws, and if at any
time any state securities commission or other regulatory authority shall issue
an order suspending the qualification or exemption of any of the Series A Notes
under any state securities or Blue Sky laws, the Company and the Guarantors
shall use their best efforts to obtain the withdrawal or lifting of such order
at the earliest possible time.
(b) To furnish you, without charge, as many copies of the
Preliminary Offering Memorandum and the Offering Memorandum, and any amendments
or supplements thereto, as you may reasonably request. The Company and the
Guarantors consent to the use of the Preliminary Offering Memorandum and the
Offering Memorandum, and any amendments and supplements thereto, by you in
connection with Exempt Resales.
(c) Not to amend or supplement the Preliminary Offering
Memorandum or the Offering Memorandum prior to the Closing Date unless you shall
previously have been advised thereof and shall not have reasonably objected
thereto after being furnished a copy thereof. The Company and the Guarantors
shall promptly prepare, upon your request, any amendment or supplement to the
Preliminary Offering Memorandum or the Offering Memorandum that may be necessary
or advisable in connection with Exempt Resales.
(d) If, after the date hereof and prior to consummation of
any Exempt
71458.4
4
<PAGE>
Resales, any event shall occur as a result of which, in the judgment of the
Company or in the reasonable opinion of your counsel, the Offering Memorandum
includes an untrue statement of a material fact or omits to state any material
fact necessary to make the statements therein, in light of the circumstances
under which they are made, not misleading, or if it is necessary to amend or
supplement the Offering Memorandum to comply with applicable law, promptly to
prepare an appropriate amendment or supplement to the Offering Memorandum that
will correct such statement or omission or effect such compliance.
(e) To cooperate with you and your counsel in connection with
the qualification of the Series A Notes under the securities or Blue Sky laws of
such jurisdictions as you may reasonably request and to continue such
qualification in effect so long as reasonably required for the Exempt Resales;
provided, however, that neither the Company nor any of the Guarantors shall be
required in connection therewith to register or qualify as a foreign corporation
where it is not now so qualified or to take any action that would subject it to
the service of process in suits or taxation.
(f) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement becomes effective or is terminated,
to pay all costs, expenses, fees and taxes incident to and in connection with:
(i) the preparation, printing, filing and distribution of the Preliminary
Offering Memorandum and the Offering Memorandum (including, without limitation,
financial statements and exhibits) and all amendments and supplements thereto,
(ii) the preparation (including, without limitation, word processing and
duplication costs) and delivery of this Agreement and the other Operative
Documents and all preliminary and final Blue Sky memoranda and all other
agreements, memoranda, correspondence and other documents prepared and delivered
in connection herewith and with the Exempt Resales, (iii) the issuance and
delivery by the Company and the Guarantors of the Securities, (iv) the
qualification of the Securities for offer and sale under the securities or Blue
Sky laws of the several states (including, without limitation, the reasonable
fees and disbursements of your counsel relating to such registration or
qualification), (v) furnishing such copies of the Preliminary Offering
Memorandum and the Offering Memorandum, and all amendments and supplements
thereto, as may be reasonably requested for use in connection with Exempt
Resales, (vi) the preparation of certificates for the Securities (including,
without limitation, printing and engraving thereof), (vii) the fees,
disbursements and expenses of the Company's and the Guarantors' counsel and
accountants, (viii) all expenses and listing fees in connection with the
application for quotation of the Series A Notes in the National Association of
Securities Dealers, Inc. ("NASD") Automated Quotation System - PORTAL
("PORTAL"), (ix) all fees and expenses (including fees and expenses of counsel)
of the Company and the Guarantors in connection with approval of the Securities
by DTC for "book-entry" transfer and (x) the performance by the Company and the
Guarantors of their other obligations under this Agreement and the other
Operative Documents.
(g) Except to the extent arising from events beyond the
control of the Company, to use the proceeds from the sale of the Series A Notes
in the manner described in the Offering Memorandum under the caption "Use of
Proceeds."
71458.4
5
<PAGE>
(h) Not to voluntarily claim, and to resist actively any
attempts to claim, the benefit of any usury laws against the holders of any
Securities in connection with the Securities.
(i) To do and perform all things required to be done and
performed under this Agreement by them prior to or after the Closing Date and to
satisfy all conditions precedent on their part to the delivery of the Series A
Notes.
(j) Not to sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in the Act) that
would be integrated with the sale of the Series A Notes in a manner that would
require the registration under the Act of the sale to you or Eligible Purchasers
of the Series A Notes.
(k) For so long as any of the Securities remain outstanding
and during any period in which the Company is not subject to Section 13 or 15(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), to make
available to any QIB or beneficial owner of Series A Notes in connection with
any sale thereof and any prospective purchaser of such Series A Notes from such
QIB or beneficial owner, the information required by Rule 144A(d)(4) under the
Act.
(l) To cause the Exchange Offer to be made in the appropriate
form to permit registration of the Series B Notes to be offered in exchange for
the Series A Notes and to comply with all applicable federal and state
securities laws in connection with the Exchange Offer.
(m) To comply with all of its agreements set forth in the
Registration Rights Agreement, and all agreements set forth in the
representation letter of the Company to DTC relating to the approval of the
Securities by DTC for "book-entry" transfer.
(n) To use their best efforts to effect the inclusion of the
Series A Notes in PORTAL.
(o) During a period of five years following the date of this
Agreement, to deliver to each of you promptly upon their becoming available,
copies of all reports filed by the Company and the Guarantors with the
Commission under the Exchange Act or any securities exchange or with any
Governmental Authority succeeding to any of the Commission's functions.
5. Representations and Warranties. (a) The Company and each
of the Guarantors, jointly and severally, represent and warrant to each of you
that:
(i) The Preliminary Offering Memorandum and the Offering
Memorandum have been prepared in connection with the Exempt Resales.
The Preliminary Offering Memorandum and the Offering Memorandum do not,
and any supplement or amendment to them will not, contain any untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that
the representations and warranties contained in this
71458.4
6
<PAGE>
paragraph (i) shall not apply to statements in or omissions from the
Preliminary Offering Memorandum and the Offering Memorandum (or any
supplement or amendment thereto) made in reliance upon and in
conformity with information relating to you furnished to the Company in
writing by you expressly for use therein. No stop order preventing the
use of the Preliminary Offering Memorandum or the Offering Memorandum,
or any amendment or supplement thereto, or any order asserting that any
of the transactions contemplated by this Agreement are subject to the
registration requirements of the Act, has been issued. Each of the
Preliminary Offering Memorandum and the Offering Memorandum, as of its
date, contains all the information specified in, and meeting the
requirements of, Rule 144A(d)(4) under the Act.
(ii) When the Series A Notes are issued and delivered pursuant to
this Agreement, none of the Series A Notes will be of the same class
(within the meaning of Rule 144A under the Act) as securities of the
Company or the Guarantors that are listed on a national securities
exchange registered under Section 6 of the Exchange Act or that are
quoted in a United States automated inter-dealer quotation system.
(iii) The Company and each of the Guarantors has been duly
incorporated, is validly existing as a corporation in good standing
under the laws of its respective jurisdiction of incorporation, has all
requisite corporate power and authority to carry on its business as it
is currently being conducted and as described in the Offering
Memorandum and to own, lease and operate its properties, and is duly
qualified and in good standing as a foreign corporation authorized to
do business in each jurisdiction in which the nature of its business or
its ownership or leasing of property requires such qualification and
where the failure to be so qualified, taken together with all other
such failures on the part of the Company and its subsidiaries, would
have a material adverse effect on the properties, business, results of
operations, financial condition or prospects of the Company and its
subsidiaries, taken as a whole ("Material Adverse Effect").
(iv) The entities listed on Schedule II hereto are the only
subsidiaries, direct or indirect, of the Company. The Company, owns,
directly or indirectly through other subsidiaries, 100% of the
outstanding capital stock or other securities evidencing equity
ownership of such subsidiaries, free and clear of any security
interest, claim, lien, limitation on voting rights or encumbrance; and
all of such securities have been duly authorized, validly issued, are
fully paid and nonassessable and were not issued in violation of any
preemptive or similar rights. There are no outstanding subscriptions,
rights, warrants, calls, commitments of sale or options to acquire, or
instruments convertible into or exchangeable for, any such shares of
capital stock or other equity interest of such subsidiaries.
71458.4
7
<PAGE>
(v) The Company and each of the Guarantors has all requisite
corporate power and authority to execute, deliver and perform its
obligations under this Agreement and the other Operative Documents to
which it is a party and to consummate the transactions contemplated
hereby and thereby, including, without limitation, with respect to the
Company, the corporate power and authority to issue, sell and deliver
the Securities as provided herein and therein.
(vi) This Agreement has been duly and validly authorized, executed
and delivered by the Company and each of the Guarantors and is the
legally valid and binding agreement of each such person, enforceable
against each such person in accordance with its terms.
(vii) The Indenture has been duly and validly authorized by the
Company and each of the Guarantors and, when duly executed and
delivered by each such person, will be the legally valid and binding
obligation of each such person, enforceable against each such person in
accordance with its terms. The Indenture, when executed and delivered,
will conform to the description thereof in the Offering Memorandum.
(viii) The Series A Notes have been duly and validly authorized for
issuance and sale to you by the Company pursuant to this Agreement and,
when issued and authenticated in accordance with the terms of the
Indenture and delivered against payment therefor in accordance with the
terms hereof, will be the legally valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms
and entitled to the benefits of the Indenture. The Series A Notes, when
issued, authenticated and delivered, will conform to the description
thereof in the Offering Memorandum.
(ix) The Series B Notes have been duly and validly authorized for
issuance by the Company, and when issued and authenticated in
accordance with the terms of the Indenture, the Registration Rights
Agreement and the Exchange Offer (including the delivery of Series A
Notes in exchange therefor), will be the legally valid and binding
obligations of the Company, enforceable against the Company in
accordance with their terms and entitled to the benefits of the
Indenture.
(x) The Registration Rights Agreement has been duly and validly
authorized by the Company and each of the Guarantors and, when duly
executed and delivered by each such person, will be the legally valid
and binding obligation of each such person, enforceable against each
such person in accordance with its terms. The Registration Rights
Agreement, when executed and delivered, will conform to the description
thereof in the Offering Memorandum.
(xi) Neither the Company nor any of its subsidiaries is in
71458.4
8
<PAGE>
violation of any term or provision of its charter or bylaws or is in
default in the performance or observance of any obligation, agreement
or condition contained in any bond, debenture, note or any other
evidence of indebtedness or in any mortgage, deed of trust, indenture
or other instrument or agreement to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries or any property of the Company or any of its subsidiaries
is bound, which violation or default, together with all other such
violations and defaults, would have a Material Adverse Effect on the
Company and its subsidiaries, taken as a whole.
(xii) The execution, delivery and performance by the Company and
each of the Guarantors of this Agreement and the other Operative
Documents to which it is a party, the issuance and sale of the
Securities, and the consummation of the transactions contemplated
hereby and thereby will not violate, conflict with or constitute a
breach of any of the terms or provisions of, or a default (or an event
that with notice or the lapse of time, or both, would constitute a
default) under, or require consent under, or result in the imposition
of a lien or encumbrance on any properties of the Company or any of its
subsidiaries, or an acceleration of indebtedness pursuant to, (i) the
charter or bylaws of the Company or any of its subsidiaries, (ii) any
bond, debenture, note, indenture, mortgage, deed of trust or other
agreement or instrument to which the Company or any of its subsidiaries
is a party or by which any of them or their property is or may be
bound, (iii) any law, statute, rule, regulation, order or ordinance
(including, without limitation, any Gaming Law) applicable to the
Company, any of its subsidiaries or any of their assets or properties,
or (iv) any judgment, order or decree of any court or Governmental
Authority (including, without limitation, any Gaming Authority) having
jurisdiction over the Company, any of its subsidiaries or their assets
or properties where such violation, conflict, breach, imposition or
acceleration, together with all other violations, conflicts, breaches,
impositions and accelerations, would have a Material Adverse Effect. No
consent, approval, authorization or order of, or filing, registration,
qualification, license or permit of or with, any court or Governmental
Authority (including, without limitation, any Gaming Authority) is
required for the execution, delivery and performance by the Company and
the Guarantors of this Agreement and the other Operative Documents and
the consummation by the Company and the Guarantors of the transactions
contemplated hereby and thereby, except such as have been obtained and
made (or, in the case of the Registration Rights Agreement, will be
obtained and made) under the Act, the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act") and regulations or such as may be
required under the state securities or blue sky laws and regulations
and by the NASD. No consents or waivers from any other person are
required for the execution, delivery and performance of this Agreement
and the other Operative Documents and the consummation of the
transactions contemplated hereby and thereby, other than such consents
and
71458.4
9
<PAGE>
waivers as have been obtained (or, in the case of the Registration
Rights Agreement, will be obtained).
(xiii) Except as disclosed in the Offering Memorandum, there is
(a) no action, suit or proceeding before or by any court, arbitrator or
Governmental Authority now pending or, to the knowledge of the Company,
threatened or contemplated to which the Company or any of its
subsidiaries is or may be a party or to which the business or property
of the Company or any of its subsidiaries is or may be subject, (b) no
law, statute, rule, regulation, order or ordinance (including, without
limitation, any Gaming Law) that has been enacted, adopted or issued by
any Governmental Authority (including, without limitation, any Gaming
Authority) or that has been proposed by any Governmental Authority
(including, without limitation, any Gaming Authority) affecting the
Company and the Guarantors or the gaming industry in the jurisdictions
where the Company or any Guarantor currently conducts its business or
intends to conduct its business in the future, (c) no injunction,
restraining order or order of any nature by a federal, state or foreign
court or Governmental Authority (including, without limitation, any
Gaming Authority) of competent jurisdiction to which the Company or any
of its subsidiaries is subject issued that, in the case of clauses (a),
(b) and (c) above, (x) is reasonably likely to, singly or in the
aggregate, result in a Material Adverse Effect, (y) would interfere
with or adversely affect the issuance of the Securities or (z) would
render this Agreement or any other Operative Document, or any portion
thereof, invalid or unenforceable.
(xiv) No action has been taken and no law, statute, rule,
regulation, order or ordinance (including, without limitation, any
Gaming Law) has been enacted, adopted or issued by any Governmental
Authority (including, without limitation, any Gaming Authority) that
prevents the issuance of the Securities; no injunction, restraining
order or order of any nature by a federal or state court of competent
jurisdiction has been issued that prevents the issuance of the
Securities or suspends the sale of the Securities in any jurisdiction
referred to in Section 4(e) hereof; and no action, suit or proceeding
is pending against or, to the best knowledge of the Company and any of
its subsidiaries, threatened against or affecting, the Company or any
of its subsidiaries before any court or arbitrator or any Governmental
Authority that, if adversely determined, would prohibit, interfere with
or adversely affect the issuance or marketability of the Securities or
render any Operative Document, or any portion thereof, invalid or
unenforceable; and every request of any Governmental Authority conveyed
to the Company (including, without limitation, any Gaming Authority)
for additional information in connection with the issuance of the
Securities or the Operative Documents has been complied with in all
material respects.
(xv) There is (i) no significant unfair labor practice complaint
pending against the Company or any of its subsidiaries nor, to the best
71458.4
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<PAGE>
knowledge of the Company and its subsidiaries, threatened against any
of them, before the National Labor Relations Board, any state or local
labor relations board or any foreign labor relations board, and no
significant grievance or significant arbitration proceeding arising out
of or under any collective bargaining agreement is so pending against
the Company or any or its subsidiaries or, to the best knowledge of the
Company and its subsidiaries, threatened against any of them, (ii) no
significant strike, labor dispute, slowdown or stoppage pending against
the Company or any of its subsidiaries nor, to the best knowledge of
the Company and its subsidiaries, threatened against the Company or any
of its subsidiaries which strike, labor dispute, slowdown or stoppage,
together with all other such strikes, labor disputes, slowdowns and
stoppages, would have a Material Adverse Effect and (iii) except as
disclosed on Schedule 5(xv) attached hereto, to the best knowledge of
the Company and its subsidiaries, no union organizing activities are
taking place with respect to representation of employees of the Company
or any of its subsidiaries. Neither the Company nor any of its
subsidiaries has violated any federal, state, local or foreign law,
statute, rule, regulation, order or ordinance relating to
discrimination in hiring, promotion or pay of employees, nor any
applicable wage or hour laws, nor any provision of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or the
rules and regulations thereunder, or analogous foreign laws and
regulations, that could reasonably result in a Material Adverse Effect.
(xvi) In the ordinary course of its business, each of the Company
and its subsidiaries conducts periodic reviews of the effect of
Environmental Laws (as defined herein) and the disposal of hazardous or
toxic substances, wastes, pollutants and contaminants on the business,
operations and properties of the Company and its subsidiaries, in the
course of which it identifies and evaluates associated costs and
liabilities (including, without limitation, all capital and operating
expenditures required for clean-up, closure of properties and
compliance with Environmental Laws, all permits, licenses and
approvals, all related constraints on operating activities and all
potential liabilities to third parties). On the basis of such reviews,
the Company has reasonably concluded that such associated costs and
liabilities would not have a Material Adverse Effect. Neither the
Company nor any of its subsidiaries has violated any environmental,
safety or similar law or regulation applicable to it or its business or
property relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), lacks any permit, license or other
approval required of them under applicable Environmental Laws or is
violating any term or condition of such permit, license or approval
that might have a Material Adverse Effect.
(xvii) Each of the Company and its subsidiaries has (i) good title
to all of the properties and assets described in the Offering
71458.4
11
<PAGE>
Memorandum as owned by it, free and clear of all liens, charges,
encumbrances and restrictions, except as are described in the Offering
Memorandum or as would not have a Material Adverse Effect, (ii)
peaceful and undisturbed possession under all leases to which it is
party as lessee, except as described in the Offering Memorandum, (iii)
all licenses, certificates, permits, authorizations, approvals,
franchises and other rights from, and has made all declarations and
filings with, all federal, state and local Governmental Authorities
(including, without limitation, any Gaming Authorities), all
self-regulatory authorities and all courts and other tribunals (each an
"Authorization") necessary to engage in the business currently
conducted by it in the manner described in the Offering Memorandum,
except where failure to hold any such Authorization or group of such
Authorizations would not have a Material Adverse Effect and (iv) no
knowledge that any Governmental Authority is considering limiting,
suspending or revoking any such Authorization. All such Authorizations
are valid and in full force and effect and the Company and its
subsidiaries are in compliance in all material respects with the terms
and conditions of all such Authorizations and with the rules and
regulations of the Governmental Authorities (including, without
limitation, any Gaming Authorities) having jurisdiction with respect
thereto. All material leases to which the Company or any of its
subsidiaries is a party are valid and binding, no material default by
the Company or any of its subsidiaries has occurred and is continuing
thereunder, and, to the knowledge of the Company, no material defaults
by the landlord are existing under any such lease.
(xviii) Each of the Company and its subsidiaries owns or possesses
all patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks and trade names (collectively, the
"Intellectual Property") necessary to conduct the businesses now
operated by them, and neither the Company nor any of its subsidiaries
has received any notice of infringement of or conflict with asserted
rights of others with respect to any of the foregoing. The use of the
Intellectual Property in connection with the business and operations of
the Company and its subsidiaries does not infringe on the rights of any
person.
(xix) All tax returns required to be filed by the Company and each
of its subsidiaries in any jurisdiction have been filed, other than
those filings being contested in good faith, and all material taxes,
including withholding taxes, penalties and interest, assessments, fees
and other charges due or claimed to be due from such entities have been
paid, other than those being contested in good faith and for which
adequate reserves have been provided or those currently payable without
penalty or interest.
(xx) Neither the Company nor any of its subsidiaries is (i) an
71458.4
12
<PAGE>
"investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended (the "Investment Company Act"), or analogous foreign laws and
regulations, or (ii) a "holding company" or a "subsidiary company" or
an "affiliate" of a holding company within the meaning of the Public
Utility Holding Company Act of 1935, as amended, or analogous foreign
laws and regulations.
(xxi) Except as set forth on Schedule 5(xxi) hereto, there are no
holders of securities of the Company or any of the Guarantors who, by
reason of the execution by the Company and each of the Guarantors of
this Agreement or any other Operative Document to which the Company or
such Guarantor is a party or the consummation of the transactions
contemplated hereby and thereby, have the right to request or demand
that the Company or any Guarantor register under the Act or analogous
foreign laws and regulations securities held by such holders.
(xxii) The authorized, issued and outstanding capital stock of the
Company and each of the Guarantors has been duly and validly authorized
and issued, is fully paid and nonassessable and was not issued in
violation of or subject to any preemptive or similar rights. The
Company and its subsidiaries had at December 31, 1994, an authorized
and outstanding capitalization as set forth in the Offering Memorandum.
(xxiii) The Company and each of its subsidiaries maintains a
system of internal accounting controls sufficient to provide reasonable
assurance that: (i) transactions are executed in accordance with
management's general or specific authorization; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted
only in accordance with management's general or specific authorization
and (iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(xxiv) The Company and each of its subsidiaries maintains
insurance covering their properties, operations, personnel and
businesses. Such insurance insures against such losses and risks as are
adequate in accordance with customary industry practice to protect the
Company and its subsidiaries and their businesses. Neither the Company
nor any of its subsidiaries has received notice from any insurer or
agent of such insurer that substantial capital improvements or other
expenditures will have to be made in order to continue such insurance.
All such insurance is outstanding and duly in force on the date hereof
and will be outstanding and duly in force on the Closing Date. The
Company does not currently have in force business interruption
insurance.
71458.4
13
<PAGE>
(xxv) Neither the Company nor any of its subsidiaries has (i)
taken, directly or indirectly, any action designed to, or that might
reasonably be expected to, cause or result in stabilization or
manipulation of the price of any security of the Company or any of its
subsidiaries to facilitate the sale or resale of the Securities or (ii)
since the date of the Preliminary Offering Memorandum sold, bid for,
purchased or paid any person any compensation for soliciting purchases
of, the Securities or (B) paid or agreed to pay to any person any
compensation for soliciting another to purchase any other securities of
the Company or any of its subsidiaries.
(xxvi) No registration under the Act of the Series A Notes is
required for the sale of the Series A Notes to the Purchasers as
contemplated hereby or for the Exempt Resales assuming (i) that the
purchases who buy the Series A Senior Notes in the Exempt Resales are
either QIBs or Accredited Investors (up to a maximum of 35 such
Accredited Investors) and (ii) the Purchasers' compliance with the
covenants set forth in Section 5(b)(iv) hereof and the accuracy of the
Purchasers' representations regarding the absence of general
solicitation in connection with the sale of Series A Notes to the
Purchasers and the Exempt Resales contained herein. Except for news
releases contemplated by Rule 135c under the Act, no form of general
solicitation or general advertising has been or will be used by the
Company or the Guarantors or any of their representatives in connection
with the offer and sale of any of the Series A Notes or in connection
with Exempt Resales, including, but not limited to, advertisements,
articles, notices or other communications published in any newspaper,
magazine or similar medium or broadcast over television or radio, or
any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising. No securities of the same class as
the Series A Notes have been issued and sold by the Company or the
Guarantors within the six-month period immediately prior to the date
hereof.
(xxvii) The execution and delivery of this Agreement, the other
Operative Documents and the sale of the Series A Notes to be purchased
by the Eligible Purchasers will not involve any prohibited transaction
within the meaning of Section 406 of ERISA or Section 4975 of the
Internal Revenue Code of 1986. The representation made by the Company
and the Guarantors in the preceding sentence is made in reliance upon
and subject to the accuracy of, and compliance with, the
representations and covenants made or deemed made by the Eligible
Purchasers as set forth in the Offering Memorandum under the Section
entitled "Notice to Investors."
(xxviii) Each of the Preliminary Offering Memorandum and the
Offering Memorandum, as of its date, and each amendment or supplement
thereto, as of its date, contains all the information specified in, and
meets the requirements of, Rule 144A(d)(4) under the Act.
71458.4
14
<PAGE>
(xxix) Subsequent to the respective dates as of which information
is given in the Offering Memorandum and up to the Closing Date, except
as set forth in or contemplated by the Offering Memorandum, (1) neither
the Company nor any of its subsidiaries has incurred any liabilities or
obligations, direct or contingent, that are material to the Company and
its subsidiaries taken as a whole, nor entered into any transaction not
in the ordinary course of business, (2) there has not been, singly or
in the aggregate, any material adverse change, or any development that
may reasonably be expected to involve a material adverse change, in the
properties, business, results of operations, condition (financial or
otherwise), affairs or prospects of the Company and its subsidiaries,
taken as a whole (a "Material Adverse Change"), and (3) there have not
been dividends or distributions of any kind declared, paid or made by
the Company or any of its subsidiaries on any class of its capital
stock.
(xxx) Neither the Company, the Guarantors nor any agent thereof
acting on behalf of any of them has taken, and none of them will take,
any action that might cause this Agreement or the issuance or sale of
the Securities to violate Regulation G (12 C.F.R. Part 207), Regulation
T (12 C.F.R. Part 220), Regulation U (12 C.F.R. Part 221) or Regulation
X (12 C.F.R. Part 224) of the Board of Governors of the Federal Reserve
System or analogous foreign laws and regulations.
(xxxi) The accountants who have certified or shall certify the
financial statements and supporting schedules included or to be
included as part of the Offering Memorandum are independent
accountants. The consolidated historical statements fairly present the
consolidated financial condition and results of operations of the
Company and its subsidiaries at the respective dates and for the
respective periods indicated, in accordance with generally accepted
accounting principles consistently applied throughout such periods,
except as stated therein. The information set forth in the "Summary
Historical Consolidated Financial Date" and "Selected Consolidated
Financial Data" in the Offering Memorandum is fairly stated, in all
material respects, in relation to the financial statements from which
it has been derived. Other financial and statistical information and
data included in the Offering Memorandum, historical and pro forma, are
accurately presented and prepared on a basis consistent with such
financial statements and the books and records of the Company and its
subsidiaries.
(xxxii) The present fair saleable value of the assets of the
Company and each of the Guarantors exceeds the amount that will be
required to be paid on or in respect of the existing debts and other
liabilities (including, without limitation, contingent liabilities) of
each such person as they become absolute and matured. The assets of the
Company and each of the Guarantors do not constitute unreasonably small
capital to carry out their businesses as conducted or as proposed to be
conducted. The Company and the Guarantors do not, as a group,
71458.4
15
<PAGE>
believe that they will incur debts beyond their ability to pay such
debts as they mature. Upon the issuance of the Series A Notes, the
present fair saleable value of the assets of the Company and the
Guarantors, taken as a whole, will exceed the amount that will be
required to be paid on or in respect of all existing debts and other
liabilities (including contingent liabilities) of such persons as they
become absolute and matured. The assets of the Company and the
Guarantors, taken as a whole, upon the issuance of the Series A Notes,
will not constitute unreasonably small capital to carry out their
businesses as now conducted, including the capital needs of the Company
and the Guarantors, taken as a whole, taking into account the projected
capital requirements and capital availability of the Company and the
Guarantors, taken as a whole.
(xxxiii) There are no contracts, agreements or understandings
between the Company or any of its subsidiaries and any person that
would give rise to a valid claim against the Company, its subsidiaries
or any Purchaser for a brokerage commission, finder's fee or like
payment in connection with the issuance, purchase and sale of the
Securities.
Each certificate signed by any officer of the Company or any of the
Guarantors and delivered to the Purchasers or counsel for the Purchasers shall
be deemed to be a representation and warranty by the Company or such Guarantor
to each Purchaser as to the matters covered thereby. The Company and the
Guarantors acknowledge that the Purchasers and, for purposes of the opinions to
be delivered to the Purchasers pursuant to Section 7 hereof, counsel to the
Company and the Guarantors and counsel to the Purchasers, will rely upon the
accuracy and truth of the foregoing representations and hereby consent to such
reliance.
(b) Each Purchaser represents and warrants to the Company, the
Guarantors and the other Purchaser and agrees that;
(i) Such Purchaser is a QIB, with such knowledge and experience in
financial and business matters as are necessary in order to evaluate
the merits and risks of an investment in the Series A Notes.
(ii) Such Purchaser is not acquiring the Series A Notes with a
view to any distribution thereof that would violate the Act or
otherwise make unavailable to the Company an exemption under Section
4(2) of the Act concerning the sale of the Series A Notes, or that
would violate the securities laws of any state of the United States or
any other applicable jurisdiction, and such Purchaser and its
representatives will be reoffering and reselling the Series A Notes
only to QIBs in reliance on the exemption from the registration
requirements of the Act provided by Rule 144A and to Accredited
Investors in a private placement exempt from the registration
requirements of the Act.
(iii) No form of general solicitation or general advertising has
been or will be used by such Purchaser or any of its representatives in
connection with the offer and sale of any of the Series A Notes,
including, but not limited to,
71458.4
16
<PAGE>
advertisements, articles, notices or other communications published in
any newspaper, magazine or similar medium or broadcast over television
or radio, or any seminar or meeting whose attendees have been invited
by any general solicitation or general advertising.
(iv) Such Purchaser and its representatives agree that in
connection with the Exempt Resales, it will solicit offers to buy the
Series A Notes only from, and will offer to sell the Series A Notes
only to, QIBs and a total of no more than 35 Accredited Investors. Such
Purchaser (A) further agrees that it and its representatives will offer
to sell the Series A Notes only to and will solicit offers to buy the
Series A Notes only from (1) QIBs who in purchasing such Series A Notes
will have represented and agreed that they are purchasing the Series A
Notes for their own accounts, accounts of other QIBs or accounts with
respect to which they exercise sole investment discretion and that they
or such accounts are QIBs and (2) Accredited Investors who make the
representations contained in, and execute and return to the Purchaser,
a certificate in the form of Annex A attached to the Indenture and (B)
in the case of such QIBs and Accredited Investors, acknowledges and
agrees that such Series A Notes will not have been registered under the
Act and may be resold, pledged or otherwise transferred only (x)(i) to
a person who the seller reasonably believes is a QIB in a transaction
meeting the requirements of Rule 144A, (ii) in a transaction meeting
the requirements of Rule 144, (iii) to a foreign person in a
transaction meeting the requirements of Rule 904 under the Act or (iv)
in accordance with another exemption from the registration requirements
of the Act (and based upon an opinion of counsel if the Company so
requests), (y) to the Company, (z) pursuant to an effective
registration statement under the Act and, in each case, in accordance
with any applicable securities laws of any state of the United States
or any other applicable jurisdiction and (C) that the holder will, and
each subsequent holder is required to, notify any purchaser from it of
the security evidenced thereby of the resale restrictions set forth in
(B) above.
(v) Such Purchaser acknowledges that the Company, the Guarantors
and, for purposes of the opinions to be delivered to you pursuant to
Section 7 hereof, counsel to the Company and the Guarantors and counsel
to the Purchasers, will rely upon the accuracy and truth of the
foregoing representations and hereby consents to such reliance.
6. Indemnification.
(a) The Company and the Guarantors, jointly and severally,
agree to indemnify and hold harmless (i) each of the Purchasers and (ii) each
person, if any, who controls (within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act) either of the Purchasers (any of the persons
referred to in this clause (ii) being hereinafter referred to as a "controlling
person"), and (iii) the respective officers, directors, partners, employees,
representatives and agents of either of the Purchasers or any controlling person
(any person referred to in clause (i), (ii) or (iii) may hereinafter be referred
to as an "Purchaser Indemnified Person") from and against any and all losses,
claims, damages, liabilities, judgments, actions and
71458.4
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<PAGE>
expenses (including, without limitation, and as incurred, reimbursement of all
reasonable costs of investigating, preparing, pursuing or defending any claim or
action, or any investigation or proceeding by any Governmental Authority,
commenced or threatened, including the reasonable fees and expenses of counsel
to any Purchaser Indemnified Person) directly or indirectly caused by, related
to, based upon, arising out of or in connection with any untrue statement or
alleged untrue statement of a material fact contained in the Preliminary
Offering Memorandum or the Offering Memorandum (or any amendment or supplement
thereto), or any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they are made, not misleading, except
insofar as such losses, claims, damages, liabilities or expenses are based upon
or arise out of (A) an untrue statement or omission or alleged untrue statement
or omission that is made in reliance upon and in conformity with information
furnished in writing to the Company and the Guarantors by such Purchaser
expressly for use in therein or (B) the fact that such Purchaser sold Securities
to a person to whom there was not sent or given, at or prior to the written
confirmation of such sale, a copy of the Offering Memorandum as then amended or
supplemented if the Company had previously furnished copies thereof to the
Purchaser and the loss, claim, damage, liability or expense of such Purchaser
results from an untrue statement or alleged untrue statement contained in or the
omission or alleged omission of a fact from the Preliminary Offering Memorandum
that was corrected in the Offering Memorandum (or the Offering Memorandum, as
amended or supplemented). The Company and the Guarantors shall notify you
promptly of the institution, threat or assertion of any claim, proceeding
(including, without limitation, any governmental investigation) or litigation in
connection with this Agreement or the transactions contemplated hereby that
involve the Company, a Guarantor or an Indemnified Person.
(b) Each of the Purchasers agrees, severally and not jointly,
to indemnify and hold harmless the Company and the Guarantors, and their
respective directors, officers and any person controlling (within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act) (i) the Company or the
Guarantors and (ii) the respective officers, directors, partners, employees,
representatives and agents of each such person (any person referred to in clause
(i) or (ii) may hereinafter be referred to as a "Company Indemnified Person")
from and against any and all losses, claims, damages, liabilities, judgments,
actions and expenses (including, without limitation, and as incurred,
reimbursement of all reasonable costs of investigating, preparing, pursuing or
defending any claim or action, or any investigation or proceeding by any
Governmental Authority, commenced or threatened, including the reasonable fees
and expenses of counsel to any Company Indemnified Person) directly or
indirectly caused by, related to, based upon, arising out of or in connection
with any untrue statement or alleged untrue statement of a material fact
contained in the Preliminary Offering Memorandum or the Offering Memorandum (or
any amendment or supplement thereto), or any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they are made,
not misleading in so far as such losses, claims, damages, liabilities or
expenses are based upon or arise out of an untrue statement or omission or
alleged untrue statement or omission that is made in reliance upon and in
conformity with
71458.4
18
<PAGE>
information furnished in writing to the Company and the Guarantors by such
Purchaser expressly for use therein. The statements in the Offering Memorandum
in the final paragraph of the cover page, the third sentence under the caption
"Risk Factors -- Lack of Public Market," the third paragraph under the caption
"Plan of Distribution" and the second sentence of the fifth paragraph under the
caption "Plan of Distribution" constitute the only information furnished to the
Company and the Guarantors in writing by each Purchaser expressly for use in the
Preliminary Offering Memorandum or the Offering Memorandum, or any amendment or
supplement thereto.
(c) In case any action or proceeding (including any
governmental investigation) shall be brought or asserted against any of the
Indemnified Persons (which, for purposes hereof, shall mean a Purchaser
Indemnified Person with respect to any indemnity sought under Section 6(a) and a
Company Indemnified Person with respect to any indemnity sought under Section
6(b)) with respect to which indemnity may be sought against an Indemnifying
Person (which for purposes hereof, shall mean the Company and each of the
Guarantors with respect to any indemnity sought hereunder by a Purchaser
Indemnified Person and each of the Purchasers with respect to any indemnity
sought hereunder by a Company Indemnified Person), such Indemnified Person shall
promptly notify the Indemnifying Person in writing (provided that the failure to
give such notice shall not relieve such Indemnifying Person of its obligations
pursuant to this Agreement except and to the extent the Indemnifying Person is
prejudiced as a result of such failure). Such Indemnified Person shall have the
right to employ its own counsel in any such action and the fees and expenses of
such counsel shall be paid, as incurred, by such Indemnifying Person (regardless
of whether it is ultimately determined that an Indemnified Person is not
entitled to indemnification hereunder). No Indemnifying Person shall, in
connection with any one such action or proceeding or separate but substantially
similar or related actions or proceedings in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for the reasonable
fees and expenses of more than one separate firm of attorneys (in addition to
any local counsel) at any time for the Indemnified Persons, which firm shall be
designated by Donaldson, Lufkin & Jenrette Securities Corporation in the case of
the Purchaser Indemnified Persons. In connection with any indemnity being sought
under Section 6(a), the Company and the Guarantors shall be liable for any
settlement of any such action or proceeding effected with the Company's prior
written consent, which consent will not be unreasonably withheld (without
limiting the generality of the foregoing, such consent shall not be deemed to be
unreasonably withheld if the Company or a Guarantor, as the case may be, shall
be prohibited from entering into any such settlement under any Gaming Law or
without the approval of a Gaming Authority, or the entering into of any such
settlement by the Company or such Guarantor without the approval of any such
Gaming Authority would preclude, materially interfere with, materially threaten,
or delay the issuance, maintenance, existence or reinstatement of any Gaming
License or result in the imposition of materially burdensome terms or conditions
on any such Gaming License), and the Company and the Guarantors agree to
indemnify and hold harmless any Purchaser Indemnified Person from and against
any loss, claim, damage, liability or expense by reason of any settlement of any
action effected with the written consent of the Company. In connection with any
indemnity being sought under Section 6(b), no Purchaser shall be liable for any
71458.4
19
<PAGE>
settlement of any such action or proceeding effected without such Purchaser's
prior written consent, which consent will not be unreasonably withheld, and such
Purchaser agrees to indemnify and hold harmless any Company Indemnified Person
from and against any loss, claim, damage, liability or expense by reason of any
settlement of any action effected with the written consent of such Purchaser.
Notwithstanding the immediately preceding two sentences, if at any time an
Indemnified Person shall have requested an Indemnifying Person to reimburse the
Indemnified Person for fees and expenses of counsel as contemplated by the
second sentence of this paragraph, the Indemnifying Person agrees that it shall
be liable for any settlement of any proceeding effected without its written
consent if (i) such settlement is entered into more than twenty business days
after receipt by such Indemnifying Person of the aforesaid request and (ii) such
Indemnifying Person shall not have reimbursed the Indemnified Person in
accordance with such request prior to the date of such settlement. An
Indemnifying Person shall not, without the prior written consent the Indemnified
Person, settle or compromise or consent to the entry of judgment in any pending
or threatened action, claim, litigation or proceeding in respect of which
indemnification or contribution may be sought by an Indemnified Person hereunder
(whether or not any Indemnified Person is a party thereto), unless such
settlement, compromise, consent or termination includes an unconditional release
of such Indemnified Person from all liability arising out of such action, claim,
litigation or proceeding.
(d) If the indemnification provided for in this Section 6 is
unavailable to an Indemnified Person in respect of any losses, claims, damages,
liabilities or expenses referred to herein, then each Indemnifying Person, in
lieu of indemnifying such Indemnified Person, shall contribute to the amount
paid or payable by such Indemnified Person as a result of such losses, claims,
damages, liabilities and expenses (i) in such proportion as is appropriate to
reflect the relative benefits received by the Indemnifying Person on the one
hand and the Indemnified Person on the other hand from the offering of the
Series A Notes or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Indemnifying Person and the Indemnified Person, as well as any
other relevant equitable considerations. The relative benefits received by the
Company and the Guarantors, on the one hand, and either of the Purchasers, on
the other hand, shall be deemed to be in the same proportion as the total
proceeds from the offering of the Series A Notes (net of discounts and
commissions but before deducting expenses) received by the Company and the total
commissions received by such Purchaser bear to the total price to the Purchasers
of the Series A Notes, in each case as set forth in the table on the cover page
of the Offering Memorandum. The relative fault of the Company and the
Guarantors, on the one hand, and the Purchasers, on the other hand, shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact related to information supplied by the Company or any Guarantor,
on the one hand, and the Purchasers, on the other hand, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The indemnity set forth herein shall be in
addition to any liability or obligation the Company, the Guarantors or the
Purchasers may otherwise have.
71458.4
20
<PAGE>
The Company, the Guarantors and the Purchasers agree that it
would not be just and equitable if contribution pursuant to this Section 6(d)
were determined by pro rata allocation (even if the Purchasers were treated as
one entity for such purpose) or by any other method of allocation that does not
take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an Indemnified Person as a
result of the losses, claims, damages, liabilities or expenses referred to in
the immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such Indemnified Person in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 6, neither of
the Purchasers (nor the related Indemnified Persons) shall be required to
contribute, in the aggregate, any amount in excess of the amount by which the
total discounts and commissions received by such Purchaser with respect to the
respective principal amount of the Series A Notes purchased by it exceeds the
amount of any damages which such Purchaser has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. 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. The Purchasers'
obligations to contribute pursuant to this Section 6(d) are several in
proportion to the respective principal amount of Series A Notes purchases by
each of the Purchasers hereunder and not joint.
7. Conditions of Purchasers' Obligations. The several
obligations of the Purchasers under this Agreement are subject to the
satisfaction of each of the following conditions:
(a) All of the representations and warranties of the Company
and the Guarantors contained in this Agreement shall be true and correct in all
material respects on the date hereof and on the Closing Date with the same force
and effect as if made on and as of the date hereof and the Closing Date,
respectively. The Company and the Guarantors shall have performed or complied
with all of the agreements herein contained and required to be performed or
complied with by them at or prior to the Closing Date.
(b) The Offering Memorandum shall have been printed and copies
distributed to the Purchasers not later than 10:00 p.m., New York City time, on
the date of this Agreement or at such later date and time as to which you may
agree, and no stop order suspending the qualification or exemption from
qualification of any of the Series A Notes in any jurisdiction referred to in
Section 4(e) shall have been issued and no proceeding for that purpose shall
have been commenced or shall be pending or threatened.
(c) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
Governmental Authority that would, as of the Closing Date, prevent the issuance
of any of the Series A Notes; no action, suit or proceeding shall be pending
against or affecting or, to the knowledge of either of the Company or any
Guarantor, threatened against, the Company or any Guarantor or any of their
respective subsidiaries before any court or
71458.4
21
<PAGE>
arbitrator or any governmental body, agency or official that, if adversely
determined, would prohibit, interfere with or adversely affect the issuance of
the Series A Notes or would have a Material Adverse Effect, or in any manner
draw into question the validity of this Agreement, the Indenture, the Securities
or the Registration Rights Agreement; and no stop order preventing the use of
the Offering Memorandum, or any amendment or supplement thereto, or any order
asserting that any of the transactions contemplated by this Agreement are
subject to the registration requirements of the Act shall have been issued.
(d) Since the dates as of which information is given in the
Offering Memorandum, (i) other than as contemplated by the Offering Memorandum,
there shall not have been any material change, or any development that is
reasonably likely to result in a material change, in the capital stock or the
long-term debt, or material increase in the short-term debt, of the Company or
any of its subsidiaries from that set forth in the Offering Memorandum, (ii) no
dividend or distribution of any kind shall have been declared, paid or made by
the Company or any if its subsidiaries on any class of the Company's or such
subsidiary's capital stock, and (iii) neither the Company nor any of its
subsidiaries shall have incurred any liabilities or obligations, direct or
contingent, that are material, individually or in the aggregate, to the Company
and its subsidiaries, taken as a whole, and that are required to be disclosed on
a balance sheet in accordance with generally accepted accounting principles and
are not disclosed on the latest balance sheet included in the Offering
Memorandum. Since the date hereof and since the dates as of which information is
given in the Offering Memorandum, there shall not have been (1) any Material
Adverse Change or any development that may reasonably be expected to involve a
Material Adverse Change (including, without limitation, any development relating
to any Gaming Law, or any action or failure to act by any Gaming Authority, that
may be reasonably be expected to involve a Material Adverse Change) or (2) any
development whereby the likelihood that the Guarantee of the Securities to be
delivered by Southern Illinois Riverboat/Casino Cruises, Inc. will be approved
by the Illinois Gaming Board, or will otherwise be permissible under Illinois
law, decreases in any material respect from the likelihood as of the date
hereof, or otherwise becomes unlikely.
