<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 28, 1994
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): SEPTEMBER 27, 1994
AZTAR CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 1-5440 85-0636534
(STATE OR OTHER (COMMISSION FILE NUMBER) (I.R.S. EMPLOYER
JURISDICTION OF IDENTIFICATION NO.)
INCORPORATION)
2390 EAST CAMELBACK ROAD, SUITE 400
PHOENIX, ARIZONA 85016
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (602) 381-4100
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
<PAGE>
ITEM 5. OTHER EVENTS
The final form of Indenture between Aztar Corporation, as Issuer, and
American Bank National Association, as Trustee, relating to the offering of 13
3/4% Senior Subordinated Notes Due 2004 of Aztar Corporation is attached hereto
as Exhibit 4.1.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
4.1 Indenture between Aztar Corporation, as Issuer, and American Bank
National Association, as Trustee, relating to the offering of 13 3/4% Senior
Subordinated Notes Due 2004 of Aztar Corporation.
2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AZTAR CORPORATION
Date: September 28, 1994 By: MERIDITH P. SIPEK
___________________________________
Name: Meridith P. Sipek
Title: Controller
3
<PAGE>
Exhibit 4.1
- - --------------------------------------------------------------------------------
AZTAR CORPORATION,
as Issuer,
and
AMERICAN BANK NATIONAL ASSOCIATION,
as Trustee
---------------
INDENTURE
Dated as of October 1, 1994
---------------
13 3/4% Senior Subordinated Notes Due 2004
- - --------------------------------------------------------------------------------
<PAGE>
CROSS-REFERENCE TABLE
<TABLE>
<CAPTION>
Trust Indenture Act Section Indenture Section
- - --------------------------- -----------------
<C> <S> <C>
(S) 310(a)(1) .................................. 508
(a)(2) .................................. 508
(a)(3) .................................. Not applicable
(a)(4) .................................. Not applicable
(b) .................................. 508, 509
(S) 311(a) .................................. 512
(b) .................................. 512
(c) .................................. Not applicable
(S) 312(a) .................................. 207
(b) .................................. 108
(c) .................................. 108
(S) 313(a) .................................. 513(a)
(b) .................................. 513(b)
(c) .................................. 513(b)
(d) .................................. 513(c)
(S) 314(a) .................................. 713
(a)(2) .................................. 714
(b)(1) .................................. Not applicable
(b)(2) .................................. Not applicable
(c)(1) .................................. 103
(c)(2) .................................. 103
(c)(3) .................................. 103
</TABLE>
- - ----------------------------
Note: This Cross-Reference Table shall not for any purpose be
deemed to be a part of the Indenture.
<PAGE>
<TABLE>
<CAPTION>
Trust Indenture Act Section Indenture Section
- - --------------------------- -----------------
<C> <S> <C>
(d) ................................. Not applicable
(e) ................................. 103
(S) 315(a) ................................. 501(a), (d)
(b) ................................. 502
(c) ................................. 501(b)
(d) ................................. 501(c)
(d)(1) ................................. 501(a)
(d)(2) ................................. 501(c)(2)
(d)(3) ................................. 501(c)(3)
(e) ................................. 414
(S) 316(a) ................................. 402, 412, 413
(a)(1)(A)................................ 402, 412
(a)(1)(B)................................ 413
(a)(2) ................................. Not applicable
(b) ................................. 408, 602
(S) 317(a)(1) ................................. 403
(a)(2) ................................. 404
(b) ................................. 703
(S) 318(a) ................................. 109
</TABLE>
- - ----------------------------
Note: This Cross-Reference Table shall not for any purpose be
deemed to be a part of the Indenture.
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE ONE - DEFINITIONS AND OTHER PROVISIONS OF GENERAL
APPLICATION....................................... 1
SECTION 101. Definitions.................................. 1
SECTION 102. Incorporation by Reference of TIA............ 22
SECTION 103. Compliance Certificates and Opinions......... 22
SECTION 104. Form of Documents Delivered to Trustee....... 23
SECTION 105. Acts of Holders.............................. 24
SECTION 106. Notices, etc................................. 25
SECTION 107. Notice to Holders; Waiver.................... 25
SECTION 108. Communication by Holders with Other
Holders...................................... 26
SECTION 109. Conflict with TIA............................ 26
SECTION 110. Rules by Trustee and Agents.................. 26
SECTION 111. No Recourse Against Others................... 26
SECTION 112. Execution in Counterparts.................... 26
SECTION 113. Effect of Headings and Table of Contents..... 26
SECTION 114. No Adverse Interpretation of Other
Agreements................................... 26
SECTION 115. Successors and Assigns....................... 27
SECTION 116. Separability Clause.......................... 27
SECTION 117. Benefits of Indenture........................ 27
SECTION 118. Governing Law and Choice of Forum............ 27
SECTION 119. Legal Holidays............................... 27
SECTION 120. Incorporation of Exhibit..................... 28
ARTICLE TWO - THE NOTES......................................... 28
SECTION 201. Form......................................... 28
SECTION 202. Title and Terms.............................. 28
SECTION 203. Denominations................................ 29
SECTION 204. Execution, Authentication, Delivery, and
Dating....................................... 29
SECTION 205. Temporary Notes.............................. 30
SECTION 206. Registration, Registration of Transfer and
Exchange..................................... 30
SECTION 207. Holder Lists................................. 31
SECTION 208. Mutilated, Destroyed, Lost or Stolen
Notes........................................ 32
SECTION 209. Payment of Principal and Interest;
Principal and Interest Rights Preserved...... 32
SECTION 210. Persons Deemed Owners........................ 33
SECTION 211. Cancellation................................. 34
SECTION 212. Computation of Interest...................... 34
SECTION 213. CUSIP Number................................. 34
i
<PAGE>
Page
----
ARTICLE THREE - SATISFACTION AND DISCHARGE; DEFEASANCE.......... 34
SECTION 301. Satisfaction and Discharge of Indenture;
Defeasance................................... 34
SECTION 302. Application of Trust Money................... 38
SECTION 303. Repayment to the Company..................... 38
SECTION 304. Reinstatement................................ 39
SECTION 305. Indemnity.................................... 39
ARTICLE FOUR - DEFAULTS AND REMEDIES............................ 39
SECTION 401. Events of Default............................ 39
SECTION 402. Acceleration of Maturity; Rescission and
Annulment.................................... 42
SECTION 403. Collection Suits by Trustee.................. 43
SECTION 404. Trustee May File Proofs of Claim............. 44
SECTION 405. Trustee May Enforce Claims Without
Possession of Notes.......................... 44
SECTION 406. Application of Money Collected............... 45
SECTION 407. Limitation on Suits.......................... 45
SECTION 408. Unconditional Right of Holders to Receive
Principal and Interest....................... 46
SECTION 409. Restoration of Rights and Remedies........... 46
SECTION 410. Rights and Remedies Cumulative............... 46
SECTION 411. Delay or Omission Not Waiver................. 46
SECTION 412. Control by Holders........................... 47
SECTION 413. Waiver of Past Defaults...................... 47
SECTION 414. Undertaking for Costs........................ 48
ARTICLE FIVE - THE TRUSTEE...................................... 48
SECTION 501. Certain Duties and Responsibilities.......... 48
SECTION 502. Notice of Defaults........................... 49
SECTION 503. Certain Rights of Trustee.................... 49
SECTION 504. Not Responsible for Recitals or Issuance of
Notes........................................ 51
SECTION 505. May Hold Notes............................... 51
SECTION 506. Money Held in Trust.......................... 51
SECTION 507. Compensation and Reimbursement............... 51
SECTION 508. Eligibility; Disqualification................ 52
SECTION 509. Resignation and Removal; Appointment of
Successor.................................... 52
SECTION 510. Acceptance of Appointment by Successor....... 54
SECTION 511. Merger, Conversion, Consolidation or
Succession to Business....................... 54
SECTION 512. Preferential Collection of Claims Against
the Company.................................. 55
SECTION 513. Reports by Trustee........................... 55
ii
<PAGE>
Page
----
ARTICLE SIX - AMENDMENTS, SUPPLEMENTS AND WAIVERS............... 56
SECTION 601. Without Consent of Holders................... 56
SECTION 602. With Consent................................. 57
SECTION 603. Compliance with Trust Indenture Act.......... 58
SECTION 604. Revocation and Effect of Consents............ 58
SECTION 605. Notation on or Exchange of Notes; Effect of
Supplemental Indenture....................... 58
SECTION 606. Trustee Protected............................ 59
ARTICLE SEVEN - COVENANTS....................................... 59
SECTION 701. Payment of Notes............................. 59
SECTION 702. Maintenance of Office or Agency.............. 59
SECTION 703. Money for Note Payments to be Held in
Trust........................................ 60
SECTION 704. Limitation on Restricted Payments............ 61
SECTION 705. Limitation on Indebtedness................... 64
SECTION 706. Limitation on Liens.......................... 66
SECTION 707. Limitation on Payment Restrictions
Affecting Restricted Subsidiaries............ 66
SECTION 708. Limitation on Capital Stock of Restricted
Subsidiaries................................. 67
SECTION 709. Transactions with Affiliates................. 68
SECTION 710. Restriction on Incurrence of Certain
Indebtedness................................. 68
SECTION 711. Change of Control............................ 68
SECTION 712. SEC Reports.................................. 70
SECTION 713. Compliance Certificates...................... 70
SECTION 714. Continued Existence and Rights............... 71
SECTION 715. Maintenance of Properties and Other
Matters...................................... 71
SECTION 716. Taxes and Claims............................. 72
SECTION 717. Waiver of Stay, Extension and Usury Laws..... 72
SECTION 718. Investment Company Act....................... 73
ARTICLE EIGHT - MERGER, CONSOLIDATION AND SALE OF ASSETS........ 73
SECTION 801. When the Company May Merge, etc.............. 73
SECTION 802. Successor Corporation Substituted............ 74
ARTICLE NINE - REDEMPTION....................................... 74
SECTION 901. Notices to Trustee........................... 74
SECTION 902. Selection of Notes to Be Redeemed............ 75
SECTION 903. Notice of Redemption......................... 75
SECTION 904. Effect of Notice of Redemption............... 76
iii
<PAGE>
Page
----
SECTION 905. Deposit of Redemption Price.................. 76
SECTION 906. Notes Redeemed in Part....................... 76
SECTION 907. Redemption Pursuant to Gaming Jurisdiction
Law.......................................... 76
ARTICLE TEN - SUBORDINATION..................................... 78
SECTION 1001. Agreement to Subordinate.................... 78
SECTION 1002. Liquidation; Dissolution; Bankruptcy........ 78
SECTION 1003. Default on Senior Indebtedness.............. 79
SECTION 1004. When Distribution Must Be Paid Over......... 80
SECTION 1005. Notice by the Company....................... 80
SECTION 1006. Subrogation................................. 81
SECTION 1007. Relative Rights............................. 81
SECTION 1008. Subordination May Not Be Impaired by the
Company..................................... 81
SECTION 1009. Distribution or Notice to
Representatives............................. 81
SECTION 1010. Rights of Trustee and Paying Agent.......... 82
SECTION 1011. Trustee Entitled to Assume Payments Not
Prohibited in Absence of Notice............. 82
SECTION 1012. Application by Trustee of Monies Deposited
With It..................................... 82
SECTION 1013. Trustee's Compensation Not Prejudiced....... 82
SECTION 1014. Officers' Certificate....................... 83
SECTION 1015. Certain Payments............................ 83
SECTION 1016. Names of Representatives.................... 83
SECTION 1017. No Fiduciary Duty Created to Holders of
Senior Indebtedness......................... 83
SIGNATURES...................................................... 84
EXHIBIT A - Form of Note........................................ A-1
______________
Note: This Table of Contents shall not for any purpose be deemed
to be a part of the Indenture.