(e) You shall have received certificates, dated the Closing
Date, signed by (i) the President or any Vice President and (ii) a principal
financial or accounting officer of the Company and each of the Guarantors
confirming, as of the Closing Date, the matters set forth in paragraphs (a),
(b), (c) and (d) of this Section 7.
(f) You shall have received on the Closing Date the following
opinions (reasonably satisfactory to you and your counsel), dated the Closing
Date, of the following counsel on behalf of the Company and one or more of the
Guarantors: (1) Morgan, Lewis & Bockius in the form of Exhibit B hereto; (2)
Horn, Goldberg, Gorny, Daniels, Plackter & Weiss in the form of Exhibit C
hereto; (3) Hopkins & Sutter in the form of Exhibit D hereto; (4) Kruger, Henry
& Hunter in the form of Exhibit E hereto; (5) Stockwell, Sievert, Viccellio,
Clements & Shaddock, L.L.P. in the form of Exhibit F hereto; (6) Schreck, Jones,
Bernhard, Woloson & Godfrey in the form of Exhibit G hereto; (7) John V.
Barnett, Esq. in the form of Exhibit H hereto; (8) Brown, Todd & Heyburn in the
form of Exhibit I hereto; (9) Reizman & Blitz in the form of
71458.4
22
<PAGE>
Exhibit J hereto; and (10) Steven Perskie, Esq. or Patrick Madamba, Esq. in the
form of Exhibit K hereto. In giving such opinions such counsel may rely as to
matters of fact on certificates of responsible officers of the Company and the
Guarantors, including any certificates delivered to you pursuant to this
Agreement. The opinions of such counsel described in this paragraph shall be
rendered to you at the request of the Company and the Guarantors and shall so
state therein.
(g) You shall have received an opinion, dated the Closing
Date, of Gibson, Dunn & Crutcher, your counsel, in form and substance reasonably
satisfactory to you, covering such matters as are customarily covered in such
opinions.
(h) At the time this Agreement is executed and delivered by
the Company and the Guarantors and on the Closing Date, you shall have received
letters, substantially in the form previously approved by you, from Ernst &
Young LLP, independent public accountants, with respect to the financial
statements and certain financial information contained in the Offering
Memorandum.
(i) Gibson, Dunn & Crutcher shall have been furnished with
such documents and opinions, in addition to those set forth above, as they may
reasonably require for the purpose of enabling them to review or pass upon the
matters referred to in this Section 7 and in order to evidence the accuracy,
completeness or satisfaction in all material respects of any of the
representations, warranties or conditions herein contained.
(j) Prior to the Closing Date, the Company and the Guarantors
shall have furnished to you such further information, certificates and documents
as you may reasonably request. Without limiting the generality of the foregoing,
the Company shall have delivered written evidence to the Purchasers from the
Gaming Authorities in the states of Illinois, Louisiana and Nevada of the
approval of each such Gaming Authority to increase the aggregate principal
amount of the Securities to One-Hundred and Fifty Million Dollars
($150,000,000), with respect to which the Company represents and warrants it has
received the oral approval of each such Gaming Authority.
(k) The Company, the Guarantors and the Trustee shall have
entered into the Indenture and you shall have received counterparts, conformed
as executed, thereof.
(l) The Company and the Guarantors shall have entered into the
Registration Rights Agreement and you shall have received counterparts,
conformed as executed, thereof.
All opinions, certificates, letters and other documents
required by this Section 7 to be delivered by the Company and the Guarantors
will be in compliance with the provisions hereof only if they are reasonably
satisfactory in form and substance to you. The Company and the Guarantors will
furnish the Purchasers with such conformed copies of such opinions,
certificates, letters and other documents as they shall reasonably request.
71458.4
23
<PAGE>
8. Defaults. If, on the Closing Date, either of the Purchasers
shall fail or refuse to purchase Series A Notes that it has agreed to purchase
hereunder on such date, and the aggregate principal amount of such Series A
Notes that such defaulting Purchaser agreed but failed or refused to purchase
does not exceed 10% of the total principal amount of such Series A Notes that
both of the Purchasers are obligated to purchase on such Closing Date, the
non-defaulting Purchaser shall be obligated to purchase the amount of such
Series A Notes that such defaulting Purchaser agreed but failed or refused to
purchase. If, on the Closing Date, either of the Purchasers shall fail or refuse
to purchase Securities in an aggregate principal amount that exceeds 10% of such
total principal amount and arrangements satisfactory to the other Purchaser and
the Company for the purchase of such Series A Notes are not made within 48 hours
after such default, this Agreement shall terminate without liability on the part
of the non-defaulting Purchaser or the Company and the Guarantors, except as
otherwise provided in Section 9. In any such case that does not result in
termination of this Agreement, the Purchasers or the Company may postpone the
Closing Date for not longer than seven (7) days, in order that the required
changes, if any, in the Offering Memorandum or any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve a defaulting Purchaser from liability in respect of any default by any
such Purchaser under this Agreement.
9. Effective Date of Agreement and Termination. This
Agreement shall become effective upon the execution hereof.
This Agreement may be terminated at any time on or prior to
the Closing Date by you by written notice to the Company if any of the following
has occurred: (i) subsequent to the date information is provided in the Offering
Memorandum, any Material Adverse Change which, in your judgment, materially
impairs the investment quality of any of the Series A Notes, (ii) any outbreak
or escalation of hostilities or other national or international calamity or
crisis or material adverse change in the financial markets of the United States
or elsewhere, or any other substantial national or international calamity or
emergency if the effect of such outbreak, escalation, calamity, crisis, material
adverse change or emergency would, in your judgment, make it impracticable or
inadvisable to market any of the Series A Notes or to enforce contracts for the
sale of any of the Series A Notes, (iii) any suspension or limitation of trading
generally in securities on the New York Stock Exchange or in the
over-the-counter markets or any setting of minimum prices for trading on such
exchange or markets, (iv) any declaration of a general banking moratorium by
either federal or New York authorities, (v) the taking of any action by any
federal, state or local government or agency in respect of its monetary or
fiscal affairs that in your judgment has a material adverse effect on the
financial markets in the United States, and would, in your judgment, make it
impracticable or inadvisable to market any of the Series A Notes or to enforce
contracts for the sale of any of the Series A Notes, (vi) the enactment,
publication, decree, or other promulgation of any federal or state statute,
regulation, rule or order of any court or other governmental authority which, in
your judgment, would have a Material Adverse Effect, or (vii) any debt
securities of the Company or any of its subsidiaries shall have been downgraded
or placed on any "watch list" for possible downgrading by any nationally
recognized statistical rating organization.
71458.4
24
<PAGE>
The indemnities and contribution provisions and the other
agreements, representations and warranties of the Company and the Guarantors,
their respective officers and directors and of the Purchasers set forth in or
made pursuant to this Agreement shall remain operative and in full force and
effect, and will survive delivery of and payment for the Series A Notes,
regardless of (i) any investigation, or statement as to the results thereof,
made by or on behalf of either of the Purchaser or by or on behalf of the
Company and the Guarantors, the officers or directors of the Company or the
Guarantors or controlling person of the Company or the Guarantors, (ii)
acceptance of the Series A Notes and payment for them hereunder and (iii)
termination of this Agreement.
If this Agreement shall be terminated by the Purchasers
pursuant to clauses (i) or (vii) of the second paragraph of this Section 9 or
because of the failure or refusal on the part of the Company or any Guarantor to
comply with the terms or to fulfill any of the conditions of this Agreement, the
Company and the Guarantors agree to reimburse you for all reasonable
out-of-pocket expenses (including the reasonable fees and disbursements of
counsel) incurred by you. Notwithstanding any termination of this Agreement, the
Company and the Guarantors shall be liable for all expenses which it has agreed
to pay pursuant to Section 4(f) hereof.
Except as otherwise provided, this Agreement has been and is
made solely for the benefit of and shall be binding upon the Company, the
Guarantors, the Purchasers, any Indemnified Person referred to in Section 6
herein and their respective successors and assigns, all as and to the extent
provided in this Agreement, and no other person shall acquire or have any right
under or by virtue of this Agreement. The terms "successors and assigns" shall
not include a purchaser of any of the Series A Notes from any of the Purchasers
merely because of such purchase.
10. Miscellaneous. Notices given pursuant to any provision of
this Agreement shall be addressed as follows: (a) if to the Company or any
Guarantor, Players International, Inc., 3900 Paradise Road, Suite 135, Las
Vegas, Nevada 89109, Attention: President, with a copy to Morgan, Lewis &
Bockius, 2000 One Logan Square, Philadelphia, Pennsylvania 19103, Attention:
Stephen M. Goodman, Esq., and (b) if to the Purchasers, c/o Donaldson, Lufkin
& Jenrette Securities Corporation, 140 Broadway, New York, New York 10005,
Attention: General Counsel with, a copy to Gibson, Dunn & Crutcher, 2029
Century Park East, Suite 4000, Los Angeles, California 90067-3026, Attention:
Bruce D. Meyer, Esq. and Kenneth R. Lamb, Esq., or in any case to such other
address as the person to be notified may have requested in writing.
This Agreement shall be governed and construed in accordance
with the internal laws of the State of New York. This Agreement may be signed in
various counterparts which together shall constitute one and the same
instrument.
71458.4
25
<PAGE>
Please confirm that the foregoing correctly sets forth the
Agreement among the Company, the Guarantors and the Purchasers.
Very truly yours,
PLAYERS INTERNATIONAL, INC.
By:___________________________
Name:
Title:
PLAYERS LAKE CHARLES, INC.
By:___________________________
Name:
Title:
PLAYERS RIVERBOAT MANAGEMENT, INC.
By:___________________________
Name:
Title:
PLAYERS RIVERBOAT, INC.
By:____________________________
Name:
Title:
PLAYERS RIVERBOAT, LLC
By: Players Riverboat Management, Inc.
By:____________________________
Name:
Title:
<PAGE>
SHOWBOAT STAR PARTNERSHIP
By: Players Riverboat, LLC
By: Players Riverboat Management, Inc.
By:____________________________
Name:
Title:
By: Players Riverboat Management, Inc.
By:____________________________
Name:
Title:
PLAYERS NEVADA, INC.
By:____________________________
Name:
Title:
PLAYERS MESQUITE GOLF CLUB, INC.
By:_____________________________
Name:
Title:
PLAYERS MESQUITE LAND, INC.
By:_____________________________
Name:
Title:
<PAGE>
PLAYERS INDIANA, INC.
By:_____________________________
Name:
Title:
PLAYERS MICHIGAN CITY, INC.
By:______________________________
Name:
Title:
PLAYERS MICHIGAN CITY MANAGEMENT, INC.
By:_____________________________
Name:
Title:
PLAYERS BLUEGRASS DOWNS, INC.
By:_____________________________
Name:
Title:
RIVER BOTTOM, INC.
By:_____________________________
Name:
Title:
<PAGE>
PLAYERS MARYLAND HEIGHTS, INC.
By:_______________________________
Name:
Title:
Accepted and agreed to as of the date first above written:
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By:_________________________________
Name:
Title:
SALOMON BROTHERS INC
By:_________________________________
Name:
Title:
<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>
Principal Amount
<S> <C>
Donaldson, Lufkin & Jenrette
Securities Corporation . . . . . . . . . . . . . $120,000,000
Salomon Brothers Inc . . . . . . . . . . . . . . . . 30,000,000
-----------
Total . . . . . . . . . . . . . . . . . . . . $150,000,000
</TABLE>
<PAGE>
SCHEDULE II
List Subsidiaries of Company
(1) Players Bluegrass Downs, Inc., a Kentucky corporation
(2) Players Indiana, Inc., an Indiana corporation
(3) Players Lake Charles, Inc., a Louisiana corporation
(4) Players Mesquite Golf Club, Inc., a Nevada corporation
(5) Players Mesquite Land, Inc., a Nevada corporation
(6) Players Maryland Heights, Inc., a Missouri corporation
(7) Players Michigan City, Inc., an Indiana corporation
(8) Players Michigan City Management, Inc., an Indiana corporation
(9) Players Nevada, Inc., a Nevada corporation
(10) Players Riverboat, Inc., a Nevada corporation
(11) Players Riverboat Management, Inc., a Nevada corporation
(12) River Bottom, Inc., a Missouri corporation
(13) Players Riverboat, LLC, a Louisiana limited liability company
(14) Showboat Star Partnership, a Louisiana general partnership
(15) Southern Illinois Riverboat/Casino Cruises, Inc., an Illinois
corporation
<PAGE>
SCHEDULE 5(xxi)
Registration Rights
(1) Registration rights granted to the purchasers of Series B debentures
pursuant to Registration Rights Agreements dated June 23, 1994 by and among such
purchasers, Players International, Inc. and Southern Illinois Riverboat Casino
Cruises, Inc.
(2) Registration rights granted to The Griffin Group, Inc. as purchaser of
Series A debentures pursuant to a Registration Rights Agreement dated June 23,
1994 by and among The Griffin Group, Inc., Players International, Inc. and
Southern Illinois Riverboat Casino Cruises, Inc.
(3) Registration rights granted to Gem Mesquite, Ltd. with respect to certain
shares of restricted stock pursuant to a letter agreement dated as of June 16,
1994 by and between Players International, Inc. and Gem Mesquite, Inc.
(4) Registration rights granted to Jebaco, Inc. with respect to certain
shares of restricted stock pursuant to a letter agreement dated as of February
12, 1993 by and between Players International, Inc. and Jebaco, Inc.
(5) Registration rights granted to The Beeber Corporation with respect to
certain shares of stock pursuant to a letter agreement dated January 25, 1995
between Players Lake Charles, Inc. and The Beeber Corporation.
<PAGE>
SCHEDULE 5(xv)
Organizing Activities
On April 6, 1995, a representative of Local 881 of the United Food and
Commercial Workers Union visited the Company's Metropolis facility to discuss
the potential unionization of that facility's workers. Because the appropriate
Company personnel were unavailable, the discussion was postponed until a later
date.
<PAGE>
EXHIBIT A
Registration Rights Agreement
<PAGE>
EXHIBIT B
Form of Opinion of Morgan, Lewis & Bockius
<PAGE>
EXHIBIT C
Form of Opinion of
Horn, Goldberg, Gorny, Daniels, Plackter & Weiss
<PAGE>
EXHIBIT D
Form of Opinion of Hopkins & Sutter
<PAGE>
EXHIBIT E
Form of Opinion of Kruger, Henry & Hunter
<PAGE>
EXHIBIT F
Form of Opinion of Stockwell, Sievert, Viccellio, Clements &
Shaddock, L.L.P.
<PAGE>
EXHIBIT G
Form of Opinion of Schreck, Jones, Bernhard, Woloson & Godfrey
<PAGE>
EXHIBIT H
Form of Opinion of John V. Barnett, Esq.
<PAGE>
EXHIBIT I
Form of Opinion of Brown, Todd & Heyburn
<PAGE>
EXHIBIT J
Form of Opinion of Reizman & Blitz
<PAGE>
EXHIBIT K
Form of Opinion of Steven Perskie, Esq. or Patrick Madamba, Esq.
<PAGE>
PLAYERS INTERNATIONAL, INC.,
Issuer
and
THE GUARANTORS NAMED HEREIN
and
FIRST FIDELITY BANK, NATIONAL ASSOCIATION,
Trustee
INDENTURE
Dated as of April 10, 1995
$150,000,000
10 7/8% Senior Notes Due 2005
PH02/71453.3
<PAGE>
PLAYERS INTERNATIONAL, INC.
Reconciliation and tie between Trust Indenture Act of 1939 and Indenture, dated
as of April 10, 1995.
<TABLE>
<CAPTION>
Trust Indenture Act Section Indenture Section
<S> <C>
Section 310(a)(1)..............................................................................8.10
(a)(2)..............................................................................8.10
(a)(3)....................................................................Not Applicable
(a)(4)....................................................................Not Applicable
(a)(5)..............................................................................8.10
(b)......................................................................8.8, 8.10, 14.2
(c).......................................................................Not Applicable
Section 311(a).................................................................................8.11
(b).................................................................................8.11
(c).......................................................................Not Applicable
Section 312(a)..................................................................................2.5
(b).................................................................................14.3
(c).................................................................................14.3
Section 313(a)..................................................................................8.6
(b)(1)....................................................................Not Applicable
(b)(2)...............................................................................8.6
(c)............................................................................8.6, 14.2
(d)..................................................................................8.6
Section 314(a)............................................................................5.8, 13.2
(b).......................................................................Not Applicable
(c)(1)....................................................................2.2, 8.2, 14.4
(c)(2).........................................................................8.2, 14.4
(c)(3)....................................................................Not Applicable
(d).......................................................................Not Applicable
(e).................................................................................14.5
(f).......................................................................Not Applicable
Section 315(a)...............................................................................8.1(b)
(b).......................................................................8.5, 8.6, 14.2
(c)...............................................................................8.1(a)
(d).........................................................................7.12, 8.1(c)
(e).................................................................................7.13
Section 316(a)(last sentence)...................................................................2.9
(a)(1)(A)...........................................................................7.11
(a)(1)(B)...........................................................................7.12
(a)(2)....................................................................Not Applicable
(b)............................................................................7.8, 7.14
Section 317(a)(1)...............................................................................7.3
(a)(2)...............................................................................7.4
(b)..................................................................................2.4
Section 318(a).................................................................................14.1
</TABLE>
- ----------------------
Note: This reconciliation and tie shall not, for any purpose, be deemed to
be a part of the Indenture.
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CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE...................................................................... 2
Section 1.1 Definitions................................................................................... 2
Section 1.2 Incorporation by Reference of TIA............................................................. 30
Section 1.3 Rules of Construction......................................................................... 30
ARTICLE II
THE SECURITIES...................................................................................................32
Section 2.1 Form and Dating............................................................................... 32
Section 2.2 Execution and Authentication...................................................................32
Section 2.3 Registrar and Paying Agent.................................................................... 33
Section 2.4 Paying Agent to Hold Assets in Trust.......................................................... 34
Section 2.5 Holder Lists.................................................................................. 35
Section 2.6 Transfer and Exchange......................................................................... 35
Section 2.7 Replacement Senior Notes...................................................................... 43
Section 2.8 Outstanding Senior Notes...................................................................... 44
Section 2.9 Treasury Senior Notes......................................................................... 44
Section 2.10 Temporary Senior Notes........................................................................ 45
Section 2.11 Cancellation.................................................................................. 45
Section 2.12 Defaulted Interest............................................................................ 45
ARTICLE III
REDEMPTION.......................................................................................................47
Section 3.1 Right of Redemption........................................................................... 47
Section 3.2 Regulatory Redemption Pursuant to Gaming Laws................................................. 47
Section 3.3 Notices to Trustee............................................................................ 48
Section 3.4 Selection of Senior Notes to Be Redeemed...................................................... 48
Section 3.5 Notice of Redemption.......................................................................... 49
Section 3.6 Effect of Notice of Redemption................................................................ 50
Section 3.7 Effect of Deposit by the Company with the Paying Agent........................................ 50
Section 3.8 Senior Notes Redeemed in Part................................................................. 51
ARTICLE IV
[INTENTIONALLY OMITTED]..........................................................................................52
ARTICLE V
COVENANTS........................................................................................................52
Section 5.1 Payment of Senior Notes....................................................................... 52
Section 5.2 Maintenance of Office or Agency............................................................... 52
Section 5.3 Limitation on Restricted Payments............................................................. 53
Section 5.4 Corporate Existence........................................................................... 54
Section 5.5 Payment of Taxes and Other Claims............................................................. 55
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Section 5.6 Maintenance of Insurance...................................................................... 55
Section 5.7 Compliance Certificates; Notice of Default.................................................... 55
Section 5.8 Reports....................................................................................... 56
Section 5.9 Waiver of Stay, Extension or Usury Laws....................................................... 57
Section 5.10 Limitation on Transactions with Affiliates.................................................... 57
Section 5.11 Limitation on Incurrence of Additional Indebtedness and Disqualified Capital Stock............ 58
Section 5.12 Limitation on Dividends and Other Payment Restrictions Affecting Subsidiaries................. 61
Section 5.13 Liens......................................................................................... 61
Section 5.14 Limitation on Sale of Assets and Subsidiary Stock; Event of Loss.............................. 62
Section 5.15 Limitation on Lines of Business............................................................... 69
Section 5.16 Limitation on Status as Investment Company.................................................... 69
Section 5.17 Restrictions on Issuance or Sale of Subsidiary Stock.......................................... 69
Section 5.18 Guarantee by Maryland Heights Subsidiary...................................................... 69
Section 5.19 SIRCC Guarantee............................................................................... 70
Section 5.20 Additional Subsidiary Guarantors.............................................................. 70
Section 5.21 Rule 144A Information Requirement............................................................. 71
ARTICLE VI
SUCCESSOR CORPORATION............................................................................................72
Section 6.1 Limitation on Consolidation, Merger and Sale of Assets........................................ 72
Section 6.2 Successor Corporation Substituted............................................................. 73
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES.................................................................................. 74
Section 7.1 Events of Default............................................................................. 74
Section 7.2 Acceleration of Maturity Date; Rescission and Annulment....................................... 77
Section 7.3 Collection of Indebtedness and Suits for Enforcement by Trustee............................... 78
Section 7.4 Trustee May File Proofs of Claim.............................................................. 79
Section 7.5 Trustee May Enforce Claims Without Possession of Senior Notes................................. 80
Section 7.6 Priorities.................................................................................... 80
Section 7.7 Limitation on Suits........................................................................... 81
Section 7.8 Unconditional Right of Holders to Receive Principal, Premium and Interest..................... 82
Section 7.9 Rights and Remedies Cumulative................................................................ 82
Section 7.10 Delay or Omission Not Waiver.................................................................. 82
Section 7.11 Control by Holders............................................................................ 83
Section 7.12 Waiver of Past Default........................................................................ 83
Section 7.13 Undertaking for Costs......................................................................... 84
Section 7.14 Restoration of Rights and Remedies............................................................ 84
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ARTICLE VIII
TRUSTEE......................................................................................................... 85
Section 8.1 Duties of Trustee............................................................................. 85
Section 8.2 Rights of Trustee............................................................................. 86
Section 8.3 Individual Rights of Trustee.................................................................. 87
Section 8.4 Trustee's Disclaimer.......................................................................... 87
Section 8.5 Notice of Default............................................................................. 88
Section 8.6 Reports by Trustee to Holders................................................................. 88
Section 8.7 Compensation and Indemnity.................................................................... 88
Section 8.8 Replacement of Trustee........................................................................ 90
Section 8.9 Successor Trustee by Merger, Etc.............................................................. 91
Section 8.10 Eligibility; Disqualification................................................................. 91
Section 8.11 Preferential Collection of Claims against Company............................................. 91
ARTICLE IX
LEGAL DEFEASANCE AND COVENANT DEFEASANCE........................................................................ 92
Section 9.1 Option to Effect Legal Defeasance or Covenant Defeasance...................................... 92
Section 9.2 Legal Defeasance and Discharge................................................................ 92
Section 9.3 Covenant Defeasance........................................................................... 93
Section 9.4 Conditions to Legal or Covenant Defeasance.................................................... 93
Section 9.5 Deposited U.S. Legal Tender and U.S. Government Obligations to be Held in Trust; Other
Miscellaneous Provisions.................................................................... 95
Section 9.6 Repayment to the Company...................................................................... 96
Section 9.7 Reinstatement................................................................................. 96
Section 9.8 Termination of Obligations Upon Cancellation of the Senior Notes.............................. 97
ARTICLE X
AMENDMENTS, SUPPLEMENTS AND WAIVERS............................................................................. 98
Section 10.1 Supplemental Indentures Without Consent of Holders........................................... 98
Section 10.2 Amendments, Supplemental Indentures and Waivers with Consent of Holders...................... 99
Section 10.3 Compliance with TIA..........................................................................101
Section 10.4 Revocation and Effect of Consents............................................................101
Section 10.5 Notation on or Exchange of Senior Notes......................................................102
Section 10.6 Trustee to Sign Amendments, Etc..............................................................103
ARTICLE XI
MEETINGS OF HOLDERS.............................................................................................104
Section 11.1 Purposes for Which Meeting May Be Called.....................................................104
Section 11.2 Manner of Calling Meetings...................................................................104
Section 11.3 Call of Meetings by Company or Holders.......................................................105
Section 11.4 Who May Attend and Vote at Meetings..........................................................105
Section 11.5 Regulations May Be Made by Trustee; Conduct of the Meeting; Voting Rights; Adjournment.......106
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Section 11.6 Voting at the Meeting and Record to Be Kept..................................................107
Section 11.7 Exercise of Rights of Trustee or Holders May Not Be Hindered or Delayed by Call
of Meeting.................................................................................107
ARTICLE XII
RIGHT TO REQUIRE REPURCHASE....................................................................................108
Section 12.1 Repurchase of Senior Notes at the Option of the Holder Upon a Change of Control.............108
ARTICLE XIII
GUARANTEE.......................................................................................................112
Section 13.1 Guarantee....................................................................................112
Section 13.2 Execution and Delivery of Guarantee..........................................................114
Section 13.3 Certain Bankruptcy Events....................................................................114
Section 13.4 Release of Guarantors........................................................................114
..
ARTICLE XIV
MISCELLANEOUS...................................................................................................116
Section 14.1 TIA Controls.................................................................................116
Section 14.2 Notices......................................................................................116
Section 14.3 Communications by Holders with Other Holders.................................................117
Section 14.4 Certificate and Opinion as to Conditions Precedent...........................................117
Section 14.5 Statements Required in Certificate of Opinion................................................117
Section 14.6 Rules by Trustee, Paying Agent, Registrar....................................................118
Section 14.7 Legal Holidays...............................................................................118
Section 14.8 Governing Law................................................................................118
Section 14.9 No Adverse Interpretation of Other Agreements................................................119
Section 14.10 No Recourse Against Others...................................................................119
Section 14.11 Successors...................................................................................119
Section 14.12 Duplicate Originals..........................................................................119
Section 14.13 Severability.................................................................................120
Section 14.14 Table of Contents, Headings, Etc.............................................................120
</TABLE>
PH02/71453.3
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EXHIBITS
Exhibit A - Form of Senior Note
Exhibit B - Form of Investment Letter for Institutional
Accredited Investors
SCHEDULES
Schedule I - Liens
PH02/71453.3
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This INDENTURE, dated as of April 10, 1995, is by and among
Players International, Inc., a Nevada corporation (the "Company"), the
Guarantors referred to below and First Fidelity Bank, National Association, as
Trustee (the "Trustee"). Each party hereto agrees as follows for the benefit of
each other party and for the equal and ratable benefit of the Holders of the
Company's 10 7/8% Senior Notes Due 2005:
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ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1 Definitions.
"Acceleration Notice" shall have the meaning specified in Section 7.2.
"Acceptance Amount" shall have the meaning specified in Section
5.14(c).
"Acquired Indebtedness" means, with respect to a person, Indebtedness
of another person existing at the time such person becomes a Subsidiary of the
subject person or is merged or consolidated into or with the subject person or
one of its Subsidiaries, and not incurred in connection with or in anticipation
of, such merger or consolidation or such other person becoming a Subsidiary of
such subject person.
"Acquisition" means the purchase or other acquisition of any person or
substantially all the assets of any person by any other person, whether by
purchase, merger, consolidation or other transfer, and whether or not for
consideration.
"Adjusted Consolidated Net Income" means, with respect to any period,
Consolidated Net Income for such period, minus 100% of the amount of any
writedowns, writeoffs or negative extraordinary charges not otherwise reflected
in Consolidated Net Income during such period.
"Affiliate" means (i) any person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company or any
of its Subsidiaries, (ii) any spouse, immediate family member or other relative
who has the same principal residence of any person described in clause (i)
above, and (iii) any trust in which any person described in clause (i) or (ii)
above has a beneficial interest. For purposes of this definition, the term
"control" means (a) the power to direct the management and policies of a person,
directly or through one or more intermediaries, whether through the ownership of
voting securities, by contract or otherwise, or (b) the beneficial ownership of
10% or more of any class of voting Capital Stock of a person (on a fully diluted
basis) or of warrants or other rights to acquire such class of Capital Stock
(whether or not presently exercisable).
PH02/71453.3
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"Affiliate Transaction" shall have the meaning specified in
Section 5.10.
"Agent" means any Registrar, Paying Agent or co-Registrar.
"Asset Sale" shall have the meaning specified in Section 5.14(a).
"Asset Sale Offer" shall have the meaning specified in Section 5.14(a).
"Asset Sale Offer Amount" shall have the meaning specified in
Section 5.14(a).
"Asset Sale Offer Price" shall have the meaning specified in
Section 5.14(a).
"Asset Sale Purchase Date" shall have the meaning specified in
Section 5.14(a).
"Asset Sale Put Date" shall have the meaning specified in
Section 5.14(b)(5).
"Average Life" means, as of the date of determination, with respect to
any security or instrument, the quotient obtained by dividing (i) the sum of the
products of the number of years from the date of determination to the date of
each successive scheduled principal (or redemption) payment of such security or
instrument multiplied by the amount of each such respective principal (or
redemption) payment by (ii) the sum of all such principal (or redemption)
payments.
"Bankruptcy Law" means Title 11, U.S. Code or any similar Federal, state or
foreign law for the relief of debtors.
"Beeber Agreement" means that certain agreement for the purchase and sale
of a hotel and certain real estate in Lake Charles, Louisiana between Players
Lake Charles, Inc. and The Beeber Corporation, dated January 25, 1995.
"beneficial owner" for purposes of the definition of Change of Control
has the meaning attributed to it in Rules 13d-3 and 13d-5 under the Exchange
Act, whether or not applicable, 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
PH02/71453.3
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passage of time.
"Board of Directors" means, with respect to any person, the Board of
Directors of such person or any committee of the Board of Directors of such
person authorized, with respect to any particular matter, to exercise the power
of the Board of Directors of such person.
"Board Resolution" means with respect to any person, a duly adopted
resolution of the Board of Directors of such person.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in New York, New York and
Philadelphia, Pennsylvania are authorized or obligated by law or executive order
to close.
"Capital Stock" means, with respect to any corporation, any and all
shares, interests, rights to purchase (other than convertible or exchangeable
Indebtedness), warrants, options, participations or other equivalents of or
interests (however designated) in stock issued by that corporation.
"Capitalized Lease Obligation" means rental obligations under a lease
that are required to be capitalized for financial reporting purposes in
accordance with GAAP, and the amount of Indebtedness represented by such
obligations shall be the capitalized amount of such obligations, as determined
in accordance with GAAP.
"Cash" means U.S. Legal Tender.
"Cash Equivalent" means (i) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof), (ii) time deposits and
certificates of deposit having a maturity not greater than one year of any
domestic commercial bank, or U.S. branch of a foreign bank, of recognized
standing having capital and surplus in excess of five hundred million dollars
($500,000,000), and time deposits and certificates of deposit having a maturity
not greater than one year of other banks located in jurisdictions where the
Company and its Subsidiaries do business; provided, however, the aggregate
amount of all time deposits and certificates of deposit of such other banks may
not
PH02/71453.3
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exceed five million dollars ($5,000,000), (iii) commercial paper rated at the
time of purchase at least A-2 or the equivalent thereof by Standard & Poor's
Corporation or at least P-2 or the equivalent thereof by Moody's Investors
Service, Inc. and maturing within one year after the date of acquisition, (iv)
repurchase obligations with a term of not more than ten (10) days for underlying
securities of the types described in clause (i) above entered into with any bank
meeting the qualifications specified in clause (ii) above, (v) marketable
obligations issued by any state of the United States of America or any political
subdivision of any such state or any public instrumentality thereof maturing, or
payable at the demand of the holder thereof, within one year from the date of
acquisition thereof and, at the time of acquisition, having one of the three
highest ratings obtainable from either Standard & Poor's Corporation or Moody's
Investors Service, Inc., and (vi) investments in money market funds
substantially all of whose assets comprise securities of the types described in
clauses (i) through (v) above, including, to the extent such funds meet the
above criteria, funds for which the Trustee acts as investment advisor.
"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 (i) any merger or consolidation of the
Company with or into any person or any sale, transfer or other conveyance,
whether direct or indirect, of all or substantially all of the assets of the
Company, on a consolidated basis, in one transaction or a series of related
transactions, if, immediately after giving effect to such transaction or
transactions, any "person" or "group" (as such terms are used for purposes of
Sections 13(d) and 14(d) of the Exchange Act, whether or not applicable) is or
becomes the beneficial owner, directly or indirectly, of more than forty percent
(40%) of the total voting power in the aggregate normally entitled to vote in
the election of directors, managers or trustees, as applicable, of the
transferee or surviving entity, (ii) the time that the Company first determines
or reasonably should have known that any "person" or "group" (as such terms are
used for purposes of Sections 13(d) and 14(d) of the Exchange Act, whether
PH02/71453.3
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or not applicable) is or becomes the beneficial owner, directly or indirectly,
of more than forty percent (40%) of the total voting power in the aggregate of
all classes of Capital Stock then outstanding of the Company normally entitled
to vote in elections of directors, or (iii) during any period of twelve (12)
consecutive months after the Issue Date, individuals who at the beginning of any
such 12-month period constituted the Board of Directors of the Company (together
with any new directors whose election by such Board or whose nomination for
election by the shareholders of the Company was approved by a vote of a majority
of the directors 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 of the Company then in office; provided, however, that a "Change of
Control" shall not be deemed to occur under clauses (i) or (ii) above if the
"person" referred to in either such clause is an Excluded Person, or the "group"
referred to in either such clause consists exclusively of two or more "Excluded
Persons" who engages or engage in any transaction or series of transactions or
announces or announce any intention to effect any transaction or series of
transactions referred to in clauses (i) or (ii), unless (y) such transaction or
series of transactions is subject to Rule 13e-3 under the Exchange Act, or any
similar or successor rule, and (z) immediately prior to and during the 180-day
period following (1) such transaction or series of related transactions referred
to in clause (i), or (2) the time that the Company first determines or
reasonably should have known that any such Excluded Person or any such "group"
consisting exclusively of two or more Excluded Persons, is or becomes the
Beneficial Owner, directly or indirectly, of more than 40% of such total voting
power, as referred to in clause (ii), the Senior Notes are or become rated, in
the case of either clause (1) or (2), "B+" or below by Standard & Poor's
Corporation and "B1" or below by Moody's Investors Service, or if either such
service or both such services shall no longer make a rating of the Senior Notes
publicly available, another nationally recognized securities agency or agencies,
as the case may be, selected by the Company, which shall be substituted for
Standard & Poor's Corporation or Moody's Investors Service or both, as the case
may be; provided, further, that the 180-day period referred to in clause (z)
shall be extended for so long as the rating of the Senior Notes is under
publicly announced consideration for possible downgrade by any such rating
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agency.
"Change of Control Offer" shall have the meaning specified in
Section 12.1.
"Change of Control Offer Period" shall have the meaning specified in
Section 12.1.
"Change of Control Offer Price" shall have the meaning specified in
Section 12.1.
"Change of Control Payment Date" shall have the meaning specified in
Section 12.1.
"Change of Control Put Date" shall have the meaning specified in
Section 12.1.
"Common Stock" shall mean the Common stock, $.005 par value, of the
Company, now or hereafter issued.
"Company" means the party named as such in this Indenture until a
successor replaces it pursuant to the Indenture and thereafter means such
successor.
"Consolidated Coverage Ratio" of any person on any date of
determination (the "Transaction Date") means, the ratio, on a pro forma basis,
of (a) the aggregate amount of Consolidated EBITDA of such person attributable
to continuing operations and businesses (exclusive of amounts attributable to
operations and businesses permanently discontinued or disposed of prior to the
Transaction Date) to (b) the aggregate Consolidated Fixed Charges of such person
(exclusive of amounts attributable to operations and businesses permanently
discontinued or disposed of prior to the Transaction Date but only to the extent
that the obligations giving rise to such Consolidated Fixed Charges would no
longer be obligations contributing to such person's Consolidated Fixed Charges
subsequent to the Transaction Date) during the Reference Period; provided,
however, that for purposes of such calculation, (i) Acquisitions which occurred
during the Reference Period or subsequent to the Reference Period and on or
prior to the Transaction Date shall be assumed to have occurred on the first day
of the Reference Period, (ii) transactions giving rise to the need to calculate
the Consolidated Coverage Ratio shall be assumed to have occurred on the first
day of the Reference Period, (iii) the incurrence of any Indebtedness or
issuance of any Disqualified Capital Stock during the Reference Period or
subsequent to the Reference Period and on or prior to the Transaction
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Date (and the application of the proceeds therefrom to the extent used to
refinance or retire other Indebtedness) shall be assumed to have occurred on the
first day of such Reference Period, and (iv) the Consolidated Fixed Charges of
such person attributable to interest on any Indebtedness or dividends on any
Disqualified Capital Stock bearing a floating interest (or dividend) rate shall
be computed on a pro forma basis as if the average rate in effect from the
beginning of the Reference Period to the Transaction Date had been the
applicable rate for the entire period, unless such person or any of its
Subsidiaries is a party to an Interest Swap and Hedging Obligation (which shall
remain in effect for the 12-month period immediately following the Transaction
Date) that has the effect of fixing the interest rate on the date of
computation, in which case such rate (whether higher or lower) shall be used.
"Consolidated Debt" means, with respect to any person, as of a specific
date, all Indebtedness of such person and its Consolidated Subsidiaries as of
such date, determined in accordance with GAAP.
"Consolidated Depreciation and Amortization" for any person means the
total depreciation and amortization for such person and its Consolidated
Subsidiaries, as determined in accordance with GAAP.
"Consolidated EBITDA" means, with respect to any person, for any
period, the Consolidated Net Income of such person for such period adjusted to
add thereto (to the extent deducted from net revenues in determining
Consolidated Net Income), without duplication, the sum of (i) Consolidated
Income Tax Expense, (ii) Consolidated Depreciation and Amortization expense,
(iii) Consolidated Fixed Charges, and (iv) consolidated preopening expenses.
"Consolidated Fixed Charges" of any person means, for any period, the
aggregate amount (without duplication and determined in each case in accordance
with GAAP) of (a) interest expense of such person for such period, whether paid
or accrued (including, in accordance with the following sentence, interest
attributable to Capitalized Lease Obligations) of such person and its
Consolidated Subsidiaries during such period, including, without limitation, to
the extent such expense was deducted in computing Consolidated Net Income for
such period (i) amortization of original issue discount and non-cash interest
payments or accruals on any Indebtedness, (ii) the interest portion
PH02/71453.3
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of all deferred payment obligations that constitute Indebtedness and (iii) all
commissions, discounts and other fees and charges owed with respect to bankers'
acceptances and letters of credit financings and currency and Interest Swap and
Hedging Obligations, (b) one-third of rental expense for such period
attributable to operating leases of such person and its Consolidated
Subsidiaries, and (c) the amount of dividends payable by such person or any of
its Consolidated Subsidiaries in respect of Disqualified Capital Stock (other
than by Subsidiaries of such person to such person or such person's wholly-owned
Subsidiaries). For purposes of this definition, (x) interest on a Capitalized
Lease Obligation shall be deemed to accrue at an interest rate reasonably
determined by the Company to be the rate of interest implicit in such
Capitalized Lease Obligation in accordance with GAAP and (y) interest expense
attributable to any Indebtedness represented by the guarantee by such person or
a Subsidiary of such person of an obligation of another person shall be deemed
to be the interest expense attributable to the Indebtedness guaranteed.
"Consolidated Income Tax Expense" for any person means the total net
income tax expense for such person and its Consolidated Subsidiaries, as
determined in accordance with GAAP.
"Consolidated Net Income" means, with respect to any person for any
period, the net income (or loss) of such person and its Consolidated
Subsidiaries (determined in accordance with GAAP) for such period, adjusted to
exclude (only to the extent included in computing such net income (or loss) and
without duplication): (a) all gains (but not losses) which are either
extraordinary (as determined in accordance with GAAP) or are either unusual or
nonrecurring (including, without limitation, from the sale of assets outside of
the ordinary course of business or from the issuance or sale of any Capital
Stock), (b) the net income, if positive, of any person, other than a
Consolidated Subsidiary, in which such person or any of its Consolidated
Subsidiaries has an interest, except to the extent of the amount of any
dividends or distributions actually paid in cash to such person or a
Consolidated Subsidiary of such person during such period, but not in excess of
such person's pro rata share of such person's net income for such period, (c)
the net income (or loss) of any person acquired in a pooling of interests
transaction for any period prior to the date of such acquisition, (d) the net
income, if
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positive, of any of such person's Consolidated Subsidiaries to the extent that
the declaration or payment of dividends or similar distributions is not at the
time permitted by operation of the terms of its charter or bylaws or any other
agreement, instrument, judgment, decree, order, law, statute, rule or
governmental regulation (other than any Gaming Law that is generally applicable
to all persons operating Casinos through Subsidiaries in any jurisdiction in
which the Company or such Subsidiary is conducting business so long as there is
in effect no specific order, decree or other prohibition pursuant to such Gaming
Law in such jurisdiction limiting the payment of a dividend or similar
distribution by such a Consolidated Subsidiary) applicable to such Consolidated
Subsidiary and (e) the cumulative effect of a change in accounting principles.
"Consolidated Net Worth" of any person at any date means the aggregate
of capital, surplus and retained earnings of such person and its Consolidated
Subsidiaries, as would be shown on the consolidated balance sheet of such person
prepared in accordance with GAAP, adjusted to exclude (to the extent included in
calculating such equity), (a) the amount of capital, surplus and accrued but
unpaid dividends attributable to any Disqualified Capital Stock or treasury
stock of such person or any of its Consolidated Subsidiaries, (b) all upward
revaluations and other write-ups in the book value of any asset of such person
or a Consolidated Subsidiary of such person subsequent to the Issue Date and (c)
all investments in Subsidiaries that are not Consolidated Subsidiaries and in
persons that are not Subsidiaries.
"Consolidated Subsidiary" means, for any person, each Subsidiary of
such person (whether now existing or hereafter created or acquired) the
financial statements of which shall be (or should have been) consolidated for
financial statement reporting purposes with the financial statements of such
person in accordance with GAAP.
"Credit Agreement" means the credit agreement contemplated by that
certain letter dated March 15, 1995 to the Company from First Interstate Bank of
Nevada, N.A. and Bankers Trust Company, providing for an aggregate of one
hundred twenty million dollars ($120,000,000) revolving credit facility or any
substitute therefor, including any related notes, guarantees, collateral
documents, instruments and agreements executed in connection therewith, as such
PH02/71453.3
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credit agreement and/or related documents may be amended, restated,
supplemented, renewed, replaced or otherwise modified from time to time whether
or not with the same agent, trustee, representative lenders or holders, and,
subject to the proviso to the next succeeding sentence, irrespective of any
changes in the terms and conditions thereof. Without limiting the generality of
the foregoing, the term "Credit Agreement" shall include agreements in respect
of Interest Swap and Hedging Obligations with lenders party to the Credit
Agreement and shall also include any amendment, amendment and restatement,
renewal, extension, restructuring, supplement or modification to any Credit
Agreement and all refundings, refinancings and replacements of the Credit
Agreement, and all refundings, refinancings and replacements thereafter,
including any agreement (i) extending the maturity of any Indebtedness incurred
thereunder or contemplated thereby, (ii) adding or deleting borrowers, issuers
or guarantors thereunder, so long as such borrowers, issuers and guarantors
include one or more of the Company and its Subsidiaries and their respective
successors and assigns, (iii) increasing the amount of Indebtedness incurred
thereunder or available to be borrowed thereunder, provided, however, that on
the date such additional Indebtedness is incurred the incurrence thereof is
permitted pursuant to paragraph (a) of Section 5.11 hereof, or (iv) otherwise
altering the terms and conditions thereof in a manner not prohibited by the
terms hereof.
"Current Market Price" on any date means the arithmetic mean of the
Quoted Price of the Senior Notes for the twenty (20) consecutive trading days
commencing thirty (30) days before such date.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
"Definitive Senior Notes" means Senior Notes that are in the form of
the Note attached hereto as Exhibit A but without the paragraph referred to in
footnote 1 and without the additional schedule referred to in footnote 3.