iv
<PAGE>
INDENTURE, dated as of October 1, 1994, among AZTAR CORPORATION, a
Delaware corporation (the "Company"), and AMERICAN BANK NATIONAL ASSOCIATION, a
national banking association, as trustee (the "Trustee").
RECITALS
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance of its 13 3/4% Senior Subordinated Notes
Due 2004 (the "Notes").
All covenants and agreements made by the Company herein are for the
benefit of the Holders of the Notes. All things necessary to make this
Indenture a valid agreement of the Company in accordance with its terms have
been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Notes
by the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Notes, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions. (a) For all purposes of this Indenture,
-----------
except as otherwise expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
(2) all accounting terms not otherwise defined herein have the
meanings assigned to them from time to time in accordance with generally
accepted accounting principles;
(3) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision and all references to Sections refer
to Sections hereof; and
(4) "or" is not exclusive.
(b) As used herein, the following terms shall have the following
meanings:
"Accountants' Certificate" means a written opinion or verification
------------------------
from a nationally recognized firm of independent certified public accountants.
<PAGE>
"Act" shall have the meaning provided in Section 105.
---
"Adamar of Nevada" means Adamar of Nevada, a Nevada corporation.
----------------
"Affiliate" means, with respect to any Person, a Person (i) which
---------
directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, such Person, (ii) which
beneficially owns or holds 10% or more of any class of the Voting Stock of such
Person (or a 10% or greater equity interest in a Person which is not a
corporation) or (iii) of which 10% or more of any class of the Voting Stock (or
in the case of a Person which is not a corporation, 10% or more of the equity
interest) is beneficially owned or held by such Person or any Subsidiary of such
Person. The term "control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.
"Agent" means any Registrar or Paying Agent.
-----
"Asset Sale" means the sale or other disposition (including, without
----------
limitation, dispositions pursuant to Sale and Leaseback Transactions) by the
Company or one of its Subsidiaries to any Person other than the Company or one
of its Subsidiaries of (i) any of the Capital Stock of any of the Subsidiaries
of the Company or (ii) any other assets of the Company or any assets of its
Subsidiaries outside the ordinary course of business of the Company or such
Subsidiary.
"Authorized Officer" means, with respect to any Person, the chief
------------------
executive officer, president, chief financial officer or treasurer of such
Person.
"Average Life" means, as of the date of determination, with respect to
------------
any debt security, the quotient obtained by dividing (i) the sum of the products
of (x) the numbers of years from the date of determination to the dates of each
successive scheduled principal payment of such debt security multiplied by (y)
the amount of such principal payment by (ii) the sum of all such principal
payments.
"Bankruptcy Law" shall have the meaning provided in Section 401(5).
--------------
"Board of Directors" means, with respect to any Person, the board of
------------------
directors of such Person or any authorized committee of such board.
"Business Day" means a day, other than a Saturday or a Sunday, on
------------
which banks in New York City and the City of Los
2
<PAGE>
Angeles are open for business and not required or authorized to close and, with
respect to any place of payment other than New York City, a day, other than a
Saturday or a Sunday, on which banks in New York City and in the place of such
payment are open for business and not required or authorized to close.
"Capital Stock" means, with respect to any Person, any and all shares,
-------------
interests, participations or other equivalents (however designated) of capital
stock of such Person and any rights (other than debt securities convertible into
capital stock), warrants or options to acquire such capital stock.
"Capitalized Lease Obligation" means, with respect to any Person, the
----------------------------
obligation of such Person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) real or personal Property, which
obligation is required to be classified and accounted for as a capital lease
obligation on a balance sheet of such Person under generally accepted accounting
principles. For purposes of this Indenture, the amount of such obligation at
any date shall be the outstanding amount thereof at such date, determined in
accordance with generally accepted accounting principles.
"Change of Control" means any one or more of the following:
-----------------
(A) the Company shall consolidate with or merge into any other
corporation or any other corporation shall consolidate with or merge into
the Company (in either case, other than a consolidation or merger with a
Wholly Owned Subsidiary in which all of the Voting Stock of the Company
outstanding immediately prior to the effectiveness thereof is changed into
or exchanged for substantially the same consideration), in either case
pursuant to a transaction in which substantially all of the Voting Stock of
the Company outstanding immediately prior to the effectiveness thereof is
changed into or exchanged for cash, securities (other than Voting Stock of
the Company) or other property; provided, however, that the term "Change of
-------- -------
Control" shall not include any such consolidation or merger if, with
respect to such consolidation or merger, (x) substantially all of the
Voting Stock of the Company outstanding immediately prior to the
effectiveness thereof is changed into or exchanged for Voting Stock of the
surviving corporation or the ultimate parent of the surviving corporation
(the "Merger Common Stock"), (y) the Merger Common Stock, immediately
following the effectiveness thereof, is listed for trading on the New York
Stock Exchange or the American Stock Exchange or is quoted on the National
Association of Securities Dealers Automated Quotation System and is
designated as a "national market system security" and (z) immediately after
the effectiveness
3
<PAGE>
thereof, the Persons who were holders of Voting Stock of the Company
immediately prior to the effectiveness thereof (excluding Persons who
immediately prior to the effectiveness thereof were Affiliates of the
corporation consolidated or merged with the Company in such consolidation
or merger (other than Persons who were such Affiliates solely as a result
of the ownership by the Company of Capital Stock in such consolidated or
merged corporation)) hold in the aggregate more than 50% of the then
outstanding Voting Stock of the surviving corporation (or the ultimate
parent of the surviving corporation);
(B) the Company shall convey, transfer or lease all or substantially
all its assets to any Person or Persons (other than to a Wholly Owned
Subsidiary); provided, however, that the term "Change of Control" shall not
-------- -------
include any such conveyance, transfer or lease of assets (1) pursuant to a
Sale and Leaseback Transaction or (2) if immediately after the
effectiveness thereof, the Persons who were holders of Voting Stock of the
Company immediately prior to the effectiveness thereof (excluding Persons
who immediately prior to the effectiveness thereof were Affiliates of the
transferee of such assets (other than Persons who were such Affiliates
solely as a result of the ownership by the Company of Capital Stock in such
transferee)) hold in the aggregate more than 50% of the then outstanding
common stock of such transferee; or
(C) any Person (other than the Company) or group shall acquire,
directly or indirectly, beneficial ownership, in the aggregate, of 50% or
more of the outstanding shares of Voting Stock of the Company or securities
representing 50% or more of the combined Voting Power of the Company's
Voting Stock (the "Controlling Securities"), in either case, outstanding on
the date immediately prior to the date of the last such acquisition by such
Person or group; provided, however, that the term "Change of Control" shall
-------- -------
not include any such acquisition that results in the Company ESOP and
members of management of the Company who have been employed in a management
capacity with the Company for at least eighteen months owning 50% or more
of the Voting Stock of the Company or 50% or more of the Controlling
Securities.
"Change of Control Offer" shall have the meaning provided in Section
-----------------------
711(a).
"Change of Control Payment Date" shall have the meaning provided in
------------------------------
Section 711(b)(2).
"Company" means Aztar Corporation unless and until a successor
-------
replaces it in accordance with the terms of this Indenture and thereafter means
such successor.
4
<PAGE>
"Company ESOP" means the employee stock ownership plan adopted by the
------------
Company.
"Company Request" or "Company Order" means a written request or order,
--------------- -------------
respectively, signed in the name of the Company by an Authorized Officer and
delivered to the Trustee.
"Consolidated Amortization Expense" means, for any period,
---------------------------------
amortization expense of the Company and its Restricted Subsidiaries, on a
consolidated basis, for such period (including, without limitation, any
amortization or write-offs of deferred financing costs by the Company and its
Restricted Subsidiaries during such period).
"Consolidated Depreciation Expense" means, for any period,
---------------------------------
depreciation expense of the Company and its Restricted Subsidiaries, on a
consolidated basis, for such period.