"Depository" means, with respect to the Senior
Notes issuable or issued in whole or in part in global
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form, the person specified in Section 2.3 as the Depository with respect to the
Senior Notes, until the successor shall have been appointed and becomes such
pursuant to the applicable provisions of this Indenture, and, thereafter,
"Depository" shall mean or include such successor.
"Disqualified Capital Stock" means (a) except as provided in (b), with
respect to any person, Capital Stock of such person that, by its terms or by the
terms of any security into which it is convertible, exercisable or exchangeable,
is, or upon the happening of an event or the passage of time would be, required
to be redeemed or repurchased (including at the option of the holder thereof) by
such person or any of its Subsidiaries, in whole or in part, on or prior to the
Stated Maturity of the Senior Notes and (b) with respect to any Subsidiary of
such person (including any Subsidiary of the Company), any Capital Stock other
than any common stock with no special rights and no preferences, privileges, or
redemption or repayment provisions; provided, however, that the Common Stock
issued pursuant to, and subject to, the terms of the Beeber Agreement shall not
constitute Disqualified Capital Stock.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute.
"Event of Default" shall have the meaning specified in Section 7.01.
"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.
"Event of Loss Offer" shall have the meaning specified in
Section 5.14(a).
"Event of Loss Offer Amount" shall have the meaning specified in
Section 5.14(a).
"Event of Loss Offer Price" shall have the meaning specified in
Section 5.14(a).
"Event of Loss Purchase Date" shall have the meaning specified in
Section 5.14(a).
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"Event of Loss Put Date" shall have the meaning specified in
Section 5.14(b)(5).
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated by the SEC thereunder.
"Exchange Offer" means the offer by the Company and the Guarantors to
exchange the Exchange Senior Notes and Guarantees thereof for the Senior Notes
and Guarantees thereof made pursuant to the Exchange and Registration Rights
Agreement.
"Exchange Senior Notes" means Indebtedness of the Company identical in
all material respects to the Senior Notes that are issued by the Company in
exchange for the Senior Notes.
"Excluded Person" means (a) the Company or any wholly-owned Guarantor,
(b) any employee benefit plan of the Company or any wholly-owned Guarantor or
any trustee or similar fiduciary holding Capital Stock of the Company for or
pursuant to the terms of any such plan, (c) Merv Griffin, (d) Edward Fishman,
(e) David Fishman, (f) Howard Goldberg, (g) Thomas E. Gallagher, (h) Marshall S.
Geller, (i) Lee Seidler, (j) Steven P. Perskie, (k) Peter J. Aranow and (l)
members of the immediate families and Affiliates (where the determination of
whether a person is an Affiliate is made without reference to clause (b) of the
definition of such term) of the foregoing persons.
"GAAP" means United States generally accepted accounting principles 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 as in effect on the Issue Date.
"Gaming Authority" means any Governmental Authority with the power to
regulate gaming in any Gaming Jurisdiction, and the corresponding Governmental
Authorities with the responsibility to interpret and enforce the laws and
regulations applicable to gaming
in any Gaming Jurisdiction.
"Gaming Jurisdiction" means any Federal, state or local jurisdiction in
which any entity in which the Company has a direct or indirect beneficial, legal
or
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voting interest conducts casino gaming, now or in the future.
"Gaming Law" means any law, rule, regulation or ordinance governing
gaming activities (including, without limitation, The Riverboat Gambling Act of
Illinois, The Louisiana Riverboat Economic Development and Gaming Control Act,
the Missouri Riverboat Gaming Act, Mo. Rev. Stat. ss. 313.800 et seq. and the
Nevada Gaming Control Act, in each case including all amendments or
modifications thereof), any administrative rules or regulations promulgated
thereunder, and any of the corresponding statutes, rules and regulations in each
Gaming Jurisdiction.
"Gaming Licenses" means every material license, material franchise or
other material authorization required to own, lease, operate or otherwise
conduct or manage riverboat, dockside or land-based gaming in any state or
jurisdiction in which the Company or any of the Guarantors conduct business now
or in the future and any applicable liquor licenses.
"Global Senior Note" means a Senior Note that contains the paragraphs
referred to in footnote 1 and the additional schedule referred to in footnote 3
to the form of security attached hereto as Exhibit A.
"Governmental Authority" means any agency, authority, board, bureau,
commission, department, office or instrumentality of any nature whatsoever of
the United States or a foreign government, any state, any province or any city
or other political subdivision or otherwise and whether now or hereafter in
existence, or any officer or official thereof, and any maritime authority.
"Guarantee" shall have the meaning provided in Section 13.1(a).
"Guarantors" means (1) the Initial Guarantors, (2) all future
Subsidiaries of the Company and (3) upon receipt of the approval of the
applicable Illinois Gaming Authorities, SIRCC.
"Holder" means the person in whose name a Senior Note is registered on
the Registrar's books.
"incur" shall have the meaning specified in Section 5.11.
"Incurrence Date" shall have the meaning specified
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in Section 5.11.
"Indebtedness" of any person means, without duplication, (a) all
liabilities and obligations, contingent or otherwise, of such person, (i) in
respect of borrowed money (whether or not the recourse of the lender is to the
whole of the assets of such person or only to a portion thereof), (ii) evidenced
by bonds, notes, debentures or similar instruments, (iii) representing the
balance deferred and unpaid of the purchase price of any property or services,
except (other than accounts payable or other obligations to trade creditors that
have remained unpaid for greater than ninety (90) days past their original due
date or that are being contested in good faith and for which adequate reserves
have been made) those incurred in the ordinary course of its business that would
constitute ordinarily a trade payable to trade creditors, (iv) evidenced by
bankers' acceptances or similar instruments issued or accepted by banks, (v) for
the payment of money relating to a Capitalized Lease Obligation, or (vi)
evidenced by a letter of credit or a reimbursement obligation of such person
with respect to any letter of credit; (b) all net obligations of such person
under Interest Swap and Hedging Obligations; (c) all liabilities of others of
the kind described in the preceding clause (a) or (b) that such person has
guaranteed or that is otherwise its legal liability and all obligations to
purchase, redeem or acquire any Capital Stock; (d) all obligations secured by a
Lien to which the property or assets (including, without limitation, leasehold
interests and any other tangible or intangible property rights) of such person
are subject, whether or not the obligations secured thereby shall have been
assumed by or shall otherwise be such person's legal liability, provided,
however, that the amount of such obligations shall be limited to the lesser of
the fair market value of the assets or property to which such Lien attaches and
the amount of the obligation so secured; and (e) any and all deferrals,
renewals, extensions, refinancings and refundings (whether direct or indirect)
of, or amendments, modifications or supplements to, any liability of the kind
described in any of the preceding clauses (a), (b), (c) or (d), or this clause
(e), whether or not between or among the same parties.
"Indenture" means this Indenture, as amended or supplemented from time
to time in accordance with the terms hereof.
"Initial Guarantors" means Players Lake Charles,
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Inc., a Louisiana corporation; Players Riverboat Management, Inc., a Nevada
corporation; Players Riverboat, Inc., a Nevada corporation; Players Mesquite
Golf Club, Inc., a Nevada corporation; Players Indiana, Inc., an Indiana
corporation; Players Michigan City, Inc., an Indiana corporation; Players
Riverboat, LLC, a Louisiana limited liability company; Players Nevada, Inc., a
Nevada corporation; Players Bluegrass Downs, Inc., a Kentucky corporation;
Players Mesquite Land, Inc., a Nevada corporation; Players Michigan City
Management, Inc., an Indiana corporation; Players Maryland Heights, Inc., a
Missouri corporation; River Bottom, Inc., a Missouri corporation; and Showboat
Star Partnership, a Louisiana general partnership.
"Initial Purchasers" means Donaldson, Lufkin & Jenrette Securities
Corporation and Salomon Brothers Inc.
"Interest Payment Date" means the stated due date of an installment of
interest on the Senior Notes.
"Interest Swap and Hedging Obligation" means any obligation of any
person pursuant to any interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate exchange agreement,
currency exchange agreement or any other agreement or arrangement designed to
protect against fluctuations in interest rates or currency values, including,
without limitation, any arrangement whereby, directly or indirectly, such person
is entitled to receive from time to time periodic payments calculated by
applying either a fixed or floating rate of interest on a stated notional amount
in exchange for periodic payments made by such person calculated by applying a
fixed or floating rate of interest on the same notional amount.
"Investment" by any person in any other person means (without
duplication) (a) the acquisition by such person (whether for cash, property,
services, securities or otherwise) of capital stock, bonds, notes, debentures,
partnership or other ownership interests or other securities, including any
options or warrants, of such other person or any agreement to make any such
acquisition; (b) the making by such person of any deposit with, or advance, loan
or other extension of credit to, such other person (including the purchase of
property from another person subject to an understanding or agreement,
contingent or otherwise, to resell such property to such other person) or any
commitment to make any such advance, loan or extension
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(but excluding accounts receivable arising in the ordinary course of business);
(c) other than the Guarantees of the Senior Notes and guarantees of other
Indebtedness of the Company or any Subsidiary to the extent permitted by Section
5.11, the entering into by such person of any guarantee of, or other credit
support or contingent obligation with respect to, Indebtedness or other
liability of such other person; (d) the making of any capital contribution by
such person to another person, other than to the Company or a wholly-owned
Subsidiary; or (e) the designation by the Board of Directors of the Company of a
person to be an Unrestricted Subsidiary in accordance with the definition of
"Unrestricted Subsidiary." The Company shall be deemed to make an "Investment"
in an amount equal to the fair market value of the net assets of any person,
determined by the Board of Directors of the Company in good faith at the time
that such person is designated an Unrestricted Subsidiary, and any property
transferred to an Unrestricted Subsidiary from the Company or one of its
Subsidiaries, shall be deemed an Investment valued at its fair market value,
determined by the Board of Directors of the Company in good faith at the time of
such transfer.
"Issue Date" means the date of first issuance of the Senior Notes under
this Indenture.
"Lake Charles Star Riverboat" means the fully equipped Las Vegas style
riverboat casino recently acquired by the Company for a purchase price of $52
million to operate as the Company's second riverboat casino in Lake Charles,
Louisiana.
"Legal Holiday" shall have the meaning specified in Section 14.7.
"Lien" means any mortgage, lien, pledge, charge, security interest, or
other encumbrance of any kind, whether or not filed, recorded or otherwise
perfected under applicable law (including any conditional sale or other title
retention agreement and any lease deemed to constitute a security interest, and
any option or other agreement to give any security interest).
"Maryland Heights Investment Subsidiary" means the wholly-owned
Subsidiary of the Company (which may be the Maryland Heights Operating
Subsidiary) that will make the Investment in the Maryland Heights Joint
Venture Entity.
"Maryland Heights Joint Venture" means the joint
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venture and business operations proposed to be conducted by the Company and its
Subsidiaries, as contemplated by that certain Letter of Intent dated March 3,
1995, among the Company, The Promus Companies
Incorporated and Harrah's Club.
"Maryland Heights Joint Venture Entity" means the entity to be formed
jointly by the Company (or any wholly-owned Subsidiary thereof) and The Promus
Companies Incorporated or any successor thereto (or any Affiliate thereof) to
develop and operate certain shoreside facilities in connection with the Maryland
Heights Joint Venture.
"Maryland Heights Operating Subsidiary" means the wholly-owned
Subsidiary of the Company that will operate a Casino and certain Related
Business Assets in connection with the Maryland Heights Joint Venture.
"Maturity Date" when used with respect to any Senior Note, means the
date on which the principal of such Senior Note becomes due and payable as
therein or herein provided, whether at Stated Maturity, a Change of Control
Payment Date, an Asset Sale Purchase Date or an Event of Loss Purchase Date or
by declaration of acceleration, call for redemption or otherwise.
"Metropolis Complex" means SIRCC's Casino operations in
Metropolis, Illinois.
"Minimum Accumulation Date" shall have the meaning specified in
Section 5.14.
"Net Cash Proceeds" means the aggregate amount of U.S. Legal Tender or
Cash Equivalents received by the Company, in the case of a sale of Qualified
Capital Stock, and by the Company and its Subsidiaries in respect of an Asset
Sale or Event of Loss, plus, in the case of an issuance of Qualified Capital
Stock upon any exercise, exchange or conversion of securities (including
options, warrants, rights and convertible or exchangeable debt) of the Company
that were issued for cash on or after the Issue Date, the amount of cash
originally received by the Company upon the issuance of such securities
(including options, warrants, rights and convertible or exchangeable debt),
less, in each case, the sum of all fees, commissions and other expenses incurred
in connection with such Asset Sale or Event of Loss, and, in the case of an
Asset Sale or Event of Loss only, less the amount (estimated reasonably and in
good faith by the Company) of income, franchise, sales and other applicable
taxes required to
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be paid by the Company or any of its Subsidiaries in connection with such Asset
Sale or Event of Loss.
"Non-recourse Indebtedness" means Indebtedness of a person to the
extent that under the terms thereof (including any related instruments,
documents or filings) (i) no personal recourse shall be had against such person
for the payment of the principal of, premium, if any, or interest 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 or the Indebtedness
refinanced by such Indebtedness and as to which neither the Company nor any
Subsidiary provides any credit support.
"Obligation" means any principal, premium, interest, penalties, fees,
reimbursements, damages, indemnification and other liabilities relating to
obligations of the Company or any Guarantor under the Senior Notes, the
Guarantees or this Indenture, including any liquidated damages pursuant to the
Exchange and Registration Rights Agreement.
"Offer to Purchase" means any Change of Control
Offer, Asset Sale Offer or Event of Loss Offer.
"Offering Memorandum" means the confidential offering memorandum of
the Company, dated , 1995.
"Officer" means, with respect to the Company, the Chairman of the
Board, the President, any Vice President, the Chief Financial Officer, the
Treasurer, the Controller, or the Secretary or Assistant Secretary of the
Company.
"Officers' Certificate" means, with respect to the Company or any
Guarantor, a certificate signed by two Officers of the Company or such Guarantor
and otherwise complying with the requirements of Sections 14.4 and 14.5.
"Opinion of Counsel" means a written opinion from legal counsel to the
Company complying with the requirements of Sections 14.4 and 14.5. Unless
otherwise required by this Indenture, the counsel may be in-house counsel to the
Company.
"Pari Passu," as applied to the ranking of any Indebtedness of a
person in relation to other
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Indebtedness of such person, means that each such Indebtedness either (i) is not
subordinate or junior in right of payment to any Indebtedness or (ii) is
subordinate or junior in right of payment to the same Indebtedness as is the
other, and is so subordinate or junior to the same extent, and is not
subordinate or junior in right of payment to each other or to any Indebtedness
as to which the other is not so subordinate or junior.
"Paying Agent" means First Fidelity Bank, National Association or any
successor as paying agent under this Indenture and as more fully described in
Section 2.3 hereto.
"Permitted Indebtedness" means any of the following:
(a) The Company and each of its Subsidiaries may incur Indebtedness
solely in respect of bankers' acceptances, letters of credit and performance
bonds (to the extent that such incurrence does not result in the incurrence of
any obligation for the payment of borrowed money of any person other than the
Company or such Subsidiary), all in the ordinary course of business, in amounts
and for the purposes customary in the Company's industry for gaming operations
similar to those of the Company and its Subsidiaries; provided, however, that
the aggregate principal amount outstanding of such Indebtedness (including any
Indebtedness issued to refinance, refund or replace such Indebtedness) for the
Company and its Subsidiaries shall at no time exceed five million dollars
($5,000,000);
(b) The Company may incur Indebtedness to any wholly-owned Subsidiary,
and any wholly-owned Subsidiary may incur Indebtedness, or issue Disqualified
Capital Stock, to any other wholly-owned Subsidiary or the Company; provided,
however, that such obligations, in any case where the Company or a Guarantor is
the obligor, shall be subordinated in all respects to the Company's Obligations
pursuant to the Senior Notes and each Guarantor's Obligations pursuant to its
Guarantee of the Company's Obligations pursuant to the Senior Notes, as the case
may be; and
(c) The Company and any Subsidiary may post a bond or surety obligation
(or incur an indemnity or similar obligation) in order to prevent the impairment
or loss of or to obtain a Gaming License, to the extent required by applicable
law and consistent in character
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and amount with customary industry practice.
"Permitted Liens" means any of the following:
(a) Liens for taxes, assessments or other governmental charges not yet
due or which are being contested in good faith and by appropriate proceedings by
the Company or one or more of its Subsidiaries if adequate reserves with respect
thereto are maintained on the books of the Company or such Subsidiary or
Subsidiaries, as the case may be, in accordance with GAAP;
(b) Liens of carriers, warehousemen, mechanics, landlords, materialmen,
repairmen and for crew wages or salvage or other like Liens arising by operation
of law in the ordinary course of business and consistent with industry practices
and Liens on deposits made to obtain the release of such Liens if (i) the
underlying obligations are not overdue for a period of more than sixty (60) days
or (ii) such Liens are being contested in good faith and by appropriate
proceedings by the Company or its Subsidiary and adequate reserves with respect
thereto are maintained on the books of the Company or such Subsidiary, as the
case may be, in accordance with GAAP;
(c) easements, rights-of-way, zoning and similar restrictions and other
similar encumbrances or title defects incurred or imposed, as applicable, in the
ordinary course of business and consistent with industry practices which, in the
aggregate, are not substantial in amount, and which do not in any case
materially detract from the value of the property subject thereto (as such
property is used by the Company or its Subsidiary) or interfere with the
ordinary conduct of the business of the Company or such Subsidiary; provided,
however, that any such Liens are not incurred in connection with any borrowing
of money or any commitment to loan any money or to extend any credit;
(d) Liens disclosed on Schedule I to this Indenture;
(e) Liens that secure Acquired Indebtedness of the Company or any of
its Subsidiaries; provided, however, in each case, that such Liens do not secure
any other property or assets and were not put in place in connection with or in
anticipation of such acquisition, merger or consolidation;
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(f) customary Liens (other than any Lien imposed by ERISA) incurred or
deposits made in the ordinary course of business in connection with worker's
compensation, unemployment insurance and other types of social security
legislation;
(g) judgment and attachment Liens with respect to judgments and
attachments not giving rise to an Event of Default; and
(h) any Lien in favor of the Company or any wholly-owned Subsidiary
thereof.
"Person" or "person" means an individual, corporation, partnership,
association, limited liability company, limited liability partnership, trust,
estate or other entity.
"Property" or "property" means any right or interest in or to property
or assets of any kind whatsoever, whether real, personal or mixed and whether
tangible, intangible, contingent, indirect or direct.
"Purchase Money Indebtedness" means any Nonrecourse Indebtedness of
such person owed to any seller or other person incurred to finance the
acquisition of any Related Business Assets and incurred substantially
concurrently with or within thirty (30) days following such acquisition.
"Purchase Price" means any Change of Control Offer Price, Asset Sale
Offer Price or Event of Loss Offer Price.
"Qualified Capital Stock" means any Capital Stock of the Company that
is not Disqualified Capital Stock.
"Qualified Exchange" means any defeasance, redemption, repurchase or
other acquisition of Capital Stock or Subordinated Indebtedness of the Company
with the Net Cash Proceeds received by the Company from the substantially
concurrent sale of Qualified Capital Stock of the Company or in exchange for
Qualified Capital Stock of the Company.
"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 Senior Notes are listed or
admitted to trading, or if the Senior Notes are not
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listed or admitted to trading on any national securities exchange, but are
traded in the over the counter market, the closing sale price of the Senior
Notes 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.
"Record Date" means a Record Date specified in the Senior Notes whether
or not such Record Date is a Business Day.
"Redemption Date" when used with respect to any Senior Note to be
redeemed, means the date fixed for such redemption pursuant to Article III of
this Indenture and Paragraph 5 in the form of security attached hereto as
Exhibit A.
"Redemption Price" when used with respect to any Senior Note to be
redeemed, means the redemption price for such redemption set forth in Paragraph
5 in the form of security attached hereto as Exhibit A, which shall include in
each case accrued and unpaid interest with respect to such Senior Note to the
applicable Redemption Date.
"Reference Period" with respect to any person means the four full
fiscal quarters (or such lesser period during which such person has been in
existence) for which financial information is available ended immediately
preceding any date upon which any determination is to be made pursuant to the
terms of the Senior Notes or this Indenture.
"Refinancing Indebtedness" means Indebtedness or Disqualified Capital
Stock (a) issued in exchange for, or the proceeds from the issuance and sale of
which are used substantially concurrently to repay, redeem, defease, refund,
refinance, discharge or otherwise retire for value, in whole or in part, or (b)
constituting an amendment, modification or supplement to, or a deferral or
renewal of ((a) and (b) above are, collectively, a "Refinancing"), any
Indebtedness or Disqualified Capital Stock in a principal amount or, in the case
of Disqualified Capital Stock, liquidation preference, not to exceed (after
deduction of reasonable and customary fees and expenses incurred in connection
with the Refinancing) the lesser of (i) the principal amount or, in the case of
Disqualified Capital Stock, liquidation preference, of the Indebtedness or
Disqualified Capital Stock so
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<PAGE>
refinanced and (ii) if such Indebtedness being refinanced was issued with an
original issue discount, the accredited value thereof (as determined in
accordance with GAAP) at the time of such Refinancing; provided, however that
(A) Refinancing Indebtedness of any Guarantor shall only be used to refinance
outstanding Indebtedness or Disqualified Capital Stock of such Guarantor, (B)
Refinancing Indebtedness shall (x) not have an Average Life shorter than the
Indebtedness or Disqualified Capital Stock to be so refinanced at the time of
such Refinancing and (y) in all respects, be no less subordinated, if
applicable, to the rights of Holders of the Senior Notes than was the
Indebtedness or Disqualified Capital Stock to be refinanced and (C) such
Refinancing Indebtedness shall have no installment of principal (or redemption)
scheduled to come due earlier than the scheduled maturity of any installment of
principal of the Indebtedness (or Disqualified Capital Stock) to be so
refinanced which was scheduled to come due prior to the Stated Maturity.
"Registrar" shall have the meaning specified in Section 2.3.
"Registration Rights Agreement" means the Exchange and Registration
Rights Agreement by and among the Company, the Guarantors and the Initial
Purchasers, dated as of the Issue Date.
"Regulatory Redemption" means (i) disposition by the Holder of any of
the Senior Notes required by any Governmental Authority or the Board of
Directors of the Company or (ii) a redemption or repurchase by the Company of
any of the Senior Notes required by any Governmental Authority or the Board of
Directors of the Company if, in either case, the ownership of any of the Senior
Notes by the Holder thereof will preclude, interfere with, threaten or delay the
issuance, maintenance, existence or reinstatement of any gaming or liquor
license, permit or approval, or result in the imposition of burdensome terms or
conditions on such license, permit or approval.
"Related Business" means the gaming business (including parimutuel
betting) conducted (or proposed to be conducted) by the Company and its
Subsidiaries as of the Issue Date 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
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(including any land-based, dockside, riverboat or other type of Casino) owned,
or to be owned, by the Company or one of its Subsidiaries.
"Related Business Asset" means property, goods or services pertaining
to a Related Business, other than debt or securities of any other person.
"Restricted Investment" means, in one or a series of related
transactions, any Investment other than in Cash Equivalents and in Investments
of the type set forth in clause (v) of the definition of Cash Equivalents that
have a maturity longer than one year so long as the Average Life of all such
Investments does not exceed fifteen (15) months; provided, however, that the
extension of credit to customers of Casinos consistent with industry practice in
the ordinary course of business shall not be a Restricted Investment.
"Restricted Payment" means, with respect to any person, (a) the
declaration or payment of any dividend or other distribution in respect of
Capital Stock of such person or any Subsidiary of such person or, (b) any
payment on account of the purchase, redemption or other acquisition or
retirement for value of Capital Stock of such person or any Subsidiary of such
person, (c) any purchase, redemption or other acquisition or retirement for
value of, or any defeasance of, any Subordinated Indebtedness, directly or
indirectly, by such person or a Subsidiary of such person, prior to the
scheduled maturity, any scheduled repayment of principal or any scheduled
sinking fund payment, as the case may be, of such Subordinated Indebtedness
(including any payment in respect of any amendment of the terms of any such
Subordinated Indebtedness, which amendment is sought in connection with any such
acquisition of such Indebtedness or seeks to shorten any such due date), and (d)
any Restricted Investment (including, in any case, the designation of a person
as an Unrestricted Subsidiary) by such person; provided, however, that the term
"Restricted Payment" does not include (i) any dividend, distribution or other
payment on or with respect to Capital Stock of an issuer to the extent payable
solely in shares of Qualified Capital Stock of such issuer; (ii) any dividend,
distribution or other payment to the Company, or to any of its wholly-owned
Subsidiaries, by any of its Subsidiaries; (iii) Investments in or loans to a
wholly-owned Subsidiary the proceeds of which are used by such Subsidiary in a
Related Business activity of such Subsidiary; (iv) loans or advances to officers
or
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employees of the Company or any of its Subsidiaries to pay business related
expenses or relocation costs of such officers or employees in connection with
their employment by the Company or any of its Subsidiaries in an aggregate
amount outstanding at any time not exceeding five million dollars ($5,000,000)
for all such officers and employees; (v) any Investment received as
consideration for any Asset Sale to the extent that the Company or any of its
Subsidiaries is permitted to receive such Investment without violating the
provisions of Section 5.14; and (vi) Investments received as part of the
settlement of litigation or in satisfaction of extensions of credit to any
Person otherwise permitted under this Indenture pursuant to the reorganization,
bankruptcy or liquidation of such Person.
"Restricted Senior Note" means a Senior Note, unless or until it has
been (i) effectively registered under the Securities Act and disposed of in
accordance with the registration statement covering it or (ii) distributed to
the public pursuant to Rule 144 (or any similar provision then in force) under
the Securities Act; provided, however, that in no case shall an Exchange Senior
Note be issued in accordance with this Indenture and the terms and provisions of
the Registration Rights Agreement be a Restricted Senior Note.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
"Senior Notes" or "Notes" or "Securities" means, prior to the Exchange
Offer, the 10 7/8% Senior Notes Due 2005, and after the Exchange Offer, the
Senior Notes (if any) and the Exchange Senior Notes, in each case as amended or
modified from time to time in accordance with the terms hereof, issued under
this Indenture.
"Senior Notes Custodian" means the Trustee, as custodian with respect
to the Senior Notes in global form, or any successor entity thereto.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act of 1933, as amended, as
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such regulation is in effect on the date hereof.
"SIRCC" means Southern Illinois Riverboat/Casino Cruises, Inc., an
Illinois corporation.
"Stated Maturity," when used with respect to the principal of any
Senior Note, means April 15, 2005 and, with respect to interest on any Senior
Note, means the scheduled date for payment of such interest.
"Subordinated Indebtedness" means Indebtedness of the Company or a
Guarantor, as applicable, that is subordinated by its express terms in right of
payment to the Senior Notes or any Guarantee, as applicable, in all respects and
has no scheduled installment of principal due, by maturity, redemption, sinking
fund payment or otherwise, on or prior to the Stated Maturity of the Senior
Notes.
"Subsidiary," with respect to any person, means (i) a corporation a
majority of whose Capital Stock with voting power, under ordinary circumstances,
to elect directors is at the time, directly or indirectly, owned by such person,
by such person and one or more Subsidiaries of such person or by one or more
Subsidiaries of such person or (ii) any other person (other than a corporation)
in which such person, one or more Subsidiaries of such person, or such person
and one or more Subsidiaries of such person, directly or indirectly, at the date
of determination thereof has at least a majority ownership interest. When used
with respect to the Company, "Subsidiary" shall be deemed to include any direct
Subsidiary of the Company and each indirect Subsidiary that is a direct
Subsidiary of the Company or one or more of its direct or indirect Subsidiaries.
Notwithstanding the foregoing, no Unrestricted Subsidiary shall be a Subsidiary
of the Company or any of its Subsidiaries.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code ss.ss.
77aaa-7bbbb) as in effect on the date of the execution of this Indenture.
"Transfer Restricted Senior Note" means Senior Notes that bear or are
required to bear the legend set forth in Section 2.6.
"Trustee" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture and
thereafter means such successor.
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"Trust Officer" means any officer within the corporate trust department
(or any successor group) of the Trustee including any vice president, assistant
vice president, secretary, assistant secretary or any other officer or assistant
officer of the Trustee customarily performing functions similar to those
performed by the persons who at that time shall be such officers, and also
means, with respect to a particular corporate trust matter, any other officer of
the corporate trust department (or any successor group) of the Trustee to whom
such trust matter is referred because of his knowledge of and familiarity with
the particular subject.
"U.S. Government Obligations" means direct non-callable of, or
non-callable obligations guaranteed by, the United States of America for the
payment of which obligation or guarantee the full faith and credit of the United
States of America is pledged.
"U.S. Legal Tender" means such coin or currency of the United States
of America as at the time of payment is legal tender for the payment of public
and private debts.
"Unrestricted Subsidiary" means any person that, at the time of
determination, shall be an Unrestricted Subsidiary (as designated by the Board
of Directors of the Company, as provided below) provided that such person shall
not engage, to any substantial extent, in any line or lines of business activity
other than a Related Business. The Board of Directors of the Company may
designate any person (including any newly acquired or newly formed Subsidiary at
or prior to the time it is so formed or acquired) to be an Unrestricted
Subsidiary if (a) such Restricted Payment is not prohibited by Section 5.3;
provided, however, that the determination of whether a Restricted Payment is
prohibited by Section 5.3 may be made without reference to clause (3) of the
first paragraph thereof in the case of an Investment in any person that would be
a Subsidiary but for the designation as an Unrestricted Subsidiary (except that
the definition of "Subsidiary," solely for purposes of this proviso, shall be
modified by substituting "50% or more" for the words "a majority" in clauses (i)
and (ii) of such definition) engaged solely in, or being formed solely for the
purposes of engaging in, the business of developing, constructing, expanding or
acquiring (y) a Casino or Casinos and, if applicable, any Related Businesses in
connection with such Casino or Casinos, or (z) a Related Business to be used
primarily in connection
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with an existing Casino or Casinos in which the Company or its Subsidiaries have
at least a fifty percent (50%) ownership interest, if (A) the Consolidated
Coverage Ratio of the Company for the Reference Period immediately preceding the
date of such designation is not less than 3.25 to 1; or (B) the ratio of
Consolidated Debt of the Company as of the date of such designation to
Consolidated EBITDA of the Company for such Reference Period is less than 3.25
to 1; provided, further, that the full amount of any Restricted Payment pursuant
to the foregoing proviso shall be deducted in the calculation of the aggregate
amount of Restricted Payments available to be made pursuant to clause (3) of
Section 5.3, (b) such person does not own any Capital Stock of, or own or hold
any Lien on any property of, or hold any debt of, the Company or any Guarantor
and (c) such person does not, at the time of designation, and does not
thereafter, create, incur, issue, assume, guarantee or otherwise become directly
or indirectly liable with respect to any Indebtedness pursuant to which the
holder of such Indebtedness has recourse to any of the assets of the Company or
any of its Subsidiaries. Any such designation also constitutes a Restricted
Payment for purposes of Section 5.3 hereof. The Board of Directors of the
Company may designate any Unrestricted Subsidiary to be a Subsidiary, provided,
however, that (i) no Default or Event of Default is existing or will occur as a
consequence thereof and (ii) immediately after giving effect to such
designation, on a pro forma basis, the Company could incur at least one dollar
($1.00) of additional Subordinated Indebtedness pursuant to clause (ii) of
paragraph (a) of Section 5.11. Each such designation shall be evidenced by
filing with the Trustee a certified copy of the resolution giving effect to such
designation and an Officers' Certificate certifying that such designation
complied with the foregoing conditions. Notwithstanding anything to the
contrary, no Initial Guarantor may be designated an Unrestricted Subsidiary. In
addition, SIRCC may not be designated an Unrestricted Subsidiary.
"wholly-owned" with respect to a Subsidiary of any person means (i)
with respect to a Subsidiary that is a partnership, limited liability company or
similar entity, a Subsidiary whose capital stock is 99% or greater beneficially
owned by such person and (ii) with respect to a Subsidiary that is other than a
limited liability company or similar entity, a Subsidiary whose capital stock or
other equity interest is 100% beneficially owned by such person.
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Section 1.2 Incorporation by Reference of TIA.
Whenever this Indenture refers to a provision of the TIA, such
provision is incorporated by reference in and made a part of this Indenture. The
following TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Senior Notes.
"indenture securityholder" means a Holder.
"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 Senior Notes.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by SEC rule and
not otherwise defined herein have the meanings assigned to them thereby.
Section 1.3 Rules of Construction.
Unless the context otherwise requires:
(i) a term has the meaning assigned to
it;
(ii) an accounting term not otherwise
defined has the meaning assigned to it in
accordance with GAAP;
(iii) "or" is not exclusive;
(iv) words in the singular include the
plural, and words in the plural include the
singular;
(v) provisions apply to successive
events and transactions;
(vi) the words "include" and "including"
shall be deemed to mean "include, without
limitation," and "including, without
limitation";
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(vii) "herein," "hereof" and other words of similar
import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision; and
(viii) references to Sections or Articles means
reference to such Section or Article in this Indenture, unless
stated otherwise.
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ARTICLE II
THE SECURITIES
Section 2.1 Form and Dating.
The Senior Notes and the Trustee's certificate of
authentication in respect thereof shall be substantially in the form of the
Senior Note and Trustee's certificate contained in Exhibit A hereto, which
Exhibit is part of this Indenture. The Senior Notes may have notations, legends
or endorsements required by law, stock exchange rule or usage. The Company shall
approve the form of the Senior Notes and any notation, legend or endorsement on
them. Any such notations, legends or endorsements not contained in the form of
Senior Note attached as Exhibit A hereto shall be delivered in writing to the
Trustee. Each Senior Note shall be dated the date of its authentication.
The terms and provisions contained in the forms of Senior Note
shall constitute, and are hereby expressly made, a part of this Indenture and,
to the extent applicable, the Company and the Trustee, by their execution and
delivery of this Indenture, expressly agree to such terms and provisions and to
be bound thereby.
Section 2.2 Execution and Authentication.
Two Officers shall sign, or one Officer shall sign and one
Officer shall attest to, the Senior Notes for the Company by manual or facsimile
signature. The Company's seal shall be impressed, affixed, imprinted or
reproduced on the Senior Notes and may be in facsimile form. If an Officer whose
signature is on a Senior Note was an Officer at the time of such execution but
no longer holds that office at the time the Trustee authenticates the Senior
Note, the Senior Note shall be valid nevertheless and the Company shall
nevertheless be bound by the terms of the Senior Notes and this Indenture. A
Senior Note shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Senior Note, but such
signature shall be conclusive evidence that the Senior Note has been
authenticated pursuant to the terms of this Indenture.
The Trustee shall authenticate Senior Notes for original issue
in the aggregate principal amount of up to $150,000,000 and shall authenticate
Exchange Senior Notes for original issue in the aggregate principal amount of up
to $150,000,000, in each case
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upon a written order of the Company in the form of an Officers' Certificate;
provided, however, that such Exchange Senior Notes shall be issuable only upon
the valid surrender for cancellation of original Senior Notes of a like
aggregate principal amount in accordance with the Registration Rights Agreement.
The Officers' Certificate shall specify the amount of Senior Notes to be
authenticated and the date on which the Senior Notes are to be authenticated.
The aggregate principal amount of Senior Notes outstanding at any time may not
exceed $150,000,000, except as provided in Section 2.7. Upon the written order
of the Company in the form of an Officers' Certificate, the Trustee shall
authenticate Senior Notes in substitution of Senior Notes originally issued to
reflect any name change of the Company.
The Trustee may appoint an authenticating agent acceptable to
the Company to authenticate Senior Notes. Unless otherwise provided in the
appointment, an authenticating agent may authenticate Senior Notes whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with the Company, any Affiliate of the Company
or any of their respective Subsidiaries.
Senior Notes shall be issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof.
Section 2.3 Registrar and Paying Agent.
The Company shall maintain an office or agency in the Borough
of Manhattan, The City of New York, where Senior Notes may be presented for
registration of transfer or for exchange ("Registrar") and an office or agency
in the Borough of Manhattan, The City of New York where Senior Notes may be
presented for payment ("Paying Agent") and an office or agency where notices and
demands to or upon the Company in respect of the Senior Notes may be served. The
Company may act as its own Registrar or Paying Agent, except that, for the
purposes of Articles III, IX, XII and Section 5.14 neither the Company nor any
Affiliate of the Company shall act as Paying Agent. The Registrar shall keep a
register of the Senior Notes 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
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additional Paying Agent. The Company hereby initially appoints the Trustee as
Registrar and Paying Agent, and the Trustee hereby initially agrees so to act.
The Company shall enter into an appropriate written agency
agreement with any Agent not a party to this Indenture, which agreement shall
implement the provisions of this Indenture that relate to such Agent. The
Company shall promptly notify the Trustee in writing of the name and address of
any such Agent. If the Company fails to maintain a Registrar or Paying Agent,
the Trustee shall act as such.
The Company initially appoints The Depository Trust Company
("DTC") to act as Depository with respect to the Global Senior Notes.
The Company initially appoints the Trustee to act as Senior
Notes Custodian with respect to the Global Senior Notes.
Section 2.4 Paying Agent to Hold Assets in Trust.
The Company shall require each Paying Agent other than the
Trustee to agree in writing that each Paying Agent shall hold in trust for the
benefit of Holders or the Trustee all assets (if any) held by the Paying Agent
for the payment of principal of, and interest on, the Senior Notes (whether such
assets have been distributed to it by the Company or any other obligor on the
Senior Notes), and shall notify the Trustee in writing of any Default by the
Company (or any other obligor on the Senior Notes) in making any such payment.
If the Company or a Subsidiary of the Company acts as Paying Agent, it shall
segregate such assets and hold them as a separate trust fund for the benefit of
the Holders or the Trustee. The Company at any time may require a Paying Agent
to distribute all assets held by it to the Trustee and account for any assets
disbursed and the Trustee may at any time during the continuance of any payment
Default, upon written request to a Paying Agent, require such Paying Agent to
distribute all assets held by it to the Trustee and to account for any assets
distributed. Upon distribution to the Trustee of all assets that shall have been
delivered by the Company to the Paying Agent, the Paying Agent (if other than
the Company) shall have no further liability for such assets.
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Section 2.5 Holder 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 the Holders. If the Trustee is not the Registrar, the Company shall
furnish to the Trustee on or before the third Business Day preceding each
Interest Payment Date and at such other times as the Trustee may request in
writing a list in such form and as of such date as the Trustee reasonably may
require of the names and addresses of Holders. The Trustee, the Registrar and
the Company shall provide a current Holder list to any Gaming Authority upon
demand.
Section 2.6 Transfer and Exchange.
(a) Transfer and Exchange of a Definitive Senior Note
for a Definitive Senior Note. When Definitive Senior Notes are presented to the
Registrar or a co-Registrar with a request
(x) to register the transfer of such
Definitive Senior Notes or
(y) to exchange such Definitive Senior
Notes for an equal principal amount
of Definitive Senior Notes of other
authorized denominations,
the Registrar or co-Registrar shall register the transfer or make the exchange
as requested if its reasonable requirements for such transaction are met;
provided, however, that the Definitive Senior Notes surrendered for transfer or
exchange:
(i) shall be duly endorsed or accompanied by a
written instrument of transfer in form reasonably satisfactory
to the Company and the Registrar, duly executed by the Holder
thereof or the Holder's attorney duly authorized in writing,
and
(ii) in the case of Transfer Restricted Senior
Notes that are Definitive Senior Notes, shall be accompanied
by the following additional information and documents, as
applicable:
(A) if such Transfer Restricted Senior Note is
being delivered to the
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Registrar by a Holder for registration in the name of
such Holder, without transfer, a certification from
such Holder to that effect (in substantially the form
set forth on the reverse of the Senior Note); or
(B) if such Transfer Restricted Senior
Note is being transferred (i) to a "qualified
institutional buyer" (as defined in Rule 144A under
the Securities Act) in accordance with Rule 144A
under the Securities Act, (ii) to an institutional
"accredited investor" within the meaning of Rule
501(a)(1), (2), (3) or (7) under the Securities Act
that is acquiring at least $100,000 aggregate
principal amount of the Senior Notes and that has
delivered to the Trustee and the Company a letter in
the form of Exhibit B hereto with respect to such
transfer, (iii) pursuant to an exemption from
registration in accordance with Rule 144 or
Regulation S under the Securities Act or (iv)
pursuant to an effective registration statement under
the Securities Act, a certification to that effect
(in substantially the form set forth on the reverse
of the Senior Note); or
(C) if such Transfer Restricted Senior
Note is being transferred in reliance on another
exemption from the registration requirements of the
Securities Act, a certification to that effect (in
substantially the form set forth on the reverse of
the Senior Note) and an Opinion of Counsel reasonably
acceptable to the Company and to the Registrar to the
effect that such transfer is in compliance with the
Securities Act.
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(b) Restriction on Transfer of a Definitive
Senior Note for a Beneficial Interest in a Global Senior Note. A Definitive
Senior Note may not be exchanged for a beneficial interest in a Global Senior
Note except upon satisfaction of the requirements set forth below. Upon receipt
by the Trustee of a Definitive Senior Note, duly endorsed or accompanied by
appropriate instruments of transfer, in form satisfactory to the Trustee,
together with:
(i) if such Definitive Senior Note is a Transfer
Restricted Senior Note, certification, substantially in the
form set forth on the reverse of the Senior Note, that such
Definitive Senior Note is being transferred to (A) a
"qualified institutional buyer" (as defined in Rule 144A under
the Securities Act) in accordance with Rule 144A under the
Securities Act, or (B) to an institutional "accredited
investor" within the meaning of Rule 501(a)(1), (2), (3) or
(7) under the Securities Act that is acquiring at least
$100,000 aggregate principal amount of the Senior Notes and
that has delivered to the Trustee and the Company a letter in
the form of Exhibit B hereto with respect to such transfer;
and
(ii) whether or not such Definitive Senior Note is
a Transfer Restricted Senior Note, written instructions
directing the Trustee to make, or to direct the Senior Notes
Custodian to make, an endorsement on the Global Senior Note to
reflect an increase in the aggregate principal amount of the
Senior Notes represented by the Global Senior Note, then the
Trustee shall cancel such Definitive Senior Note and cause, or
direct the Senior Notes Custodian to cause, in accordance with
the standing instructions and procedures existing between the
Depository and the Senior Notes Custodian, the aggregate
principal amount of Senior Notes represented by the Global
Senior Note to be increased accordingly. If no Global Senior
Notes are then outstanding, the Company shall issue and the
Trustee shall authenticate a new Global Senior Note in the
appropriate principal amount.
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(c) Transfer and Exchange of Global Senior
Notes. The transfer and exchange of Global Senior Notes or beneficial interests
therein shall be effected through the Depository, in accordance with this
Indenture (including the restrictions on transfer set forth herein) and the
procedures of the Depository therefor.
(d) Transfer of a Beneficial Interest in a
Global Senior Note for a Definitive Senior Note.
(i) Any Person having a beneficial interest in a
Global Senior Note may upon request exchange such beneficial
interest for a Definitive Senior Note. Upon receipt by the
Trustee of written instructions or such other form of
instructions as is customary for the Depository from the
Depository or its nominee on behalf of any Person having a
beneficial interest in a Global Senior Note and upon receipt
by the Trustee of a written order or such other form of
instructions as is customary for the Depository or the Person
designated by the Depository as having such a beneficial
interest in a Transfer Restricted Senior Note only, together
with the following additional information and documents (all
of which may be submitted by facsimile):
(A) if such beneficial interest is being
transferred to the Person designated by the
Depository as being the beneficial owner, a
certification from such person to that effect (in
substantially the form set forth on the reverse of
the Senior Note); or
(B) if such beneficial interest is being
transferred (i) to a "qualified institutional buyer"
(as defined in Rule 144A under the Securities Act) in
accordance with Rule 144A under the Securities Act,
(ii) to an institutional "accredited investor" within
the meaning of Rule 501(a)(1), (2), (3) or (7) under
the Securities Act that is acquiring at least
$100,000 aggregate principal amount of the Senior
Notes and that has delivered to the Trustee and the
Company a letter in the form of Exhibit B hereto with
respect to such transfer, (iii) pursuant to an
exemption from
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registration in accordance with Rule 144 or
Regulation S under the Securities Act or (iv)
pursuant to an effective registration statement under
the Securities Act, a certification to that effect
(in substantially the form set forth on the reverse
of the Senior Note); or
(C) if such beneficial interest is being
transferred in reliance on another exemption from the
registration requirements of the Securities Act, a
certification to that effect from the transferee or
transferor (in substantially the form set forth on
the reverse of the Senior Note) or an Opinion of
Counsel from the transferee or transferor reasonably
acceptable to the Company and to the Registrar to the
effect that such transfer is in compliance with the
Securities Act; or
(D) if such Transfer Restricted Senior
Note is being transferred pursuant to an exemption
from registration in accordance with Regulation S
under the Securities Act, if the Trustee so requests,
an Opinion of Counsel reasonably acceptable to the
Trustee to the effect that such transfer is in
compliance with the Securities Act,
then the Trustee or the Senior Notes Custodian, at the direction of the Trustee,
will cause, in accordance with the standing instructions and procedures existing
between the Depository and the Senior Notes Custodian, the aggregate principal
amount of the Global Senior Note to be reduced and, following such reduction,
the Company will execute and, upon receipt of an authentication order in the
form of an Officers' Certificate, the Trustee will authenticate and deliver to
the transferee a Definitive Senior Note.
(ii) Definitive Senior Notes issued in exchange
for a beneficial interest in a Global Senior Note pursuant to
this Section 2.6(d) shall be registered in such names and in
such authorized denominations as the Depository, pursuant to
instructions from its direct or indirect participants or
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otherwise, shall instruct the Trustee. The Trustee shall
deliver such Definitive Senior Notes to the persons in whose
names such Senior Notes are so registered.
(e) Restrictions on Transfer and Exchange of
Global Senior Notes. Notwithstanding any other provisions of this Indenture
(other than the provisions set forth in subsection (f) of this Section 2.6), a
Global Senior Note may not be transferred as a whole except by the Depository to
a nominee of the Depository or by the nominee of the Depository to the
Depository or another nominee of the Depository or by the Depository or any such
nominee to a successor Depository or a nominee of such successor Depository.
(f) Authentication of Definitive Senior
Notes in Absence of Depository. If at any time:
(i) the Depository for the Senior Notes notifies
the Company that the Depository is unwilling or unable to
continue as Depository for the Global Senior Notes and a
successor Depository for the Global Senior Notes is not
appointed by the Company within ninety (90) days after
delivery of such notice; or
(ii) the Company, in its sole discretion, notifies
the Trustee in writing that it elects to cause the issuance of
Definitive Senior Notes under this Indenture,
then the Company will execute, and the Trustee, upon receipt of an Officers'
Certificate requesting the authentication and delivery of Definitive Senior
Notes, will authenticate and deliver Definitive Senior Notes, in an aggregate
principal amount equal to the principal amount of the Global Senior Notes, in
exchange for such Global Senior Notes.
(g) Legends.
(i) Except as permitted by the following
paragraph (ii), each Senior Note certificate evidencing the
Global Senior Notes and the Definitive Senior Notes (and all
Senior Notes issued in exchange therefor or substitution
thereof) shall bear a legend in substantially the following
form:
"THE SECURITIES HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS
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AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS.
NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN
MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE
DATE THAT IS THREE YEARS AFTER THE LATER OF THE ORIGINAL ISSUE
DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR
ANY PREDECESSOR OF SUCH SECURITY) ONLY (A) TO THE COMPANY, (B)
PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE
SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A
PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, OR (D)
PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S
AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR
TRANSFER PURSUANT TO CLAUSE (D) TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING
CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE
OTHER SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE
TRANSFEROR TO THE TRUSTEE. THESE SECURITIES MAY BE HELD OR
TRANSFERRED ONLY IN COMPLIANCE WITH APPLICABLE GAMING LAWS."
(ii) Upon any sale or transfer of a
Transfer Restricted Senior Note (including
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any Transfer Restricted Senior Note represented by a Global
Senior Note) pursuant to Rule 144 under the Act or an
effective registration statement under the Act:
(A) in the case of any Transfer
Restricted Senior Note that is a Definitive Senior
Note, the Registrar shall permit the Holder thereof
to exchange such Transfer Restricted Senior Note for
a Definitive Senior Note that does not bear the
legend set forth above and rescind any restriction on
the transfer of such Transfer Restricted Senior Note;
and
(B) any such Transfer Restricted Senior
Note represented by a Global Senior Note shall not be
subject to the provisions set forth in (i) above
(such sales or transfers being subject only to the
provisions of Section 2.6(c) hereof); provided,
however, that with respect to any request for an
exchange of a Transfer Restricted Senior Note that is
represented by a Global Senior Note for a Definitive
Senior Note that does not bear a legend, which
request is made in reliance upon Rule 144A, the
Holder thereof shall certify in writing to the
Registrar that such request is being made pursuant to
Rule 144 (such certification to be substantially in
the form set forth on the reverse of the Senior
Note).
(h) Cancellation and/or Adjustment of Global
Senior Note. At such time as all beneficial interests in a Global Senior Note
have either been exchanged for Definitive Senior Notes, redeemed, repurchased or
canceled, such Global Senior Note shall be returned to or retained and canceled
by the Trustee. At any time prior to such cancellation, if any beneficial
interest in a Global Senior Note is exchanged for Definitive Senior Notes,
redeemed, repurchased or canceled, the principal amount of Senior Notes
represented by such Global Senior Note shall be reduced and an endorsement shall
be made on such Global Senior Note, by the Trustee or the Senior Notes
Custodian, at the direction of the Trustee, to reflect such reduction.
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(i) Obligations with respect to Transfers and Exchanges
of Definitive Senior Notes.
(i) To permit registrations of transfers and
exchanges, the Company shall execute and the Trustee shall
authenticate Definitive Senior Notes and Global Senior Notes
at the Registrar's or co-Registrar's
request.
(ii) No service charge shall be made for any
registration of transfer or exchange, but the Company may
require payment of a sum sufficient to cover any transfer tax,
assessments or similar governmental charge payable in
connection therewith (other than any such transfer taxes,
assessments or similar governmental charge payable upon
exchanges or transfers pursuant to Section 2.2, 2.10, 3.8,
5.14, 10.5 or 12.1).
(iii) Except for a Regulatory Redemption pursuant
to Section 3.2 or upon an order of any Gaming Authority, the
Registrar or co- Registrar shall not be required to register
the transfer of or exchange of (a) any Definitive Senior Note
selected for redemption in whole or in part pursuant to
Article III, except the unredeemed portion of any Definitive
Senior Note being redeemed in part, or (b) any Senior Note for
a period beginning fifteen (15) Business Days before the
mailing of a notice of an offer to repurchase pursuant to
Article XII or Section 5.14 hereof or a notice of the
Company's intent to redeem Senior Notes pursuant to Article
III hereof and ending at the close of business on the day of
such mailing.
Section 2.7 Replacement Senior Notes.
If a mutilated Senior Note is surrendered to the Trustee or if
the Holder of a Senior Note claims and submits an affidavit or other evidence,
satisfactory to the Trustee, to the effect that the Senior Note has been lost,
destroyed or wrongfully taken, the Company shall issue and the Trustee shall
authenticate a replacement Senior Note if the Trustee's requirements are met. If
required by the Trustee or the Company, such Holder must provide an indemnity
bond or other indemnity, sufficient in the judgment of both
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the Company and the Trustee, to protect the Company, the Trustee or any Agent
from any loss that any of them may suffer if a Senior Note is replaced. The
Company may charge such Holder for its reasonable, out-of-pocket expenses in
replacing a Senior Note. Every replacement Senior Note shall be an additional
obligation of the Company.
Section 2.8 Outstanding Senior Notes.
Senior Notes outstanding at any time are all the Senior Notes
that have been authenticated by the Trustee except those canceled by it, those
delivered to it for cancellation, those reductions in the interest in a Global
Senior Note effected by the Trustee hereunder and those otherwise described in
this Section 2.8 as not outstanding. A Senior Note does not cease to be
outstanding because the Company or an Affiliate of the Company holds the Senior
Note, except as provided in Section 2.9.
If a Senior Note is replaced pursuant to Section 2.7 (other
than a mutilated Senior Note surrendered for replacement), it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Senior Note is held by a bona fide purchaser. A mutilated Senior Note
ceases to be outstanding upon surrender of such Senior Note and replacement
thereof pursuant to Section 2.7.
If on a Redemption Date or the Maturity Date the Paying Agent
(other than the Company or an Affiliate of the Company) holds U.S. Legal Tender
or U.S. Government Obligations sufficient to pay all of the principal and
interest due on the Senior Notes payable on that date and payment of the Senior
Notes called for redemption is not otherwise prohibited, then on and after that
date such Senior Notes shall cease to be outstanding and interest on them shall
cease to accrue.
Section 2.9 Treasury Senior Notes.
In determining whether the Holders of the required principal
amount of Senior Notes have concurred in any direction, amendment, supplement,
waiver or consent, Senior Notes owned by the Company, any Guarantor and
Affiliates of the Company or of any Guarantor shall be disregarded, except that,
for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, amendment, supplement, waiver or consent, only
Senior Notes that a
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Trust Officer for the Trustee has actual knowledge are so owned shall be
disregarded.
Section 2.10 Temporary Senior Notes.
Until definitive Senior Notes are ready for delivery, the
Company may prepare, the Guarantors shall endorse and the Trustee shall
authenticate temporary Senior Notes. Temporary Senior Notes shall be
substantially in the form of definitive Senior Notes but may have variations
that the Company reasonably and in good faith considers appropriate for
temporary Senior Notes. Without unreasonable delay, the Company shall prepare,
the Guarantors shall endorse and the Trustee shall authenticate definitive
Senior Notes in exchange for temporary Senior Notes. Until so exchanged, the
temporary Senior Notes shall in all respects be entitled to the same benefits
under this Indenture as permanent Senior Notes authenticated and delivered
hereunder.
Section 2.11 Cancellation.
The Company at any time may deliver Senior Notes to the
Trustee for cancellation. The Registrar and the Paying Agent shall forward to
the Trustee any Senior Notes surrendered to them for transfer, exchange or
payment. The Trustee, or at the direction of the Trustee, the Registrar or the
Paying Agent (other than the Company or an Affiliate of the Company), and no one
else, shall cancel and, at the written direction of the Company, shall destroy
and return to the Company all Senior Notes surrendered for transfer, exchange,
payment or cancellation. Subject to Section 2.7, the Company may not issue new
Senior Notes to replace Senior Notes it has paid or delivered to the Trustee for
cancellation. No Senior Notes shall be authenticated in lieu of or in exchange
for any Senior Notes canceled as provided in this Section 2.11, except as
expressly permitted in the form of Senior Notes and as permitted by this
Indenture.
Section 2.12 Defaulted Interest.
If the Company defaults on a payment of interest on the Senior
Notes, it shall pay the defaulted interest, plus (to the extent lawful) interest
on the defaulted interest, to the persons who are Holders on a Record Date (or
at its option a subsequent special record date) which date shall be the
fifteenth (15th) day next preceding the date fixed by the Company for the
payment of defaulted interest,
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whether or not such day is a Business Day, unless the Trustee fixes another
record date. At least fifteen (15) days before the subsequent special record
date, the Company shall mail to each Holder with a copy to the Trustee a notice
that states the subsequent special record date, the payment date and the amount
of defaulted interest, and interest payable on such defaulted interest, if any,
to be paid.
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ARTICLE III
REDEMPTION
Section 3.1 Right of Redemption.
Redemption of Senior Notes shall be made only in accordance
with this Article III. At its election, the Company may redeem the Senior Notes
in whole or in part, at any time or from time to time on or after April 15,
2000, at the Redemption Prices specified under the caption "Redemption," in the
forms of Note attached as Exhibit A hereto, plus accrued and unpaid interest to
the Redemption Date. Except as provided in this paragraph, Section 3.2 and
pursuant to the Senior Notes, the Senior Notes may not otherwise be redeemed at
the option of the Company.
Section 3.2 Regulatory Redemption Pursuant to Gaming Laws.
Notwithstanding any other provision of this Indenture, if the
ownership of any of the Senior Notes by any person or entity will preclude,
interfere with, threaten or delay the issuance, maintenance, existence or
reinstatement of any gaming or liquor license, permit or approval, or result in
the imposition of burdensome terms or conditions on such license, permit or
approval, as determined by any Governmental Authority or the Board of Directors
of the Company (including, without limitation, such Holder failing to qualify or
to be found suitable under applicable Gaming Laws), such Holder shall be
obligated, at the request of the Company, to dispose of such Holder's Senior
Notes within thirty (30) days (or such other time period required by any Gaming
Authority) after receipt of notice of such determination by any Governmental
Authority or the Board of Directors (in which event the Company shall have no
obligation to pay any interest to such Holder), and if such Senior Notes are not
so disposed of within the required period, the Company shall have the right to
redeem such Holder's Senior Notes at a redemption price equal to the lowest of
(i) the price at which such Holder or beneficial owner acquired such Senior
Notes, without accrued interest, if any, (ii) the principal amount of such
Senior Notes, without accrued interest, if any, and (iii) the Current Market
Price of such Senior Notes on such redemption date, without accrued interest, if
any. Any Holder or beneficial owner of a Senior Note required to qualify or be
found suitable under applicable Gaming Laws must pay all investigative fees and
costs of the Gaming Authorities in connection with such application therefor.
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Section 3.3 Notices to Trustee.
If the Company elects to redeem Senior Notes pursuant to
Article III, it shall notify the Trustee in writing of the date on which the
Senior Notes are to be redeemed ("Redemption Date") and the principal amount of
Senior Notes to be redeemed and whether it wants the Trustee to give notice of
redemption to the Holders.
If the Company elects to reduce the principal amount of Senior
Notes to be redeemed pursuant to the optional redemption provisions of the
Senior Notes by crediting against any such redemption Senior Notes it has not
previously delivered to the Trustee for cancellation, it shall so notify the
Trustee of the amount of the reduction and deliver such Senior Notes with such
notice.
The Company shall give each notice to the Trustee provided for
in this Section 3.3 at least forty (40) days before the Redemption Date (unless
a shorter notice shall be required by applicable Gaming Laws or by order of any
Gaming Authority).
Section 3.4 Selection of Senior Notes to Be Redeemed.
If less than all of the Senior Notes are to be redeemed, the
particular Senior Notes to be redeemed shall be selected by the Trustee by lot
or by such other method as the Trustee shall determine to be fair and
appropriate and in such manner as complies with any applicable legal and stock
exchange requirements.
The Trustee shall make the selection from the Senior Notes
outstanding and not previously called for redemption and shall promptly notify
the Company in writing of the Senior Notes selected for redemption and, in the
case of any Senior Note selected for partial redemption, the principal amount
thereof to be redeemed. Senior Notes in denominations of one thousand dollars
($1,000) may be redeemed only in whole. The Trustee may select for redemption
portions (equal to one thousand dollars ($1,000) or any integral multiple
thereof) of the principal of Senior Notes that have denominations larger than
one thousand dollars ($1,000). Provisions of this Indenture that apply to Senior
Notes called for redemption also apply to portions of Senior Notes called for
redemption.
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Section 3.5 Notice of Redemption.
At least thirty (30) days but not more than sixty (60) days
before a Redemption Date, the Company shall mail a notice of redemption by first
class mail, postage prepaid, to each Holder whose Senior Notes are to be
redeemed (unless a shorter notice shall be required by any Governmental
Authority) at such Holder's last address as then shown upon the Company's
registry books. At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. Each notice for
redemption shall identify the Senior Notes to be redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price, including the amount of
accrued and unpaid interest to be paid upon such redemption;
(3) the name and address of the Paying Agent;
(4) that Senior Notes called for redemption must be
surrendered to the Paying Agent at the address specified in such notice
to collect the Redemption Price;
(5) that, unless (a) the
Company defaults in its obligation to deposit U.S. Legal Tender with
the Paying Agent in accordance with Section 3.7 hereof or (b) such
redemption payment is prevented for any reason, interest on Senior
Notes called for redemption ceases to accrue on and after the
Redemption Date and the only remaining right of the Holders of such
Senior Notes is to receive payment of the Redemption Price, including
accrued and unpaid interest, upon surrender to the Paying Agent of the
Senior Notes called for redemption and to be redeemed;
(6) if any Senior Note is being redeemed in part,
the portion of the principal amount, equal to one thousand dollars
($1,000) or any integral multiple thereof, of such Senior Note to be
redeemed and that, after the Redemption Date, and upon surrender of
such Senior Note, a new Senior
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Note or Senior Notes in aggregate principal amount equal to the
unredeemed portion thereof will be issued;
(7) if less than all the Senior Notes are to be
redeemed, the identification of the particular Senior Notes (or
portion thereof) to be redeemed, as well as the aggregate principal
amount of such Senior Notes to be redeemed and the aggregate principal
amount of Senior Notes to be outstanding after such partial redemption;
(8) the CUSIP number of the Senior Notes to be
redeemed; and
(9) that the notice is being sent pursuant to this
Section 3.5 and pursuant to the optional redemption provisions
of the Senior Notes.
Section 3.6 Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section
3.5, Senior Notes called for redemption become due and payable on the Redemption
Date and at the Redemption Price, including accrued and unpaid interest. Upon
surrender to the Trustee or Paying Agent, such Senior Notes called for
redemption shall be paid at the Redemption Price, including interest, if any,
accrued to and unpaid on the Redemption Date; provided, however, that if the
Redemption Date is after a regular Record Date and on or prior to the Interest
Payment Date, the accrued interest shall be payable to the Holder of the
redeemed Senior Notes registered on the relevant Record Date; and provided,
further, that if a Redemption Date is a Legal Holiday, payment shall be made on
the next succeeding Business Day and no interest shall accrue for the period
from such Redemption Date to such succeeding Business Day.
Section 3.7 Effect of Deposit by the Company with the Paying Agent.
On or before the Redemption Date, the Company shall deposit
with the Paying Agent (other than the Company or an Affiliate of the Company)
U.S. Legal Tender sufficient to pay the Redemption Price of, including accrued
and unpaid interest on, all Senior Notes to be redeemed on such Redemption Date
(other than Senior Notes or portions thereof called for
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redemption on that date that have been delivered by the Company to the Trustee
for cancellation). The Paying Agent shall promptly return to the Company any
U.S. Legal Tender so deposited that is not required for that purpose upon the
written request of the Company.
If the Company complies with the preceding paragraph and the
other provisions of this Article III and payment of the Senior Notes called for
redemption is not prevented for any reason, interest on the Senior Notes to be
redeemed will cease to accrue on the applicable Redemption Date, whether or not
such Senior Notes are presented for payment. Notwithstanding anything herein to
the contrary, if any Senior Note surrendered for redemption in the manner
provided in the Senior Notes shall not be so paid upon surrender for redemption
because of the failure of the Company to comply with the preceding paragraph and
the other provisions of this Article III, interest shall continue to accrue and
be paid from the Redemption Date until such payment is made on the unpaid
principal, and, to the extent lawful, on any interest not paid on such unpaid
principal, in each case at the rate and in the manner provided in Section 5.1
hereof and the Senior Notes.
Section 3.8 Senior Notes Redeemed in Part.
Upon surrender of a Senior Note that is to be redeemed in
part, the Company shall execute and the Trustee shall authenticate and deliver
to the Holder, without service charge, a new Senior Note or Senior Notes equal
in principal amount to the unredeemed portion of the Senior Note surrendered.
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ARTICLE IV
[INTENTIONALLY OMITTED]
ARTICLE V
COVENANTS
Section 5.1 Payment of Senior Notes.
The Company shall pay the principal of and interest on the
Senior Notes on the dates and in the manner provided in the Senior Notes and
this Indenture. An installment of principal of or interest on the Senior Notes
shall be considered paid on the date it is due if the Trustee or Paying Agent
(other than the Company or an Affiliate of the Company) holds for the benefit of
the Holders, on or before 10:00 a.m. New York City time on that date, in
immediately payable funds deposited and designated for and sufficient to pay the
installment. The Company shall pay interest on overdue principal and on overdue
installments of interest at the rate specified in the Senior Notes compounded
semi-annually, to the extent lawful.
Section 5.2 Maintenance of Office or Agency.
The Company and the Guarantors shall maintain in the Borough
of Manhattan, The City of New York, an office or agency where Senior Notes may
be presented or surrendered for payment, where Senior Notes may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Company and the Guarantors in respect of the Senior Notes and this
Indenture may be served. The Company and the Guarantors shall give prompt
written notice to the Trustee of the location, and any change in the location,
of such office or agency. If at any time the Company and the Guarantors shall
fail to maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or serviced at the address of the Trustee set forth in
Section 14.2.
The Company and the Guarantors may also from time to time
designate one or more other offices or agencies where the Senior Notes may be
presented or surrendered for any or all such purposes and may from time to time
rescind such designations; provided, however, that no such designation or
rescission shall in any manner relieve the Company and the Guarantors of their
obligation to maintain an office or agency in the
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Borough of Manhattan, The City of New York, for such purposes. The Company and
the Guarantors shall give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of any such other
office or agency. The Company and the Guarantors hereby initially designate the
Corporate Trust Office of the Trustee set forth in Section 14.2 as such office.
Section 5.3 Limitation on Restricted Payments.
The Company will not, and will not permit any of its
Subsidiaries to, directly or indirectly, make any Restricted Payment if,
immediately prior thereto and after giving effect thereto on a pro forma basis
(1) a Default or an Event of Default shall have occurred and be continuing, (2)
the Company could not incur at least one dollar ($1.00) of additional
Subordinated Indebtedness pursuant to clause (ii) of paragraph (a) of Section
5.11 hereof or (3) the aggregate amount of all Restricted Payments made by the
Company and its Subsidiaries, including after giving pro forma effect to such
proposed Restricted Payment, from and after the Issue Date, would exceed the sum
of (a) 50% of the aggregate Adjusted Consolidated Net Income of the Company for
the period (taken as one accounting period) commencing on the first day of the
first full fiscal quarter that preceded the Issue Date, to and including the
last day of the latest fiscal quarter ended immediately prior to the date of
each such calculation for which financial statements are available (or, in the
event Adjusted Consolidated Net Income for such period is a deficit, then minus
100% of such deficit), plus (b) the aggregate Net Cash Proceeds received by the
Company as a capital contribution after the Issue Date or from the sale of the
Company's Qualified Capital Stock (other than to a Subsidiary of the Company and
other than in connection with a Qualified Exchange) after the Issue Date.
The foregoing clauses (2) and (3) of the immediately preceding
paragraph will not prohibit (t) Investments in a Maryland Heights Joint Venture
Entity in an amount not in excess of sixty-five million dollars ($65,000,000),
(u) Investments in one or more persons in an amount not in excess of forty-five
million dollars ($45,000,000) in the aggregate at any one time outstanding for
all such Investments made in any one or more persons in reliance upon this
clause (u), for the purpose of developing, constructing or acquiring (i) a
Casino or Casinos or, if applicable, any Related Businesses in connection with
such Casino
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or Casinos, or (ii) a Related Business to be used primarily in connection with
an existing Casino or Casinos in which the Company or its Subsidiaries have at
least a fifty percent (50%) ownership interest, (v) in the case of any
Subsidiary, pro rata distributions on its Capital Stock, (w) the payment of any
dividend on or redemption of Qualified Capital Stock within sixty (60) days
after the date of its declaration or authorization, respectively, if such
dividend or redemption could have been made on the date of such declaration or
authorization, respectively, in compliance with the foregoing provisions, (x)
the redemption or repurchase of any Capital Stock or Indebtedness of the Company
or any of its Subsidiaries (other than any Capital Stock or Indebtedness that is
held or beneficially owned by any Excluded Person) required by the Regulatory
Redemption provisions contained in Section 3.2 hereof (or any substantially
comparable provision governing other Indebtedness), or by any Governmental
Authority or the Board of Directors of the Company if, in any such case, the
ownership of such Capital Stock or Indebtedness by the holder thereof will
preclude, interfere with, threaten or delay the issuance, maintenance, existence
or reinstatement of any gaming or liquor license, permit or approval, or result
in the imposition of burdensome terms or conditions on such license, permit or
approval, (y) a Qualified Exchange or (z) other Restricted Payments which in the
aggregate do not exceed ten million dollars ($10,000,000) for all such
Restricted Payments permitted by this clause (z) taken together. The full amount
of any Restricted Payment made pursuant to clause (w) or (x), however, will be
deducted in the calculation of the aggregate amount of Restricted Payments
available to be made referred to in clause (3) of the immediately preceding
paragraph.
Section 5.4 Corporate Existence.
Subject to Article VI, the Company and the Guarantors shall do
or cause to be done all things necessary to preserve and keep in full force and
effect their corporate existence and the corporate or other existence of each of
their Subsidiaries in accordance with the respective organizational documents of
each of them and the rights (charter and statutory) and corporate franchises of
the Company and their Guarantors and each of their Subsidiaries; provided,
however, that neither the Company nor any of the Guarantors shall be required to
preserve, with respect to itself, any right or franchise, and with respect to
any of their Subsidiaries, any such existence, right or
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franchise, if (a) the Board of Directors of the Company shall determine
reasonably and in good faith that the preservation thereof is no longer
desirable in the conduct of the business of the Company and (b) the loss thereof
is not adverse in any material respect to the Holders.
Section 5.5 Payment of Taxes and Other Claims.
The Company and the Guarantors shall, and shall cause each of
their Subsidiaries to, pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (i) all taxes, assessments and
governmental charges (including withholding taxes and any penalties, interest
and additions to taxes) levied or imposed upon the Company, any Guarantor or any
of their Subsidiaries or properties and assets of the Company, any Guarantor or
any of their Subsidiaries and (ii) all lawful claims, whether for labor,
materials, supplies, services or anything else, that have become due and payable
and that by law have or may become a Lien upon the property and assets of the
Company, any Guarantor or any of their Subsidiaries; provided, however, that
neither the Company nor any Guarantor shall be required to pay or discharge or
cause to be paid or discharged any such tax, assessment, charge or claim whose
amount, applicability or validity is being contested in good faith by
appropriate proceedings and for which disputed amounts adequate reserves have
been established in accordance with GAAP.
Section 5.6 Maintenance of Insurance.
From and at all times after the Issue Date, the Company and
its Subsidiaries shall have in effect customary property and comprehensive
general liability insurance and (as applicable) brownwater coverage, in each
case on terms and in an amount reasonably sufficient (taking into account, among
other factors, the creditworthiness of the insurer) to avoid a material adverse
change in the financial condition or results of operation of the Company and its
Subsidiaries, taken as a whole.
Section 5.7 Compliance Certificates; Notice of Default.
(a) The Company shall deliver to the Trustee
within one hundred twenty (120) days after the end of each fiscal year an
Officers' Certificate complying (whether or not required) with Section 314(a)(4)
of the
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TIA and stating that a review of its activities and the activities of its
Subsidiaries during the preceding fiscal year has been made under the
supervision of the signing Officers with a view to determining whether the
Company has kept, observed, performed and fulfilled its obligations under this
Indenture and further stating, as to each such Officer signing such certificate,
whether or not the signer knows of any failure by the Company, any Guarantor, or
any Subsidiary of the Company or any Guarantor to comply with any conditions or
covenants in this Indenture and, if such signer does know of such a failure to
comply, the certificate shall describe such failure with particularity. The
Officers' Certificate shall also notify the Trustee should the relevant fiscal
year end on any date other than the current fiscal year-end date.
(b) So long as not contrary to the then
current recommendation of the American Institute of Certified Public
Accountants, the Company shall deliver to the Trustee within one hundred twenty
(120) days after the end of each of its fiscal years a written report of a firm
of independent certified public accountants with an established national
reputation stating that in conducting their audit for such fiscal year, nothing
has come to their attention that caused them to believe that the Company or any
Subsidiary of the Company was not in compliance with the provisions set forth in
Section 5.3, 5.11 or 5.14 of this Indenture.
(c) The Company shall, so long as any of the
Senior Notes are outstanding, deliver to the Trustee, promptly upon becoming
aware of any Default or Event of Default under this Indenture, an Officers'
Certificate specifying such Default or Event of Default and what action the
Company is taking or proposes to take with respect thereto. The Trustee shall
not be deemed to have knowledge of a Default or an Event of Default unless one
of its trust officers receives notice of the Default giving rise thereto from
the Company or any of the Holders.
Section 5.8 Reports.
Whether or not the Company is subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, the Company shall
deliver to the Trustee and to each Holder, within fifteen (15) days after it is
or would have been required to file such with the SEC, annual and quarterly
consolidated financial statements substantially equivalent to financial
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statements that would have been included in reports filed with the SEC if the
Company was subject to the requirements of Section 13 or 15(d) of the Exchange
Act, including, with respect to annual information only, a report thereon by the
Company's independent certified public accountants as such would be required in
such reports to the SEC and, in each case, together with a management's
discussion and analysis of financial condition and results of operations as such
would be so required. 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 such reports,
documents and other information as it would be required to file if it were
subject to the reporting requirements of Section 13 or 15(d) of the Exchange
Act.
Section 5.9 Waiver of Stay, Extension or Usury Laws.
The Company and each Guarantor covenants that it will not at
any time insist upon, plead or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law or any usury law or other law
wherever enacted that would prohibit or forgive the Company or any Guarantor
from paying all or any portion of the principal of or interest on the Senior
Notes as contemplated herein, wherever enacted, now or at any time hereafter in
force, or that may affect the covenants or the performance of this Indenture,
and the Company and each Guarantor hereby expressly waives all benefit and
advantage of any such law insofar as such law applies to the Senior Notes and
covenant that it shall not hinder, delay or impede the execution of any power
herein granted to the Trustee, but will suffer and permit the execution of every
such power as though no such law had been enacted.
Section 5.10 Limitation on Transactions with Affiliates.
Neither the Company nor any of its Subsidiaries or Unrestricted
Subsidiaries shall, after the Issue Date, enter into any contract, arrangement,
understanding or transaction with an Affiliate (an "Affiliate Transaction") or
series of related Affiliate Transactions involving consideration to either party
in excess of five million dollars ($5,000,000) except for transactions approved
by a majority of the disinterested (as to such transaction) members of the Board
of Directors of the Company and evidenced by an Officers' Certificate addressed
and delivered to the
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Trustee stating that such Affiliate Transaction has been so approved and is made
in good faith and that the terms of such Affiliate Transaction are fair and
reasonable to the Company and such Subsidiaries and Unrestricted Subsidiaries,
as the case may be; provided, however, that with respect to any Affiliate
Transaction (including any series of related transactions) involving
consideration to either party in excess of ten million dollars ($10,000,000),
the Company also must, prior to the consummation thereof, obtain a favorable
written opinion as to the fairness of such transaction to the Company and such
Subsidiaries and Unrestricted Subsidiaries, as the case may be, from a financial
point of view from an independent investment banking firm of national
reputation. Notwithstanding the foregoing, "Affiliate Transaction" shall not
include: (a) payments of reasonable and customary compensation, directors' fees
and indemnities of directors, officers and employees, (b) payments under the
Griffin License as in effect on the Issue Date, (c) related party transactions
described under "Certain Transactions" in the Company's Proxy Statement for its
1994 Annual Meeting of Stockholders as in effect on the Issue Date, (d)
Restricted Payments permitted under Section 5.3 of this Indenture, (e)
transactions solely between or among the Company and one or more wholly-owned
Guarantors or between or among one or more wholly-owned Guarantors, (f) the
making of any Investment in SIRCC described in clauses (a), (b) or (c) of the
definition of "Investment" or the making of any capital contribution by the
Company to SIRCC; provided, however, that this clause (f) shall cease to be
applicable at such time as SIRCC becomes a Guarantor, and (g) any employment
agreement entered into by the Company or any of its Subsidiaries in the ordinary
course of business and consistent with the past practice of the Company or such
Subsidiary.
Section 5.11 Limitation on Incurrence of Additional Indebtedness and
Disqualified Capital Stock.
Except as set forth below, neither the Company nor any of its
Subsidiaries will, directly or indirectly, issue, assume, guarantee, incur,
become directly or indirectly liable with respect to (including as a result of
an acquisition, merger or consolidation), extend the maturity of, or otherwise
become responsible for, contingently or otherwise (individually and
collectively, to "incur" or, as appropriate, an "incurrence"), any Indebtedness
or any Disqualified Capital Stock from and after the Issue
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Date. Notwithstanding the foregoing:
(a) The Company and the Guarantors may incur
Indebtedness or Disqualified Capital Stock if (i) no Default or Event of Default
shall have occurred and be continuing at the time of, or would occur after
giving effect on a pro forma basis to, such incurrence of Indebtedness or
Disqualified Capital Stock and (ii) on the date of such incurrence (the
"Incurrence Date"), the Consolidated Coverage Ratio of the Company for the
Reference Period immediately preceding the Incurrence Date, after giving effect
on a pro forma basis to such incurrence of such Indebtedness or Disqualified
Capital Stock, would be at least 3.0 to 1 (or 2.5 to 1 in the case of the
incurrence of Subordinated Indebtedness or Disqualified Capital Stock);
(b) The Company and the Guarantors may incur
Indebtedness evidenced by the Senior Notes (and the Exchange Senior Notes) and
represented by this Indenture up to the amounts specified herein as of the Issue
Date and the Guarantees hereof;
(c) The Company and its Subsidiaries may
incur Purchase Money Indebtedness to finance the purchase of land, buildings,
furniture, fixtures or equipment for any Casino owned and operated by the
Company that has at least two hundred (200) slot machines and ten (10) table
games; provided, however, that the aggregate principal amount of such
Indebtedness outstanding at any time pursuant to this paragraph (c) (including
any Indebtedness issued to refinance, replace or refund such Indebtedness) with
respect to any such Casino shall not exceed fifteen million dollars
($15,000,000); provided, further, that until such time as SIRCC shall become a
Guarantor, it shall only be entitled to incur such Purchase Money Indebtedness
with respect to its one, existing Casino at the Metropolis Complex;
(d) The Company and its Subsidiaries may
incur Refinancing Indebtedness with respect to any Indebtedness or Disqualified
Capital Stock, as applicable, described in clauses (a), (b) and (c) of this
Section 5.11; provided, however, that in the case of the refinancing of
Indebtedness described in clause (c), such Refinancing Indebtedness is
Non-recourse Indebtedness as to any assets other than with respect to the assets
acquired with the Indebtedness refinanced, replaced or refunded;
(e) The Company and the Guarantors may incur
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Indebtedness (in addition to any Indebtedness incurred in accordance with any
other provision of this Section 5.11) in an aggregate amount outstanding at any
time (including any Indebtedness issued to refinance, replace, or refund such
Indebtedness) of up to ten million dollars ($10,000,000), minus the amount of
any Indebtedness incurred pursuant to this clause (e) retired with Net Cash
Proceeds from any Asset Sale or Event of Loss or assumed by a transferee in an
Asset Sale;
(f) The Company and its Subsidiaries may
incur Indebtedness pursuant to the Credit Agreement on or after the Issue Date
up to an aggregate amount outstanding (including any Indebtedness issued to
refinance, refund or replace such Indebtedness) at any time equal to the sum of
(i) one hundred twenty million dollars ($120,000,000) minus the amount of any
Indebtedness incurred pursuant to this clause (f) retired with the Net Cash
Proceeds from any Asset Sale or Event of Loss or assumed by a transferee in an
Asset Sale, plus (ii) such additional amounts as may be deemed to be outstanding
in the form of Interest Swap and Hedging Obligations with lenders party to the
Credit Agreement; provided, however, that the maximum aggregate amount permitted
to be outstanding under this paragraph (f) shall not be deemed to limit
additional Indebtedness under the Credit Agreement to the extent such additional
Indebtedness is permitted pursuant to paragraph (a) hereof; and
(g) Permitted Indebtedness.
In the event that the Company incurs Indebtedness, or any
Subsidiary incurs Indebtedness or Disqualified Capital Stock, to any
wholly-owned Subsidiary pursuant to clause (b) of the definition of Permitted
Indebtedness, and such latter Subsidiary thereafter ceases to remain a
"Subsidiary" as defined herein, the aggregate outstanding amount of such
Indebtedness incurred by the Company, or of such Indebtedness or Disqualified
Capital Stock incurred by such Subsidiary, to the Subsidiary that ceases to so
remain a "Subsidiary" shall be deemed to be Indebtedness incurred by the Company
or such Subsidiary at the time of such change in Subsidiary status. Indebtedness
and Disqualified Capital Stock issued by any person that is not a Subsidiary,
which Indebtedness or Disqualified Capital Stock is outstanding at the time such
person becomes a Subsidiary of the Company, or is merged into or consolidated
with the Company or a Subsidiary of the Company, shall be deemed to have been
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incurred at the time such person becomes a Subsidiary of the Company, or is
merged into or consolidated with the Company or a Subsidiary of the Company. A
guarantee by the Company or a Subsidiary of the Company of Indebtedness incurred
by the Company or a Subsidiary is not considered a separate incurrence for
purposes of this covenant.
Section 5.12 Limitation on Dividends and Other Payment Restrictions
Affecting Subsidiaries.
Neither the Company nor any of its Subsidiaries will, directly
or indirectly, create, assume or suffer to exist any consensual encumbrance or
restriction on the ability of any Subsidiary to pay dividends or make other
distributions to, or to pay any obligation (including, without limitation, in
respect of a Guarantee) to, or to otherwise transfer assets or make or pay loans
or advances to, the Company or any of its Subsidiaries, except (a) reasonable
and customary provisions restricting subletting or assignment of any lease
entered into in the ordinary course of business, consistent with industry
practices, (b) restrictions imposed by applicable law, (c) restrictions under
any Acquired Indebtedness or any agreement relating to any property, asset or
business acquired by the Company or any of its Subsidiaries, which restrictions
existed at the time of acquisition, were not put in place in connection with or
in anticipation of such acquisition and are not applicable to any person, other
than the person acquired or to any property, asset or business other than the
property, asset and business so acquired, (d) restrictions with respect solely
to a Subsidiary of the Company imposed pursuant to a binding agreement (subject
only to reasonable and customary closing conditions and termination provisions)
that has been entered into for the sale or disposition of all or substantially
all of the Capital Stock or assets to be sold of such Subsidiary, provided such
restrictions apply solely to the Capital Stock or assets to be sold of such
Subsidiary, and such sale or disposition is permitted under Section 5.14, (e)
reasonable and customary restrictions on transfers of all collateral imposed in
connection with Liens securing Indebtedness, to the extent such Liens are
permitted by Section 5.13 and to the extent such Indebtedness is permitted by
Section 5.11, and (f) replacements of restrictions imposed pursuant to clause
(c) and this clause (f) that are not more restrictive than those being replaced
and do not apply to any additional property or assets.
Section 5.13 Liens.
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Neither the Company nor any of its Subsidiaries will, directly
or indirectly, create, grant, assume, incur or suffer to exist any Lien upon any
of its property or assets, whether now owned or hereafter acquired, or any
income or profits therefrom, securing Indebtedness, other than (i) Permitted
Liens; (ii) Liens securing Indebtedness incurred in accordance with clause (c)
of Section 5.11; (iii) Liens securing Refinancing Indebtedness in accordance
with clause (d) of Section 5.11, but only if such Liens have the same relative
priority and do not extend to property or assets permitted to be subject to the
Liens securing the Indebtedness being refinanced; (iv) Liens securing
Indebtedness incurred in accordance with clause (f) of Section 5.11 and Liens
securing any increases in the amount of Indebtedness under the Credit Agreement
above the amount of Indebtedness permitted under such clause (f), but only to
the extent that the increase in such Indebtedness is permitted under clause (a)
of Section 5.11 at the time of the incurrence of such additional Indebtedness;
(v) a Lien on the Lake Charles Star Riverboat to secure Indebtedness to the
seller of the Interests in connection with the purchase of such Interests by the
Company's Subsidiaries in a principal amount not to exceed ten million dollars
($10,000,000) and a maturity date no later than December 31, 1995; and (vi)
Liens in favor of the Company. Notwithstanding the foregoing, the Company may
not and may not permit any Subsidiary to, directly or indirectly, create, grant,
assume, incur or suffer to exist any Lien (other than Permitted Liens) upon any
of its property or assets, whether now owned or hereafter acquired, securing
Subordinated Indebtedness.
Section 5.14 Limitation on Sale of Assets and Subsidiary Stock; Event
of Loss.
(a) Other than upon an Event of Loss,
neither the Company nor any of its Subsidiaries will, in one or a series of
related transactions, convey, sell, transfer, assign or otherwise dispose of,
directly or indirectly, any of its property, business or assets, including,
without limitation, upon any sale or other transfer or issuance of any Capital
Stock of any Subsidiary or any sale and leaseback transaction, whether by the
Company or any such Subsidiary, or through the issuance, sale or transfer of
Capital Stock by a Subsidiary (an "Asset Sale"), with an aggregate fair market
value in excess of seven million five hundred thousand dollars ($7,500,000)
unless (1) within three hundred ten (310) days after the date of such Asset
Sale, the Asset Sale Offer Amount (as defined
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below), or so much thereof that is required pursuant to the provisions described
below, is applied to the repurchase of the Senior Notes with U.S. Legal Tender
pursuant to an irrevocable, unconditional offer (an "Asset Sale Offer") to
repurchase Senior Notes at a purchase price (the "Asset Sale Offer Price") of
one hundred percent (100%) of principal amount, together with accrued interest
to the date of payment (the "Asset Sale Purchase Date"), (2) at least eighty
percent (80%) of the consideration for such conveyance, sale, transfer or other
disposition or issuance (other than assumption of trade indebtedness) consists
of U.S. Legal Tender or Cash Equivalents; provided, however, that for purposes
of this clause (2), the assumption of Indebtedness of the Company or a
Subsidiary that is Pari Passu with the Senior Notes shall be deemed to be Cash
Equivalents if the Company, such Subsidiary and all other Subsidiaries of the
Company, to the extent any of the foregoing are liable with respect to such
Indebtedness, are expressly released from all liability for such Indebtedness by
the holder thereof in connection with such Asset Sale, and any securities or
notes received by the Company or such Subsidiary from such transferee that are
converted by the Company or such Subsidiary into U.S. Legal Tender or Cash
Equivalents within ten (10) Business Days of the date of such Asset Sale shall
be deemed to be Cash Equivalents, (3) no Default or Event of Default shall have
occurred and be continuing at the time of, or would occur after giving effect,
on a pro forma basis, to, such Asset Sale and (4) the Board of Directors of the
Company determines in good faith that the Company or such Subsidiary, as
applicable, receives not less than fair market value for such Asset Sale. The
"Asset Sale Offer Amount" shall mean, with respect to any Asset Sale, the
product of (A)(1) the Net Cash Proceeds of such Asset Sale, minus (2) the sum of
the amounts that, within two hundred seventy (270) days of such Asset Sale, are
(i) invested in assets or property that is part of a Related Business of the
Company or one of its Subsidiaries, (ii) used to retire Indebtedness outstanding
under the Credit Agreement if, concurrently therewith, the amount of such
Indebtedness permitted pursuant to paragraph (f) of Section 5.11 is permanently
reduced by the amount so retired (and any related revolving or multiple advance
arrangement is permanently reduced by a corresponding amount), or (iii) used to
retire Indebtedness secured by the assets sold (if required by its terms as a
result of the applicable Asset Sale), and any related revolving or multiple
advance arrangement is permanently reduced by a corresponding amount, and pay
related fees and
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reasonable expenses, multiplied by (B) a fraction, the numerator of which is the
aggregate principal amount of the Senior Notes outstanding on the date of such
Asset Sale and the denominator of which is the sum of (1) the aggregate
principal amount of the Senior Notes outstanding on the date of such Asset Sale,
plus (2) the aggregate principal amount of any other Indebtedness of the Company
or its Subsidiaries existing on the date of such Asset Sale that (w) is not
retired under clause (A)(2)(ii) or (iii) of this sentence, (x) is Pari Passu
with the Senior Notes, (y) is not assumed by the transferee in such Asset Sale
with a concurrent release in full of the Company and its Subsidiaries therefrom,
and (z) pursuant to the instruments relating thereto, is required to be repaid
with the proceeds from such Asset Sale. An Asset Sale Offer may be deferred
until the accumulated Asset Sale Offer Amounts from Asset Sales exceed ten
million dollars ($10,000,000). Notwithstanding the foregoing provisions of this
paragraph:
(i) the Company and its Subsidiaries may in the
ordinary course of business, convey, sell, lease, transfer,
assign or otherwise dispose of assets acquired and held for
resale in the ordinary course of business;
(ii) the Company and its Subsidiaries may convey,
sell, lease, transfer or otherwise dispose of assets pursuant
to and in accordance with the limitation on mergers,
consolidations and sales of assets provisions in Section 6.1;
(iii) the Company and its Subsidiaries may sell or
dispose of damaged, worn out or other obsolete property in the
ordinary course of business so long as such property is no
longer necessary for the proper conduct of the business of the
Company or such Subsidiary, as applicable; and
(iv) the Company and its Subsidiaries may convey,
sell, transfer, assign or otherwise dispose of assets to the
Company or any of its wholly-owned Subsidiaries.