"Consolidated Fixed Charge Coverage Ratio" means, as of any
----------------------------------------
Transaction Date, the ratio of (i) Consolidated Operating Cash Flow for the four
consecutive fiscal quarters for which financial information in respect thereof
is available immediately prior to such Transaction Date to (ii) Consolidated
Fixed Charges which will accrue during the then current fiscal quarter in which
such Transaction Date occurs (beginning on the first day of such quarter) and
the three fiscal quarters immediately subsequent to the end of such current
fiscal quarter, provided that, for the purpose of calculating Consolidated Fixed
--------
Charges for the period described in this clause (ii), (A) the interest rate on
any Indebtedness bearing interest at a rate that is adjustable based on market
rate levels shall be calculated based on the assumption that the applicable
market rate level in effect on the Transaction Date shall remain constant
throughout such period at the market rate level in effect on the Transaction
Date, (B) adjustments that are reasonably anticipated to occur during such
period to Consolidated Fixed Charges shall be included in such calculation
(including such adjustments that result from the scheduled maturity of
Indebtedness of the Company and its Restricted Subsidiaries) and (C)
Indebtedness shall be included in such calculation that is reasonably
anticipated to be created, incurred, assumed or guaranteed by, or to otherwise
become the obligation of, the Company or any Restricted Subsidiary; provided,
--------
however, that, for purposes of calculating the Consolidated Fixed Charge
- - -------
Coverage Ratio, Consolidated Operating Cash Flow and Consolidated Fixed Charges
shall (x) include the consolidated operating cash flow and consolidated fixed
charges of any Person to be acquired by the Company or any of its Restricted
Subsidiaries as a Restricted Subsidiary in connection with the transaction
giving rise to the need to calculate the Consolidated Fixed Charge Coverage
Ratio, (y) include the consolidated operating cash flow and consolidated fixed
charges of any other Person acquired during the period described in
5
<PAGE>
clause (i) above by the Company or by any of its Restricted Subsidiaries as a
Restricted Subsidiary and (z) exclude the consolidated operating cash flow of
any Person directly attributable to the Property of such Person that was the
subject of an Asset Sale, on a pro forma basis for the four consecutive fiscal
--- -----
quarters for which financial information in respect thereof is available
immediately prior to such Transaction Date, in the case of calculating
Consolidated Operating Cash Flow, and for the then current fiscal quarter in
which such Transaction Date occurs and the three fiscal quarters immediately
subsequent to the end of such fiscal quarter (on the same basis as described in
clause (ii) above), in the case of calculating Consolidated Fixed Charges. For
purposes of the foregoing proviso, the consolidated operating cash flow and
consolidated fixed charges of any such Person shall be determined on the same
basis as such items are determined for the Company. For purposes of each pro
---
forma determination of the Consolidated Fixed Charge Coverage Ratio in
- - -----
connection with Section 705(a), the proposed new Indebtedness shall be deemed to
be incurred on the first day of the fiscal quarter in which the relevant
Transaction Date occurs.
"Consolidated Fixed Charges" means, for any period, the sum of
--------------------------
Consolidated Interest Expense plus the Tropicana Payments.
"Consolidated Income Tax Expense" means, for any period, the income
-------------------------------
tax expense of the Company and its Restricted Subsidiaries, on a consolidated
basis, for such period (other than income tax expense attributable to Asset
Sales).
"Consolidated Interest Expense" means, for any period, without
-----------------------------
duplication, (A) the sum of (i) the aggregate amount of interest recognized by
the Company and its Restricted Subsidiaries during such period in respect of
Indebtedness of the Company and its Restricted Subsidiaries (including, without
limitation, all interest capitalized by the Company and its Restricted
Subsidiaries during such period and all commissions, discounts and other fees
and charges owed by the Company and its Restricted Subsidiaries with respect to
letters of credit and bankers' acceptance financing and the net costs associated
with Interest Swap Obligations of the Company and its Restricted Subsidiaries),
(ii) the aggregate amount of the interest component of rentals in respect of
Capitalized Lease Obligations recognized by the Company and its Restricted
Subsidiaries during such period, (iii) to the extent any Indebtedness of any
Person is guaranteed by the Company or any of its Restricted Subsidiaries, the
aggregate amount of interest paid or accrued by such Person during such period
attributable to any such Indebtedness, (iv) one-third of the rent expense
incurred under noncancelable operating leases (excluding the Tropicana Lease)
during such period and (v) the aggregate amount of Redeemable Dividends
recognized by the Company and its Restricted Subsidiaries, whether or not
declared during such period, less
6
<PAGE>
(B) any amortization or write-off of deferred financing costs by the Company and
its Restricted Subsidiaries during such period; in each case after elimination
of intercompany accounts among the Company and its Restricted Subsidiaries and
as determined in accordance with generally accepted accounting principles.
"Consolidated Interest Income" means, for any period, interest income
----------------------------
from all sources of the Company and its Restricted Subsidiaries, on a
consolidated basis, for such period.
"Consolidated Net Income" means, for any period, the aggregate net
-----------------------
income of the Company and its Subsidiaries for such period on a consolidated
basis, determined in accordance with generally accepted accounting principles,
provided that there shall be excluded therefrom (i) gains and losses from Asset
- - --------
Sales or reserves relating thereto, (ii) items classified as extraordinary or
nonrecurring, (iii) the income (or loss) of any Unrestricted Subsidiary or Joint
Venture, except to the extent that the aggregate amount of cash dividends or
other distributions actually paid during such period to the Company or any
Restricted Subsidiary by such Unrestricted Subsidiary or Joint Venture in
respect of its Capital Stock out of funds legally available therefor exceeds the
aggregate amount of new Investments in such Unrestricted Subsidiary or Joint
Venture by the Company or any Restricted Subsidiary during such period, (iv)
except to the extent includable pursuant to clause (iii), the income (or loss)
of any Person accrued or attributable to any period prior to the date it becomes
a Restricted Subsidiary or is merged into or consolidated with the Company or
any of its Restricted Subsidiaries or that Person's assets (or a portion
thereof) are acquired by the Company or any of its Restricted Subsidiaries and
(v) the income of any Restricted Subsidiary to the extent that such Restricted
Subsidiary is prevented by any Legal Requirement from paying such income to the
Company or another Restricted Subsidiary. Notwithstanding the foregoing,
Consolidated Net Income as used in Section 704 shall include gains (or losses)
on the sale by the Company or a Restricted Subsidiary of an Unrestricted
Subsidiary.
"Consolidated Net Rent" means, for any period, without duplication, an
---------------------
amount equal to the total of: (A) the rent expense, net of intercompany rent,
incurred by HRN pursuant to the Tropicana Lease plus (B) two-thirds of the rent
expense incurred under other noncancelable operating leases.
"Consolidated Net Worth" means, as of any date, with respect to any
----------------------
Person, the sum of the Capital Stock and additional paid-in capital plus
retained earnings (or minus accumulated deficit) of such Person and its
Subsidiaries on a consolidated basis at such date, each item determined in
accordance with generally accepted accounting principles, less
7
<PAGE>
amounts attributable to Redeemable Stock of such Person and its Subsidiaries.
"Consolidated Operating Cash Flow" means, for any period, without
--------------------------------
duplication, Consolidated Net Income plus (i) Consolidated Interest Expense plus
(ii) Consolidated Income Tax Expense plus (iii) Consolidated Depreciation
Expense plus (iv) Consolidated Amortization Expense plus (v) Consolidated Net
Rent plus (vi) equity in unconsolidated partnerships' losses minus (vii)
Consolidated Interest Income plus (viii) other non-cash items reducing such
Consolidated Net Income, minus (ix) other non-cash items increasing such
Consolidated Net Income, for such period, all as determined in accordance with
generally accepted accounting principles.
"Corporate Trust Office" means the office of the Trustee at which at
----------------------
any particular time its corporate trust business shall be administered, which
office as of the date hereof is located at Corporate Trust Division, 101 E.
Fifth Street, St. Paul, Minnesota 55101.
"corporation" means any corporation and any voluntary association,
-----------
joint stock company, business trust or similar organization.
"Credit Facility" means any agreement between the Company and/or any
---------------
of its Restricted Subsidiaries and one or more banks or other financial
institutions providing for the making of term loans or loans on a revolving
basis (including, in either case, construction loans and lines of credit), the
issuance of letters of credit and the creation of bankers' acceptances, as any
such agreement may be amended (including any amendment and restatement thereof),
supplemented or otherwise modified, including any agreement extending the
maturity, refinancing or restructuring of all or any portion of the Indebtedness
and other obligations under such agreement or any successor agreement.
"Currency Agreement" means, with respect to any Person, any foreign
------------------
exchange contract, currency swap agreement, option or futures contract or other
similar agreement or arrangement designed to protect such Person or any of its
Subsidiaries against fluctuations in currency values.
"Custodian" shall have the meaning provided in Section 401(5)(iii).
---------
"Default" means any event or condition which is, or after giving of
-------
notice or passage of time or both would be, an Event of Default.
"Defaulted Interest" shall have the meaning provided in Section 209.
------------------
8
<PAGE>
"Designated Senior Indebtedness" means each issue of
------------------------------
Senior Indebtedness that (i) has an outstanding principal amount of not less
than $25,000,000 and (ii) has been designated as
Designated Senior Indebtedness pursuant to an Officers' Certificate of the
Company received by the Trustee.
"Discharged" means that the Company shall be deemed to have paid and
----------
discharged the entire Indebtedness represented by, and obligations under, the
Notes and to have satisfied all the obligations under this Indenture relating to
the Notes (and the Trustee, at the request and the expense of the Company, shall
execute proper instruments acknowledging the same) except (a) the rights of the
Holders to receive, from the trust fund described in Section 301(c), payment of
the principal of and the interest on such Notes when such payments are due, (b)
the Company's obligations with respect to the Notes under Sections 206, 207,
208, 302, 509, 510 and 703 so long as any of the Notes are Outstanding and (c)
the rights, powers, trusts, duties and immunities of the Trustee hereunder;
provided, however, that notwithstanding the foregoing, the obligations of the
- - -------- -------
Company under Sections 303, 304, 305 and 507, together with the definitions in
Article One necessary for the interpretation of such Sections, shall survive.