Upon an Event of Loss incurred by the Company
or any of its Subsidiaries resulting in Net Cash Proceeds of more than
seven million five hundred thousand dollars ($7,500,000), the Company shall make
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an offer (an "Event of Loss Offer"), within three hundred ten (310) days after
such Event of Loss, to purchase for U.S. Legal Tender at a purchase price (the
"Event of Loss Offer Price") of one hundred percent (100%) of principal amount,
together with accrued interest to the date of payment (the "Event of Loss
Purchase Date"), that principal amount of Senior Notes equal to the "Event of
Loss Offer Amount," which shall mean, with respect to any Event of Loss, the
product of (A)(1) the Net Cash Proceeds from such Event of Loss, minus (2) the
sum of the amounts that, within two hundred seventy (270) days after such Event
of Loss, are (i) invested in assets or property that is part of a Related
Business of the Company or one of its Subsidiaries, (ii) used to retire
Indebtedness outstanding under the Credit Agreement if, concurrently therewith,
the amount of such Indebtedness permitted pursuant to paragraph (f) of Section
5.11 is permanently reduced by the amount so retired (and any related revolving
or multiple advance arrangement is permanently reduced by a corresponding
amount), or (iii) used to retire Indebtedness secured by the assets to which
such Event of Loss relates (if required by its terms as a result of the
applicable Event of Loss) and any related revolving or multiple advance
arrangement is permanently reduced by a corresponding amount, and pay related
fees and reasonable expenses, multiplied by (B) a fraction, the numerator of
which is the aggregate principal amount of the Senior Notes outstanding on the
date of such Event of Loss and the denominator of which is the sum of (1) the
aggregated principal amount of the Senior Notes outstanding on the date of such
Event of Loss, plus (2) the aggregate principal amount of any other Indebtedness
of the Company or its Subsidiaries existing on the date of such Event of Loss
that is not retired under clause (A)(2)(ii) or (iii) of this sentence, (x) is
Pari Passu with the Senior Notes and, pursuant to the instruments relating
thereto, is required to be repaid with the proceeds of such Event of Loss. An
Event of Loss Offer may be deferred until the accumulated Event of Loss Offer
Amounts of all Events of Loss exceed ten million dollars ($10,000,000).
(b) For the purposes of this Section 5.14,
"Minimum Accumulation Date" means each date on which the accumulated Asset Sale
Offer Amounts or accumulated Event of Loss Offer Amounts, as applicable, exceed
ten million dollars ($10,000,000). Not later than ten (10) Business Days after
each Minimum Accumulation Date, the Company shall commence an Asset Sale Offer
or Event of Loss Offer, as applicable, to the Holders to purchase,
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on a pro rata basis, for U.S. Legal Tender, Senior Notes having a principal
amount equal to the accumulated Asset Sale Offer Amount or Event of Loss Offer
Amount, as applicable. Notice of an Asset Sale Offer or Event of Loss Offer, as
applicable, shall be sent twenty (20) Business Days prior to the close of
business on the Asset Sale Put Date or Event of Loss Put Date (each as defined
below), as applicable, by first-class mail, by the Company to each Holder at its
registered address, with a copy to the Trustee. Each Asset Sale Offer and Event
of Loss Offer shall remain open for twenty (20) Business Days following its
commencement and no longer, except to the extent that a longer period is
required by applicable law. The notice to the Holders shall contain all
information, instructions and materials required by applicable law or otherwise
material to such Holders' decision to tender Senior Notes pursuant to the Asset
Sale Offer or Event of Loss Offer. The notice, which, to the extent consistent
with this Indenture, shall govern the terms of an Asset Sale Offer or Event of
Loss Offer, as applicable, shall state that:
(1) the Asset Sale Offer or Event of Loss Offer,
as applicable, is being made pursuant to such notice and this
Section 5.14;
(2) the Asset Sale Offer Amount or the Event of
Loss Offer Amount, as applicable, the Asset Sale Offer Price or Event
of Loss Offer Price, as applicable (including the amount of accrued
and unpaid interest), the Asset Sale Put Date or Event of Loss Put
Date, as applicable (which Asset Sale Put Date or Event of Loss Put
Date shall be on or prior to thirty (30) Business Days following the
Minimum Accumulation Date);
(3) any Senior Note or portion thereof not
tendered or accepted for payment will continue to accrue interest if
interest is then accruing;
(4) unless the Company defaults in depositing U.S.
Legal Tender with the Paying Agent (which may not for purposes of this
Section 5.14, notwithstanding anything in this Indenture to the
contrary, be the Company or any Affiliate of the Company) in
accordance with the last paragraph of this clause (b), any
Senior
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Note, or portion thereof, accepted for payment pursuant to an Asset
Sale Offer or Event of Loss Offer, as applicable, shall cease to accrue
interest after the Asset Sale Purchase Date or Event of Loss Purchase
Date, as applicable;
(5) Holders electing to have a Senior Note,
or portion thereof, purchased pursuant to an Asset Sale Offer
or Event of Loss Offer, as applicable, will be required to
surrender their Senior Note, with the form entitled "Option of Holder
to Elect Purchase" on the reverse of the Senior Note completed, to the
Paying Agent (which may not for purposes of this Section 5.14,
notwithstanding any other provision of this Indenture, be the Company
or any Affiliate of the Company) at the address specified in the notice
prior to the close of business on the third Business Day prior to the
Asset Sale Purchase Date (the "Asset Sale Put Date") or the Event of
Loss Purchase Date (the "Event of Loss Put Date");
(6) Holders will be entitled to withdraw
their elections, in whole or in part, if the Paying Agent
receives, up to the close of business one Business Day
prior to the Asset Sale Put Date or Event of Loss Put Date, as
applicable, a telegram, telex, facsimile transmission or letter setting
forth the name of the Holder, the Senior Note number, if in definitive
form, the principal amount of the Senior Notes the Holder is
withdrawing and a statement containing a facsimile signature and
stating that such Holder is withdrawing such Holder's election to have
such principal amount of Senior Notes purchased;
(7) if Senior Notes in a principal amount
in excess of the principal amount of Senior Notes to be acquired
pursuant to the Asset Sale Offer or Event of Loss Offer, as
applicable, are tendered and not withdrawn, the Company shall purchase
Senior Notes on a pro rata basis (with such adjustments as may be
deemed appropriate by the Company so that only Senior Notes in
denominations of one thousand dollars ($1,000) or integral multiples of
one
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thousand dollars ($1,000) shall be acquired);
(8) Holders whose Senior Notes were purchased
only in part will be issued new Senior Notes equal in principal amount
to the unpurchased portion of the Senior Notes surrendered; and
(9) The circumstances and relevant facts
regarding such Asset Sale or Event of Loss, as applicable.
Any such Asset Sale Offer or Event of Loss Offer shall comply
with all applicable provisions of Federal and state laws, including those
regulating tender offers, if applicable, and any provisions of this Indenture
that conflict with such laws shall be deemed to be superseded by the provisions
of such laws.
On or before an Asset Sale Purchase Date or Event of Loss
Purchase Date, as applicable, the Company shall (i) accept for payment Senior
Notes or portions thereof properly tendered pursuant to the Asset Sale Offer or
Event of Loss Offer, as applicable (on a pro rata basis if required pursuant to
paragraph (7) above), (ii) deposit with the Paying Agent U.S. Legal Tender
sufficient to pay the Asset Sale Offer Price or Event of Loss Offer Price, as
applicable, for all Senior Notes or portions thereof so accepted and (iii)
deliver to the Trustee Senior Notes so accepted together with an Officers'
Certificate setting forth the Senior Notes or portions thereof being purchased
by the Company. The Paying Agent shall promptly mail or deliver to Holders of
Senior Notes so accepted payment in an amount equal to the Asset Sale Offer
Price or Event of Loss Offer Price, as applicable, for such Senior Notes, and
the Trustee shall promptly authenticate and mail or deliver to such Holders new
Senior Notes equal in principal amount to any unpurchased portion of the Senior
Notes surrendered. Any Senior Notes not so accepted shall be promptly mailed or
delivered by the Company to the Holder thereof.
(c) If the amount required to acquire all
Senior Notes tendered by Holders pursuant to an Asset Sale Offer or Event of
Loss Offer, as applicable (the "Acceptance Amount"), shall be less than the
Asset Sale Offer Amount for such Asset Sale Offer, or Event of Loss Offer Amount
for such Event of Loss, as applicable, the excess of such Asset Sale Offer
Amount or Event of Loss Offer Amount, as applicable over the
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Acceptance Amount may be used by the Company for general corporate purposes
without restriction, unless otherwise restricted by the other provisions of this
Indenture. Upon consummation of any Asset Sale Offer or Event of Loss Offer, as
applicable, made in accordance with the terms of paragraph (b) above, the
accumulated Asset Sale Offer Amount or the accumulated Event of Loss Offer
Amount, as applicable, as of the Minimum Accumulation Date shall be reduced to
zero and accumulations shall be deemed to recommence from the day next following
such Minimum Accumulation Date.
Section 5.15 Limitation on Lines of Business.
Neither the Company nor any of its Subsidiaries or Unrestricted
Subsidiaries shall directly or indirectly engage to any substantial extent in
any line or lines of business activity other than in
a Related Business.
Section 5.16 Limitation on Status as Investment
Company.
Neither the Company nor any of its Subsidiaries shall become required
to register as an "investment company" (as that term is defined in the
Investment Company Act of 1940, as amended), or otherwise become subject to
regulation under the Investment Company Act.
Section 5.17 Restrictions on Issuance or Sale of Subsidiary Stock.
The Company shall not sell, and shall not permit any of its
Subsidiaries to issue or sell, any shares of Capital Stock of any Subsidiary,
other than common stock with no special rights and no preferences, privileges,
or redemption or repayment provisions, to any Person other than the Company or a
wholly-owned Subsidiary of the Company. Notwithstanding the foregoing, all of
the Capital Stock of a Subsidiary may be sold in transaction that complies with
Section 5.14.
Section 5.18 Guarantee by Maryland Heights Subsidiary.
The Company shall cause the Maryland Heights Investment
Subsidiary and the Maryland Heights Operating Subsidiary, which may be the same
Subsidiary of the Company, to become Guarantors on the same basis as the Initial
Guarantors and to execute supplemental indentures, in the form prescribed
herein, and a
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Guarantee evidencing such obligations in the same form as the Guarantee executed
by the Initial Guarantors with respect to the Senior Notes, in the form attached
hereto as contained in Exhibit A, and deliver such executed supplemental
indentures and Guarantees to the Trustee within five (5) Business Days after
they become Subsidiaries, subject to the receipt of any approval required by any
Gaming Authority, which the Company, the Maryland Heights Investment Subsidiary
and the Maryland Heights Operating Subsidiary shall use their best efforts to
obtain. Further, the Company shall cause the Maryland Heights Investment
Subsidiary and the Maryland Heights Operating Subsidiary to be and remain
wholly-owned Subsidiaries of the Company. However, the Company shall not have
any obligation to cause the Maryland Heights Joint Venture Entity to become a
Guarantor or execute such a supplemental indenture or Guarantee.
Section 5.19 SIRCC Guarantee.
The Company shall use all reasonable efforts, and shall cause
SIRCC to use all reasonable efforts, to obtain all necessary approvals of Gaming
Authorities in the State of Illinois for SIRCC to execute a Guarantee and a
supplemental indenture, in the form prescribed herein, in favor of the Holders.
Further, the Company shall cause SIRCC to execute such a Guarantee and
supplemental indenture and deliver them to the Trustee upon receipt of such
approvals. Until such time as SIRCC obtains such approval and executes and
delivers such a Guarantee and supplemental indenture to the Trustee, the Company
will not permit SIRCC to make any Investments (other than Investments in Cash
Equivalents, Investments of the nature described in clauses (iv), (v) and (vi)
in the proviso in the definition of "Restricted Payment" and the extension of
credit to customers of Casinos consistent with industry practice in the ordinary
course of business) or to conduct any operations other than SIRCC's operations
at the Metropolis Complex, as such operations may be conducted from time to
time.
Section 5.20 Additional Subsidiary Guarantors.
The Company shall cause each of its Subsidiaries created or
acquired after the Issue Date to execute a Guarantee and a supplemental
indenture, in the form prescribed herein, and to deliver copies of the
supplemental indenture and guarantee to the Trustee, subject to the receipt of
any approval required by any Gaming Authority, which the Company and
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its Subsidiaries shall use their best efforts to obtain.
Section 5.21 Rule 144A Information Requirement.
The Company shall furnish to the Holders of the Senior Notes
and prospective purchasers of Senior Notes designated by the Holders of Transfer
Restricted Senior Notes, upon their reasonable request, the information required
to be delivered pursuant to Rule 144A(d)(4) under the Securities Act until such
time as the Company either consummates an offer to exchange the Exchange Senior
Notes for the Senior Notes or a registration statement relating to resales of
the Senior Notes has become effective under the Securities Act. The Company
shall also furnish such information during the pendency of any suspension of
effectiveness of the resale registration statement.
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ARTICLE VI
SUCCESSOR CORPORATION
Section 6.1 Limitation on Consolidation, Merger and Sale of Assets.
Neither the Company nor any Subsidiary may consolidate with or
merge with or into another person or, directly or indirectly, sell, lease or
convey all or substantially all of its assets, whether in a single transaction
or a series of related transactions, to another Person or group of affiliated
Persons, unless:
(i) if the transaction involves the Company or a
Guarantor, either (a) the Company or such Guarantor, as the
case may be, is the continuing entity, and in the case of a
Guarantor, (1) such Guarantor remains a Subsidiary of the
Company, and (2) such Guarantor's Guarantee remains in full
force and effect and the rights of the Holders thereunder and
under the Senior Notes and this Indenture are not to be
adversely affected as a result thereof, or (b) the resulting,
surviving or transferee entity is a corporation organized
under the laws of the United States, any state thereof or the
District of Columbia and expressly assumes by supplemental
indenture all of the Obligations of the Company or such
Guarantor, as the case may be, in connection with the Senior
Notes, this Indenture and any applicable Guarantee, and the
rights of the Holders under the Senior Notes, this Indenture
and any such Guarantee are not adversely affected as a result
thereof;
(ii) no Default or Event of Default shall exist or
shall occur immediately after giving effect on a pro forma
basis to such transaction;
(iii) other than in the case of a transaction
between the Company and a wholly-owned Subsidiary or between
wholly-owned Subsidiaries of the Company, immediately after
giving effect to such transaction on a pro forma basis, the
Consolidated Net Worth of the consolidated surviving or
transferee entity is at least equal to the Consolidated Net
Worth of the Company or such Subsidiary, as the case may be,
immediately prior to such transaction;
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(iv) other than in the case of a transaction
solely between the Company and any wholly-owned Subsidiary or
between wholly-owned Subsidiaries of the Company, the
consolidated surviving or transferee entity would, immediately
after giving effect to such transaction on a pro forma basis,
be permitted to incur at least one dollar ($1.00) of
additional Indebtedness pursuant to clause (ii) of paragraph
(a) of Section 5.11;
(v) such transaction will not result in
the loss of any material Gaming License.
For purposes of this Section 6.1, the Consolidated Coverage
Ratio shall be determined on a pro forma consolidated basis (giving pro forma
effect to the transaction and any related incurrence of Indebtedness or
Disqualified Capital Stock) for the four fiscal quarters that ended immediately
preceding such transaction for which financial statements are available.
Notwithstanding the foregoing, a Subsidiary shall not be subject to the
foregoing restrictions in circumstances involving the disposition by the Company
of such Subsidiary or a disposition of all or substantially all the assets of
such Subsidiary in a transaction that is not prohibited by Section 5.14 herein.
Section 6.2 Successor Corporation Substituted.
Upon any consolidation or merger or any transfer of all or
substantially all of the assets of the Company or a Guarantor that is subject to
the foregoing restrictions contained in Section 6.1, the successor corporation
formed by such consolidation or into which the Company or such Guarantor, as the
case may be, is merged or to which such transfer is made, shall succeed to, and
be substituted for, and may exercise every right and power of, the Company or
such Guarantor, as the case may be, under this Indenture and the Senior Notes
(including, without limitation, any Guarantee) with the same effect as if such
successor corporation had been named therein as the Company or such Guarantor,
as the case may be, and the Company or such Guarantor, as applicable, will be
released from its obligations under this Indenture, the Senior Notes and any
applicable Guarantee, except as to any obligations that arise from or as a
result of such transaction.
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ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
Section 7.1 Events of Default.
"Event of Default," wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be caused voluntarily or involuntarily or effected, without limitation, by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any Governmental Authority):
(1) the failure by the Company to pay
any installment of interest on the Senior Notes as and when due
and payable and the continuance of any such failure for thirty
(30) days;
(2) the failure by the Company to pay all or
any part of the principal, or premium, if any, on the Senior Notes
when and as the same become due and payable at maturity, redemption,
by acceleration or otherwise, including, without limitation, pursuant
to any Offer to Purchase, or otherwise;
(3) except as otherwise provided herein, the
failure by the Company or any Guarantor to observe or perform
any other covenant or agreement contained in the Senior
Notes, this Indenture or any Guarantee, and subject to certain
exceptions, the continuance of such failure for a period of thirty (30)
days after written notice is given to the Company by the Trustee or to
the Company and the Trustee by the Holders of at least twenty-five
percent (25%) in aggregate principal amount of the Senior Notes
outstanding;
(4) a decree, judgment or order by a court
of competent jurisdiction shall have been entered adjudging the
Company or any of its Subsidiaries that individually or
as a group constitute a Significant Subsidiary, as bankrupt or
insolvent, or approving as properly filed a petition seeking
reorganization of the Company or such Significant Subsidiary under any
bankruptcy
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or similar law, and such decree or order shall have continued
undischarged and unstayed for a period of sixty (60) days; or a decree
or order of a court of competent jurisdiction over the appointment of a
receiver, liquidator, trustee or assignee in bankruptcy or insolvency
of the Company or such Significant Subsidiary, or of the property of
any such person, or for the winding up for liquidation of the affairs
of any such person, shall have been entered, and such decree, judgment
or order shall have remained in force undischarged and unstayed for a
period of sixty (60) days;
(5) the Company or any of its Subsidiaries
that individually or as a group constitute a Significant
Subsidiary, shall institute proceedings to be adjudicated a
voluntary bankrupt, or shall consent to the filing of a bankruptcy
proceeding against it, or shall file a petition or answer or consent
seeking reorganization under any bankruptcy or similar law or similar
statute, or shall consent to the filing of any such petition, or shall
consent to the appointment of a Custodian, receiver, liquidator,
trustee or assignee in bankruptcy or insolvency of it or any of its
assets or property, or shall make a general assignment for the benefit
of creditors, or shall admit in writing its inability to pay its debts
generally as they become due, or shall, within the meaning of any
Bankruptcy Law, become insolvent or fail generally to pay its debts as
they become due;
(6) a default in the payment of principal,
premium or interest when due that extends beyond any stated period
of grace applicable thereto or an acceleration for any other reason
of the maturity of any Indebtedness of the Company or any of its
Subsidiaries with an aggregate principal amount in excess of
ten million dollars ($10,000,000);
(7) final, non-appealable, unsatisfied
judgments not covered by insurance aggregating in excess of
ten million dollars ($10,000,000), at any one time being
rendered against the Company or
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any of its Subsidiaries and not stayed, bonded or discharged within
sixty (60) days; and
(8) the loss of the legal right to operate any
Casino by the Company or any of its Subsidiaries and such loss
continuing for more than ninety (90) consecutive days.
If a Default occurs and is continuing, the Trustee must,
within ninety (90) days after the occurrence of such default, give to the
Holders notice of such default; provided, however, that except in the case of a
Default in payment of principal of or interest on any Senior Note, 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 interest of the
Holders. Prior to the declaration of acceleration of the maturity of the Senior
Notes, the Holders of a majority in aggregate principal amount of the Senior
Notes at the time outstanding may waive on behalf of all the Holders any
default, except a default in the payment of principal of or interest on any
Senior Note not yet cured, or a default with respect to any covenant or
provision that cannot be modified or amended without the consent of the Holder
of each outstanding Senior Note affected. Subject to the provisions of Article
VIII relating to the duties of the Trustee, the Trustee will be under no
obligation to exercise any of its rights or powers under this Indenture at the
request, order or direction of any of the Holders, unless such Holders have
offered to the Trustee reasonable security or indemnity. Subject to all
provisions of this Indenture and applicable law, the Holders of a majority in
aggregate principal amount of the Senior Notes at the time outstanding shall
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or power
conferred on the Trustee. The Company shall be required to file annually with
the Trustee a certificate as to the performance by the Company and the
Guarantors of certain of their obligations under this Indenture and as to any
default in such performances.
The Company shall, within thirty (30) days following the end
of each of its fiscal years, file with the Trustee an Officers' Certificate
certifying that the Company and each of the Guarantors have performed all of
their obligations under this Indenture
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in all material respects and that no Event of Default has occurred during the
preceding fiscal year, or in the event any such Event of Default has occurred,
the facts and circumstances resulting in such Event of Default.
Section 7.2 Acceleration of Maturity Date; Rescission and Annulment.
If an Event of Default occurs and is continuing (other than an
Event of Default specified in Section 7.1(4) or (5)), then in every such case,
unless the principal of all of the Senior Notes shall have already become due
and payable, either the Trustee or the Holders of not less than twenty-five
percent (25%) in aggregate principal amount of the Senior Notes then
outstanding, by notice in writing to the Company (and to the Trustee if given by
Holders) (an "Acceleration Notice"), may declare all principal and accrued
interest thereon to be due and payable immediately. If an Event of Default
specified in Section 7.1(4) or (5) occurs, all principal and accrued interest
thereon will be immediately due and payable on all outstanding Senior Notes
without any declaration or other act on the part of the Trustee or the Holders.
At any time after such declaration of acceleration being made
and before a judgment or decree for payment of the money due has been obtained
by the Trustee as hereinafter provided in this Article Seven, the Holders of no
less than a majority in aggregate principal amount of the Senior Notes then
outstanding, by written notice to the Company and the Trustee, may waive, on
behalf of all Holders, an Event of Default or an event that with notice or lapse
of time or both would become an Event of Default if:
(1) the Company has paid or deposited
with the Trustee a sum sufficient to pay
(A) all overdue interest on all Senior Notes,
(B) the principal of (and premium, if
any) applicable to any Senior Notes that would become
due otherwise than by such declaration of
acceleration, and interest thereon at the rate borne
by the Senior Notes,
(C) to the extent that payment of
such interest is lawful, interest upon
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overdue interest at the rate borne by
the Senior Notes, and
(D) all sums paid or advanced by the
Trustee hereunder and the compensation, expenses,
disbursements and advances of the Trustee, its agents
and counsel, and
(2) all Events of Default, other than the non-payment
of amounts that have come due solely by such declaration of
acceleration, have been cured or waived as provided in Section 7.13.
Notwithstanding the previous sentence of this Section 7.2, no waiver shall be
effective for any Event of Default or event that with notice or lapse of time or
both would be an Event of Default with respect to any covenant or provision that
cannot be modified or amended without the consent of the Holder of each
outstanding Note, unless all such affected Holders agree, in writing, to waive
such Event of Default or event. No such waiver shall cure and waive any
subsequent default or impair any right consequent thereon.
Section 7.3 Collection of Indebtedness and Suits for Enforcement
by Trustee.
The Company covenants that if an Event of Default in payment
of principal, premium or interest specified in Section 7.1(1) or (2) occurs and
is continuing, the Company shall, upon demand of the Trustee, pay to it, for the
benefit of the Holders of such Senior Notes, the whole amount then due and
payable on such Senior Notes for principal, premium (if any), and interest, and,
to the extent that any interest shall be legally enforceable, interest on any
overdue principal (and premium, if any) and on any overdue interest, at the rate
borne by the Senior Notes, and, in addition thereto, such further amount as
shall be sufficient to cover the reasonable costs and expenses of collection,
including reasonable compensation to, and expenses, disbursements and advances
of, the Trustee, its agents and counsel.
If the Company fails to pay such amounts promptly upon such
demand, the Trustee, in its own name and as trustee of an express trust in favor
of the Holders, may institute a judicial proceeding for the collection of the
sums so due and unpaid, may prosecute
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such proceedings to judgment or final decree and may enforce the same against
the Company or any other obligor upon the Senior Notes and collect the moneys
adjudged or decreed to be payable in the manner provided by law out of the
property of the Company or any other obligor upon the Senior Notes, wherever
situated.
If an Event of Default occurs and is continuing, the Trustee
may in its discretion proceed to protect and enforce its rights and the rights
of the Holders by such appropriate judicial proceedings as the Trustee shall
deem most effective to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this Indenture or in aid of
the exercise of any power granted herein, or to enforce any other proper remedy.
Section 7.4 Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceeding relative to the Company or any other obligor upon the
Senior Notes or the property of the Company or of such other obligor or their
creditors, the Trustee shall be entitled and empowered, by intervention in such
proceeding or otherwise, to take any and all actions under the TIA, including
(i) to file and prove a claim for the whole
amount of principal (and premium, if any) and interest owing
and unpaid in respect of the Senior Notes and to file such
other papers or documents as may be necessary or advisable in
order to have the claims of the Trustee (including any claim
for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agent and counsel) and of the
Holders allowed in such judicial proceeding, and
(ii) to collect and receive any moneys
or other property payable or deliverable on
any such claims and to distribute the same,
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay
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the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 8.7.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting the
Senior Notes or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding.
Section 7.5 Trustee May Enforce Claims Without Possession of Senior Notes.
All rights of action and claims under this Indenture or the
Senior Notes may be prosecuted and enforced by the Trustee without the
possession of any of the Senior Notes or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust in favor of the
Holders, and any recovery of judgment shall, after provision for the payment of
compensation to, and expenses, disbursements and advances of the Trustee, its
agents and counsel, be for the ratable benefit of the Holders of the Senior
Notes in respect of which such judgment has been recovered.
Section 7.6 Priorities.
Any money collected by the Trustee pursuant to this Article
VII shall be applied in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of such money on account of principal,
premium (if any) or interest, upon presentation of the Senior Notes and the
notion thereon of the payment if only partially paid and upon surrender thereof
if fully paid:
FIRST: To the Trustee in payment of (I) all amounts due pursuant to
Section 8.7 and (ii) all costs and expenses (including reasonable attorneys'
fees and disbursements) incurred by the Trustee in collecting any monies due
hereunder;
SECOND: To the Holders in payment of the amount then due and unpaid for
principal of, premium, if any, and interest on, the Senior Notes in respect of
which or for the benefit of which such money has been collected, ratably,
without preference or priority of
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any kind, according to the amounts due and payable on such Senior Notes for
principal, premium, if any, and interest, respectively; and
THIRD: To whomsoever may be lawfully entitled thereto, the remainder,
if any.
Section 7.7 Limitation on Suits.
No Holder of any Senior Note shall have any right to order or
direct the Trustee to institute any proceeding, judicial or otherwise, with
respect to this Indenture, or for the appointment of a receiver or trustee, or
for any other remedy hereunder, unless
(A) such Holder has previously
given written notice to the Trustee of a
continuing Event of Default;
(B) the Holders of not less than
twenty-five percent (25%) in principal amount of then
outstanding Senior Notes shall have made written
request to the Trustee to institute proceedings in
respect of such Event of Default in its own name as
Trustee hereunder;
(C) such Holder or Holders have offered
to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities to be
incurred or reasonably likely to be incurred in
compliance with such request;
(D) the Trustee for sixty (60) days after
its receipt of such notice, request and offer of
indemnity has failed to institute any such
proceeding; and
(E) no direction inconsistent with such
written request has been given to the Trustee during
such 60-day period by the Holders of a majority in
principal amount of the outstanding Senior Notes;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to
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enforce any right under this Indenture, except in the manner herein provided and
for the equal and ratable benefit of all the Holders.
Section 7.8 Unconditional Right of Holders to Receive Principal, Premium
and Interest.
Notwithstanding any other provision of this Indenture, the
Holder of any Senior Note shall have the right, which is absolute and
unconditional, to receive payment of the principal of, and premium, if any, and
interest on, such Senior Note on the Maturity Dates or Interest Payment Dates,
as applicable, of such payments as are expressed in such Senior Note (in the
case of redemption, the Redemption Price on the applicable Redemption Date, in
the case of the Change of Control Offer Price, on the applicable Change of
Control Payment Date, in the case of an Asset Sale, the Asset Sale Purchase Date
and in the case of an Event of Loss, the Event of Loss Purchase Date) and to
institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.
Section 7.9 Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Senior Notes in Section 2.7,
no right or remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 7.10 Delay or Omission Not Waiver.
No delay or omission by the Trustee or by any Holder of any
Senior Note to exercise any right or remedy arising upon any Event of Default
shall impair the exercise of any such right or remedy or constitute a waiver of
any such Event of Default. Every right and remedy given by this Article VII or
by law to the Trustee or to the Holders may be exercised from time to time, and
as often as may be deemed expedient, by the Trustee or by the Holders, as the
case may be.
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Section 7.11 Control by Holders.
The Holder or Holders of a majority in aggregate principal
amount of then outstanding Senior Notes shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or exercising any trust or power conferred upon the Trustee; provided,
however, that
(1) such direction shall not be in conflict with
any applicable law or with this Indenture,
(2) the Trustee shall not determine that the action
so directed would be unjustly prejudicial to the Holders not taking
part in such direction, and
(3) the Trustee may take any other action deemed
proper by the Trustee that is not inconsistent with such direction.
Section 7.12 Waiver of Past Default.
Subject to Section 7.8, the Holder or Holders of not less than
a majority in aggregate principal amount of the outstanding Senior Notes may, by
written notice to the Trustee on behalf of the Holders, prior to the declaration
of the maturity of the Senior Notes, waive any past Default hereunder and its
consequences, except a Default
(A) in the payment of the principal of,
premium, if any, or interest on, any Senior Note as
specified in clauses (1) and (2) of Section 7.1, or
(B) in respect of a covenant or provision
hereof which, under Article X, cannot be modified or
amended without the consent of the Holder of each
outstanding Senior Note affected.
Upon any such waiver, such default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture, but no such waiver shall extend to any
subsequent or other default or impair the exercise of any right arising
therefrom.
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Section 7.13 Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any
Senior Note by such Holder's acceptance thereof shall be deemed to have agreed,
that any court may in its discretion require, in any suit for the enforcement of
any right or remedy under this Indenture, or in any suit against the Trustee for
any action taken, suffered or omitted to be taken by it as Trustee, the filing
by any party litigant in such suit of an undertaking to pay the costs of such
suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant, but the provisions of this Section 7.13 shall not apply to
any suit instituted by the Company, to any suit instituted by the Trustee, to
any suit instituted by any Holder, or group of Holders, holding in the aggregate
more than ten percent (10%) in aggregate principal amount of the outstanding
Senior Notes, or to any suit instituted by any Holder for enforcement of the
payment of principal of, or premium, if any, or interest on, any Senior Note on
or after the Maturity Date of such Senior Note.
Section 7.14 Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every case, subject to any
determination in such proceeding, the Company, the Guarantor, the Trustee and
the Holders shall be restored severally and respectively to their former
positions hereunder and thereafter all rights and remedies of the Trustee and
the Holders shall continue as though no such proceeding had been instituted.
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ARTICLE VIII
TRUSTEE
The Trustee hereby accepts the trust imposed upon it by this
Indenture and covenants and agrees to perform the same, as herein expressed.
Section 8.1 Duties of Trustee.
(a) If a Default or an Event of Default has
occurred and is continuing, the Trustee shall exercise such of the rights and
powers vested in it by this Indenture and use the same degree of care and skill
in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of a
Default or an Event of Default:
(1) The Trustee undertakes to perform only those duties as are
specifically set forth in this Indenture and no others, and no
covenants or obligations shall be implied in or read into this
Indenture that are adverse to the Trustee.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture. However, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements
of this Indenture.
(c) The Trustee may not be relieved from
liability for its own negligent action, its negligent failure to act or its own
willful misconduct, except that:
(i) This clause does not limit the
effect of paragraph (b) of this Section 8.1;
(ii) 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
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(iii) The Trustee shall not be liable with respect
to any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to Section
7.12.
(d) The Trustee shall cooperate fully and
completely with, provide any information required by, and comply with any order
or directive of a Gaming Authority that the Trustee submit an application for
any license, finding of suitability or other approval pursuant to any Gaming
Law.
(e) No provision of this Indenture shall
require the Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder or to take
or omit to take any action under this Indenture or at the request, order or
direction of the Holders or in the exercise of any of its rights or powers if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it.
(f) Every provision of this Indenture that in any way
relates to the Trustee is subject to paragraphs (a), (b), (c), (d) and (e) of
this Section 8.1.
(g) The Trustee shall not be liable for
interest on any assets received by it except as the Trustee may agree in writing
with the Company. Assets held in trust by the Trustee need not be segregated
from other assets except to the extent required by law.
Section 8.2 Rights of Trustee.
Subject to Section 8.1:
(a) The Trustee may rely on any document
believed by it to be genuine and to have been signed or presented by the proper
person. The Trustee need not investigate any fact or matter stated in the
document.
(b) Before the Trustee acts or refrains from
acting, it may consult with counsel and may require an Officers' Certificate or
an Opinion of Counsel, which shall conform to Sections 14.4 and 14.5. The
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on such certificate or opinion.
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(c) The Trustee may act through its attorneys and agents
and shall not be responsible for the misconduct or negligence of any agent
appointedwith due care.
(d) The Trustee shall not be liable for any action
it takes or omits to take in good faith that it believes to be authorized
or within its rights or powers.
(e) The Trustee shall not be bound to make
any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, notice, request, direction,
consent, order, bond, debenture or other paper or document, but the Trustee, in
its discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit.
(f) The Trustee shall be under no obligation
to exercise any of the rights or powers vested in it by this Indenture at the
request, order or direction of any of the Holders, pursuant to the provisions of
this Indenture, unless such Holders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities that may be
incurred therein or thereby.
(g) Except with respect to Section 5.1, the
Trustee shall have no duty to inquire as to the performance of the Company's
covenants in Article V hereof. In addition, the Trustee shall not be deemed to
have knowledge of any Default or Event of Default except (i) any Event of
Default occurring pursuant to Sections 5.1, 7.1(1) and 7.1(2), or (ii) any
Default or Event of Default of which a Trust Officer of the Trustee shall have
received written notification or obtained actual knowledge.
Section 8.3 Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Senior Notes and may otherwise deal with the Company, any
Guarantor, any of their respective Subsidiaries or their respective Affiliates
with the same rights it would have if it were not Trustee. Any Agent may do the
same with like rights. However, the Trustee must comply with Sections 8.10 and
8.11.
Section 8.4 Trustee's Disclaimer.
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The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Senior Notes, and it shall not be responsible for any
statement in the Senior Notes, other than the Trustee's certificate of
authentication, or the use or application of any funds received by a Paying
Agent other than the Trustee.
Section 8.5 Notice of Default.
If a Default or an Event of Default occurs and is continuing and if it
is known to the Trustee, the Trustee shall mail to each Holder notice of the
uncured Default or Event of Default within ninety (90) days after such Default
or Event of Default occurs. Except in the case of a Default or an Event of
Default in payment of principal (or premium, if any) of, or interest on, any
Senior Note (including the payment of the Change of Control Offer Price on the
Change of Control Payment Date, the Redemption Price on the Redemption Date, the
Asset Sale Offer Amount on the Asset Sale Purchase Date and the Event of Loss
Offer Amount on the Event of Loss Purchase Date, as the case may be), the
Trustee may withhold the notice if and so long as a Trust Officer in good faith
determines that withholding the notice is in the interest of the Holders.
Section 8.6 Reports by Trustee to Holders.
If required by law, within sixty (60) days after each May 15
beginning with the May 15 following the date of this Indenture, the Trustee
shall mail to each Holder a brief report dated as of such date that complies
with TIA ss. 313(a). If required by law, the Trustee also shall comply with TIA
ss.ss. 313(b) and 313(c). The Company shall promptly notify the Trustee in
writing if the Senior Notes become listed on any stock exchange or automatic
quotation system. A copy of each report at the time of its mailing to Holders
shall be mailed to the Company and filed with the SEC and each stock exchange,
if any, on which the Senior Notes are listed.
Section 8.7 Compensation and Indemnity.
The Company shall pay to the Trustee from time to time
reasonable compensation for its services. The Trustee's compensation shall not
be limited by any law on compensation of a trustee of an express trust. The
Company shall reimburse the Trustee upon request for all reasonable
disbursements, expenses and advances
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incurred or made by it. Such expenses shall include the reasonable compensation,
disbursements and expenses of the Trustee's agents, accountants, experts and
counsel.
The Company shall indemnify the Trustee (in its capacity as
Trustee) and each of its officers, directors, attorneys-in-fact and agents for,
and hold it harmless against, any claim, demand, expense (including reasonable
compensation, disbursements and expenses of the Trustee's agents and counsel),
loss or liability incurred by them without negligence or bad faith on its part,
arising out of or in connection with the administration of this trust and their
rights or duties hereunder including the reasonable costs and expenses of
defending themselves against any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder. The Trustee
shall notify the Company promptly of any claim asserted against the Trustee for
which it may seek indemnity. The Company shall defend the claim and the Trustee
shall provide reasonable cooperation at the Company's expense in the defense.
The Trustee may have separate counsel and the Company shall pay the reasonable
fees and expenses of such counsel; provided, however, that the Company will not
be required to pay such fees and expenses if it assumes the Trustee's defense
and there is no conflict of interest between the Company and the Trustee in
connection with such defense. The Company need not pay for any settlement made
without its written consent. The Company need not reimburse any expense or
indemnify against any loss or liability to the extent incurred by the Trustee
through its negligence, bad faith or willful misconduct.
To secure the Company's payment obligations in this Section
8.7, the Trustee shall have a lien prior to the Senior Notes on all assets held
or collected by the Trustee, in its capacity as Trustee, except assets held in
trust to pay principal of, premium, if any, or interest on particular Senior
Notes.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 7.1(4) or (5) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any applicable Bankruptcy Law.
The Company's obligations under this Section 8.7 and
any lien arising hereunder shall
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survive the resignation or removal of the Trustee, the discharge of the
Company's obligations pursuant to Article IX of this Indenture and any rejection
or termination of this Indenture under any applicable Bankruptcy Law.
Section 8.8 Replacement of Trustee.
The Trustee may resign by so notifying the Company in writing.
The Holder or Holders of a majority in principal amount of the outstanding
Senior Notes may remove the Trustee by so notifying the Company and the Trustee
in writing and may appoint a successor trustee with the Company's consent. The
Company may remove the Trustee if:
(1) the Trustee fails to comply with
Section 8.1 or 8.10;
(2) the Trustee is adjudged bankrupt or
insolvent;
(3) a receiver, Custodian or other public
officer takes charge of the Trustee or its property;
(4) the Trustee becomes incapable of acting; or
(5) the Trustee seeks an increase in its fee
for administering this Indenture which increase is not mutually
agreed upon.
If the Trustee resigns or is removed or if a vacancy exists in
the office of the Trustee for any reason, the Company shall promptly appoint a
successor Trustee. The Holder or Holders of a majority in principal amount of
the Senior Notes may appoint a successor Trustee to replace the successor
Trustee appointed by the Company in accordance with the foregoing provisions.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that
and provided that all sums owing to the Trustee provided for in Section 8.7 have
been paid, the retiring Trustee shall transfer all property held by it as
Trustee to the successor Trustee, subject to the lien provided in Section 8.7,
the resignation or removal of the retiring Trustee shall become effective, and
the successor
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Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. A successor Trustee shall mail notice of its succession to each
Holder.
If a successor Trustee does not take office within sixty (60)
days after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company or the Holder or Holders of at least ten percent (10%) in principal
amount of the outstanding Senior Notes may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 8.10, any Holder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this
Section 8.8, the Company's obligations under Section 8.7 shall continue for the
benefit of the retiring Trustee.
Section 8.9 Successor Trustee by Merger, Etc.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the resulting, surviving or transferee corporation without any
further act shall, if such resulting, surviving or transferee corporation is
otherwise eligible hereunder, be the successor Trustee.
Section 8.10 Eligibility; Disqualification.
The Trustee shall at all times satisfy the requirements of TIA ss.
310(a)(1) and TIA ss. 310(a)(5). The Trustee shall have a combined capital and
surplus of at least twenty-five million dollars ($25,000,000) as set forth in
its most recent published annual report of condition. The Trustee shall comply
with TIA ss. 310(b).
Section 8.11 Preferential Collection of Claims against Company.
The Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or has been
removed shall be subject to TIA ss. 311(a) to the extent indicated.
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ARTICLE IX
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 9.1 Option to Effect Legal Defeasance or Covenant Defeasance.
The Company may at its option at any time elect to have Section 9.2 or
Section 9.3 applied to all outstanding Senior Notes upon compliance with the
conditions set forth below in this Article IX.
Section 9.2 Legal Defeasance and Discharge.
Upon the Company's exercise under Section 9.1 of the option applicable
to this Section 9.2, the Company and the Guarantors shall be deemed to have been
discharged from their obligations with respect to all outstanding Senior Notes
on the date the conditions set forth below are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, such Legal Defeasance means that the Company
shall be deemed to have paid and discharged the entire Indebtedness represented
by the outstanding Senior Notes, and this Indenture shall cease to be of further
effect as to all outstanding Senior Notes and Guarantees except as to rights of
Holders to receive payments which shall thereafter be deemed to be "outstanding"
only for the purposes of Section 9.5 and the other Sections of this Indenture
referred to in (a) and (b) below, and to have satisfied all its other
obligations under such Senior Notes and this Indenture (and the Trustee, on
demand of and at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following which shall survive until
otherwise terminated or discharged hereunder: (a) the rights of Holders of
outstanding Senior Notes to receive solely from the trust fund described in
Section 9.4, and as more fully set forth in such section, payments in respect of
the principal of, premium, if any, and interest on such Senior Notes when such
payments are due, (b) the Company's obligations with respect to such Senior
Notes under Sections 2.4, 2.6, 2.7, 2.10 and 6.2, (c) the rights, powers,
trusts, duties and immunities of the Trustee hereunder and the Company's
obligations in connection therewith and (d) this Article IX. Subject to
compliance with this Article IX, the Company may exercise its option under this
Section 9.2 notwithstanding the prior exercise of its option under Section 9.3
with respect to the Senior Notes.
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Section 9.3 Covenant Defeasance.
Upon the Company's exercise under Section 9.1 of the option applicable
to this Section 9.3, the Company shall be released from its obligations under
the covenants contained in Sections 5.3, 5.6, 5.7, 5.8, 5.10, 5.11, 5.12, 5.13,
5.14, 5.15, 5.16, 5.17, 5.18, 5.19 and 5.20 and Article VI with respect to the
outstanding Senior Notes on and after the date the conditions set forth below
are satisfied (hereinafter "Covenant Defeasance"), and the Senior Notes shall
thereafter be deemed not "outstanding" for the purposes of any direction,
waiver, consent or declaration or act of Holders (and the consequences of any
thereof) in connection with such covenants, but shall continue to be deemed
"outstanding" for all other purposes hereunder. For this purpose, such Covenant
Defeasance means that, with respect to the outstanding Senior Notes, the Company
need not comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such covenant or
by reason of any reference in any such covenant to any other provision herein or
in any other document, but, except as specified above, the remainder of this
Indenture and such Senior Notes shall be unaffected thereby. In addition, upon
the Company's exercise under Section 9.1 of the option applicable to this
Section 9.3, Section 7.1(3) (to the extent it relates to the foregoing listed
covenants) and Sections 7.1(4) through 7.1(8) shall not constitute Events of
Default.
Section 9.4 Conditions to Legal or Covenant Defeasance.
The following shall be the conditions to the application of
either Section 9.2 or Section 9.3 to the outstanding Senior Notes:
(a) the Company shall irrevocably deposit or
cause to be deposited with the Trustee (or another trustee satisfying the
requirements of Section 8.10 who shall agree to comply with the provisions of
this Article IX applicable to it) as trust funds in trust for the purpose of
making the following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of such Senior Notes, (a) U.S.
Legal Tender in an amount, or (b) U.S. Government Obligations that through the
scheduled payment of principal and interest in respect thereof in accordance
with their terms will provide, not later
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than one day before the due date of any payment, U.S. Legal Tender in an amount,
or (c) a combination thereof, in such amounts, as in each case will be
sufficient, in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee, to pay and discharge and which shall be applied by the Trustee (or
other qualifying trustee) to pay and discharge, (i) the principal of, premium,
if any, and interest on the outstanding Senior Notes on the stated date for
payment thereof or on the redemption date, as the case may be, of such principal
or installment of principal, premium, if any, or interest on such Senior Notes,
and the Trustee on behalf of the Holders must have a valid, perfected, exclusive
security interest in such trust; provided, however, that the Trustee shall have
been irrevocably instructed to apply such U.S. Legal Tender and the proceeds of
such U.S. Government Obligations to said payments with respect to the Senior
Notes.
(b) in the case of an election under
Section 9.2, the Company shall have delivered to the Trustee an Opinion of
Counsel in the United States reasonably satisfactory to the Trustee confirming
that (i) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling or (ii) since the date hereof, there has been
a change in the applicable Federal income tax law, in either case to the effect
that, and based thereon such opinion shall confirm that, the Holders of the
outstanding Senior Notes will not recognize income, gain or loss for Federal
income tax purposes as a result of such Legal Defeasance and will be subject to
Federal income tax in the same amounts, in the same manner and at the same times
as would have been the case if such Legal Defeasance had not occurred;
(c) in the case of an election under
Section 9.3, the Company shall have delivered to the Trustee an Opinion of
Counsel in the United States reasonably satisfactory to the Trustee confirming
that the Holders of the outstanding Senior Notes will not recognize income, gain
or loss for Federal income tax purposes as a result of such Covenant Defeasance
and will be subject to Federal income tax in the same amounts, in the same
manner and at the same times as would have been the case if such Covenant
Defeasance had not occurred;
(d) no Default or Event of Default with
respect to the Senior Notes shall have occurred and be
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continuing on the date of such deposit or, insofar as Sections 7.1(4) and 7.1(5)
are concerned, at any time in the period ending on the ninety-first (91st) day
after the date of such deposit (it being understood that this condition shall
not be deemed satisfied until the expiration of such period);
(e) such Legal Defeasance or Covenant
Defeasance shall not result in a breach or violation of, or constitute a default
under, this Indenture or any other material agreement or instrument to which the
Company or any of its Subsidiaries is a party or by which the Company or any of
its Subsidiaries is bound;
(f) the Company shall have delivered to the
Trustee an Officers' Certificate stating that the deposit made by the Company
pursuant to its election under Section 9.2 or 9.3 was not made with the intent
of preferring the Holders of such Senior Notes over any other creditors of the
Company or with the intent of defeating, hindering, delaying or defrauding any
other creditors of the Company or others; and
(g) the Company shall have delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel in the United States,
each stating that all conditions precedent provided for relating to either the
Legal Defeasance under Section 9.2 or the Covenant Defeasance under Section 9.3
(as the case may be) have been complied with as contemplated by this Section
9.4.
Section 9.5 Deposited U.S. Legal Tender and U.S. Government Obligations
to be Held in Trust; Other Miscellaneous Provisions.
Subject to Section 9.6, all U.S. Legal Tender and U.S.
Government Obligations (including the proceeds thereof) deposited with the
Trustee (or other qualifying trustee, collectively for purposes of this Section
9.5, the "Trustee") pursuant to Section 9.4 in respect of the outstanding Senior
Notes shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Senior Notes and this Indenture, to the payment, either
directly or through any Paying Agent as the Trustee may determine, to the
Holders of such Senior Notes of all sums due and to become due thereon in
respect of principal, premium, if any, and interest, but such money need not be
segregated from other funds except to the extent required by law.
Anything in this Article IX to the contrary notwithstanding, the Trustee shall
deliver or pay to the Company from time to time upon the request of the
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Company any U.S. Legal Tender or U.S. Government Obligations held by it as
provided in Section 9.4 that, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereto
delivered to the Trustee (which may be the opinion delivered under Section
9.4(a)), are in excess of the amount thereof that would then be required to be
deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
Section 9.6 Repayment to the Company.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of, premium,
if any, or interest on any Senior Note and remaining unclaimed for two (2) years
after such principal, and premium, if any, or interest has become due and
payable, shall be paid to the Company on its request, and the Holder of such
Senior Note shall thereafter look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money shall thereupon cease; provided, however, that the Trustee or such Paying
Agent, before being required to make any such repayment, may at the expense of
the Company cause to be published once, in the New York Times and The Wall
Street Journal (national edition), notice that such money remains unclaimed and
that, after a date specified therein, which shall not be less than thirty (30)
days from the date of such notification or publication, any unclaimed balance of
such money then remaining will be repaid to the issuers.
Section 9.7 Reinstatement.
If the Trustee or Paying Agent is unable to apply any U.S.
Legal Tender or U.S. Government Obligations in accordance with Section 9.2 or
9.3, as the case may be, by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and the Senior
Notes shall be revived and reinstated as though no deposit had occurred pursuant
to Section 9.2 or 9.3 until such time as the Trustee or Paying Agent is
permitted to apply such money in accordance with Section 9.2 and 9.3, as the
case may be; provided, however, that, if the Company makes any payment of
principal of, premium, if any, or interest on any Senior Note following the
reinstatement of its obligations, the Company shall be subrogated to the
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rights of the Holders of such Senior Notes to receive such payment from the Cash
held by the Trustee or Paying Agent.
Section 9.8 Termination of Obligations Upon Cancellation of the Senior
Notes.
In addition to the Company's rights under Sections 9.2 and
9.3, the Company and the Guarantors may terminate all of their obligations under
this Indenture (subject to Section 9.7) when:
(1) either (a) all such outstanding Senior Notes
theretofore authenticated and delivered (other than Senior Notes
that have been destroyed, lost or stolen and that have been replaced
or paid as provided in Section 2.7) have been delivered to the
Trustee for cancellation, or (b) all such Senior Notes not
theretofore delivered to the Trustee for cancellation have become
due and payable and the Company has irrevocably deposited or caused to
be deposited with the Trustee funds in an amount sufficient to pay and
discharge the entire indebtedness on the Senior Notes not theretofore
delivered to the Trustee for cancellation, for principal of, premium,
if any, and interest to the Stated Maturity of the Senior Notes;
(2) the Company has paid all sums payable
hereunder; and
(3) the Company has delivered to the Trustee
an Officers' Certificate and an Opinion of Counsel (other than
in-house counsel), each stating that all conditions precedent
specified herein relating to the satisfaction and discharge
of this Indenture have been complied with, and that such satisfaction
and discharge will not result in a breach or violation of, or
constitute a Default under, this Indenture or any other instrument to
which the Company, any Guarantor or any of their Subsidiaries is a
party or by which it or their property is bound.
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ARTICLE X
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 10.1 Supplemental Indentures Without Consent of Holders.
Without the consent of any Holder, the Company, when
authorized by Board Resolutions, and the Trustee, at any time and from time to
time, may amend or supplement the Indenture or the Senior Notes for any of the
following purposes:
(1) to cure any ambiguity, defect, or
inconsistency, or to make any other provisions with respect to
matters or questions arising under this Indenture that
shall not be inconsistent with the provisions of this Indenture,
provided such action pursuant to this clause (1) shall not adversely
affect the interests of any Holder in any respect;
(2) to add to the covenants of the Company
for the benefit of the Holders, or to surrender any right or power
herein conferred upon the Company, or to provide any additional
rights or benefits to the Holders, or to make any other change
that does not adversely affect the rights of any Holder;
provided, however, that the Company has delivered to the
Trustee an Opinion of Counsel stating that such change does not
adversely affect the rights of any Holder;
(3) to provide for additional collateral for or
additional Guarantors of the Senior Notes;
(4) to provide for uncertificated Senior Notes
in addition to or in place of certificated Senior Notes;
(5) to evidence the succession of another
person to the Company, and the assumption by any such successor of
the Obligations of the Company herein and in the Senior Notes in
accordance with Article VI;
(6) to comply with the TIA; or
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(7) to set out the form of the Exchange Notes
and to set forth such other matters as may be necessary or desirable in
connection with the Exchange Offer.
Section 10.2 Amendments, Supplemental Indentures and Waivers with Consent
of Holders.
Subject to Section 7.8 and the last sentence of this
paragraph, with the consent of the Holders of not less than a majority in
aggregate principal amount of the Senior Notes then outstanding, by written act
of said Holders delivered to the Company and the Trustee (including consents
obtained in connection with a tender offer or exchange offer for the Senior
Notes), the Company and the Guarantors, when authorized by Board Resolutions,
and the Trustee, may amend or supplement this Indenture or the Senior Notes or
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or the Senior Notes or of modifying in any manner
the rights of the Holders under this Indenture or the Senior Notes. Subject to
Section 7.8 and the last sentence of this paragraph, the Holder or Holders of a
majority in principal amount of then outstanding Senior Notes may waive
compliance by the Company or any Guarantor with any provision of this Indenture
or the Senior Notes. Notwithstanding the foregoing provisions of this Section
10.2, without the consent of the Holders of at least sixty-six and two-thirds
percent (66-2/3%) of the aggregate principal amount of outstanding Senior Notes,
no such amendment, supplemental indenture or waiver shall change any provision
of Article VII or Article XIII or (except for the Stated Maturity which is
governed by clause (4) below) extend any Maturity Date of any Senior Note, and
without the consent of the Holder of each outstanding Senior Note affected
thereby, no such amendment, supplemental indenture or waiver shall:
(1) reduce the percentage in principal
amount of Senior Notes, the consent of whose Holders is required
for any amendment, supplement or waiver provided for in this Indenture
or the Senior Notes;
(2) reduce the rate or extend the time for payment
of interest on any Senior Note;
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(3) reduce the principal amount of any Senior
Note or reduce any Purchase Price;
(4) change the Stated Maturity of any Senior Note;
(5) alter the redemption provisions of Article
III in a manner that adversely affects the rights of any Holder of
Senior Notes;
(6) make any changes in the provisions
concerning waivers of Defaults or Events of Default by Holders
of the Senior Notes or the rights of Holders to recover the
principal or premium of, interest on, or redemption payment with
respect to, any Senior Note or otherwise impair the right to institute
suit for enforcement of any such payment whether on or after the Stated
Maturity thereof, the Redemption Date thereof, or otherwise, in a
manner that adversely affects the rights of any Holder of Senior Notes;
(7) make any changes in Section 7.4, 7.7 or this
third sentence of this Section 10.2 in a manner that adversely affects
the rights of any Holder of Senior Notes;
(8) make the principal of, premium, if any, or
the interest on, any Senior Note payable with anything, at any place
of payment or in any manner other than as provided for in this
Indenture and the Senior Notes as in effect on the date hereof;
(9) except as expressly permitted by this
Indenture, make the Senior Notes subordinated in right of payment to
any extent or under any circumstances to any other indebtedness;
(10) make any changes in the provisions of Article
XII in a manner that adversely affects the rights of any Holder of
Senior Notes; or
(11) make any changes in the provisions of
Section 5.14 regarding an
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Asset Sale Offer or an Event of Loss Offer in a manner that adversely
affects the rights of any Holder of Senior Notes.
It shall not be necessary for the consent of the Holders under
this Section to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section
becomes effective, the Company shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such supplemental indenture.
After an amendment, supplement or waiver under this Section
10.2 or 10.4 becomes effective, it shall bind each Holder.
In connection with any amendment, supplement or waiver under
this Article X, the Company may, but shall not be obligated to, offer to any
Holder who consents to such amendment, supplement or waiver, or to all Holders,
consideration for such Holder's consent to such amendment, supplement or waiver.
Section 10.3 Compliance with TIA.
Every amendment, waiver or supplement of this Indenture or the
Senior Notes shall comply with the TIA as then in effect.
Section 10.4 Revocation and Effect of Consents.
Until an amendment, waiver or supplement becomes effective, a
consent to it by a Holder is a continuing consent by the Holder and every
subsequent Holder of a Senior Note or portion of a Senior Note that evidences
the same indebtedness as the consenting Holder's Senior Note, even if notation
of the consent is not made on any Senior Note. However, any such Holder or
subsequent Holder may revoke the consent as to such Holder's Senior Note or
portion of such Holder's Senior Note by written notice to the Company or the
person designated by the Company as the person to whom consents should be sent
if such revocation is received by the Company or such person before the date on
which the Trustee receives an Officers' Certificate
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certifying that the Holders of the requisite principal amount of Senior Notes
have consented (and not theretofore revoked such consent) to the amendment,
supplement or waiver.
The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Holders entitled to consent to any
amendment, supplement or waiver, which record date shall be the date so fixed by
the Company notwithstanding the provisions of the TIA. If a record date is
fixed, then notwithstanding the last sentence of the immediately preceding
paragraph, those persons who were Holders at such record date, and only those
persons (or their duly designated proxies), shall be entitled to revoke any
consent previously given, whether or not such persons continue to be Holders
after such record date. No such consent shall be valid or effective for more
than ninety (90) days after such record date.
After an amendment, supplement or waiver becomes effective, it
shall bind every Holder, unless it makes a change described in any of clauses
(1) through (10) of Section 10.2, in which case, the amendment, supplement or
waiver shall bind only each Holder of a Senior Note who has consented to it and
every subsequent Holder of a Senior Note or portion of a Senior Note that
evidences the same indebtedness as the consenting Holder's Senior Note;
provided, however, that any such waiver shall not impair or affect the right of
any Holder to receive payment of principal and premium of and interest on a
Senior Note, on or after the respective dates set for such amounts to become due
and payable expressed in such Senior Note, or to bring suit for the enforcement
of any such payment on or after such respective dates.
Section 10.5 Notation on or Exchange of Senior Notes.
If an amendment, supplement or waiver changes the terms of a
Senior Note, the Trustee may require the Holder of the Senior Note to deliver it
to the Trustee or require the Holder to put an appropriate notation on the
Senior Note. The Trustee may place an appropriate notation on the Senior Note
about the changed terms and return it to the Holder. Alternatively, if the
Company or the Trustee so determines, the Company in exchange for the Senior
Note shall issue, the Guarantors shall endorse and the Trustee shall
authenticate a new Senior Note that reflects the changed terms. Any failure to
make the appropriate notation or to issue a new Senior Note shall not affect the
validity of such amendment,
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supplement or waiver.
Section 10.6 Trustee to Sign Amendments, Etc.
The Trustee shall execute any amendment, supplement or waiver
authorized pursuant to this Article X; provided, however, that the Trustee may,
but shall not be obligated to, execute any such amendment, supplement or waiver
that affects the Trustee's own rights, duties or immunities under this
Indenture. The Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
any amendment, supplement or waiver authorized pursuant to this Article X is
authorized or permitted by this Indenture.
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ARTICLE XI
MEETINGS OF HOLDERS
Section 11.1 Purposes for Which Meeting May Be Called.
A meeting of Holders may be called at any time and from time
to time pursuant to the provisions of this Article XI for any of the following
purposes:
(a) to give any notice to the Company, any
Guarantor or to the Trustee, or to give any directions to the Trustee, or to
waive or to consent to the waiving of any Default or Event of Default hereunder
and its consequences, or to take any other action authorized to be taken by
Holders pursuant to any of the provisions of Article VII;
(b) to remove the Trustee or appoint a successor Trustee
pursuant to the provisions of Article VIII;
(c) to consent to any amendment, supplement
or waiver pursuant to the provisions of Section 10.2;
or
(d) to take any other action (i) authorized
to be taken by or on behalf of the Holder or Holders of any specified aggregate
principal amount of the Senior Notes under any other provision of this
Indenture, or authorized or permitted by law or (ii) that the Trustee deems
necessary or appropriate in connection with the administration of this
Indenture.
Section 11.2 Manner of Calling Meetings.
The Trustee may at any time call a meeting of Holders to take
any action specified in Section 11.1, to be held at such time and at such place
in The City of New York, State of New York or elsewhere as the Trustee shall
determine. Notice of every meeting of Holders, setting forth the time and place
of such meeting and in general terms the action proposed to be taken at such
meeting, shall be mailed by the Trustee, first-class postage prepaid, to the
Company, the Guarantors and to the Holders at their last addresses as they shall
appear on the registration books of the Registrar, not less than ten (10) nor
more than sixty (60) days prior to the date fixed for a meeting. The Company
shall pay the reasonable costs and expenses of preparing and mailing such
notice.
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Any meeting of Holders shall be valid without notice if the
Holders of all Senior Notes then outstanding are present in person or by proxy,
or if notice is waived before or after the meeting by the Holders of all Senior
Notes outstanding, and if the Company and the Trustee are either present by duly
authorized representatives or have, before or after the meeting, waived notice.
Section 11.3 Call of Meetings by Company or Holders.
In case at any time the Company, pursuant to a Board
Resolution, or the Holders of not less than twenty-five percent (25%) in
aggregate principal amount of the Senior Notes then outstanding, shall have
requested the Trustee to call a meeting of Holders to take any action specified
in Section 11.1, by written request setting forth in reasonable detail the
action proposed to be taken at the meeting, and the Trustee shall not have
mailed the notice of such meeting within twenty (20) days after receipt of such
request, then the Company or the Holders of Senior Notes in the amount above
specified may determine the time and place in The City of New York, State of New
York or elsewhere for such meeting and may call such meeting for the purpose of
taking such action, by mailing or causing to be mailed notice thereof as
provided in Section 11.2, or by causing notice thereof to be published at least
once in each of two (2) successive calendar weeks (on any Business Day during
such week) in a newspaper or newspapers printed in the English language,
customarily published at least five (5) days a week of a general circulation in
The City of New York, State of New York, the first such publication to be not
less than ten (10) nor more than sixty (60) days prior to the date fixed for the
meeting.
Section 11.4 Who May Attend and Vote at Meetings.
To be entitled to vote at any meeting of Holders, a person
shall (a) be a registered Holder of one or more Senior Notes, or (b) be a person
appointed by an instrument in writing as proxy for the registered Holder or
Holders of Senior Notes. The only persons who shall be entitled to be present or
to speak at any meeting of Holders shall be the persons entitled to vote at such
meeting and their counsel and any representatives of the Trustee and its counsel
and any representatives of the Company, the Guarantors and their counsel.
Section 11.5 Regulations May Be Made by Trustee;
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Conduct of the Meeting; Voting Rights; Adjournment.
Notwithstanding any other provision of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable for any
action by or any meeting of Holders, in regard to proof of the holding of Senior
Notes and of the appointment of proxies, and in regard to the appointment and
duties of inspectors of votes, and submission and examination of proxies,
certificates and other evidence of the right to vote, and such other matters
concerning the conduct of the meeting as it shall think appropriate. Such
regulations may fix a record date and time for determining the Holders of record
of Senior Notes entitled to vote at such meeting, in which case those and only
those persons who are Holders of Senior Notes at the record date and time so
fixed, or their proxies, shall be entitled to vote at such meeting whether or
not they shall be such Holders at the time of the meeting.
The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been called by
the Company or by Holders as provided in Section 11.3, in which case the Company
or the Holders calling the meeting, as the case may be, shall in like manner
appoint a temporary chairman. A permanent chairman and a permanent secretary of
the meeting shall be elected by vote of the Holders of a majority in principal
amount of the Senior Notes represented at the meeting and entitled to vote.
At any meeting each Holder or proxy shall be entitled to one
vote for each one thousand dollar ($1,000) principal amount of Senior Notes held
or represented by such Holder; provided, however, that no vote shall be cast or
counted at any meeting in respect of any Senior Notes challenged as not
outstanding and ruled by the chairman of the meeting to be not then outstanding.
The chairman of the meeting shall have no right to vote other than by virtue of
Senior Notes held by him or her or instruments in writing as aforesaid duly
designating him or her as the proxy to vote on behalf of other Holders. Any
meeting of Holders duly called pursuant to the provisions of Section 11.2 or
Section 11.3 may be adjourned from time to time by vote of the Holder or Holders
of a majority in aggregate principal amount of the Senior Notes represented at
the meeting and entitled to vote, and the meeting may be held as so adjourned
without further notice.
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Section 11.6 Voting at the Meeting and Record to Be Kept.
The vote upon any resolution submitted to any meeting of
Holders shall be by written ballots on which shall be subscribed the signatures
of the Holders of Senior Notes or of their representatives by proxy and the
principal amount of the Senior Notes voted by the ballot. The permanent chairman
of the meeting shall appoint two inspectors of votes, who shall count all votes
cast at the meeting for or against any resolution and who shall make and file
with the secretary of the meeting their verified written reports in duplicate of
all votes cast at the meeting. A record in duplicate of the proceedings of each
meeting of Holders shall be prepared by the secretary of the meeting and there
shall be attached to such record the original reports of the inspectors of votes
on any vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts, setting forth a copy of the notice of the meeting and
showing that such notice was mailed as provided in Section 11.2 or published as
provided in Section 11.3. The record shall be signed and verified by the
affidavits of the permanent chairman and the secretary of the meeting and one of
the duplicates shall be delivered to the Company and the other to the Trustee to
be preserved by the Trustee, the latter to have attached thereto the ballots
voted at the meeting.
Any record so signed and verified shall be conclusive evidence
of the matters therein stated.
Section 11.7 Exercise of Rights of Trustee or Holders May Not Be Hindered
or Delayed by Call of Meeting.
Nothing contained in this Article XI shall be deemed or
construed to authorize or permit, by reason of any call of a meeting of Holders
or any rights expressly or impliedly conferred hereunder to make such call, any
hindrance or delay in the exercise of any right or rights conferred upon or
reserved to the Trustee or to the Holders under any of the provisions of this
Indenture or of the Senior Notes.
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ARTICLE XII
RIGHT TO REQUIRE REPURCHASE
Section 12.1 Repurchase of Senior Notes at the Option of the Holder
Upon a Change of Control.
(a) In the event that a Change of Control
has occurred, each Holder of Senior Notes will have the right, at such Holder's
option, pursuant to an irrevocable and unconditional offer by the Company (the
"Change of Control Offer") to require the Company to repurchase all or any part
of such Holder's Senior Notes on the date that is no later than thirty (30)
Business Days after the occurrence of such Change of Control (the "Change of
Control Payment Date"), at a cash price equal to one hundred one percent (101%)
of the principal amount thereof (the "Change of Control Offer Price"), plus
accrued and unpaid interest, if any, to and including the Change of Control
Payment Date. Upon expiration of the Change of Control Offer Period, the Company
shall purchase all Senior Notes tendered in response to the Change of Control
Offer.
(b) In the event that, pursuant to this
Section 12.1, the Company shall be required to commence a Change of Control
Offer, the Company shall follow the procedures set forth in this Section 12.1 as
follows:
(1) the Change of Control Offer shall commence
within ten (10) Business Days following the Change of Control;
(2) the Change of Control Offer shall remain
open for twenty (20) Business Days following its commencement and no
longer, except to the extent that a longer period is required by
applicable law (the "Change of Control Offer Period");
(3) within five (5) Business Days following
the expiration of a Change of Control Offer, the Company shall
purchase all of the tendered Senior Notes at the Change of Control
Offer Price, plus accrued interest;
(4) if the Change of Control Payment
Date is on or after an interest payment record date and
on or before the related interest payment date, any accrued interest
will be paid to the person
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in whose name a Senior Note is registered at the close of business on
such record date, and no additional interest will be payable to Holders
who tender Senior Notes pursuant to the Change of Control Offer;
(5) the Company shall use its best
efforts to provide the Trustee with notice of the Change of Control
Offer at least five (5) Business Days before the commencement of any
Change of Control Offer; and
(6) on or before the commencement of any Change
of Control Offer, the Company or the Trustee (upon the request and
at the expense of the Company) shall send, by first-class mail, a
notice to each of the Holders, which (to the extent consistent with
this Indenture) shall govern the terms of any Change of Control Offer
and shall state:
(i) that the Change of Control Offer is being
made pursuant to this Section 12.1 and that all Senior Notes
or portions thereof tendered will be accepted for payment;
(ii) the Change of Control Offer Price (including
the amount of accrued and unpaid interest), the Change of
Control Payment Date and the Change of Control Put Date (as
defined below);
(iii) that any Senior Note, or portion
thereof, not tendered or accepted for payment
will continue to accrue interest;
(iv) that, unless the Company defaults in
depositing U.S. Legal Tender with the Paying Agent in
accordance with the last paragraph of this clause (b), or such
payment is prevented for any reason, any Senior Note, or
portion thereof, accepted for payment pursuant to the Change
of Control Offer shall cease to accrue interest after the
Change of Control Payment Date;
(v) that Holders electing to have a Senior Note,
or portion thereof, purchased pursuant to a Change of Control
Offer will be required to surrender the Senior Note, with
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the form entitled "Option of Holder to Elect Purchase" on the
reverse of the Senior Note completed, to the Paying Agent
(which may not for purposes of this Section 12.1,
notwithstanding anything in this Indenture to the contrary, be
the Company or any Affiliate of the Company) at the address
specified in the notice prior to the close of business on the
earlier of (a) the fifth (5th) Business Day prior to the
Change of Control Payment Date and (b) the fifth (5th)
Business Day following the expiration of the Change of Control
Offer (such earlier date being the "Change of Control Put
Date");
(vi) that Holders will be entitled to withdraw
their election, in whole or in part, if the Paying Agent
receives, prior to the close of business on the Change of
Control Put Date, a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder, the principal
amount of the Senior Notes the Holder is withdrawing and a
statement containing a facsimile signature and stating that
such Holder is withdrawing his election to have such principal
amount of Senior Notes purchased; and
(vii) a brief description of the events
resulting in such Change of Control.
Any such Change of Control Offer shall comply with all
applicable provisions of Federal and state laws, including those regulating
tender offers, if applicable, and any provisions of this Indenture that conflict
with such laws shall be deemed to be superseded by the provisions of such laws.
On or before the Change of Control Payment Date, the Company
shall (i) accept for payment Senior Notes or portions thereof properly tendered
pursuant to the Change of Control Offer prior to the close of business on the
Change of Control Put Date, (ii) deposit with the Paying Agent U.S. Legal Tender
or Cash Equivalents sufficient to pay the Change of Control Offer Price
(together with accrued and unpaid interest) of all Senior Notes so tendered and
(iii) deliver to the Trustee Senior Notes so accepted together with an Officers'
Certificate listing the Senior Notes or portions thereof being purchased by the
Company. The Paying Agent shall promptly mail to the Holders of Senior Notes so
accepted payment in an
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amount equal to the Change of Control Offer Price (together with accrued and
unpaid interest), and the Trustee shall promptly authenticate and mail or
deliver to such Holder a new Senior Note equal in principal amount to any
unpurchased portion of the Senior Note surrendered. Any Senior Notes not so
accepted shall be promptly mailed or delivered by the Company to the Holder
thereof. The Company shall publicly announce the results of the Change of
Control Offer on or as soon as practicable after the Change of Control Offer
Period expires, by causing notice thereof to be published at least once in each
of two (2) successive calendar weeks (on any Business Day during such week) in a
newspaper or newspapers printed in the English language, customarily published
at least five (5) days a week of a general circulation in The City of New York,
State of New York.
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ARTICLE XIII
GUARANTEE
Section 13.1 Guarantee.
(a) In consideration of good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, each
of the Guarantors hereby irrevocably and unconditionally guarantees (the
"Guarantee") to each Holder of a Senior Note authenticated and delivered by the
Trustee and to the Trustee and its successors and assigns, irrespective of the
validity and enforceability of this Indenture, the Senior Notes or the
obligations of the Company under this Indenture or the Senior Notes, that: (x)
the principal and premium (if any) of and interest on the Senior Notes will be
paid in full when due, whether at the maturity or interest payment date, by
acceleration, call for redemption, upon an Offer to Purchase, or otherwise; (y)
all other obligations of the Company to the Holders or the Trustee under this
Indenture or the Senior Notes will be promptly paid in full or performed, all in
accordance with the terms of this Indenture and the Senior Notes; and (z) in
case of any extension of time of payment or renewal of any Senior Notes or any
of such other obligations, they will be paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at maturity, by
acceleration, call for redemption, upon an Offer to Purchase or otherwise.
Failing payment when due of any amount so guaranteed for whatever reason, each
Guarantor shall be obligated to pay the same before failure so to pay becomes an
Event of Default.
(b) Each Guarantor hereby agrees that its
obligations with regard to this Guarantee shall be unconditional, irrespective
of the validity, regularity or enforceability of the Senior Notes or this
Indenture, the absence of any action to enforce the same, any delays in
obtaining or realizing upon or failures to obtain or realize upon collateral,
the recovery of any judgment against the Company, any action to enforce the same
or any other circumstances that might otherwise constitute a legal or equitable
discharge or defense of a guarantor. Each Guarantor hereby waives diligence,
presentment, demand of payment, filing of claims with a court in the event of
insolvency or bankruptcy of the Company, any right to require a proceeding first
against the Company or right to require the prior disposition of the assets of
the Company to meet its obligations, protest, notice and all demands whatsoever
and covenants that this
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Guarantee will not be discharged except by complete performance of the
obligations contained in the Senior Notes and this Indenture.
(c) If any Holder or the Trustee is required
by any court or otherwise to return to either the Company or any Guarantor, or
any Custodian, Trustee, or similar official acting in relation to either the
Company or such Guarantor, any amount paid by either the Company or such
Guarantor to the Trustee or such Holder, this Guarantee, to the extent
theretofore discharged, shall be reinstated in full force and effect. Each
Guarantor agrees that it will not be entitled to any right of subrogation in
relation to the Holders in respect of any obligations guaranteed hereby until
payment in full of all obligations guaranteed hereby. Each Guarantor further
agrees that, as between such Guarantor, on the one hand, and the Holders and the
Trustee, on the other hand, (i) the maturity of the obligations guaranteed
hereby may be accelerated as provided in Section 7.2 for the purposes of this
Guarantee, notwithstanding any stay, injunction or other prohibition preventing
such acceleration as to the Company of the obligations guaranteed hereby, and
(ii) in the event of any declaration of acceleration of those obligations as
provided in Section 7.2, those obligations (whether or not due and payable) will
forthwith become due and payable by each of the Guarantors for the purpose of
this Guarantee.
(d) It is the intention of each Guarantor
and the Company that the obligations of each Guarantor hereunder shall be in,
but not in excess of, the maximum amount permitted by applicable law.
Accordingly, if the obligations in respect of the Guarantee would be annulled,
avoided or subordinated to the creditors of any Guarantor by a court of
competent jurisdiction in a proceeding actually pending before such court as a
result of a determination both that such Guarantee was made without fair
consideration and, immediately after giving effect thereto, such Guarantor was
insolvent or unable to pay its debts as they mature or left with an unreasonably
small capital, then the obligations of such Guarantor under such Guarantee shall
be reduced by such court if and to the extent such reduction would result in the
avoidance of such annulment, avoidance or subordination; provided, however, that
any reduction pursuant to this paragraph shall be made in the smallest amount as
is strictly necessary to reach such result. For purposes of this paragraph,
"fair consideration", "insolvency", "unable to pay its debts as they mature",
"unreasonably small
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capital" and the effective times of reductions, if any, required by this
paragraph shall be determined in accordance with applicable law.
Section 13.2 Execution and Delivery of Guarantee.
To evidence its Guarantee set forth in Section 13.1, each
Guarantor agrees that a notation of such Guarantee substantially in the form
annexed hereto as contained in Exhibit A shall be endorsed on each Senior Note
authenticated and delivered by the Trustee and that this Indenture shall be
executed on behalf of such Guarantor by two (2) Officers or an Officer and an
Assistant Secretary by manual or facsimile signature.
Each Guarantor agrees that its Guarantee set forth in Section
13.1 shall remain in full force and effect and shall apply to all the Senior
Notes notwithstanding any failure to endorse on each Senior Note a notation of
such Guarantee.
If an Officer whose signature is on a Senior Note no longer
holds that office at the time the Trustee authenticates the Senior Note on which
a Guarantee is endorsed, the Guarantee shall be valid nevertheless.
The delivery of any Senior Note by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of the Guarantee
set forth in this Indenture on behalf of each Guarantor.
Section 13.3 Certain Bankruptcy Events.
Each Guarantor hereby covenants and agrees that in the event
of the insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Company, such Guarantor shall not file (or join in any filing of), or otherwise
seek to participate in the filing of, any motion or request seeking to stay or
to prohibit (even temporarily) execution on the Guarantee and hereby waives and
agrees not to take the benefit of any such stay of execution, whether under
Section 362 or 105 of the United States Bankruptcy Code or otherwise.
Section 13.4 Release of Guarantors.
(a) If a Subsidiary is designated an
Unrestricted Subsidiary in accordance with the provisions of this Indenture and
such Unrestricted Subsidiary is not an Initial Guarantor, the Trustee, at
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the Company's direction, shall cause such designated Unrestricted Subsidiary's
Guarantee to be released and be of no further force and effect and such
Unrestricted Subsidiary shall no longer be deemed to be a Subsidiary or
Guarantor unless and until such designated subsidiary is designated a
Subsidiary.
(b) If all the Capital Stock of a Guarantor
is sold by the Company or any Subsidiary or upon the consolidation or merger of
a Guarantor with or into any other person other than the Company or a
Subsidiary, in circumstances where such sale, consolidation or merger is not
prohibited by Section 5.14, such Guarantor shall be deemed automatically and
unconditionally released and discharged from all obligations under its Guarantee
and this Indenture without any further action required on the part of the
Trustee or any Holder.
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ARTICLE XIV
MISCELLANEOUS
Section 14.1 TIA Controls.
If any provision of this Indenture limits, qualifies or
conflicts with the duties imposed by operation of the TIA, the imposed duties,
upon qualification of this Indenture under the TIA, shall control.
Section 14.2 Notices.
Any notices or other communications to the Company, the
Guarantors or the Trustee required or permitted hereunder shall be in writing,
and shall be sufficiently given if made by hand delivery, by telex, by
telecopier or registered or certified mail, postage prepaid, return receipt
requested, addressed as follows:
if to the Company or any Guarantor:
Players International, Inc.
3900 Paradise Road
Suite 135
Las Vegas, NV 89109
Attn: Chief Financial Officer
if to the Trustee:
First Fidelity Bank, National Association
123 South Broad Street, 12th Floor
Philadelphia, PA 19109
Attention: Corporate Trust Administration
The Company, the Guarantors or the Trustee by notice to each
other party may designate additional or different addresses as shall be
furnished in writing by such party. Any notice or communication to the Company,
the Guarantors or the Trustee shall be deemed to have been given or made as of
the date so delivered, if personally delivered; when answered by, if telexed;
when receipt is acknowledged, if telecopied; and five (5) Business Days after
mailing if sent by registered or certified mail, postage prepaid (except that a
notice of change of address shall not be deemed to have been given until
actually received by the addressees).
Any notice or communication mailed to a Holder shall be mailed
to such person by first class mail or other equivalent means at such person's
address
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as it appears on the registration books of the Registrar and shall be
sufficiently given to such person if so mailed within the time prescribed.
Failure to mail a notice or communication to a Holder or any
defect in it shall not affect its sufficiency with respect to other Holders. If
a notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
Section 14.3 Communications by Holders with Other Holders.
Holders may communicate pursuant to TIA ss. 312(b) with other
Holders with respect to their rights under this Indenture or the Senior Notes.
The Company, the Guarantors, the Trustee, the Registrar and any other person
shall have the protection of TIA ss. 312(c).
Section 14.4 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee
to take any action under this Indenture, the Company shall furnish to the
Trustee:
(1) an Officers'
Certificate (in form and substance reasonably satisfactory to the
Trustee) stating that, in the opinion of the signers, all conditions
precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with; and
(2) an Opinion of
Counsel (in form and substance reasonably satisfactory to the Trustee)
stating that, in the opinion of such counsel, all such conditions
precedent have been complied with.
Section 14.5 Statements Required in Certificate of Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that the person making such
certificate or opinion has read such covenant or condition;
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(2) a brief statement as to the nature and
scope of the examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;
(3) a statement that, in
the opinion of such person, he or she has made such examination or
investigation as is necessary to enable him or her to express an
informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether or not, in the
opinion of each such person, such condition or covenant has
been complied with; provided, however, that with respect
to matters of fact an Opinion of Counsel may rely on an Officers'
Certificate or certificates of public officials.
Section 14.6 Rules by Trustee, Paying Agent, Registrar.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Paying Agent or Registrar may make reasonable rules for its
functions.
Section 14.7 Legal Holidays.
A "Legal Holiday" used with respect to a particular place of payment
is a Saturday, a Sunday or a day on which banking institutions in New York, New
York are not required to be open. If a payment date is a Legal Holiday in New
York, New York, payment may be made at such place on the next succeeding day
that is not a Legal Holiday, and no interest shall accrue for the intervening
period.
Section 14.8 Governing Law.
THIS INDENTURE AND THE SENIOR NOTES SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS
MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW. THE COMPANY AND EACH GUARANTOR HEREBY IRREVOCABLY SUBMIT TO
THE JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN
IN THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN
IN
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THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS INDENTURE AND THE SENIOR NOTES, AND IRREVOCABLY ACCEPTS FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY,
JURISDICTION OF THE AFORESAID COURTS. THE COMPANY AND EACH GUARANTOR IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT THEY MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW,
TRIAL BY JURY AND ANY OBJECTION WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH
COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH
COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. NOTHING HEREIN SHALL AFFECT THE
RIGHT OF THE TRUSTEE OR ANY HOLDER TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST
THE COMPANY IN ANY OTHER JURISDICTION.
Section 14.9 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of any of the Company, the Guarantors or any of their
Subsidiaries. Any such indenture, loan or debt agreement may not be used to
interpret this Indenture.
Section 14.10 No Recourse Against Others.
No direct or indirect stockholder, incorporator, employee,
officer or director, as such, past, present or future of the Company, the
Guarantors or any successor entity shall have any personal liability in respect
of the Obligations of the Company or the Guarantors under this Indenture or the
Senior Notes by reason of his, her or its status as such stockholder,
incorporator, employee, officer or director. Each Holder by accepting a Senior
Note waives and releases all such liability. Such waiver and release are part of
the consideration for the issuance of the Senior Notes.
Section 14.11 Successors.
All agreements of the Company and the Guarantors in this
Indenture and the Senior Notes shall bind their successors. All agreements of
the Trustee in this Indenture shall bind its successor.
Section 14.12 Duplicate Originals.
All parties may sign any number of copies or
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counterparts of this Indenture. Each signed copy or counterpart shall be an
original, but all of them together shall represent the same agreement.
Section 14.13 Severability.
In case any one or more of the provisions in this Indenture or
in the Senior Notes shall be held invalid, illegal or unenforceable, in any
respect for any reason, the validity, legality and enforceability of any such
provision in every other respect and of the remaining provisions shall not in
any way be affected or impaired thereby, it being intended that all of the
provisions hereof shall be enforceable to the full extent permitted by law.
Section 14.14 Table of Contents, Headings, Etc.
The Table of Contents, Cross-Reference Table and headings of
the Articles and the Sections of this Indenture have been inserted for
convenience of reference only, are not to be considered a part hereof and shall
in no way modify or restrict any of the terms or provisions hereof.
PH02/71453.3
120
<PAGE>
SIGNATURE
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed as of the date first written above.
PLAYERS INTERNATIONAL, INC.
By:
---------------------------
Name:
Title:
FIRST FIDELITY BANK, NATIONAL
ASSOCIATION, as Trustee
By:
---------------------------
Name:
Title:
GUARANTORS:
PLAYERS LAKE CHARLES, INC.
By:________________________
Name:
Title:
PLAYERS RIVERBOAT MANAGEMENT, INC.
By:__________________________
Name:
Title:
PH02/71453.3
<PAGE>
PLAYERS RIVERBOAT, INC.
By:___________________________
Name:
Title:
PLAYERS RIVERBOAT, LLC
By: Players Riverboat
Management, Inc.
By:__________________________
Name:
Title:
SHOWBOAT STAR PARTNERSHIP
By: Players Riverboat, LLC
By: Players Riverboat
Management, Inc.
By:________________________
Name:
Title:
By: Players Riverboat
Management, Inc.
By:__________________________
Name:
Title:
PLAYERS NEVADA, INC.
By:__________________________
Name:
Title:
PLAYERS MESQUITE GOLF CLUB, INC.
By:__________________________
Name:
Title:
PLAYERS MESQUITE LAND, INC.
By:___________________________
Name:
Title:
PLAYERS INDIANA, INC.
PH02/71453.3
<PAGE>
By:___________________________
Name:
Title:
PH02/71453.3
<PAGE>
PLAYERS MICHIGAN CITY, INC.
By:___________________________
Name:
Title:
PLAYERS MICHIGAN CITY
MANAGEMENT, INC.
By:___________________________
Name:
Title:
PLAYERS BLUEGRASS DOWNS, INC.
By:___________________________
Name:
Title:
RIVER BOTTOM, INC.
By:__________________________
Name:
Title:
PLAYERS MARYLAND HEIGHTS, INC.
By:_________________________
Name:
Title:
PH02/71453.3
<PAGE>
Exhibit A
FORM OF SENIOR NOTE
PLAYERS INTERNATIONAL, INC.
10 7/8% SENIOR NOTES
DUE 2005
Unless and until it is exchanged in whole or in part for
Senior Notes in definitive form, this Senior Note may not be transferred except
as a whole by the Depository to the nominee of the Depository or by a nominee of
the Depository to the Depository or another nominee of the Depository or by the
Depository or any such nominee to a successor Depository or a nominee of such
successor Depository. Unless this certificate is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) ("DTC") 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 requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or 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.1
THE SENIOR NOTES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS.
NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS
SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION. THE
HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL
OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE WHICH IS THREE
YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST
DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER
OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) ONLY (A) TO THE
COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE
SENIOR NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON
IT REASONABLY
- --------
1 This paragraph should only be added if the Senior is issued in global form.
PH02/71453.3
<PAGE>
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE
IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, OR (D) PURSUANT TO ANOTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS, OF THE SECURITIES ACT, SUBJECT TO
THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY
SUCH OFFER, SALE OR TRANSFER PURSUANT TO
CLAUSE (D) TO REQUIRE THE DELIVERY OF AN OPINION
OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE
FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE
FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY
IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO
THE TRUSTEE. THESE SENIOR NOTES MAY BE HELD OR
TRANSFERRED ONLY IN COMPLIANCE WITH APPLICABLE
GAMING LAWS.2
- --------
2 This paragraph should be included only for the Original
Senior Notes.