"DTC" shall have the meaning provided in Section 711.
---
"Effective Date" means September 27, 1994.
--------------
"Event of Default" shall have the meaning provided in Section 401.
----------------
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
------------
"Gaming Authority" means the United States federal government or any
----------------
state, county, municipality or other political subdivision or any agency or
other governmental authority thereof that now or hereafter has jurisdiction over
all or any portion of the gaming activities of the Company or any of its
Subsidiaries.
"Gaming Jurisdiction Law" means any law, statute, ordinance, code,
-----------------------
regulation, constitutional provision, rule, order, directive or other
enforcement requirement now or hereafter in existence of any Gaming Authority.
"Gaming License" means any license, franchise or other authorization
--------------
on the date of this Indenture or thereafter required to own, lease, operate or
otherwise conduct the gaming business of the Company, including, without
limitation, all licenses granted under the New Jersey Act, the Nevada Act, the
regulations of the New Jersey Commission, the New Jersey
9
<PAGE>
Division, the Nevada Commission and the Nevada Control Board and other Legal
Requirements.
"Governmental Authority" means any agency, authority, board, bureau,
----------------------
commission, department, office or instrumentality of any nature whatsoever of
any governmental or quasi-government unit, whether federal, state, county,
district, city or other political subdivision or otherwise and whether now or
hereafter in existence, or any officer or official of any thereof, including,
without limitation, the New Jersey Commission, the New Jersey Division, the
Nevada Commission, the Nevada Control Board and the Clark County (Nevada) Liquor
and Gaming License Board.
"guarantee" means any direct or indirect obligation, contingent or
---------
otherwise, of a Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other Person in any manner.
"Holder" means the Person in whose name a Note is registered in the
------
Register.
"Holdings" means Ramada New Jersey Holdings, a Delaware corporation.
--------
"HRN" means Hotel Ramada of Nevada, a Nevada corporation.
---
"Indebtedness" means, with respect to any Person, without duplication,
------------
(a) any obligation, contingent or otherwise, for 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), (b) any obligation evidenced by bonds, debentures, notes
or other similar instruments, (c) any obligation owed for all or any part of the
purchase price of Property, other assets or services or for the cost of Property
or other assets constructed or of improvements thereto (including any obligation
under or in connection with any letter of credit related thereto), other than
accounts payable included in current liabilities and incurred in respect of
Property or services purchased in the ordinary course of business, (d) any
obligation of such Person under or in connection with any letter of credit
issued for the account of such Person and all drafts drawn or demands for
payment honored thereunder, (e) any obligation under conditional sale or other
title retention agreements relating to purchased Property, (f) any obligation
issued or assumed as the deferred purchase price of Property (other than
accounts payable incurred in the ordinary course of business), (g) any
obligation, contingent or otherwise, as set forth in subclauses (a), (b) and (c)
of this definition, of any other Person secured by any Lien in respect of
Property of such Person even though such Person has not assumed or become liable
for payment of such obligation, (h) any Capitalized Lease Obligation or any
other obligation pursuant
10
<PAGE>
to any Sale and Leaseback Transaction, (i) any note payable or draft accepted
representing an extension of credit (other than extensions of credit for
Property and services purchased in the ordinary course of business), whether or
not representing an obligation for borrowed money, (j) the maximum fixed
repurchase price of any Redeemable Stock, (k) obligations in respect of Interest
Swap Obligations and Currency Agreements and (1) any obligation which is a
guarantee with respect to Indebtedness (of a kind otherwise described in this
definition) of another Person. For purposes of the preceding sentence, the
maximum fixed repurchase price of any Redeemable Stock which does not have a
fixed repurchase price shall be calculated in accordance with the terms of such
Redeemable Stock as if such Redeemable Stock were repurchased on any date on
which Indebtedness shall be required to be determined pursuant to this
Indenture; provided, however, that if such Redeemable Stock is not then
-------- -------
permitted to be repurchased, the repurchase price shall be the book value of
such Redeemable Stock. The amount of Indebtedness of any Person at any date
shall be the outstanding balance at such date of all unconditional obligations
as described above, the maximum liability of such contingent obligations at such
date and, in the case of clause (g), the lesser of the fair market value at such
date of any asset subject to a Lien securing the Indebtedness of others and the
amount of the Indebtedness secured.
"Indenture" means this Indenture as amended or supplemented from time
---------
to time.
"Independent" means a Person who (1) is in fact independent, (2) does
-----------
not have any direct financial interest or any material indirect financial
interest in the Company or in any other obligor upon the Notes or in any
Affiliate of the Company or of such other obligor and (3) is not connected with
the Company or such other obligor as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar functions.
"Interest Payment Date" means the Stated Maturity of an installment of
---------------------
interest on the Notes.
"Interest Swap Obligations" means the obligations of any Person
-------------------------
pursuant to any interest rate swap agreement, interest rate collar agreement or
other similar agreement or arrangement designed to protect such Person or any of
its Subsidiaries against fluctuations in interest rates.
"Investment" means, with respect to any Person (such Person being
----------
referred to in this definition as the "Investor'), any amount paid by the
Investor, directly or indirectly, or any transfer of Property, directly or
indirectly (such amount to be the fair market value of such Property at the time
of transfer as determined in good faith by the Board of Directors of the
11
<PAGE>
Investor, whose determination shall be conclusive) by the Investor to any other
Person (i) for Capital Stock of, or other equity interest in, or as a capital
contribution to, such other Person or (ii) as a direct or indirect loan or
advance to such other Person (other than accounts receivable of the Investor
arising in the ordinary course of business).
"Investment Company Act" means the Investment Company Act of 1940, as
----------------------
amended.
"Jaffe Partnership Interest" means the general partnership interest in
--------------------------
Tropicana Enterprises held by members of the Jaffe family pursuant to the
Amended and Restated Partnership Agreement dated as of November 19, 1984 between
the Jaffe family and Adamar of Nevada, as amended.
"Joint Venture" means any Person (other than a Subsidiary of the
-------------
Company) in which any Person other than the Company or any of its Subsidiaries
has a joint or shared equity interest with the Company or any of its
Subsidiaries.
"Legal Holiday" means any day that is not a Business Day.
-------------
"Legal Requirements" means all laws, statutes and ordinances
------------------
(including building codes and zoning and environmental laws, regulations and
ordinances) and all rules, orders, rulings, regulations, directives, decrees,
injunctions and requirements of all Governmental Authorities, that are now or
may hereafter be in existence, and that may be applicable to the Company or any
Subsidiary or Affiliate thereof, or the Trustee (including, without limitation,
the New Jersey Act, the Nevada Act and the regulations and supervisory
procedures of the New Jersey Division, the New Jersey Commission, the Nevada
Commission, the Nevada Control Board and the Clark County (Nevada) Liquor and
Gaming License Board, as modified by any variances, special use permits,
waivers, exceptions or other exemptions which may from time to time be
applicable).
"Lien" means any mortgage, pledge, lien, charge, deed of trust,
----
security interest, conditional sale or other title retention agreement or any
other similar encumbrance (including any agreement to give any security
interest).
"Nevada Act" means the Nevada Gaming Control Act, Nev. Rev. Stat. Ann.
----------
(S)(S) 463.010, et seq., as amended from time to time, or any successor
-- ----
provision of law.
"Nevada Commission" means the Nevada Gaming Commission or any
-----------------
successor agency appointed pursuant to the Nevada Act.
12
<PAGE>
"Nevada Control Board" means the Nevada State Gaming Control Board or
--------------------
any successor agency appointed pursuant to the Nevada Act.
"New Jersey Act" means the New Jersey Casino Control Act, N.J. Stat.
--------------
Ann. 5:12-1 et seq., (New Jersey Public Law 1977, L. 110) as amended from time
-- ----
to time, or any successor provision of law.
"New Jersey Commission" means the New Jersey Casino Control Commission
---------------------
or any successor agency appointed pursuant to the New Jersey Act.
"New Jersey Division" means the Division of Gaming Enforcement of the
-------------------
New Jersey Department of Law and Public Safety or any successor division or
agency.
"Notes" means the notes, as amended or supplemented from time to time,
-----
that are issued under this Indenture.
"Officers' Certificate" means, with respect to any Person, a
---------------------
certificate signed by an Authorized Officer (other than the treasurer) and by
the treasurer, an assistant treasurer, the secretary or an assistant secretary
of such Person.
"Opinion of Counsel" means a written opinion from legal counsel who is
------------------
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.
"Outstanding" means, with respect to the Notes, as of the date of
-----------
determination, all Notes theretofore authenticated and delivered under this
Indenture, except:
(i) the Notes theretofore cancelled by the Trustee or delivered to
the Corporate Trust Office of the Trustee for cancellation;
(ii) the Notes for whose payment or redemption money in the necessary
amount has been theretofore deposited (other than pursuant to Article III)
with the Trustee or any Paying Agent (other than the Company or an
Affiliate thereof), provided that, if such Notes are to be redeemed, notice
--------
of such redemption has been duly given pursuant to this Indenture or
provision therefor satisfactory to the Trustee has been made; and
(iii) the Notes in exchange for or in lieu of which other Notes have
been authenticated and delivered pursuant to this Indenture except for the
Notes replaced pursuant to Section 208 if the Trustee has received proof
satisfactory to it that the replaced Note is held by a bona fide purchaser;
---- ----
13
<PAGE>
provided, however, that solely for the purpose of determining whether the
- - -------- -------
Holders of the requisite principal amount of Outstanding Notes have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Notes held of record or beneficially owned by the Company or any other obligor
upon the Notes or any Affiliate of the Company or such other obligor shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Notes which the
Trustee knows to be so held or owned shall be so disregarded. Notes so held or
owned which have been pledged in good faith may be regarded as Outstanding if
the pledgee establishes to the satisfaction of the Trustee the pledgee's right
so to act with respect to such Notes and that the pledgee is not the Company or
any other obligor upon the Notes or any Affiliate of the Company or such other
obligor.
"Paying Agent" means any Person authorized by the Company pursuant to
------------
Section 702 to pay the principal of or interest on any Notes on behalf of the
Company. The Trustee shall be the Paying Agent until a successor replaces it.
"Payment Blockage Period" shall have the meaning provided in Section
-----------------------
1003.
"Permitted Liens" means, with respect to any Person, (i) Liens for
---------------
taxes, assessments, governmental charges or claims which are not yet due and
payable or are being contested in good faith by such Person by appropriate
proceedings promptly instituted and diligently conducted and for which a reserve
or other appropriate provision, if any, as shall be required in accordance with
generally accepted accounting principles shall have been made by such Person;
(ii) statutory Liens of landlords and carriers, warehousemen, mechanics,
suppliers, materialmen, repairmen, or other like Liens arising in the ordinary
course of business and with respect to amounts not yet delinquent or being
contested in good faith by appropriate proceedings promptly instituted and
diligently conducted and for which a reserve or other appropriate provision, if
any, as shall be required in accordance with generally accepted accounting
principles shall have been made by such Person; (iii) Liens incurred or deposits
made by such Person in the ordinary course of business in connection with
worker's compensation, unemployment insurance, medical insurance and other types
of social security and deposits made by such Person in the ordinary course of
business in connection with other kinds of insurance; (iv) Liens incurred or
deposits made by such Person to secure the performance of tenders, bids, leases,
statutory obligations, surety and appeal bonds, government contracts,
performance and return-of-money bonds and other obligations of a like nature
incurred in the ordinary course of business (exclusive of obligations for the
14
<PAGE>
payment of borrowed money); (v) easements, rights-of-way, restrictions, minor
defects or irregularities in title and other similar charges or encumbrances not
interfering in any material respect with the business of such Person or any of
its Subsidiaries incurred in the ordinary course of business; (vi) Liens
(including extensions and renewals thereof) upon real or tangible personal
property acquired by such Person after the date of this Indenture; provided that
--------
(a) any such Lien is created solely for the purpose of securing Indebtedness
representing, or incurred to finance, refinance or refund, all costs (including
the cost of construction) of the item of Property subject thereto, (b) the
principal amount of the Indebtedness secured by such Lien does not exceed 100%
of such cost, (c) such Lien does not extend to or cover any other Property other
than such item of Property and any improvements on such item and (d) the
incurrence of such Indebtedness is permitted by Section 705; (vii) Liens upon
specific items of inventory or other goods and proceeds of such Person securing
such Person's obligations in respect of bankers' acceptances issued or created
for the account of such Person in the ordinary course of business to facilitate
the purchase, shipment or storage of such inventory or other goods; (viii) Liens
securing reimbursement obligations with respect to commercial letters of credit
issued for the account of such Person which encumber documents and other
Property relating to such commercial letters of credit and the products and
proceeds thereof; (ix) Liens in favor of customs and revenue authorities arising
as a matter of law to secure payment of customs duties in connection with the
importation of goods by such Person; (x) licenses, leases or subleases granted
to others not interfering in any material adverse respect with the business of
such Person or any of its Subsidiaries; (xi) Liens encumbering Property or
assets of such Person under construction arising from progress or partial
payments by a customer of such Person or one of its Subsidiaries relating to
such Property or assets; (xii) Liens encumbering customary initial deposits and
margin accounts, and other Liens incurred in the ordinary course of business and
which are within the general parameters customary in the gaming industry, in
each case securing Interest Swap Obligations or Currency Agreements; (xiii)
Liens encumbering deposits made to secure obligations arising from statutory or
regulatory requirements of such Person or its Subsidiaries; (xiv) any interest
or title of a lessor in the Property subject to any Capitalized Lease obligation
or operating lease which, in each case, is permitted under this Indenture; (xv)
Liens securing obligations to the Trustee pursuant to the compensation and
indemnity provisions of this Indenture; (xvi) purchase money liens securing
payables arising from the purchase by such Person or any of its Subsidiaries of
any equipment or goods in the ordinary course of business, provided that such
--------
payables do not constitute Indebtedness; (xvii) Liens arising out of consignment
or similar arrangements for the sale of goods entered into by such Person or any
of its Subsidiaries in the ordinary course of
15
<PAGE>
business; (xviii) Liens for judgments or orders not giving rise to a Default or
Event of Default; and (xix) Liens not specified in the foregoing and not
otherwise permitted by Section 706, provided that the aggregate Indebtedness
--------
secured by the Liens under this clause (xix) shall not exceed $5,000,000 at any
time.
"Person" means any individual, partnership, corporation, venture,
------
joint venture, unincorporated organization, association, joint-stock company,
trust or Governmental Authority.
"Predecessor Note" means, with respect to any particular Note, every
----------------
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note. For the purposes of this definition, any Note
authenticated and delivered under Section 208 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Note shall be deemed to evidence the same
debt as the mutilated, destroyed, lost or stolen Note.
"Preferred Share Purchase Rights" shall have the meaning given to the
-------------------------------
term "Rights" in the Rights Agreement dated as of December 20, 1989 between the
Company and First Interstate Bank of Arizona, N.A.
"principal" means, with respect to any debt security (including any
---------
Note), the principal of such debt security plus the premium, if any, on such
debt security.
"Property" means any interest in any kind of property or asset,
--------
whether real, personal or mixed, or tangible or intangible.
"Qualified Capital Stock" means Capital Stock not constituting
-----------------------
Redeemable Stock.
"Ramada" means Ramada Inc., a Delaware corporation.
------
"Redeemable Dividend" means, for any dividend payable with respect to
-------------------
Redeemable Stock, (i) to the extent such dividend is fully deductible for
federal income tax purposes, the amount of such dividend and (ii) to the extent
such dividend may not be deductible, the quotient of the amount of such dividend
divided by the difference between one and the maximum statutory federal income
tax rate (expressed as a decimal number between 1 and 0) then applicable to the
issuer of such Redeemable Stock.
"Redeemable Stock" means, with respect to any Person, any equity
----------------
security issued by such Person that by its terms or otherwise is required to be
redeemed (other than a security that is required to be redeemed only in the
event that a holder of such security fails to qualify or to be found suitable or
16
<PAGE>
otherwise eligible under a Gaming Jurisdiction Law to remain as a holder of such
security) or is redeemable at the option of the holder of such security at any
time prior to the maturity of the Notes.
"Redemption Date" means, with respect to any Note to be redeemed, the
---------------
date fixed for such redemption pursuant to the terms of this Indenture and the
Notes.
"Redemption Price" means, with respect to any Note to be redeemed, the
----------------
price fixed for such redemption pursuant to the terms of this Indenture and the
Notes.
"Register" shall have the meaning provided in Section 206.
--------
"Registrar" shall have the meaning provided in Section 206.
---------
"Regular Record Date" means, for the interest payable on any Interest
-------------------
Payment Date in respect of a Note, the date so specified in Paragraph 2 of such
Note.
"Replacement Indebtedness" shall have the meaning provided in Section
------------------------
705.
"Representative" means the indenture trustee or other trustee, agent
--------------
or representative for an issue of Senior Indebtedness.
"Restricted Payments" shall have the meaning provided in Section 704.
-------------------
"Restricted Subsidiary" means any Subsidiary of the Company that (i)
---------------------
has not been designated by the Board of Directors of the Company as an
Unrestricted Subsidiary or (ii) was an Unrestricted Subsidiary but has been
redesignated by the Board of Directors of the Company as a Restricted
Subsidiary, in each case as provided under the definition of Unrestricted
Subsidiary in this Section 101.
"Sale and Leaseback Transaction" means any direct or indirect
------------------------------
arrangement with any Person or to which any such Person is a party, providing
for the leasing to the Company or a Subsidiary of the Company of any Property,
whether owned at the date of this Indenture or thereafter acquired, which has
been or is to be sold or transferred by the Company or such Subsidiary to such
Person or to any other Person to whom funds have been or are to be advanced by
such Person on the security of such Property if, after giving effect to such
arrangement, the Company or a Subsidiary of the Company operates the business,
if any, located on such Property.
17
<PAGE>
"SEC" means the Securities and Exchange Commission.
---
"Senior Indebtedness" means the principal of, interest (including
-------------------
without limitation, interest at the contract rate subsequent to the commencement
of any bankruptcy, insolvency or similar proceeding with respect to the Company)
on and other amounts due on or in connection with any Indebtedness of the
Company for money borrowed from others, whether outstanding on the date of the
Indenture or thereafter created, incurred, assumed or guaranteed, which, at the
date of the Indenture or at the time of any such creation, incurrence,
assumption or guarantee, (i) is by its terms expressly senior to and not
subordinate or subject in right of payment to any other Indebtedness of the
Company, or (ii) is secured by a lien on any Property of the Company or any of
its Subsidiaries; provided, however, that Senior Indebtedness shall not include
-------- -------
any such Indebtedness if (A) the value of the collateral securing such
Indebtedness at time of incurrence is less than the amount of such Indebtedness
or (B) the value of any Property substituted for the collateral securing such
Indebtedness is less than the value of the collateral so released in either case
as determined by the Company and set forth in an Officer's Certificate of the
Company received by the Trustee, which certificate shall be conclusive evidence
of the correctness of the matters set forth herein, or (iii) has been designated
Senior Indebtedness pursuant to an Officers' Certificate of the Company received
by the Trustee. Notwithstanding anything herein to the contrary, Senior
Indebtedness shall not mean (a) Indebtedness of the Company to a Subsidiary of
the Company for money borrowed or advances from such Subsidiary, (b)
Indebtedness representing the maximum fixed repurchase price of any Capital
Stock of the Company which by its terms or otherwise is or may be required to be
redeemed or repurchased prior to the Stated Maturity of the Notes or at the
option of the holder thereof, (c) Indebtedness of the Company to any officer or
director thereof, (d) obligations owing under judgments arising out of
obligations that are not Indebtedness for borrowed money, (e) accounts payable
or any other Indebtedness to trade creditors created or assumed by the Company
in the ordinary course of business in connection with the obtaining of materials
or services and (f) any liability for federal, state, local or other taxes owed
or owing by the Company.