PH02/71453.3
<PAGE>
No.
$
Players International, Inc., a Nevada corporation (hereinafter
called the "Company," which term includes any successor corporation under the
Indenture hereinafter referred to), for value received, hereby promises to pay
to _______, or registered assigns, the principal sum of _________ Dollars, on
April 15, 2005.
Interest Payment Dates: April 15 and October
15.
Record Dates: April 1 and October 1.
Reference is made to the further provisions of this Senior
Note on the reverse side, which will, for all purposes, have the same effect as
if set forth at this place.
IN WITNESS WHEREOF, the Company has caused this Instrument to
be duly executed under its corporate seal.
Dated: ______________, 1995
PLAYERS INTERNATIONAL, INC.
By: _________________________
Title: ______________________
Attest:
- ------------------------
Secretary
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Senior Notes described in the
within-mentioned Indenture.
Dated: _______
--------------------------------
, as Trustee
By: ____________________________
Authorized Signatory
PH02/71453.3
<PAGE>
[REVERSE SIDE OF NOTE]
PLAYERS INTERNATIONAL, INC.
10 7/8% Senior Note
due 2005
1. Interest.
Players International, Inc., a Nevada corporation (hereinafter called
the "Company," which term includes any successors under the Indenture
hereinafter referred to), promises to pay interest on the principal amount of
this Security at the rate of 10 7/8% per annum. To the extent it is lawful, the
Company promises to pay interest on any interest payment due but unpaid on such
principal amount at a rate of 10 7/8% per annum compounded semi-annually.
The Company will pay interest semi-annually on April 15 and October 15
of each year (each, an "Interest Payment Date"), commencing October 15, 1995.
Interest on the Securities will accrue from the most recent date to which
interest has been paid or, if no interest has been paid on the Securities, from
April 17, 1995. Interest will be computed on the basis of a 360-day year
consisting of twelve 30-day months.
2. Method of Payment.
The Company shall pay interest on the Securities (except defaulted
interest) to the persons who are the registered Holders at the close of business
on the Record Date immediately preceding the Interest Payment Date. Holders must
surrender Securities to a Paying Agent to collect principal payments. Except as
provided below, the Company shall pay principal and interest in such coin or
currency of the United States of America as at the time of payment shall be
legal tender for payment of public and private debts ("U.S. Legal Tender").
However, the Company may pay principal and interest by wire transfer of Federal
funds, or interest by its check payable in such U.S. Legal Tender. The Company
may deliver any such interest payment to the Paying Agent or the Company may
mail any such interest payment to a Holder at the Holder's registered address.
3. Paying Agent and Registrar.
Initially, First Fidelity Bank, National
PH02/71453.3
<PAGE>
Association (the "Trustee") will act as Paying Agent and Registrar. The Company
may change any Paying Agent, Registrar or co-Registrar without notice to the
Holders. The Company or any of its Subsidiaries may, subject to certain
exceptions, act as Paying Agent, Registrar or co-Registrar.
4. Indenture.
The Company issued the Securities under an Indenture, dated as of April
10, 1995 (the "Indenture"), among the Company, the Guarantors named therein and
the Trustee. Capitalized terms herein have the meanings ascribed to such terms
in the Indenture unless otherwise defined herein. The terms of the Securities
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act, as in effect on the date of the Indenture.
The Securities are subject to all such terms, and Holders of Securities are
referred to the Indenture and said Act for a statement thereof. The Securities
are senior unsecured obligations of the Company limited in aggregate principal
amount to $150,000,000 and are unconditionally guaranteed by certain of the
Company's present, and all of the Company's future, Subsidiaries.
5. Redemption.
The Securities may be redeemed in whole or, from time to time, in part,
at any time on or after April 15, 2000, at the option of the Company, at the
Redemption Price (expressed as a percentage of principal amount) set forth
below, if redeemed during the 12-month period commencing April 15 of each of the
years indicated below, in each case, plus any accrued but unpaid interest to the
Redemption Date. Except as otherwise provided in the next paragraph, the
Securities may not otherwise be redeemed.
<TABLE>
<CAPTION>
Year Redemption Price
---- ----------------
<S> <C>
2000 104.078%
2001 102.719%
2002 101.359%
2003 and thereafter 100.000%
</TABLE>
The Securities may also be redeemed at any time if the ownership of any
of the Securities by any person or entity will preclude, interfere with,
threaten or delay the issuance, maintenance, existence or reinstatement of any
gaming or liquor license, permit or approval, or result in the imposition of
burdensome terms or
PH02/71453.3
<PAGE>
conditions on such license, permit or approval, as determined by any
Governmental Authority or the Board of Directors of the Company (including,
without limitation, such Holder failing to qualify or to be found suitable under
applicable Gaming Laws).
Any redemption of the Securities will comply with Article III of the
Indenture.
6. Notice of Redemption.
Notice of redemption will be sent by first class mail, postage prepaid,
at least thirty (30) days but not more than sixty (60) days prior to the
Redemption Date to each Holder whose Securities are to be redeemed (unless a
shorter notice shall be required by any Governmental Authority) at such Holder's
last address as then shown upon the Company's registry books. Securities may be
redeemed in part in multiples of $1,000 only.
Except as set forth in the Indenture, from and after any Redemption
Date, if monies for the redemption of the Securities called for redemption shall
have been deposited with the Paying Agent on or before such Redemption Date, the
Securities called for redemption will cease to bear interest and the only right
of the Holders of such Securities will be to receive payment of the Redemption
Price, plus any accrued and unpaid interest to the Redemption Date.
7. Denominations; Transfer; Exchange.
The Securities are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder may register
the transfer of, or exchange Securities in accordance with, the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. The Registrar need not register the transfer
of or exchange of (a) any Definitive Security selected for redemption in whole
or in part pursuant to Article III of the Indenture, except the unredeemed
portion of any Definitive Security being redeemed in part, or (b) any Security
for a period beginning fifteen (15) Business Days before the mailing of a notice
of an offer to repurchase pursuant to Article XII or Section 5.14 of the
Indenture or a notice of the Company's intent to redeem Senior Notes pursuant to
Article III of the Indenture and ending at the close of business on the
PH02/71453.3
<PAGE>
day of such mailing.
8. Persons Deemed Owners.
The registered Holder of a Security may be treated as the owner of the
Security for all purposes.
9. Unclaimed Money.
If money for the payment of principal or interest remains unclaimed for
two years, the Trustee and the Paying Agent(s) will pay the money back to the
Company at its written request. After that, all liability of the Trustee and
such Paying Agent(s) with respect to such money shall cease.
10. Discharge Prior to Redemption or Maturity.
If the Company irrevocably deposits with the Trustee, in trust, for the
benefit of the Holders, U.S. Legal Tender or U.S. Government Obligations or a
combination thereof, in such amounts as will be sufficient in the opinion of a
nationally recognized firm of independent public accountants selected by the
Trustee, to pay the principal of, premium, if any, and interest on the
Securities to redemption or maturity and complies with the other provisions of
the Indenture relating thereto, the Company and the Guarantors will be
discharged from certain provisions of the Indenture and the Securities
(including the financial covenants, but excluding their obligation to pay the
principal of, premium, if any, and interest on the Securities). Upon
satisfaction of certain additional conditions set forth in the Indenture, the
Company may elect to have its and the Guarantors' obligations discharged with
respect to outstanding Securities by defeasing the Securities, as more fully
described in Article IX of the Indenture.
11. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture or the Securities may be
amended or supplemented with the written consent of the Holder or Holders of not
less than a majority in aggregate principal amount of the Securities then
outstanding. Subject to Section 7.8 of the Indenture, the Holder or Holders of a
majority in principal amount of then outstanding Securities may waive compliance
by the Company or any Guarantor with any provision of the Indenture or the
Securities. Notwithstanding the foregoing, and subject to the provisions of
Section 10.2 of the Indenture, without the consent of the Holders of at least
sixty-six and
PH02/71453.3
<PAGE>
two-thirds percent (66-2/3%) of the aggregate principal amount of then
outstanding Securities, no such amendment, supplemental indenture or waiver
shall change any provision of Article VII or Article XIII of the Indenture or
extend any Maturity Date of any Senior Note. Without notice to or consent of any
Holder, the parties thereto may under certain circumstances amend or supplement
the Indenture or the Securities to, among other things, cure any ambiguity,
defect or inconsistency, or make any other change that does not adversely affect
the rights of any Holder of a Security.
12. Restrictive Covenants.
The Indenture imposes certain limitations on the ability of the Company
and the Guarantors to, among other things, incur additional Indebtedness and
Disqualified Capital Stock, pay dividends or make certain other restricted
payments, enter into certain transactions with Affiliates, incur Liens, sell
assets, merge or consolidate with any other Person or transfer (by lease,
assignment or otherwise) substantially all of the properties and assets of the
Company. The limitations are subject to a number of important qualifications and
exceptions. The Company must periodically report to the Trustee on compliance
with such limitations.
13. Ranking.
Payment of principal of, premium, if any, and interest on the
Securities ranks Pari Passu in right of payment with all present and future
senior Indebtedness of the Company and senior to all future subordinated
Indebtedness of the Company. The payment of the principal of, premium, if any,
and interest on the Securities is unconditionally guaranteed on a senior
unsecured basis by certain of the present and all future Subsidiaries of the
Company, as more fully set forth in the Indenture. The Guarantees will rank Pari
Passu with all existing and future senior Indebtedness of the Guarantors and
senior to all future subordinated Indebtedness of the Guarantors.
14. Repurchase at Option of Holder.
(a) If there is a Change of Control, the Company shall be required to
offer to purchase on the Change of Control Payment Date all outstanding
Securities at a purchase price equal to 101% of the principal amount thereof,
plus accrued and unpaid interest, if any, to
PH02/71453.3
<PAGE>
the Change of Control Payment Date. Holders of Securities will receive a Change
of Control Offer from the Company prior to any related Change of Control Payment
Date and may elect to have such Securities purchased by completing the form
entitled "Option of Holder to Elect Purchase" appearing below.
(b) The Indenture imposes certain limitations on the ability of the
Company or any of its Subsidiaries to sell assets or to incur an Event of Loss.
In the event the Net Cash Proceeds from an Asset Sale or Event of Loss exceed
certain amounts, as specified in the Indenture, the Company will be required
either to reinvest the proceeds of such Asset Sale or Event of Loss in its
business or to make an offer to purchase each Holder's Securities at 100% of the
principal amount thereof, plus accrued interest, if any, to the purchase date.
15. Gaming Laws.
The rights of the Holder of this Security and any owner of any
beneficial interest in this Security are subject to the Gaming Laws and the
jurisdiction and requirements of the Gaming Authorities and the further
limitations and requirements set forth in the Indenture.
16. Defaults and Remedies.
If an Event of Default occurs and is continuing (other than an Event of
Default relating to certain events of bankruptcy, insolvency or reorganization),
then in every such case, unless the principal of all of the Securities shall
have already become due and payable, either the Trustee or the Holders of not
less than 25% in aggregate principal amount of Securities then outstanding may
declare all principal and interest thereon to be due and payable immediately in
the manner and with the effect provided in the Indenture. Holders of Securities
may not enforce the Indenture or the Securities except as provided in the
Indenture. The Trustee may require indemnity satisfactory to it before the
Trustee enforces the Indenture or the Securities. Subject to certain
limitations, Holders of not less than a majority in aggregate principal amount
of the Securities then outstanding may direct the Trustee in its exercise of any
trust or power. The Trustee may withhold from Holders of Securities notice of
any continuing Default or Event of Default (except a Default in payment of
principal or interest), if it determines that withholding notice is in their
PH02/71453.3
<PAGE>
interest.
17. Trustee Dealings with Company.
The Trustee under the Indenture, in its individual or any other
capacity, may make loans to, accept deposits from, and perform services for the
Company or its Affiliates, and may otherwise deal with the Company or its
Affiliates as if it were not the Trustee.
18. Successors.
When a successor assumes all the obligations of its predecessor under
the Securities and the Indenture, the predecessor will be released from those
obligations.
19. No Recourse Against Others.
No direct or indirect stockholder, incorporator, employee, officer or
director, as such, past, present or future of the Company, the Guarantors or any
successor entity shall have any personal liability in respect of the Obligations
of the Company or the Guarantors under this Indenture or the Senior Notes by
reason of his, her or its status as such stockholder, incorporator, employee,
officer or director. Each Holder by accepting a Senior Note waives and releases
all such liability. Such waiver and release are part of the consideration for
the issuance of the Senior Notes.
20. Authentication.
This Security shall not be valid until the Trustee or authenticating
agent signs the certificate of authentication on the other side of this
Security.
21. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a
Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
22. CUSIP Numbers.
Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification
PH02/71453.3
<PAGE>
Procedures, the Company will cause CUSIP numbers to be printed on the Securities
as a convenience to the Holders of the Securities. No representation is made as
to the accuracy of such numbers as printed on the Securities and reliance may be
placed only on the other identification numbers printed hereon.
23. Additional Rights of Holders of Transfer
Restricted Securities.
In addition to the rights provided to Holders of Securities under the
Indenture, Holders of Securities shall have all the rights set forth in the
Registration
Rights Agreement.
PH02/71453.3
<PAGE>
FORM OF GUARANTEE
For value received, Players Lake Charles, Inc., a Louisiana
corporation; Players Riverboat Management, Inc., a Nevada corporation; Players
Riverboat, Inc., a Nevada corporation; Players Mesquite Golf Club, Inc., a
Nevada corporation; Players Indiana, Inc., an Indiana corporation; Players
Michigan City, Inc., an Indiana corporation; Players Riverboat, LLC, a Louisiana
limited liability company; Players Nevada, Inc., a Nevada corporation; Players
Bluegrass Downs, Inc., a Kentucky corporation; Players Mesquite Land, Inc., a
Nevada corporation; Players Michigan City Management, Inc., an Indiana
corporation; Players Maryland Heights, Inc., a Missouri corporation; River
Bottom, Inc., a Missouri corporation; and Showboat Star Partnership, a Louisiana
general partnership, hereby unconditionally guarantee to the Holder of the
Senior Note upon which this Guarantee is endorsed the due and punctual payment,
as set forth in the Indenture pursuant to which such Senior Note and this
Guarantee were issued, of the principal of, premium (if any) and interest on
such Senior Note when and as the same shall become due and payable for any
reason according to the terms of such Senior Note and Article XIII of the
Indenture. The Guarantee of the Senior Note upon which this Guarantee is
endorsed will not become effective until the Trustee signs the certificate of
authentication on such Senior Note.
Players Lake Charles, Inc., Players Michigan City, Inc.,
a Louisiana corporation an Indiana corporation
By: By:
Its: Its:
Players Riverboat Management, Players Riverboat, LLC
Inc., a Nevada corporation a Louisiana limited liability
company
By: By: Players Riverboat
Its: Management, Inc.
By:
Its:
Players Riverboat, Inc., Players Nevada, Inc.,
a Nevada corporation a Nevada corporation
By: By:
Its: Its:
PH02/71453.3
<PAGE>
Players Mesquite Golf Club, Players Bluegrass Downs,
Inc., a Nevada corporation Inc., a Kentucky corporation
By: By:
Its: Its:
Players Indiana, Inc., an Players Mesquite Land, Inc.,
Indiana corporation a Nevada corporation
By: By:
Its: Its:
Players Michigan City Players Maryland Heights,
Management, Inc., an Indiana Inc., a Missouri corporation
corporation
By:
By: Its:
Its:
River Bottom, Inc., a Showboat Star Partnership, a
Missouri corporation Louisiana general partnership
PH02/71453.3
<PAGE>
FORM OF ASSIGNMENT
I or we assign this Security to
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
[Print or type name, address and zip code of assignee]
Please insert Social Security or other identifying
number of assignee
- --------------------------------------------- and irrevocably appoint
- -------------------------------------- agent to transfer this Security on
the books of the Company. The agent may substitute
another to act for him.
Dated: ---------------------- Signed: ------------------------
- -------------------------------------------------------------------------------
(Sign exactly as name appears on
the other side of this Security)
PH02/71453.3
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the
Company pursuant to any of the following provisions of the Indenture, check the
appropriate box:
/ / Section 5.14 / /Article XII
If you want to elect to have only part of this Security
purchased by the Company pursuant to Section 5.14 or Article XII of the
Indenture, as the case may be, state the principal amount you want to be
purchased: $
Date: Signature:
(Sign exactly as your name
appears on the other side of
this Security)
PH02/71453.3
<PAGE>
SCHEDULE OF EXCHANGES OF DEFINITIVE SECURITIES3
The following exchanges of a part of this
Global Security for Definitive Securities have been
made:
<TABLE>
<S> <C> <C> <C> <C>
Principal
Date of Amount of Amount of this Global Signature
Exchange decrease in increase in Security of
Principal Principal following authorized
Amount of Amount of such officer of
this Global this Global decrease Trustee or
Security Security (or Securities
increase) Custodian
</TABLE>
- --------
3 This schedule should only be added if the Security is issued in global
form.
PH02/71453.3
<PAGE>
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR
REGISTRATION OF TRANSFER OF SECURITIES4
Re: 10 7/8% SENIOR NOTES DUE 2005 OF PLAYERS
INTERNATIONAL, INC.
This Certificate relates to $_________ principal amount of Securities
held in (check applicable space) ___ book-entry or ___ definitive form by
_____________ (the "Transferor").
The Transferor (check applicable box):
o has requested the Trustee by written order to deliver in exchange for its
beneficial interest in the Global Security held by the Depository a Security or
Securities in definitive, registered form of authorized denominations and an
aggregate principal amount equal to its beneficial interest in such Global
Security (or the portion thereof indicated above); or
o has requested the Trustee by written order to
exchange or register the transfer of a Security or
Securities.
In connection with such request and in respect of each such Security,
the Transferor does hereby certify that Transferor is familiar with the
Indenture relating to the above-captioned Securities and as provided in Section
2.6 of such Indenture, the transfer of this Security does not require
registration under the Securities Act (as defined below) because (check
applicable box):
o Such Security is being acquired for the Transferor's own account,
without transfer (in satisfaction of Section 2.6(a)(ii)(A) or Section
2.6(d)(i)(A) of the Indenture).
o Such Security is being transferred to a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act of 1933, as
amended (the "Securities Act")) in reliance on Rule 144A (in
satisfaction of Section 2.6(a)(ii)(B), Section 2.6(b)(i) or Section
2.6(d)(i)(B) of the Indenture) or pursuant to an exemption from
registration in accordance with Regulation S under the Securities Act
(in
- --------
4 The following should be included only for Original Senior Notes.
PH02/71453.3
<PAGE>
satisfaction of Section 2.6(a)(ii)(B) or Section
2.6(d)(i)(B) of the Indenture).
o Such Security is being transferred in accordance with Rule 144A under
the Securities Act, or pursuant to an effective registration statement
under the Securities Act (in satisfaction of Section 2.6(a)(ii)(B) or
Section 2.6(d)(i)(B) of the Indenture).
o Such Security is being transferred in reliance on and in compliance
with an exemption from the registration requirements of the Securities
Act, other than Rule 144A, Rule 144 or Regulation S under the
Securities Act. An Opinion of Counsel to the effect that such transfer
does not require registration under the Securities Act accompanies this
Certificate (in satisfaction of Section 2.6(a)(ii)(C) or Section
2.6(d)(i)(C) of the Indenture).
[INSERT NAME OF TRANSFEROR]
By:
Date:
PH02/71453.3
<PAGE>
Exhibit B
FORM OF INVESTMENT LETTER FOR
INSTITUTIONAL ACCREDITED INVESTORS
Players International, Inc.
c/o First Fidelity Bank, National Association
Dear Sirs:
In connection with our proposed purchase of $_________ aggregate
principal amount of the 10 7/8% Senior Notes due 2005 (the "Notes") of Players
International, Inc. (the "Company"), we confirm that:
1. We understand that the Notes and the related Guarantees (the
"Restricted Securities") have not been registered under the Securities Act of
1933, as amended (the "Securities Act"), and, unless so registered, may not be
sold except as permitted in the following sentence. We agree on our own behalf
and on behalf of any investor account for which we are purchasing Restricted
Securities to offer, sell or otherwise transfer such Restricted Securities prior
to the date that is three years after the later of the date of original issue
and the last date on which the Company or any affiliate of the Company was the
owner of such Restricted Securities (or any predecessor thereto) (the "Resale
Restriction Termination Date") only (a) to the Company, (b) pursuant to a
registration statement that has been declared effective under the Securities
Act, (c) so long as the Restricted Securities are eligible for resale pursuant
to Rule 144A under the Securities Act, to a person we reasonably believe is a
qualified institutional buyer under Rule 144A (a "QIB") that purchases for its
own account or for the account of a QIB and to whom notice is given that the
transfer is being made in reliance on Rule 144A, (d) pursuant to offers and
sales that occur outside the United States within the meaning of Regulation S
under the Securities Act, (e) to an institutional "accredited investor" within
the meaning of subparagraph (a)(1), (2), (3) or (7) of Rule 501 under the
Securities Act that is purchasing for its own account or for the account of such
an institutional "accredited investor," in each case in a minimum principal
amount of Restricted
PH02/71453.3
<PAGE>
Securities of $100,000, or (f) pursuant to any other available exemption from
the registration requirements of the Securities Act, subject in each of the
foregoing cases to any requirement of law that the disposition of our property
or the property of such investor account or accounts be at all times within our
or their control and in compliance with any applicable state securities laws.
The foregoing restrictions on resale will not apply subsequent to the Resale
Restriction Termination Date. If any resale or other transfer of the Restricted
Securities is proposed to be made pursuant to clause (e) above prior to the
Resale Restriction Termination Date, the transferor shall deliver a letter from
the transferee substantially in the form of this letter to the Trustee, that
shall provide, among other things, that the transferee is an institutional
"accredited investor" within the meaning of subparagraph (a)(1), (2), (3) or (7)
of Rule 501 under the Securities Act and that it is acquiring such Restricted
Securities for investment purposes and not for distribution in violation of the
Securities Act. Each purchaser acknowledges that the Company and the Trustee
reserve the right prior to any offer, sale or other transfer prior to the Resale
Restriction Termination Date of the Restricted Securities pursuant to clause
(d), (e) or (f) above to require the delivery of an opinion of counsel,
certifications and/or other information satisfactory to the Company and the
Trustee.
2. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) purchasing
for our own account or for the account of such an institutional "accredited
investor," and we are acquiring the Restricted Securities for investment
purposes and not with a view to, or for offer or sale in connection with, any
distribution in violation of the Securities Act and we have such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risk of our investment in the Restricted Securities, and we and any
accounts for which we are acting are each able to bear the economic risk of our
or its investment.
3. We are acquiring the Restricted Securities purchased by us for our
own account or for one or more accounts as to each of which we exercise sole
investment discretion.
4. You are entitled to rely upon this letter and
you are irrevocably authorized to produce this letter
PH02/71453.3
<PAGE>
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: _____________________
Upon transfer, the Restricted Securities would be registered in the
name of the new beneficial owner as follows:
Name:
Address:
Taxpayer ID Number:
PH02/71453.3
<PAGE>
SCHEDULE I
LIENS
First Ships Mortgage on Metropolis riverboat held by Mercedes Benz Credit
Corporation/Debis Financial -- current mortgage balance is $5.7 million.
Liens securing Indebtedness (in an amount that shall not exceed $1.25 million)
which is to be assumed as contemplated by the Beeber Agreement.
PH02/71453.3
<PAGE>
GUARANTEE
For value received, Players Lake Charles, Inc., a Louisiana
corporation; Players Riverboat Management, Inc., a Nevada corporation; Players
Riverboat, Inc., a Nevada corporation; Players Mesquite Golf Club, Inc., a
Nevada corporation; Players Indiana, Inc., an Indiana corporation; Players
Michigan City, Inc., an Indiana corporation; Players Riverboat, LLC, a Louisiana
limited liability company; Players Nevada, Inc., a Nevada corporation; Players
Bluegrass Downs, Inc., a Kentucky corporation; Players Mesquite Land, Inc., a
Nevada corporation; Players Michigan City Management, Inc., an Indiana
corporation; Players Maryland Heights, Inc., a Missouri corporation; River
Bottom, Inc., a Missouri corporation; and Showboat Star Partnership, a Louisiana
general partnership, hereby unconditionally guarantee to the Holder of the
Senior Note upon which this Guarantee is endorsed the due and punctual payment,
as set forth in the Indenture pursuant to which such Senior Note and this
Guarantee were issued, of the principal of, premium (if any) and interest on
such Senior Note when and as the same shall become due and payable for any
reason according to the terms of such Senior Note and Article XIII of the
Indenture. The Guarantee of the Senior Note upon which this Guarantee is
endorsed will not become effective until the Trustee signs the certificate of
authentication on such Senior Note.
<TABLE>
<S> <C>
Players Lake Charles, Inc., Players Michigan City, Inc.,
a Louisiana corporation an Indiana corporation
By: By:
Its: Its:
Players Riverboat Management, Inc., Players Riverboat, LLC
a Nevada corporation a Louisiana limited liability company
By: By: Players Riverboat Management, Inc.
Its: By:
Its:
Players Riverboat, Inc., Players Nevada, Inc.,
a Nevada corporation a Nevada corporation
By: By:
Its: Its:
<PAGE>
Players Mesquite Golf Club, Inc., Players Bluegrass Downs, Inc.,
a Nevada corporation a Kentucky corporation
By: By:
Its: Its:
Players Indiana, Inc., Players Mesquite Land, Inc.,
an Indiana corporation a Nevada corporation
By: By:
Its: Its:
Players Michigan City Management, Players Maryland Heights, Inc.,
Inc., an Indiana corporation a Missouri corporation
By: By:
Its: Its:
River Bottom, Inc., Showboat Star Partnership,
</TABLE>
EXCHANGE AND
REGISTRATION RIGHTS AGREEMENT
Dated as of April 17, 1995
relating to
Up to $150,000,000 Aggregate Principal Amount
of 10 7/8% Senior Notes due 2005
by and among
Players International, Inc.,
The Guarantors Named Herein
and
Donaldson, Lufkin & Jenrette Securities Corporation
and
Salomon Brothers Inc
PH02/71459.3
<PAGE>
This Exchange and Registration Rights Agreement (this
"Agreement") is made and entered into as of April 17, 1995 by and among Players
International, Inc., a Nevada corporation (the "Company"), the Guarantors (as
defined below), and Donaldson, Lufkin & Jenrette Securities Corporation and
Salomon Brothers Inc (each a "Purchaser" and, collectively, the "Purchasers"),
each of whom has agreed to purchase the Company's 10 7/8% Senior Notes due 2005
(the "Original Senior Notes") pursuant to the Purchase Agreement (as defined
below).
This Agreement is made pursuant to the Purchase Agreement,
dated April 10, 1995, (the "Purchase Agreement"), by and among the Company, the
Guarantors and the Purchasers. In order to induce the Purchasers to purchase the
Original Senior Notes, the Company has agreed to provide the registration rights
set forth in this Agreement. The execution and delivery of this Agreement is a
condition to the obligations of the Purchasers set forth in Section 1 of the
Purchase Agreement.
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms
shall have the following meanings:
Act: The Securities Act of 1933, as amended.
Broker-Dealer: Any broker or dealer registered under the
Exchange Act.
Closing Date: The date of this Agreement.
Commission: The Securities and Exchange Commission.
Company: As set forth in the preamble and shall also include
the Company's successors.
Consummate: A Registered Exchange Offer shall be deemed
"Consummated" for purposes of this Agreement upon the occurrence of (i) the
filing and effectiveness under the Act of the Exchange Offer Registration
Statement relating to the Exchange Senior Notes to be issued in the Exchange
Offer, (ii) the maintenance of such Registration Statement continuously
effective and the keeping of the Exchange Offer open for a period not less than
the minimum period required pursuant to Section 3(b) hereof, and (iii) the
delivery by the Company to the Registrar under the Indenture of Exchange Senior
Notes in the same aggregate principal amount as the aggregate principal amount
of Original Senior Notes that were tendered by Holders thereof pursuant to the
Exchange Offer.
Damages Payment Date: With respect to the Original Senior
Notes, each Interest Payment Date.
PH02/71459.3
<PAGE>
Effectiveness Target Date: As defined in Section 5.
Exchange Act: The Securities Exchange Act of 1934, as
amended.
Exchange Offer: The registration by the Company under the Act
of the Exchange Senior Notes pursuant to a Registration Statement pursuant to
which the Company offers the Holders of all outstanding Transfer Restricted
Securities the opportunity to exchange all such outstanding Transfer Restricted
Securities held by such Holders for Exchange Senior Notes in an aggregate
principal amount equal to the aggregate principal amount of the Transfer
Restricted Securities tendered in such exchange offer by such Holders.
Exchange Offer Registration Statement: The Registration
Statement relating to the Exchange Offer, including the related Prospectus.
Exchange Senior Notes: The Company's 10 7/8% Exchange Senior
Notes due 2005 to be issued pursuant to the Indenture in the Exchange Offer.
Exempt Resales: The transactions in which the Purchasers
propose to sell the Original Senior Notes to certain "qualified institutional
buyers," as such term is defined in Rule 144A under the Act, and to certain
institutional "accredited investors," as such term is defined in Rule 501(a)(1),
(2), (3) and (7) of Regulation D under the Act ("Accredited Institutions").
Guarantors: Players Lake Charles, Inc., a Louisiana
corporation; Players Riverboat Management, Inc., a Nevada corporation; Players
Riverboat, Inc., a Nevada corporation; Players Mesquite Golf Club, Inc., a
Nevada corporation; Players Indiana, Inc., an Indiana corporation; Players
Michigan City, Inc., an Indiana corporation; Players Riverboat, LLC, a Louisiana
limited liability company; Players Nevada, Inc., a Nevada corporation; Players
Bluegrass Downs, Inc., a Kentucky corporation; Players Mesquite Land, Inc., a
Nevada corporation; Players Michigan City Management, Inc., an Indiana
corporation; Players Maryland Heights, Inc., a Missouri corporation; River
Bottom, Inc., a Missouri corporation; and Showboat Star Partnership, a Louisiana
general partnership.
Holders: As defined in Section 2(b) hereof.
Indemnified Holder: As defined in Section 8(a) hereof.
Indenture: The Indenture, dated as of April 10, 1995, by and
among the Company, First Fidelity Bank, National Association, as trustee (the
"Trustee"), and the Guarantors, pursuant to which the Notes are to be issued, as
suchIndenture is amended or supplemented from time to time in accordance with
the terms thereof.
Interest Payment Date: As defined in the Indenture and the
Notes.
NASD: National Association of Securities Dealers, Inc.
Notes.
2
PH02/71459.3
<PAGE>
Person or person: An individual, corporation, partnership,
association, limited liability company, limited liability partnership, trust,
estate or other entity.
Prospectus: The prospectus included in the Registration
Statement, as amended or supplemented by any prospectus supplement and by all
other amendments thereto, including post-effective amendments, and all material
incorporated by reference into such prospectus.
Purchasers: As defined in the preamble hereto.
Record Holder: With respect to any Damages Payment Date
relating to the Notes, each Person who is a Holder of Transfer Restricted
Securities on the record date with respect to the Interest Payment Date on which
such Damages Payment Date shall occur.
Registration Default: As defined in Section 5 hereof.
Registration Statement: Any registration statement of the
Company relating to (a) an offering of Exchange Senior Notes pursuant to an
Exchange Offer or (b) the registration for resale of Transfer Restricted
Securities pursuant to a Shelf Registration Statement, which is filed pursuant
to the provisions of this Agreement, in each case, including the Prospectus
included therein, all amendments and supplements thereto (including
post-effective amendments) and all exhibits and material incorporated by
reference therein.
Shelf Filing Deadline: As defined in Section 4 hereof.
Shelf Registration Statement: As defined in Section 4 hereof.
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section
77aaa-77bbbb) as in effect on the date of the Indenture.
Transfer Restricted Securities: Each Original Senior Note,
until the earliest to occur of (a) the date on which such Original Senior Note
is exchanged in the Exchange Offer for an Exchange Senior Note and entitled to
be resold to the public without complying with the prospectus delivery
requirements of the Act, (b) the date on which such Original Senior Note has
been effectively registered under the Act and disposed of in accordance with a
Shelf Registration Statement, (c) the date on which such Original Senior Note is
distributed to the public pursuant to Rule 144 under the Act or by a
Broker-Dealer pursuant to the "Plan of Distribution" contemplated by the
Exchange Offer Registration Statement (including delivery of the Prospectus
contained therein) and (d) the date on which such Original Senior Note is
saleable pursuant to Rule 144(k) under the Act.
Underwritten Registration or Underwritten Offering: A
registration in which securities of the Company are sold to an underwriter for
reoffering to the public.
3
PH02/71459.3
<PAGE>
SECTION 2. SECURITIES SUBJECT TO THIS AGREEMENT
(a) Transfer Restricted Securities. The securities
entitled to the benefits of this Agreement are the Transfer Restricted
Securities.
(b) Holders of Transfer Restricted Securities. A Person
is deemed to be a holder of Transfer Restricted Securities (each, a "Holder")
whenever such Person owns Transfer Restricted Securities.
SECTION 3. REGISTERED EXCHANGE OFFER
(a) Unless the Exchange Offer shall not be permissible under
applicable law or Commission policy (after the procedures set forth in Section
6(a) below have been complied with), the Company and the Guarantors shall (i)
cause to be filed with the Commission as soon as practicable after the Closing
Date, but in no event later than forty five (45) days after the Closing Date, an
Exchange Offer Registration Statement on Form S-3 or S-4, if the use of such
form is then available (and, if applicable, a Shelf Registration Statement)
under the Act relating to the Exchange Senior Notes and the Exchange Offer, (ii)
use their best efforts to cause such Registration Statement to become effective
at the earliest possible time and shall use their best efforts to Consummate the
Exchange Offer prior to one hundred eighty (180) days after the Closing Date,
(iii) in connection with the foregoing, file (A) all pre-effective amendments to
such Registration Statement as may be necessary in order to cause such
Registration Statement to become effective, (B) if applicable, a post-effective
amendment to such Registration Statement under the Act and (C) cause all
necessary filings in connection with the registration and qualification of the
Exchange Senior Notes to be made under state Blue Sky or securities laws of such
jurisdictions as are necessary to permit Consummation of the Exchange Offer, and
(iv) upon the effectiveness of such Registration Statement, commence the
Exchange Offer. To the extent permitted by law, the Exchange Offer shall be on
the appropriate form permitting registration of the Exchange Senior Notes to be
offered in exchange for the Transfer Restricted Securities and to permit resales
of Notes held by Broker-Dealers as contemplated by Section 3(c) below.
(b) The Company shall cause the Exchange Offer Registration
Statement to be effective continuously and shall keep the Exchange Offer open
for a period of not less than the minimum period required under applicable
federal and state securities laws to Consummate the Exchange Offer; provided,
however, that in no event shall such period be less than twenty (20) business
days. The Company shall cause the Exchange Offer to comply with all applicable
federal and state securities laws. No securities other than the Notes shall be
included in the Exchange Offer Registration Statement; provided, however, the
Company shall not be restricted in any respect with regard to the filing or
effectiveness of any other registration statement under the Act. The Company
shall use its best efforts to cause the Exchange Offer to be Consummated on the
earliest practicable date after the Exchange Offer Registration Statement has
become effective, but in no event later than sixty (60) business days
thereafter; provided, however, the Company shall be entitled to extend, and the
preceding clause shall not be construed to restrict the Company's ability to
extend, the Exchange Offer to the extent necessary to comply with applicable
Federal and state
4
PH02/71459.3
<PAGE>
securities laws.
(c) The Company shall indicate in a "Plan of Distribution"
section contained in the Prospectus contained in the Exchange Offer Registration
Statement that any Broker-Dealer who holds Original Senior Notes that are
Transfer Restricted Securities and that were acquired for its own account as a
result of market-making activities or other trading activities (other than
Transfer Restricted Securities acquired directly from the Company), may exchange
such Original Senior Notes pursuant to the Exchange Offer; however, such
Broker-Dealer may be deemed to be an "underwriter" within the meaning of the Act
and must, therefore, deliver a prospectus meeting the requirements of the Act in
connection with any resales of the Exchange Senior Notes received by such
Broker-Dealer in the Exchange Offer, which prospectus delivery requirement may
be satisfied by the delivery by such Broker-Dealer of the Prospectus contained
in the Exchange Offer Registration Statement. Such "Plan of Distribution"
section shall also contain all other information with respect to such resales by
Broker- Dealers that the Commission may require in order to permit such resales
pursuant thereto, but such "Plan of Distribution" shall not name any such
Broker-Dealer or disclose the amount of Notes held by any such Broker-Dealer
except to the extent required by the Commission as a result of a change in
policy after the date of this Agreement.
The Company and the Guarantors shall use their best efforts to
keep the Exchange Offer Registration Statement continuously effective,
supplemented and amended as required by the provisions of Section 6(c) below to
the extent necessary to ensure that it is available for resales of Notes
acquired by Broker-Dealers for their own accounts as a result of market-making
activities or other trading activities, and to ensure that it conforms with the
requirements of this Agreement, the Act and the policies, rules and regulations
of the Commission as announced from time to time, for a period of 180 days from
the date on which the Exchange Offer is Consummated.
The Company shall provide sufficient copies of the latest
version of such Prospectus to Broker-Dealers promptly upon request at any time
during such period in order to facilitate such resales.
SECTION 4. SHELF REGISTRATION
(a) Shelf Registration. If (i) the Company is not required to
file an Exchange Offer Registration Statement or to consummate the Exchange
Offer because the Exchange Offer is not permitted by applicable law or
Commission policy (after the procedures set forth in Section 6(a) below have
been complied with), (ii) if any Holder of Transfer Restricted Securities shall
notify the Company within twenty (20) business days of the Consummation of the
Exchange Offer (A) that such Holder is prohibited by applicable law or
Commission policy from participating in the Exchange Offer, or (B) that such
Holder may not resell the Exchange Senior Notes acquired by it in the Exchange
Offer to the public without delivering a prospectus and that the Prospectus
contained in the Exchange Offer Registration Statement is not appropriate or
available for such resales by such Holder, or (C) that such Holder is a
Broker-Dealer and holds Original Senior Notes acquired directly from the Company
or one of its affiliates, then the Company and the Guarantors shall
5
PH02/71459.3
<PAGE>
(x) cause to be filed a shelf registration statement
pursuant to Rule 415 under the Act, which may be an amendment to the
Exchange Offer Registration Statement (in either event, the "Shelf
Registration Statement") on or prior to the earliest to occur of (1)
the 30th day after the date on which the Company determines that it is
not required to file the Exchange Offer Registration Statement, (2) the
30th day after the date on which the Company receives notice from a
Holder of Transfer Restricted Securities as contemplated by clause (ii)
above, and (3) the 200th day after the Closing Date, which Shelf
Registration Statement shall provide for resales of all Transfer
Restricted Securities the Holders of which shall have provided the
information required pursuant to Section 4(b) hereof (with each of the
deadlines in (1), (2) and (3) hereof constituting a "Shelf Filing
Deadline") and
(y) use their best efforts to cause such Shelf
Registration Statement to be declared effective by the Commission on or
before the 30th business day after the applicable Shelf Filing
Deadline.
The Company and the Guarantors shall use their best efforts to keep such Shelf
Registration Statement continuously effective, supplemented and amended as
required by the provisions of Sections 6(b) and (c) hereof to the extent
necessary to ensure that it is available for resales of Notes by the Holders of
Transfer Restricted Securities entitled to the benefit of this Section 4(a), and
to ensure that it conforms with the requirements of this Agreement, the Act and
the policies, rules and regulations of the Commission as announced from time to
time, for a period of two years following the Closing Date, if applicable.
(b) Provision by Holders of Certain Information in Connection
with the Shelf Registration Statement. No Holder of Transfer Restricted
Securities may include any of its Transfer Restricted Securities in any Shelf
Registration Statement pursuant to this Agreement unless and until such Holder
furnishes to the Company in writing, within ten (10) business days after receipt
of a request therefor, such information as the Company may reasonably request
for use in connection with any Shelf Registration Statement or Prospectus or
preliminary Prospectus included therein. No Holder of Transfer Restricted
Securities shall be entitled to Liquidated Damages pursuant to Section 5 hereof
unless and until such Holder shall have used its best efforts to provide all
such reasonably requested information. Each Holder as to which any Shelf
Registration Statement is being effected agrees to furnish promptly to the
Company all information required to be disclosed in order to make the
information previously furnished to the Company by such Holder not materially
misleading.
SECTION 5. LIQUIDATED DAMAGES
If (i) the Exchange Offer Registration Statement is not filed
with the Commission on or prior to forty five (45) days after the Closing Date
or a Shelf Registration Statement required by this Agreement is not filed with
the Commission on or prior to the applicable Shelf Filing Deadline specified in
Section 4 (a)(x) hereof, (ii) the Exchange Offer Registration Statement or Shelf
Registration Statement has not been declared effective by the Commission on or
prior to the date specified for such effectiveness in Section 3 or 4,
respectively, of this Agreement (the "Effectiveness
6
PH02/71459.3
<PAGE>
Target Date"), (iii) the Exchange Offer has not been Consummated within 180 days
of the Closing Date or (iv) the Exchange Offer Registration Statement or Shelf
Registration Statement required by this Agreement is filed and declared
effective but shall thereafter cease to be effective without being succeeded
within 30 days by an additional Registration Statement filed and declared
effective under the Act (each such event referred to in clauses (i) through
(iv), a "Registration Default"), the Company and the Guarantors hereby jointly
and severally agree to pay liquidated damages to each Holder of Transfer
Restricted Securities in an amount equal to $.10 per week per $1,000 principal
amount of Transfer Restricted Securities held by such Holder for each week or
portion thereof that the Registration Default continues. All accrued liquidated
damages on each Damages Payment Date shall be paid to Record Holders by the
Company in the same manner as interest payments on the Notes, as provided in the
Indenture. Following the cure of all Registration Defaults relating to any
particular Transfer Restricted Securities, the accrual of liquidated damages
with respect to such Transfer Restricted Securities will cease.
All obligations of the Company and the Guarantors set forth in the
preceding paragraph that are outstanding with respect to any Transfer Restricted
Security at the time such security ceases to be a Transfer Restricted Security
shall survive until such time as all such obligations with respect to such
Security shall have been satisfied in full.