"Series B Preferred Stock" means shares of the Company's preferred
------------------------
stock, Series B held by the trustee for the Company ESOP.
"Significant Subsidiary" means any Subsidiary of the Company (i) the
----------------------
revenues attributable to which for the then most recently completed four fiscal
quarters constituted 5% or more of the consolidated revenues of the Company and
its Subsidiaries for such period, (ii) the assets of which as of the end of such
18
<PAGE>
period constituted 5% or more of the consolidated assets of the Company and its
Subsidiaries as of the end of such period or (iii) that operates, owns or leases
any Property that is material to the business operations of the Company or any
Restricted Subsidiary.
"Special Record Date" means a date fixed by the Trustee pursuant to
-------------------
Section 209.
"Stated Maturity" means, with respect to any Note or any installment
---------------
of interest thereon, the date specified in such Note as the fixed day on which
the principal on such Note or such installment of interest is due.
"Stock Pledge" means the Stock Pledge Security and Intercreditor
------------
Agreement dated as of December 12, 1989 among the Company, Tropicana
Enterprises, the members of the Jaffe Group (as defined in the Tropicana
Enterprises partnership agreement) and Trop C.C., a Nevada general partnership,
pursuant to which the Company pledged all of the stock of Adamar of Nevada to
secure the Company's obligations under various agreements relating to the
Tropicana, as in effect on the Effective Date.
"Subsidiary" means, with respect to any Person, (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 one or more Subsidiaries of such Person or by such Person and one or more
Subsidiaries thereof or (ii) any other Person (other than a corporation) in
which such Person, one or more Subsidiaries thereof, or such Person and one or
more Subsidiaries thereof, directly or indirectly, at the date of determination
thereof has at least majority ownership interest and the power to direct the
policies, management and affairs thereof. For purposes of this definition, any
directors' qualifying shares mandated by applicable law shall be disregarded in
determining the ownership of a Subsidiary.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-
---
bbbb) as in effect on the date of execution of this Indenture, except as
provided in Section 603.
"Transaction Date" means the date of the transaction giving rise to
----------------
the need to calculate the Consolidated Fixed Charge Coverage Ratio or to make
any other determination for purposes of complying with the provisions of this
Indenture, provided that if such transaction is related to or in connection with
--------
any acquisition of any Person, the Transaction Date shall be the date on which
the Company or any of its Subsidiaries enters
19
<PAGE>
into an agreement with such Person to effect such acquisition; provided,
--------
however, that if subsequent to the entering of such agreement the Company or any
- - -------
of its Subsidiaries shall amend the terms of such acquisition with respect to
the consideration payable by the Company or any of its Subsidiaries in
connection with such acquisition, the Transaction Date shall be the date on
which the Company or any of its Subsidiaries enters into an agreement with such
Person to effect such amendment. The second proviso above shall not be
applicable if, as of the Transaction Date with respect to any acquisition, the
Company could incur at least $1.00 of additional Indebtedness under Section
705(a) when the Consolidated Fixed Charge Coverage Ratio is calculated on the
basis of the amended terms of such acquisition and the Indebtedness to be
incurred by the Company and its Restricted Subsidiaries in connection therewith.
"Tropicana" means the Las Vegas Tropicana casino hotel operated by HRN
---------
on the date of this Indenture.
"Tropicana Enterprises" means Tropicana Enterprises, a Nevada general
---------------------
partnership.
"Tropicana Lease" means the Amended and Restated Lease (Tropicana
---------------
Hotel/Casino) dated November 1, 1984 between Tropicana Enterprises and HRN, as
amended.
"Tropicana Loan" means the Loan Agreement by and between Tropicana
--------------
Enterprises, HRN, Ramada and the Lenders named therein, made and entered into on
November 19, 1984, as in effect at the Effective Date.
"Tropicana Loan Refinancings" means any refinancings or financings of,
---------------------------
or related to, the Tropicana Loan or any refinancings thereof (including, but
not limited to, any Indebtedness owed to the Company or any Restricted
Subsidiary in connection with such Tropicana Loan or any refinancings thereof),
to the extent that the aggregate amount of such Indebtedness incurred pursuant
to such refinancings or financings does not exceed the outstanding principal
amount under the Tropicana Loan at the Effective Date.
"Tropicana Payments" means, for any period, that portion of the lease
------------------
payments made by HRN to Tropicana Enterprises pursuant to the Tropicana Lease
that represents the sum of interest expense on Indebtedness of Tropicana
Enterprises payable to Persons other than the Company plus amounts distributed
in respect of the Jaffe Partnership Interest.
"Tropicana Security Deposit" means the additional security deposit
--------------------------
that HRN may be required to provide from time to time pursuant to the Tropicana
Lease (as in effect on the Effective Date).
20
<PAGE>
"Trust Officer" means, with respect to the Trustee, the chairman or
-------------
vice chairman of the board of directors, the chairman or vice chairman of the
executive committee of the board of directors, the chairman of the trust
committee, the president, any vice president, any assistant vice president, the
secretary, any assistant secretary, the cashier, any assistant cashier, any
trust officer or assistant trust officer or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is specifically referred because
of his or her knowledge of and familiarity with the particular subject.
"Trustee" means American Bank National Association, 101 East Fifth
-------
Street, St. Paul, Minnesota 55101, unless and until a successor replaces it in
accordance with the provisions of this Indenture and thereafter means the
successor.
"Unrestricted Subsidiary" means (1) any Subsidiary of the Company
-----------------------
which at the time of determination shall be an Unrestricted Subsidiary (as
designated by the Board of Directors of the Company, as provided below) and (2)
any Subsidiary of an Unrestricted Subsidiary. The Board of Directors of the
Company may designate any Subsidiary of the Company (including any newly
acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary (unless
such Subsidiary owns any Capital Stock of or owns or holds any Lien on any
Property of the Company or any other Subsidiary of the Company which is not a
Subsidiary of the Subsidiary to be so designated), provided that either (x) the
--------
Subsidiary to be so designated has total assets of $1,000 or less or (y)
immediately after giving pro forma effect to such designation the Company could
--- -----
incur $1.00 of additional Indebtedness under Section 705(a); and provided,
--------
further, that a Subsidiary shall not be designated as an Unrestricted Subsidiary
- - -------
if the Company or a Restricted Subsidiary creates, incurs, issues, assumes,
guarantees or in any other manner becomes liable with respect to any obligation
of such Subsidiary. The Board of Directors of the Company may redesignate any
Unrestricted Subsidiary to be a Restricted Subsidiary, provided that immediately
--------
after giving pro forma effect to such redesignation, the Company could incur
--- -----
$1.00 of additional Indebtedness under Section 705(a). Any such designation or
elimination thereof by the Board of Directors of the Company shall be evidenced
to the Trustee by filing with the Trustee a certified copy of the resolution of
the Board of Directors of the Company giving effect to such designation and an
Officers' Certificate certifying that such designation complies with the
foregoing conditions.
"U.S. Government Obligations" are direct noncallable obligations of
---------------------------
the United States of America or guaranteed by the
21
<PAGE>
United States of America for the payment of which the full faith and credit of
the United States is pledged.
"Voting Power" means the aggregate number of votes that may be cast
------------
for the election of a corporation's directors (or Persons performing equivalent
functions) by the beneficial owners of all shares of Voting Stock issued by the
Company.
"Voting Stock" means securities of any class or classes of a
------------
corporation the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for corporate directors (or Persons performing
equivalent functions).
"Wholly Owned Subsidiary" means any Restricted Subsidiary of which
-----------------------
100% of the Capital Stock of, or other ownership interest in, such Restricted
Subsidiary is at the time owned by the Company or a Wholly Owned Subsidiary.
SECTION 102. Incorporation by Reference of TIA. Whenever this
---------------------------------
Indenture refers to a provision of the TIA, the 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:
"indenture securities" means the Notes;
"indenture security holder" means a Holder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means
the Trustee;
"obligor" on the Notes means the Company.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rules under the
TIA have the meanings assigned to them thereby.
SECTION 103. Compliance Certificates and Opinions. (a) Upon any
------------------------------------
request or application by the Company to the Trustee to take any action under
any provision of this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate 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;
22
<PAGE>
(2) an Opinion of Counsel stating that in the opinion of such
counsel, all such conditions precedent, if any, have been complied with;
and
(3) other than for the initial request by the Company to the Trustee
to authenticate and issue the Notes, an Accountants' Certificate stating
that, in the opinion of such accountant, such action may be taken under the
Indenture without the occurrence of a Default pursuant to Sections 704,
705, 801(a)(4) and 801(a)(5).
In the case of any such application or request as to which the furnishing of any
such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificates
or opinion need be furnished.
(b) Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(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 each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 104. Form of Documents Delivered to Trustee. (a) In any
--------------------------------------
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person or that they be
so certified or covered by only one document, but one such Person may certify or
give an opinion with respect to some matters and one or more other such Persons
as to other matters, and any such Person may certify or give an opinion as to
such matters in one or several documents.
23
<PAGE>
(b) Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated to
form one instrument.
SECTION 105. Acts of Holders. (a) Any request, demand,
---------------
authorization, direction, notice, consent, waiver or other action provided for
by this Indenture to be given or taken by Holders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Holders in person or by agent duly appointed in writing. Except as herein
otherwise expressly provided, such action shall become effective when such
instrument or instruments are delivered to the Trustee and, where it is hereby
expressly required, to the Company. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes referred to
as the Act of the Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Indenture and (subject to Section 501)
conclusive in favor of the Trustee and the Company if made in the manner
provided in this Section 105.
(b) The fact and date of the execution by any Person of any
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of notary public or other officer authorized by
law to take acknowledgements of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authorization. The fact and date of the execution of any such instrument
or writing, or the authorization of the Person executing the same, may also be
proved in any other manner which the Trustee deems sufficient.