SECTION 6. REGISTRATION PROCEDURES
(a) Exchange Offer Registration Statement. In connection with
the Exchange Offer, the Company and the Guarantors shall comply with all of the
provisions of Section 6(c) below, shall use their best efforts to effect such
exchange to permit the sale of Transfer Restricted Securities being sold in
accordance with the intended method or methods of distribution thereof, and
shall comply with all of the following provisions:
(i) If in the reasonable opinion of counsel to the Company there is a
question as to whether the Exchange Offer is permitted by applicable
law, the Company and the Guarantors hereby agree to seek a no-action
letter or other favorable decision from the Commission allowing the
Company and the Guarantors to Consummate an Exchange Offer for such
Original Senior Notes. The Company and the Guarantors each hereby agree
to pursue the issuance of such a decision to the Commission staff level
but shall not be required to take action to effect a change of
Commission policy. The Company and the Guarantors each hereby agrees,
however, to (A) participate in telephonic conferences with the
Commission, (B) deliver to the Commission staff an analysis prepared by
counsel to the Company setting forth the legal bases, if any, upon
which such counsel has concluded that such an Exchange Offer should be
permitted and (C) pursue a resolution (which need not be favorable and
may be resolved by an oral, rather than written, communication from the
Commission staff) by the Commission staff of such submission with
reasonable diligence. (ii) As a condition to its participation in the
Exchange Offer pursuant to the terms of this Agreement, each Holder of
Transfer Restricted Securities shall
7
PH02/71459.3
<PAGE>
furnish, upon the request of the Company, prior to the Consummation
thereof, a written representation to the Company (which may be
contained in the letter of transmittal contemplated by the Exchange
Offer Registration Statement) to the effect that (A) it is not an
affiliate of the Company, (B) it is not engaged in, and does not intend
to engage in, and has no arrangement or understanding with any person
to participate in, a distribution of the Exchange Senior Notes to be
issued in the Exchange Offer and (C) it is acquiring the Exchange
Senior Notes in its ordinary course of business. In addition, all such
Holders of Transfer Restricted Securities shall otherwise cooperate in
the Company's preparations for the Exchange Offer. Each Holder hereby
acknowledges and agrees that any Broker- Dealer and any such Holder
using the Exchange Offer to participate in a distribution of the
securities to be acquired in the Exchange Offer (1) could not under
Commission policy as in effect on the date of this Agreement rely on
the position of the Commission enunciated in Morgan Stanley and Co.,
Inc. (available June 5, 1991) and Exxon Capital Holdings Corporation
(available May 13, 1988), as interpreted in the Commission's letter to
Shearman & Sterling dated July 2, 1993, and similar no-action letters
(including any no-action letter obtained pursuant to clause (i) above),
and (2) must comply with the registration and prospectus delivery
requirements of the Act in connection with a secondary resale
transaction and that such a secondary resale transaction should be
covered by an effective registration statement containing the selling
security holder information required by Item 507 or 508, as applicable,
of Regulation S-K if the resales are of Exchange Senior Notes obtained
by such Holder in exchange for Original Senior Notes acquired by such
Holder directly from the Company. (iii) Prior to effectiveness of the
Exchange Offer Registration Statement, the Company and the Guarantors
shall provide a supplemental letter to the Commission (A) stating that
the Company and the Guarantors are registering the Exchange Offer in
reliance on the position of the Commission enunciated in Exxon Capital
Holdings Corporation (available May 13, 1988), Morgan Stanley and Co.,
Inc. (available June 5, 1991) and, if applicable, any no-action letter
obtained pursuant to clause (i) above and (B) including a
representation that neither the Company nor the Guarantors has entered
into any arrangement or understanding with any Person to distribute the
Exchange Senior Notes to be received in the Exchange Offer and that, to
the Company's information and belief, each Holder participating in the
Exchange Offer is acquiring the Exchange Senior Notes in its ordinary
course of business and has no arrangement or understanding with any
Person to participate in the distribution of the Exchange Senior Notes
received in the Exchange Offer.
(b) Shelf Registration Statement. In connection with the Shelf
Registration Statement, the Company and the Guarantors shall comply with all the
provisions of Section 6(c) below and shall use their best efforts to effect such
registration to permit the sale of the Transfer Restricted Securities being sold
in accordance with the intended method or methods of distribution thereof, and
pursuant thereto the Company will as expeditiously as possible prepare and file
with the Commission a Registration Statement relating to the registration on any
appropriate form under the Act, which form shall be available for the sale of
the Transfer Restricted
8
PH02/71459.3
<PAGE>
Securities in accordance with the intended method or methods of distribution
thereof.
(c) General Provisions. In connection with any
Registration Statement and any Prospectus required by this Agreement to permit
the sale or resale of Transfer Restricted Securities (including, without
limitation, any Registration Statement and the related Prospectus required to
permit resales of Notes by Broker-Dealers), the Company shall:
(i) use its best efforts to keep such Registration Statement
continuously effective (which shall be deemed to be satisfied for this
purpose if after a Registration Statement ceases to be effective it is
succeeded within thirty (30) days by an additional Registration
Statement filed and declared effective under the Act) and provide all
requisite financial statements (including, if required by the Act or
any regulation thereunder, financial statements of the Guarantors) for
the period specified in Section 3 or 4 of this Agreement, as
applicable; upon the occurrence of any event that would cause any such
Registration Statement or the Prospectus contained therein (A) to
contain a material misstatement or omission or (B) not to be effective
and usable for resale of Transfer Restricted Securities during the
period required by this Agreement, the Company shall file promptly an
appropriate amendment to such Registration Statement, in the case of
clause (A), correcting any such misstatement or omission, and, in the
case of either clause (A) or (B), use its best efforts to cause such
amendment to be declared effective and such Registration Statement and
the related Prospectus to become usable for their intended purpose(s)
as soon as practicable thereafter; (ii) prepare and file with the
Commission such amendments and post-effective amendments to the
Registration Statement as may be necessary to keep the Registration
Statement effective for the applicable period set forth in Section 3 or
4 hereof, as applicable, or such shorter period as will terminate when
all Transfer Restricted Securities covered by such Registration
Statement have been sold; cause the Prospectus to be supplemented by
any required Prospectus supplement, and as so supplemented to be filed
pursuant to Rule 424 under the Act, and to comply fully with the
applicable provisions of Rule 424 under the Act in a timely manner; and
comply with the provisions of the Act with respect to the disposition
of all securities covered by such Registration Statement during the
applicable period in accordance with the intended method or methods of
distribution by the sellers thereof set forth in such Registration
Statement or supplement to the Prospectus; (iii) advise the
underwriter(s), if any, and selling Holders promptly and, if requested
by such Persons, to confirm such advice in writing, (A) when the
Prospectus or any Prospectus supplement or post-effective amendment has
been filed, and, with respect to any Registration Statement or any
post-effective amendment thereto, when the same has become effective,
(B) of any request by the Commission for amendments to the Registration
Statement or amendments or supplements to the Prospectus or for
additional information relating thereto, (C) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement under the Act or of the suspension by any state
securities commission of the qualification of the Transfer Restricted
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<PAGE>
Securities for offering or sale in any jurisdiction, or the initiation
of any proceeding for any of the preceding purposes, (D) of the
existence of any fact or the happening of any event that makes any
statement of a material fact made in the Registration Statement, the
Prospectus, any amendment or supplement thereto, or any document
incorporated by reference therein untrue (unless amended and corrected
by disclosure in a subsequently filed document that is incorporated
therein by reference), or that requires the making of any additions to
or changes in the Registration Statement or the Prospectus in order to
make the statements therein not misleading. If at any time the
Commission shall issue any stop order suspending the effectiveness of
the Registration Statement, or any state securities commission or other
regulatory authority shall issue an order suspending the qualification
or exemption from qualification of the Transfer Restricted Securities
under state securities or Blue Sky laws, the Company and the Guarantors
shall use their best efforts to obtain the withdrawal or lifting of
such order at the earliest possible time;
(iv) furnish to each of the selling Holders and each of the
underwriter(s), if any, before filing with the Commission, copies of
any Registration Statement or any Prospectus included therein or any
amendments or supplements to any such Registration Statement or
Prospectus, which documents will be subject to the review of such
Holders and underwriter(s), if any, for a period of no more than five
(5) business days, and the Company will not file any such Registration
Statement or Prospectus or any amendment or supplement to any such
Registration Statement or Prospectus (including all such documents
incorporated by reference) to which a selling Holder
of Transfer Restricted Securities covered by such Registration
Statement or the underwriter(s), if any, shall reasonably object within
five (5) business days after the receipt thereof. A selling Holder or
underwriter, if any, shall be deemed to have reasonably objected to
such filing if such Registration Statement, amendment, Prospectus or
supplement, as applicable, as proposed to be filed, contains a material
misstatement or omits to state a material fact required to be stated
therein or necessary to make the statements, in light of the
circumstances under which they were made, not misleading;
(v) make available at reasonable times for inspection by the selling
Holders, any underwriter participating in any disposition pursuant to
such Registration Statement, and any attorney or accountant retained by
such selling Holders or any of the underwriter(s), all financial and
other records, pertinent corporate documents and properties of the
Company and the Guarantors and cause the Company's and the Guarantors'
officers, directors and employees to supply all information reasonably
requested by any such Holder, underwriter, attorney or accountant in
connection with such Registration Statement subsequent to the filing
thereof and prior to its effectiveness; (vi) if requested by any
selling Holders or the underwriter(s), if any, promptly incorporate in
any Registration Statement or Prospectus, pursuant to a supplement or
post-effective amendment if necessary, such information as such
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<PAGE>
selling Holders and underwriter(s), if any, may reasonably request to
have included therein, including, without limitation, information
relating to the "Plan of Distribution" of the Transfer Restricted
Securities, information with respect to the principal amount of
Transfer Restricted Securities being sold to such underwriter(s), the
purchase price being paid therefor and any other terms of the offering
of the Transfer Restricted Securities to be sold in such offering; and
make all required filings of such Prospectus supplement or
post-effective amendment as soon as practicable after the Company is
notified of the matters to be incorporated in such Prospectus
supplement or post-effective amendment;
(vii) cause the Transfer Restricted Securities covered by the
Registration Statement to be rated with the appropriate rating
agencies, if so requested by the Holders of a majority in aggregate
principal amount of Notes covered thereby or the underwriter(s),
if any;
(viii) furnish to each selling Holder and each of the underwriter(s),
if any, without charge, at least one copy of the Registration
Statement, as first filed with the Commission, and of each amendment
thereto;
(ix) deliver to each selling Holder and each of the underwriter(s),
if any, without charge, as many copies of the Prospectus (including
each preliminary prospectus) and any amendment or supplement thereto
as such Persons reasonably may request; the Company and the Guarantors
hereby consent to the use of the Prospectus and any amendment or
supplement thereto by each of the selling Holders and each
of the underwriter(s), if any, in connection with the offering and the
sale of the Transfer Restricted Securities covered by the Prospectus or
any amendment or supplement thereto;
(x) enter into, and cause the Guarantors to enter into and deliver an
underwriting agreement and other reasonable and customary agreements
and certificates, and make, and cause the Guarantors to make, such
representations and warranties as are reasonable and customary in
connection with a registered offering, and whether or not an
underwriting agreement is entered into and whether or not the
registration is an Underwritten Registration, the Company and the
Guarantors shall:
(A) furnish to each Purchaser, each selling Holder
and each underwriter, if any, in such substance and scope as they may
reasonably request and as are customarily made by issuers to
underwriters in primary underwritten offerings, upon the date of the
Consummation of the Exchange Offer and, if applicable, the
effectiveness of the Shelf Registration Statement:
(1) a certificate, dated the date of Consummation of
the Exchange Offer or the date of effectiveness of the Shelf
Registration Statement, as the case may be, signed by (y) the
President or any Vice President and (z) a principal financial
or accounting officer of each of the Company and the
Guarantors, confirming, as of the date thereof, the matters
set forth in paragraphs (a), (b), (c) and (d) of Section 7 of
the Purchase Agreement and such other matters as such parties
may reasonably request;
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(2) an opinion, dated the date of Consummation of the
Exchange Offer or the date of effectiveness of the Shelf
Registration Statement, as the case may be, of counsel for the
Company and the Guarantors, covering the matters set forth in
Exhibits C through K of the Purchase Agreement and such other
matter as such parties may reasonably request, and in any
event with respect to the opinion or opinions covering the
matters set forth in Exhibits C and D, including a statement
to the effect that the counsel providing each such opinion or
opinions has participated in conferences with officers and
other representatives of the Company, representatives of the
independent public accountants for the Company, the
Purchasers' representatives and the Purchasers' counsel in
connection with the preparation of such Registration Statement
and the related Prospectus and have considered the matters
required to be stated therein and the statements contained
therein, although such counsel has not independently verified
the accuracy, completeness or fairness of such statements; and
that such counsel advises that, on the basis of the foregoing
(relying as to materiality to a large extent upon facts
provided to such counsel by officers and other representatives
of the Company and without independent check or verification),
no facts came to such counsel's attention that caused such
counsel to believe that the applicable Registration Statement,
at the time such Registration Statement or any post-effective
amendment thereto became effective, and, in the case of the
Exchange Offer Registration Statement, as of the date of
Consummation, contained an untrue statement of a material fact
or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading, or that the Prospectus contained in such
Registration Statement as of its date and, in the case of the
opinion dated the date of Consummation of the Exchange Offer,
as of the date of Consummation, contained an untrue statement
of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
Without limiting the foregoing, such counsel may state further
that such counsel assumes no responsibility for, and has not
independently verified, the accuracy, completeness or fairness
of the financial statements, notes and schedules and other
financial data included in any Registration Statement
contemplated by this Agreement or the related Prospectus; and
(3) a customary comfort letter, dated as of the date
of Consummation of the Exchange Offer or the date of
effectiveness of the Shelf Registration Statement, as the case
may be, from the Company's independent accountants, in the
customary form and covering matters of the type customarily
covered in comfort letters by underwriters in connection with
primary underwritten offerings, and affirming the matters set
forth in the letters delivered pursuant to Section 7(h) of the
Purchase Agreement, without exception;
(B) set forth in full or incorporate by reference in
the underwriting agreement, if any, the indemnification provisions and
procedures of Section 8
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PH02/71459.3
<PAGE>
hereof with respect to all parties to be indemnified pursuant to said
Section; and
(C) deliver such other documents and certificates as may be
reasonably requested by such parties to evidence compliance with clause
(A) above and with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Company
pursuant to this clause (xi), if any.
If at any time the representations and warranties of the
Company and the Guarantors contemplated in clause (A)(1) above cease to be true
and correct in any material respect, the Company and the Guarantors shall so
advise the Purchasers and the underwriter(s), if any, and each selling Holder
promptly and, if requested by such Persons, shall confirm such advice in
writing;
(xi) prior to any public offering of Transfer Restricted
Securities, cooperate with, and cause the Guarantors to
cooperate with, the selling Holders, the underwriter(s), if
any, and their respective counsel in connection with the
registration and qualification of the Transfer Restricted
Securities under the securities or Blue Sky laws of such
jurisdictions as the selling Holders or underwriter(s) may
request and do any and all other acts or things necessary or
advisable to enable the disposition in such jurisdictions of
the Transfer Restricted Securities covered by the Shelf
Registration Statement; provided, however, that neither the
Company nor the Guarantors shall be required to register or
qualify as a foreign corporation where it is not now so
qualified or to take any action that would subject it to the
service of process in suits or to taxation, other than as to
matters and transactions relating to the Registration
Statement, in any jurisdiction where it is not now so subject;
(xii) shall issue, upon the request of any Holder of Original
Senior Notes covered by the Shelf Registration Statement,
Exchange Senior Notes, having an aggregate principal amount
equal to the aggregate principal amount of Original Senior
Notes surrendered to the Company by such Holder in exchange
therefor or being sold by such Holder; such Exchange Senior
Notes to be registered in the name of such Holder or in the
name of the purchaser(s) of such Notes, as the case may be; in
return, the Original Senior Notes held by such Holder shall be
surrendered to the Company for cancellation; (xiii) cooperate
with, and cause the Guarantors to cooperate with, the selling
Holders and the underwriter(s), if any, to facilitate the
timely preparation and delivery of certificates representing
Transfer Restricted Securities to be sold and not bearing any
restrictive legends; and enable such Transfer Restricted
Securities to be in such denominations and registered in such
names as the Holders or the underwriter(s), if any, may
request at least two business days prior to any sale of
Transfer Restricted Securities made by such underwriter(s);
(xiv) use its best efforts to cause the Transfer Restricted
Securities
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PH02/71459.3
<PAGE>
covered by the Registration Statement to be registered with or
approved by such other governmental agencies or authorities as
may be necessary to enable the seller or sellers thereof or
the underwriter(s), if any, to consummate the disposition of
such Transfer Restricted Securities, subject to the proviso
contained in clause (viii) above; (xv) if any fact or event
contemplated by clause (c)(iii)(D) above shall exist or have
occurred, prepare a supplement or post-effective amendment to
the Registration Statement or related Prospectus or any
document incorporated therein by reference or file any other
required document so that, as thereafter delivered to the
purchasers of Transfer Restricted Securities, the Prospectus
will not contain an untrue statement of a material fact or
omit to state any material fact necessary to make the
statements therein not misleading; (xvi) provide a CUSIP
number for all Transfer Restricted Securities not later than
the effective date of the Registration Statement and provide
the Trustee under the Indenture with printed certificates for
the Transfer Restricted Securities which are in a form
eligible for deposit with the Depository Trust Company; (xvii)
cooperate and assist in any filings required to be made with
the NASD and in the performance of any due diligence
investigation by any underwriter (including any "qualified
independent underwriter") that is required to be retained in
accordance with the rules and regulations of the NASD, and use
its reasonable best efforts to cause such Registration
Statement to become effective and approved by such
governmental agencies or authorities as may be necessary to
enable the Holders selling Transfer Restricted Securities to
consummate the disposition of such Transfer Restricted
Securities; (xviii) otherwise use its best efforts to comply
with all applicable rules and regulations of the Commission,
and make generally available to its security holders, as soon
as practicable, a consolidated earnings statement meeting the
requirements of Rule 158 (which need not be audited) for the
twelve-month period (A) commencing at the end of any fiscal
quarter in which Transfer Restricted Securities are sold to
underwriters in a firm or best efforts Underwritten Offering
or (B) if not sold to underwriters in such an offering,
beginning with the first month of the Company's first fiscal
quarter commencing after the effective date of the
Registration Statement; (xix) cause the Indenture to be
qualified under the TIA not later than the effective date of
the first Registration Statement required by this Agreement,
and, in connection therewith, cooperate, and cause the
Guarantors to cooperate, with the Trustee and the Holders of
Notes to effect such changes to the Indenture as may be
required for such Indenture to be so qualified in accordance
with the terms of the TIA; and execute, and cause the
Guarantors to execute, and use its best efforts to
14
PH02/71459.3
<PAGE>
cause the Trustee to execute, all documents that may be
required to effect such changes and all other forms and
documents required to be filed with the Commission to enable
such Indenture to be so qualified in a timely manner; (xx)
cause all Transfer Restricted Securities covered by the
Registration Statement to be listed on each securities
exchange on which similar securities issued by the Company are
then listed if requested by the Holders of a majority in
aggregate principal amount of Original Senior Notes or the
managing underwriter(s), if any; and (xxi) provide promptly to
each Holder upon request each document filed with the
Commission pursuant to the requirements of Section 13 and
Section 15 of the Exchange Act.
Each Holder agrees by acquisition of a Transfer Restricted
Security that, upon receipt of any notice from the Company of the existence
of any fact of the kind described in Section 6(c)(iii)(D) hereof, such Holder
will forthwith discontinue disposition of Transfer Restricted Securities
pursuant to the applicable Registration Statement until such Holder's
receipt of the copies of the supplemented or amended Prospectus contemplated by
Section 6(c)(xvi) hereof, or until it is advised in writing (the "Advice") by
the Company that the use of the Prospectus may be resumed, and has received
copies of any additional or supplemental filings that are incorporated by
reference in the Prospectus. If so directed by the Company, each Holder will
deliver to the Company (at the Company's expense) all copies, other than
permanent file copies then in such Holder's possession, of the Prospectus
covering such Transfer Restricted Securities that was current at the time of
receipt of such notice. In the event the Company shall give any such notice, the
time period regarding the effectiveness of such Registration Statement set forth
in Section 3 or 4 hereof, as applicable, shall be extended by the number of days
during the period from and including the date of the giving of such notice
pursuant to Section 6(c)(iii)(D) hereof to and including the date when each
selling Holder covered by such Registration Statement shall have received the
copies of the supplemented or amended Prospectus contemplated by Section
6(c)(xvi) hereof or shall have received the Advice.
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<PAGE>
SECTION 7. REGISTRATION EXPENSES
(a) All expenses incident to the Company's or the Guarantors'
performance of or compliance with this Agreement will be borne by the Company or
the Guarantors, regardless of whether a Registration Statement becomes
effective, including without limitation: (i) all registration and filing fees
and expenses (including filings made by any Purchaser or Holder with the NASD
(and, if applicable, the fees and expenses of any "qualified independent
underwriter" and its counsel that may be required by the rules and regulations
of the NASD)); (ii) all fees and expenses of compliance with federal securities
and state Blue Sky or securities laws; (iii) all expenses of printing (including
printing certificates for the Exchange Senior Notes to be issued in the Exchange
Offer and printing of Prospectuses), messenger and delivery services and
telephone; (iv) all fees and disbursements of counsel for the Company, the
Guarantors and, subject to Section 7(b) below, the Holders of Transfer
Restricted Securities; (v) all application and filing fees in connection with
listing Notes on a national securities exchange or automated quotation system
pursuant to the requirements hereof; and (vi) all fees and disbursements of
independent certified public accountants of the Company and the Guarantors
(including the expenses of any special audit and comfort letters required by or
incident to such performance).
The Company will, in any event, bear its and the Guarantors'
internal expenses (including, without limitation, all salaries and expenses of
its officers and employees performing legal or accounting duties), the expenses
of any annual audit and the fees and expenses of any Person, including special
experts, retained by the Company.
(b) In connection with any Registration Statement required by
this Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Company will reimburse the
Purchasers and the Holders of Transfer Restricted Securities being tendered in
the Exchange Offer and/or resold pursuant to the "Plan of Distribution"
contained in the Exchange Offer Registration Statement or registered pursuant to
the Shelf Registration Statement, as applicable, for the reasonable fees and
disbursements of not more than one counsel, who shall be Gibson, Dunn & Crutcher
or such other counsel as may be chosen by the Holders of a majority in principal
amount of the Transfer Restricted Securities for whose benefit such Registration
Statement is being prepared.
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<PAGE>
SECTION 8. INDEMNIFICATION
(a) The Company and the Guarantors, jointly and severally,
agree to indemnify and hold harmless (i) each Holder and (ii) each person, if
any, who controls (within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act) any Holder (any of the persons referred to in this clause (ii)
being hereinafter referred to as a "controlling person") and (iii) the
respective officers, directors, partners, employees, representatives and agents
of any Holder or any controlling person (any person referred to in clause (i),
(ii) or (iii) may hereinafter be referred to as an "Indemnified Holder"), to the
fullest extent lawful, from and against any and all losses, claims, damages,
liabilities, judgments, actions and expenses (including without limitation and
as incurred, reimbursement of all reasonable costs of investigating, preparing,
pursuing or defending any claim or action, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, including the
reasonable fees and expenses of counsel to any Indemnified Holder) directly or
indirectly caused by, related to, based upon, arising out of or in connection
with any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement or Prospectus (or any amendment or
supplement thereto), or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages,
liabilities or expenses are caused by an untrue statement or omission or alleged
untrue statement or omission that is made in reliance upon and in conformity
with information relating to any of the Holders furnished in writing to the
Company by any of the Holders expressly for use therein.
In case any action or proceeding (including any governmental
or regulatory investigation or proceeding) shall be brought or asserted against
any of the Indemnified Holders with respect to which indemnity may be sought
against the Company or the Guarantors, such Indemnified Holder (or the
Indemnified Holder controlled by such controlling person) shall promptly notify
the Company and the Guarantors in writing (provided, that the failure to give
such notice shall not relieve the Company or the Guarantors of their obligations
pursuant to this Agreement). Such Indemnified Holder shall have the right to
employ its own counsel in any such action and the fees and expenses of such
counsel shall be paid, as incurred, by the Company and the Guarantors
(regardless of whether it is ultimately determined that an Indemnified Holder is
not entitled to indemnification hereunder). The Company and the Guarantors shall
not, in connection with any one such action or proceeding or separate but
substantially similar or related actions or proceedings in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) at any time for such Indemnified Holders, which
firm shall be designated by the Holders. The Company shall be liable for any
settlement of any such action or proceeding effected with the Company's prior
written consent, which consent shall not be withheld unreasonably, and the
Company agrees to indemnify and hold harmless any Indemnified Holder from and
against any loss, claim, damage, liability or expense by reason of any
settlement of any action effected with the written consent of the Company. The
Company shall not, without the prior written consent of each Indemnified Holder,
settle or compromise or consent to the entry of judgment in or otherwise seek to
terminate any pending or threatened action, claim, litigation or pro-
17
PH02/71459.3
<PAGE>
ceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not any Indemnified Holder is a party thereto), unless
such settlement, compromise, consent or termination includes an unconditional
release of each Indemnified Holder from all liability arising out of such
action, claim, litigation or proceeding.
(b) Each Holder of Transfer Restricted Securities agrees,
severally and not jointly, to indemnify and hold harmless the Company and the
Guarantors, and their respective directors, officers, and any person controlling
(within the meaning of Section 15 of the Act or Section 20 of the Exchange Act)
the Company, and the respective officers, directors, partners, employees,
representatives and agents of each such person, to the same extent as the
foregoing indemnity from the Company and the Guarantors to each of the
Indemnified Holders, but only with respect to claims and actions based on
information relating to such Holder furnished in writing by such Holder
expressly for use in any Registration Statement. In case any action or
proceeding shall be brought against the Company or its directors or officers or
any such controlling person in respect of which indemnity may be sought against
a Holder of Transfer Restricted Securities, such Holder shall have the rights
and duties given the Company and the Company or its directors or officers or
such controlling person shall have the rights and duties given to each Holder by
the preceding paragraph. In no event shall the liability of any selling Holder
hereunder be greater in amount than the dollar amount of the proceeds received
by such Holder upon the sale of the Registrable Senior Notes giving rise to such
indemnification obligation.
(c) If the indemnification provided for in this Section 8 is
unavailable to an indemnified party under Section 8(a) or Section 8(b) hereof
(other than by reason of exceptions provided in those Sections) in respect of
any losses, claims, damages, liabilities or expenses referred to therein, then
each applicable indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Holders on the other hand from their sale of
Transfer Restricted Securities or if such allocation is not permitted by
applicable law, the relative fault of the Company on the one hand and of the
Indemnified Holder on the other in connection with the statements or omissions
which resulted in such losses, claims, damages, liabilities or expenses, as well
as any other relevant equitable considerations. The relative fault of the
Company and the Guarantors on the one hand and of the Indemnified Holder on the
other shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
or the Guarantors or by the Indemnified Holder and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The amount paid or payable by a party as a result of the
losses, claims, damages, liabilities and expenses referred to above shall be
deemed to include, subject to the limitations set forth in the second paragraph
of Section 8(a), any legal or other fees or expenses reasonably incurred by such
party in connection with investigating or defending any action or claim.
The Company, the Guarantors and each Holder of Transfer
Restricted
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<PAGE>
Securities agree that it would not be just and equitable if contribution
pursuant to this Section 8(c) were determined by pro rata allocation (even if
the Holders were treated as one entity for such purpose) or by any other method
of allocation which does not take account of the equitable considerations
referred to in the immediately preceding paragraph. The amount paid or payable
by an indemnified party as a result of the losses, claims, damages, liabilities
or expenses referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8, none of the Holders (and its related Indemnified
Holders) shall be required to contribute, in the aggregate, any amount in excess
of the amount by which the total discount received by such Holder with respect
to the Original Senior Notes exceeds the amount of any damages which such Holder
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. 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. The Holders' obligations to contribute pursuant to this
Section 8(c) are several in proportion to the respective principal amount of
Original Senior Notes held by each of the Holders hereunder and not joint.
SECTION 9. RULE 144A
The Company hereby agrees with each Holder, for so long as any
Transfer Restricted Securities remain outstanding, to make available to any
Holder or beneficial owner of Transfer Restricted Securities in connection with
any sale thereof and any prospective purchaser of such Transfer Restricted
Securities from such Holder or beneficial owner, the information required by
Rule 144A(d)(4) under the Act in order to permit resales of such Transfer
Restricted Securities pursuant to Rule 144A.
SECTION 10. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS
No Holder may participate in any Underwritten Registration hereunder unless
such Holder (a) agrees to sell such Holder's Transfer Restricted Securities on
the basis provided in any underwriting arrangements approved by the Persons
entitled hereunder to approve such arrangements and (b) completes and executes
all reasonable questionnaires, powers of attorney, indemnities, underwriting
agreements, lock-up letters and other documents required under the terms of such
underwriting arrangements.
SECTION 11. SELECTION OF UNDERWRITERS
The Holders of Transfer Restricted Securities covered by the
Shelf Registration Statement who desire to do so may sell such Transfer
Restricted Securities in an Underwritten Offering. In any such Underwritten
Offering, the investment banker or investment bankers and manager or managers
that will administer the offering will be selected by the Holders of a majority
in aggregate principal amount of the Transfer Restricted Securities included in
such offering; provided, that such investment bankers and managers must be
reasonably satisfactory to the Company.
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SECTION 12. MISCELLANEOUS
(a) Remedies. To the extent permitted by law, the Company and
the Guarantors agree that monetary damages (including the liquidated damages
contemplated hereby) would not be adequate compensation for any loss incurred by
reason of a breach by it of the provisions of this Agreement and hereby agree to
waive the defense in any action for specific performance that a remedy at law
would be adequate.
(b) No Inconsistent Agreements. The Company will not, and will
cause the Guarantors not to, on or after the date of this Agreement enter into
any agreement with respect to its securities that is inconsistent with the
rights granted to the Holders in this Agreement or otherwise conflicts with the
provisions hereof. The rights granted to the Holders hereunder do not in any way
conflict with and are not inconsistent with the rights granted to the holders of
the Company's securities under any agreement in effect on the date hereof.
(c) Adjustments Affecting the Notes. The Company will not take
any action, or permit any change to occur, with respect to the Notes that would
materially and adversely affect the ability of the Holders to Consummate any
Exchange Offer.
(d) Amendments and Waivers. The provisions of this Agreement
may not be amended, modified or supplemented, and waivers or consents to or
departures from the provisions hereof may not be given unless the Company has
obtained the written consent of Holders of not less than a majority of the
outstanding principal amount of Transfer Restricted Securities. Notwithstanding
the foregoing, a waiver or consent to departure from the provisions hereof that
relates exclusively to the rights of Holders whose securities are being tendered
pursuant to the Exchange Offer and that does not affect directly or indirectly
the rights of other Holders whose securities are not being tendered pursuant to
such Exchange Offer may be given by the Holders of not less than a majority of
the outstanding principal amount of Transfer Restricted Securities being
tendered or registered.
(e) Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery, first-class
mail (registered or certified, return receipt requested), telex, telecopier, or
air courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the
records of the Registrar under the Indenture, with a copy to the
Registrar under the Indenture; and
(ii) if to the Company:
Players International, Inc.
3900 Paradise Road
Suite 135
Las Vegas, Nevada 89109
Telecopier No.: (702) 691-3377
Attention: Chief Financial Officer
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All such notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally delivered; five
business days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt acknowledged, if telecopied; and on
the next business day, if timely delivered to an air courier guaranteeing
overnight delivery.
Copies of all such notices, demands or other communications
shall be concurrently delivered by the Person giving the same to the Trustee at
the address specified in the Indenture.
(f) 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 limitation and without the need for an express
assignment, subsequent Holders of Transfer Restricted Securities; provided,
however, that this Agreement shall not inure to the benefit of or be binding
upon a successor or assign of a Holder unless and to the extent such successor
or assign acquired Transfer Restricted Securities from such Holder.
(g) 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.
(h) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO THE CONFLICT OF LAW RULES THEREOF.
(j) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
(k) Entire Agreement. This Agreement together with the other
Operative Documents (as defined in the Purchase Agreement) is intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein with respect to the registration rights granted by the Company with
respect to the Transfer Restricted Securities. This Agreement supersedes all
prior agreements and understandings between the parties with respect to such
subject matter.
21
PH02/71459.3
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
PLAYERS INTERNATIONAL, INC.
By:__________________________
Name:
Title:
GUARANTORS: PLAYERS LAKE CHARLES, INC.
By:__________________________
Name:
Title:
PLAYERS RIVERBOAT MANAGEMENT, INC.
By:__________________________
Name:
Title:
PLAYERS RIVERBOAT, INC.
By:__________________________
Name:
Title:
PLAYERS MESQUITE GOLF CLUB, INC.
By:__________________________
Name:
Title:
PH02/71459.3
<PAGE>
PLAYERS INDIANA, INC.
By:__________________________
Name:
Title:
PLAYERS MICHIGAN CITY, INC.
By:__________________________
Name:
Title:
PLAYERS RIVERBOAT, LLC
By: Players Riverboat Management, Inc.
By:__________________________
Name:
Title:
PLAYERS NEVADA, INC.
By:__________________________
Name:
Title:
PLAYERS BLUEGRASS DOWNS, INC.
By:__________________________
Name:
Title:
PH02/71459.3
<PAGE>
PLAYERS MICHIGAN CITY MANAGEMENT,
INC.
By:____________________________
Name:
Title:
PLAYERS MARYLAND HEIGHTS, INC.
By:____________________________
Name:
Title:
PLAYERS MESQUITE LAND, INC.
By:____________________________
Name:
Title:
RIVER BOTTOM, INC.
By:____________________________
Name:
Title:
SHOWBOAT STAR PARTNERSHIP
By: Players Riverboat, LLC
By: Players Riverboat Management, Inc.
By:_____________________________
Name:
Title:
By: Players Riverboat Management, Inc.
By:____________________________
Name:
Title:
PH02/71459.3
<PAGE>
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By:_______________________
Name:
Title:
SALOMON BROTHERS INC
By:_______________________
Name:
Title:
PH02/71459.3
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT
TO SECTION 305(b)(2)
FIRST FIDELITY BANK, NATIONAL ASSOCIATION
(Exact Name of Trustee as Specified in its Charter)
22-1147033
(I.R.S. Employer Identification No.)
202A SOUTH BRIDGE STREET, ELKTON, MARYLAND
(Address of Principal Executive Offices)
21921
(Zip Code)
FIRST FIDELITY BANK, NATIONAL ASSOCIATION
123 SOUTH BROAD STREET
PHILADELPHIA, PA 19109
ATTENTION: CORPORATE TRUST ADMINISTRATION
(215) 985-6000
(Name, address and telephone number of Agent for Service)
PLAYERS INTERNATIONAL, INC.
(Exact Name of Obligor as Specified in its Charter)
NEVADA
(State or other jurisdiction of Incorporation or Organization)
95-41745832
(I.R.S. Employer Identification No.)
3900 PARADISE ROAD, LAS VEGAS, NEVADA
(Address of Principal Executive Offices)
89109
(Zip Code)
10-7/8% SENIOR NOTES DUE 2005
Application relates to all securities registered pursuant
to the delayed offering registration statement
(Title of Indenture Securities)
<PAGE>
1. General information.
Furnish the following information as to the trustee:
a) Name and address of each examining of supervisory authority to
which it is subject
Comptroller of the Currency
United States Department of the Treasury
Washington, D.C. 20219
Federal Reserve Bank (3rd District)
Philadelphia, Pennsylvania 19106
Federal Deposit Insurance Corporation
Washington, D.C. 20429
b) Whether it is authorized to exercise corporate trust subject powers.
Yes.
2. Affiliations with obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
3. Voting securities of the trustee.
Furnish the following information as to each class of voting
securities of the trustee:
Not applicable - see answer to Item 13.
4. Trusteeships under other indentures.
If the trustee is a trustee under another indenture under which any other
securities, or certificates of interest or participation in any other
securities, of the obligor are outstanding, furnish the following information:
Not applicable - see answer to Item 13.
5. Interlocking directorates and similar relationships with the
obligor or underwriters.
If the trustee or any of the directors or executive officers of the
trustee is a director, officer, partner, employee, appointee, or
representative of the obligor or of any underwriter for the obligor,
identify each such person having any such connection and state the
nature of each such connection.
Not applicable - see answer to Item 13.
6. Voting securities of the trustee owned by the obligor or its
officials.
<PAGE>
Furnish the following information as to the voting securities of
the trustee owned beneficially by the obligor and each director, partner,
and executive officer of the obligor:
Not applicable - see answer to Item 13.
7. Voting securities of the trustee owned by underwriters or their
officials.
Furnish the following information as to the voting securities of
the trustee owned beneficially by each underwriter for the obligor and
each director, partner, and executive officer of each such underwriter:
Not applicable - see answer to Item 13.
8. Securities of the obligor owned or held by the trustee.
Furnish the following information as to securities of the obligor
owned beneficially or held as collateral security for obligations in
default by the trustee:
Not applicable - see answer to Item 13.
9. Securities of underwriters owned or held by the trustee.
If the trustee owns beneficially or holds as collateral security
for obligations in default any securities of an underwriter for the
obligor, furnish the following information as to each class of
securities of such underwriter any of which are so owned or held by the
trustee:
Not applicable - see answer to Item 13.
10. Ownership or holdings by the trustee of voting securities of certain
affiliates or security holders of the obligor.
If the trustee owns beneficially or holds as collateral security
for obligations in default voting securities of a person who, to the
knowledge of the trustee (1) owns 10 percent or more of the voting
stock of the obligor or (2) is an affiliate, other than a subsidiary,
of the obligor, furnish the following information as to the voting
securities of such person:
Not applicable - see answer to Item 13.
11. Ownership or holdings by the trustee of any securities of a person
owning 50 percent or more of the voting securities of the obligor.
If the trustee owns beneficially or holds as collateral security
for obligations in default any securities of a person who, to the
knowledge of the trustee, owns 50 percent or more of the voting
securities of the obligor, furnish the following information as to each
class of securities of such person any of which are so owned or held by
the trustee:
Not applicable - see answer to Item 13.
12. Indebtedness of the obligor to the trustee.
Except as noted in the instructions, if the obligor is indebted to
<PAGE>
the trustee, furnish the following information:
Not applicable - see answer to Item 13.
13. Defaults by the obligor.
(a) State whether there is or has been a default with respect to the
securities under this indenture. Explain the nature of any such default.
None.
(b) If the trustee is a trustee under another indenture under
which any other securities, or certificates of interest or participation in
any other securities, of the obligor are outstanding, or is trustee for
more than one outstanding series of securities under the indenture,
state whether there has been a default under any such indenture or
series, identify the indenture or series affected, and explain the
nature of any such default.
None.
14. Affiliations with the underwriters.
If any underwriter is an affiliate of the trustee, describe each
such affiliation.
Not applicable - see answer to Item 13.
15. Foreign trustee.
Identify the order or rule pursuant to which the trustee is
authorized to act as sole trustee under indentures qualified or to be
qualified under the Act.
Not applicable - trustee is a national banking association
organized under the laws of the United States.
16. List of Exhibits.
List below all exhibits filed as part of this statement of
eligibility.
__ 1. Copy of Articles of Association of the trustee as now in effect.**
__ 2. Copy of the Certificate of the Comptroller of the Currency date
dated January 11, 1994, evidencing the authority of the
trustee to transact business.*
3. Copy of the Certification of Fiduciary Powers of the trustee by the
Office of the Comptroller of the Currency dated July 24, 1992.*
4. Copy of existing by-laws of the trustee.**
__ 5. Copy of each indenture referred to in Item 4, if the obligor is in
default.
-Not Applicable.
X 6. Consent of the trustee required by Section 321(b) of the Act.
- --
X 7. Copy of report of condition of the trustee at the close of business
- -- on March 31, 1995, published pursuant to the requirements of its
supervising authority.
<PAGE>
8. Copy of any order pursuant to which the foreign trustee is authorized
to act as sole trustee under indentures qualified or to be qualified
under the Act.
- Not Applicable
9. Consent to service of process required of foreign trustees pursuant to
Rule 10a-4 under the Act.
- Not Applicable
_____________________
*Previously filed with the Securities Exchange Commission on February
11, 1994 as an Exhibit to Form T-1 in connection with Registration Statement
Number 22-73340 and **previously filed with the Securities Exchange Commission
on April 14, 1995 with Registration Statement Number 33-58625 and incorporated
herein by reference
NOTE
The trustee disclaims responsibility for the accuracy or completeness of
information contained in this Statement of Eligibility and Qualification not
known to the trustee and not obtainable by it through reasonable investigation
and as to which information it has obtained from the obligor and has had to rely
or will obtain from the principal underwriters and will have to rely.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
trustee, First Fidelity Bank, National Association, a national banking
association organized and existing under the laws of the United States of
America, has duly caused this Statement of Eligibility and Qualification to be
signed on its behalf by the undersigned, thereunto duly authorized, all in the
City of Philadelphia and Commonwealth of Pennsylvania, on the 22nd day of May,
1995.
FIRST FIDELITY BANK, NATIONAL ASSOCIATION
By: s/John H. Clapham
-------------------------
John H. Clapham
Asst. Vice President
<PAGE>
EXHIBIT
CONSENT OF TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture Act
of 1939, and in connection with the proposed issue of Players International,
Inc. 10-7/8% Senior Notes Due 2005, First Fidelity Bank, National Association,
hereby consents that reports of examinations by Federal, State, Territorial or
District authorities may be furnished by such authorities to the Securities and
Exchange Commission upon request therefor.
FIRST FIDELITY BANK, NATIONAL ASSOCIATION
By: s/John H. Clapham
--------------------
John H. Clapham
Asst. Vice President
Philadelphia, Pennsylvania
May 22, 1995
<PAGE>
REPORT OF CONDITION
EXHIBIT 7
Consolidating domestic and foreign subsidiaries of the First Fidelity Bank,
National Association of Elkton in the state of Maryland, at the close of
business on March 31, 1995, published in response to call made by Comptroller of
the Currency, under title 12, United States Code, Section 161. Charter Number
33869 Comptroller of the Currency Northeastern District.
Statement of Resources and Liabilities
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Thousands of Dollars
--------------------
Cash and balance due from depository institutions:
Noninterest-bearing balances and currency and coin.......... 1,599,546
Interest-bearing balances................................... 131,786
Securities....................................................
Hold-to-maturity securities................................. 3,154,827
Available-for-sale securities............................... 3,271,974
Federal funds sold and securities purchased under agreements
to resell in domestic offices of the bank and of its
Edge and Agreement subsidiaries, and in IBFs:
Federal funds sold.......................................... 10,000
Securities purchased under agreements to resell............. 207,267
Loans and lease financing receivables:
Loan and leases, net of unearned income.............22,371,585
LESS: Allowance for loan and lease losses..............517,965
LESS: Allocated transfer risk reserve........................0
Loans and leases, net of unearned income, allowance, and
reserve....................................................... 21,853,620
Assets held in trading accounts............................... 70,275
Premises and fixed assets (including capitalized leases)...... 390,023
Other real estate owned....................................... 135,803
Investment in unconsolidated subsidiaries and associated
companies..................................................... 13,434
Customer's liability to this bank on acceptances outstanding.. 180,053
Intangible assets............................................. 721,391
Other assets.................................................. 890,755
Total assets.................................................. 32,630,754
LIABILITIES
Deposits:
In domestic offices...................................... 25,014,990
Noninterest-bearing......................4,531,531
Interest-bearing........................20,483,459
In foreign offices, Edge and Agreement subsidiaries,
and IBFs................................................. 1,106,660
Noninterest-bearing.........................11,811
Interest-bearing.........................1,094,849
Federal funds purchased and securities sold under agreements
to repurchase in domestic offices of the bank and of its
Edge and Agreement subsidiaries, and IBFs
Federal fund purchased................................... 1,044,014
Securities sold under agreements to repurchase........... 1,421,199
Demand notes issued to the U.S. Treasury...................... 0
Trading liabilities........................................... 0
Other borrowed money:.........................................
With original maturity of one year or less.................... 16,956
With original maturity of more than one year............. 635
Mortgage indebtedness and obligations under capitalized leases 16,899
Bank's liability on acceptances executed and outstanding...... 180,795
Subordinated notes and debentures............................. 175,000
Other liabilities............................................. 620,629
Total liabilities............................................. 29,597,777
Limited-life preferred stock and related surplus.............. 0
<PAGE>
EQUITY CAPITAL
Perpetual preferred stock and related surplus................. 160,540
Common Stock.................................................. 452,156
Surplus....................................................... 1,300,080
Undivided profits and capital reserves........................ 1,167,757
Net unrealized holding gains (losses) on available-for-sale
securities................................................... (47,556)
Cumulative foreign currency translation adjustments........... 0
Total equity capital.......................................... 3,032,977
Total liabilities, limited-life preferred stock and equity....
capital..................................................... 32,630,754
</TABLE>