(c) Ownership of Notes shall be proved by the appearance of a
Person's name in the Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Note shall bind every future Holder
of the same Note and the Holder of every Note issued upon the registration of
transfer or in exchange therefor or in lieu thereof, to the same extent as the
original Holder, in respect of anything done, omitted or suffered to be done by
the Trustee or the Company in reliance thereon, whether or not notation of such
action is made upon such Note.
(e) The Trustee may require such additional proof of any matter
referred to in this Section as it shall deem necessary.
24
<PAGE>
SECTION 106. Notices, etc. to Trustee and the Company. Any request,
----------------------------------------
demand, authorization, direction, notice, consent, waiver or Act of Holders or
other document provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with:
(1) the Trustee shall be sufficient for every purpose hereunder if in
writing and mailed postage prepaid by firstclass, registered or certified
mail, in each case return receipt requested, or delivered personally, to
the Trustee at its Corporate Trust Division, 101 E. Fifth Street, St. Paul,
Minnesota 55101, Attention: Corporate Trust Department, or at any other
address previously furnished in writing to the Company; and
(2) the Company shall be sufficient for every purpose hereunder if in
writing and mailed postage prepaid by firstclass, registered or certified
mail, in each case return receipt requested, or delivered personally, to
the Company, addressed to it at Aztar Corporation, 2390 E. Camelback Road,
Suite 400, Phoenix, Arizona 85016, Attention: Chief Financial Officer or
at any other address previously furnished in writing to the Trustee by the
Company with copies given in one of the foregoing manners to Snell &
Wilmer, One Arizona Center, Phoenix, Arizona 85004-0001, Attention: David
Sprentall, Esq. and to Latham & Watkins, 633 West Fifth Street, Suite 4000,
Los Angeles, California 90071, Attention: Brian G. Cartwright, Esq.
(provided that any failure to furnish such copies shall not affect the
sufficiency of any such request, demand, authorization, direction, notice,
consent, waiver or Act of Holders or other document with respect to the
Company).
SECTION 107. Notice to Holders; Waiver. Where this Indenture
-------------------------
provides for notice to Holders of any event, such notice shall be sufficiently
given if in writing and mailed postage prepaid by first-class, registered or
certified mail, in each case return receipt requested, to each Holder affected
by such event, at his address as it appears in the Register, not later than the
latest date and not earlier than the earliest date prescribed for the giving of
such notice. In any case where notice to Holders is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders. Where this Indenture provides for notice in any matter, such
notice may be waived in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
25
<PAGE>
In case, by reason of suspension of regular mail service, or by reason
of any other cause, it shall be impracticable to give such notice by mail, then
such notification may be given by any other reasonable method of giving such
notice and shall be deemed to be sufficient giving of such notice for every
purpose hereunder.
If a notice or communication is delivered or mailed in the manner
provided above within the time prescribed, it is duly given, whether or not the
addressee receives it.
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
SECTION 108. Communication by Holders with Other Holders. Holders
----------------------------------- -------
may communicate pursuant to TIA (S)(S) 312(b) with other Holders with respect to
their rights under this Indenture or the Notes. The Trustee shall comply with
the provisions of TIA (S)(S) 312(b). The Company, the Trustee, the Registrar
and any agent of any of them shall have the protection of TIA (S)(S) 312(c).
SECTION 109. Conflict with TIA. If any provision hereof limits,
-----------------
qualifies or conflicts or fails to comply with another provision which is
required to be included in this Indenture by any of the provisions of the TIA,
such required provision shall control.
SECTION 110. Rules by Trustee and Agents. The Trustee may make
---------------------------
reasonable rules for action by or a meeting of Holders. Each of the Registrar
and Paying Agent may make reasonable rules and set reasonable requirements for
its functions.
SECTION 111. No Recourse Against Others. The Notes and the
--------------------------
obligations of the Company under this Indenture are solely obligations of the
Company and no officer, director, employee or stockholder, as such, shall be
liable for any failure by the Company to pay amounts on the Notes when due or
perform any such obligation.
SECTION 112. Execution in Counterparts. This Indenture may be
-------------------------
executed in any number of counterparts, each of which shall be an original, but
such counterparts shall together constitute but one and the same instrument.
SECTION 113. Effect of Headings and Table of Contents. The Article
----------------------------------------
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
SECTION 114. No Adverse Interpretation of Other Agreements. This
---------------------------------------------
Indenture may not be used to interpret another
26
<PAGE>
indenture, loan or debt agreement of the Company or a Subsidiary of the Company.
No such indenture, loan or debt agreement may be used to interpret this
Indenture.
SECTION 115. Successors and Assigns. All covenants and agreements in
----------------------
this Indenture by the Company and the Trustee shall bind their respective
successors and assigns, whether so expressed or not.
SECTION 116. Separability Clause. In case any provision in this
-------------------
Indenture or the Notes shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
SECTION 117. Benefits of Indenture. Nothing in this Indenture or the
---------------------
Notes, express or implied, shall give to any Person, other than the parties
hereto and their successors and assigns hereunder, any Paying Agent and the
Holders of Notes, any benefits or any legal or equitable right, remedy or claim
under this Indenture, except to the extent provided in Article Ten with respect
to the holders of Senior Indebtedness.
SECTION 118. Governing Law and Choice of Forum. This Indenture and
---------------------------------
each Note shall be deemed to be a contract under the laws of the State of New
York and shall be construed in accordance with and governed by the laws of the
State of New York without regard to principles of conflicts of law. If any
action or proceeding shall be brought by the Trustee or a Holder in order to
enforce any right or remedy under this Indenture or the Notes, the Company
hereby consents and will submit to the jurisdiction of the courts of the State
of New York or any federal court sitting in the Borough of Manhattan in The City
of New York, New York. Any action or proceeding brought by the Company to
enforce any right, assert any claim or obtain any relief whatsoever in
connection with this Indenture or the Notes shall be brought by the Company
exclusively in the courts of the State of New York or in any federal court
sitting in the Borough of Manhattan in The City of New York, New York. The
Trustee hereby consents and agrees to submit to the jurisdiction of the courts
of the State of New York or any federal court sitting in the Borough of
Manhattan in The City of New York, New York in respect of any action or
proceeding under this Indenture or the Notes.
SECTION 119. Legal Holidays. In any case where any Interest Payment
--------------
Date, Redemption Date or Stated Maturity of any Notes shall not be a Business
Day, then (notwithstanding any other provision of this Indenture) payment of
interest or principal need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on the
Interest Payment Date or Redemption Date or at the
27
<PAGE>
Stated Maturity and, if so made, no interest shall accrue for the period from
and after such Interest Payment Date, Redemption Date or Stated Maturity, as the
case may be, until such Business Day.
SECTION 120. Incorporation of Exhibit. Exhibit A annexed hereto
------------------------
shall constitute an integral part of this indenture for all purposes.
ARTICLE TWO
THE NOTES
SECTION 201. Form. The Notes and the Trustee's certificate of
----
authentication shall be substantially in the form annexed hereto as Exhibit A,
with such appropriate insertions, omissions, substitutions and other variations
as are required or permitted by this Indenture and may have such letters,
numbers or other marks of identification and such legends or endorsements placed
thereon, as may be required to comply with the rules of any securities exchange
on which the Notes may be listed, or as may, consistently herewith, be
determined by the officers executing such Notes, as evidenced by their execution
of the Notes. Any portion of the text of any Note may be set forth on the
reverse thereof, with an appropriate reference thereto on the face of the Note.
The terms and provisions contained in the Notes shall constitute, and
are expressly made, a part of this Indenture. 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.
The definitive Notes shall be printed, lithographed or engraved or
produced by any combination of these methods or in any other manner permitted by
the rules of any securities exchange on which the Notes may be listed, all as
determined by the officers executing such Notes, as evidenced by their execution
of such Notes.
The principal of and interest on the Notes shall be payable at the
office or agency of the Company in the Borough of Manhattan, The City of New
York, New York maintained for such purpose and at any other office or agency
maintained by the Company for such purpose; provided, however, that at the
-------- -------
option of the Company, interest may be paid by check mailed to the address of
the Person entitled thereto as such address shall appear in the Register.
SECTION 202. Title and Terms. The aggregate principal amount of
---------------
Notes that may be authenticated and delivered under this Indenture is limited to
$180,000,000, except for Notes
28
<PAGE>
authenticated and delivered upon registration of, transfer of, or in exchange
for, or in lieu of other Notes pursuant to Sections 205, 206, 208, 605 and 906.
The Notes shall be known and designated as the "13 3/4% Senior
Subordinated Notes Due 2004" of Aztar Corporation. Their Stated Maturity for
payment of principal shall be October 1, 2004.
SECTION 203. Denominations. The Notes shall be issuable only as
-------------
registered Notes without coupons in minimum denominations of $1,000 and integral
multiples thereof.
SECTION 204. Execution, Authentication, Delivery, and Dating. The
-----------------------------------------------
Notes shall be executed on behalf of the Company by the chairman of its board of
directors, its president or one of its vice presidents and attested by its
secretary or one of its assistant secretaries, under its corporate seal, if any,
which may be in facsimile form and be imprinted or otherwise reproduced thereon.
The signature of any of these officers on the Notes may be manual or facsimile.
Notes bearing the manual or facsimile signature of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to be such
prior to the authentication or delivery of such Notes or was not such at the
date of authentication or delivery of such Notes.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Notes executed by the Company together
with a Company Order authorizing authentication thereof to the Trustee for
authentication. The order shall specify the amount of Notes to be authenticated
and the date on which the original issue of Notes is to be authenticated. The
Trustee shall authenticate and deliver such Notes as provided for in this
Indenture and not otherwise.
Each Note shall be dated as of the date of its authentication.
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication in the form provided for herein executed by the
Trustee by the manual signature of one of its authorized signatories, and such
certificate upon any Note shall be conclusive evidence, and the only evidence,
that such Note has been duly authenticated and delivered hereunder.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. An
29
<PAGE>
authenticating agent may authenticate 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 or an Affiliate of the Company.
SECTION 205. Temporary Notes. Pending the preparation of definitive
---------------
Notes, the Company may prepare and execute, and upon a Company Order, the
Trustee shall authenticate and deliver, temporary Notes which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any
denomination, substantially of the tenor of the definitive Notes in lieu of
which they are issued and with such variations as the officers executing such
Notes may determine, as evidenced by their execution of such Notes.
If temporary Notes are issued, the Company will cause definitive Notes
to be prepared without unreasonable delay. After the preparation of definitive
Notes, the temporary Notes shall be exchangeable for definitive Notes upon
surrender of the temporary Notes at the office or agency of the Company to be
maintained as provided in Section 702, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Notes, the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor one
or more definitive Notes of any authorized denominations of a like initial
aggregate principal amount and Stated Maturity. Until so exchanged the
temporary Notes shall in all respects be entitled to the same benefits under
this Indenture as definitive Notes.
SECTION 206. Registration, Registration of Transfer and Exchange.
---------------------------------------------------
The Company shall cause to be kept at the office or agency maintained pursuant
to Section 702 a register (the "Register") in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the registration
of Notes and the registration of transfers of Notes. In no case shall there be
more than one Register. The Trustee is hereby appointed "Registrar" for the
purpose of registering Notes and transfers of Notes as herein provided.
If a Person other than the Trustee is appointed by the Company as
Registrar, the Company will give the Trustee prompt written notice of the
appointment of a Registrar and of the location, and any change in the location,
of the Register, and the Trustee shall have the right to inspect the Register at
all reasonable times, to obtain copies of the Register and to rely upon a
certificate executed on behalf of the Registrar by an officer thereof as to the
names and addresses of the Holders of the Notes and the initial principal
amounts and numbers of such Notes.
30
<PAGE>
Upon surrender for registration of transfer of any Note at the office
or agency of the Company to be maintained as provided in Section 702, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Notes of any
authorized denominations of a like initial aggregate principal amount and Stated
Maturity.
At the option of the Holder, Notes may be exchanged for other Notes of
any authorized denominations of a like initial aggregate principal amount and
Stated Maturity upon surrender of the Notes to be exchanged at such office or
agency. Whenever any Notes are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and deliver, the Notes which the
Holder making the exchange is entitled to receive.
All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of the Company evidencing the same debt and
entitled to the same benefits under this Indenture as the Notes surrendered upon
such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
exchange shall (if so required by the Company or the Trustee) be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to
the Trustee duly executed, by the Holder thereof or his attorney duly authorized
in writing.
No service charge shall be made to a Holder 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 that may be imposed in
connection with any registration of transfer or exchange of Notes, other than
exchanges pursuant to Section 205, 605, 711 or 906 not involving any transfer.
The Company shall not be required (i) to issue, register the transfer
of or exchange any Note during a period beginning at the opening of business 15
days before the day of the mailing of a notice of redemption of Notes selected
for redemption and ending at the close of business on the day of such mailing or
(ii) to register the transfer of or exchange any Note so selected for redemption
except, in the case of any Note to be redeemed in part, the portion thereof not
to be redeemed.
SECTION 207. 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 Holders. If the Trustee is not the Registrar, the
Company shall furnish to the Trustee at least five Business Days prior to each
semi-annual Interest Payment Date and at such other times as the Trustee may
31
<PAGE>
request in writing a list in such form and as of such date as the Trustee may
require of the names and addresses of Holders. The Trustee and the Registrar
may rely on the accuracy of such list as the same may be amended from time to
time.
SECTION 208. Mutilated, Destroyed, Lost or Stolen Notes. If (i) any
------------------------------------------
mutilated Note is surrendered to the Trustee or (ii) the Trustee receives
evidence to its satisfaction of the destruction, loss or theft of any Note and
there is delivered to the Trustee such security or indemnity as may be required
by the Trustee to hold the Company and the Trustee harmless, then the Company
shall execute and upon a Company Request the Trustee shall authenticate and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Note, a new Note of the same tenor, initial principal amount and Stated
Maturity, bearing a number not contemporaneously outstanding; provided, however,
-------- -------
that if any such mutilated, destroyed, lost or stolen Note shall have become or
shall be about to become due and payable, instead of issuing a new Note, the
Company may pay such Note without surrender thereof, except that any mutilated
Note shall be surrendered.
Upon the issuance of any new Note under this Section 208, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
reasonable expenses (including the fees and expenses of the Trustee) connected
therewith.
Every new Note issued pursuant to this Section 208 in lieu of any
mutilated, destroyed, lost or stolen Note shall constitute an original,
additional contractual obligation of the Company, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section 208 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 209. Payment of Principal and Interest; Principal and
------------------------------------------------
Interest Rights Preserved. Interest on any Note which is payable, and is paid
- - -------------------------
or for which payment is duly provided for pursuant to Paragraph 2 of the Notes,
on any Interest Payment Date shall be paid to the Person in whose name that Note
(or one or more Predecessor Notes) is registered at the close of business on the
Regular Record Date for such interest.
Any interest on any Note which is payable, but is not paid or for
which payment is not duly provided for on any
32
<PAGE>
Interest Payment Date, is herein called "Defaulted Interest." Defaulted
Interest on any Note shall forthwith cease to be payable to the Holder on the
relevant Regular Record Date by virtue then of having been such Holder, and such
Defaulted Interest may be paid by the Company, as follows:
The Company may elect to make payment of any Defaulted Interest to the
Persons in whose names the Notes (or their respective Predecessor Notes)
are registered at the close of business on a Special Record Date for the
payment of such Defaulted Interest, which shall be fixed in the following
manner. The Company shall notify the Trustee of the amount of Defaulted
Interest proposed to be paid on each Note and the date of the proposed
payment (which payment date shall not be less than 25 or more than 30 days
following the date of delivery of such notice to the Trustee), and at the
same time the Company shall deposit with the Trustee an amount of money
equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as provided in
this clause. Thereupon, the Trustee shall fix a Special Record Date for
the payment of such Defaulted Interest in respect of Notes which shall be
not more than 15 days and not less than 10 days prior to the date of the
proposed payment and not less than 10 days after the receipt by the Trustee
of the notice of the proposed payment. The Trustee shall promptly notify
the Company of such Special Record Date and, in the name and at the expense
of the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor to be given to all
Holders in the manner and to the extent provided in Section 107. Notice of
the proposed payment of such Defaulted Interest on the Notes and the
Special Record Date therefor having been so given, such Defaulted Interest
on the Notes shall be paid by the Trustee from the funds deposited therefor
to the Persons in whose names such Notes (or their respective Predecessor
Notes) are registered in the Register at the close of business on such
Special Record Date, on the date for payment of such Defaulted Interest
specified in the Notice.
Subject to the foregoing provisions of this Section, each Note
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Note shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Note.
SECTION 210. Persons Deemed Owners. Prior to due presentment for
---------------------
registration of transfer of any Note, the Company, the Trustee and any agent of
the Company or the Trustee may treat the Person in whose name any Note is
registered as the
33
<PAGE>
owner of such Note for the purpose of receiving payments of principal of and
interest on such Note (subject to Section 209) and for all other purposes
whatsoever, whether or not such Note be overdue, and none of the Company, the
Trustee or any agent of the Company or the Trustee shall be affected by notice
to the contrary.
SECTION 211. Cancellation. All Notes surrendered to the Trustee for
------------
payment, registration of transfer or exchange (including Notes surrendered to
any Person other than the Trustee which shall be delivered to the Trustee) shall
be promptly cancelled by the Trustee. The Company may at any time deliver to
the Trustee for cancellation any Notes previously authenticated and delivered
hereunder which the Company may have acquired in any manner whatsoever, and all
Notes so delivered shall be promptly cancelled by the Trustee. No Notes shall
be authenticated in lieu of or in exchange for any Notes cancelled as provided
in this Section 211, except as expressly permitted by this Indenture. Subject
to the record retention requirements under the Exchange Act, the Trustee may
destroy cancelled Notes pursuant to a Company Request and furnish a certificate
of such destruction to the Company, unless the Company shall direct by a Company
Order that cancelled Notes be returned to the Company.
SECTION 212. Computation of Interest. Interest on the Notes shall be
-----------------------
computed on the basis of a 360-day year of twelve 30-day months.
SECTION 213. CUSIP Number. The Company in issuing the Notes may use
------------
a "CUSIP" number and if so the Trustee shall use the CUSIP number in notices of
redemption or exchange as a convenience to Holders, provided that any such
--------
notice may state that no representation is made as to the correctness or
accuracy of the CUSIP number printed in the notice or on the Notes and that
reliance may be placed only on the other identification numbers printed on the
Notes. The Company shall promptly notify the Trustee of any change in the CUSIP
number.
ARTICLE THREE
SATISFACTION AND DISCHARGE; DEFEASANCE
SECTION 301. Satisfaction and Discharge of Indenture; Defeasance.
---------------------------------------------------
(a) The Company, at any time, may terminate its obligations under this
Indenture by delivering all Outstanding Notes to the Trustee for cancellation
and paying all other sums payable hereunder by the Company; provided, however,
-------- -------
that the obligations of the Company under Sections 303, 304, 305 and 507,
together with the definitions in Article One necessary for the interpretation of
such Sections, shall survive.
34
<PAGE>
(b) At the Company's option, (i) the Company will be Discharged on
the 123rd day after the satisfaction of the conditions set forth in paragraphs
(c) and (d) below or (ii) the Company need not comply with those covenants set
forth in Sections 704, 705, 706, 707, 708, 709, 710, 711 and 716 and the
provisions of Sections 401(3) (but only to the extent that Section 401(3)
relates to such enumerated provisions), 801(a)(4) and 801(a)(5) at any time
after the applicable conditions set forth in paragraphs (c) and (d) below have
been satisfied.
(c) In order to exercise either option in paragraph (b) above,
(1) the Company must irrevocably deposit with the Trustee or a
trustee satisfactory to the Company and the Trustee, in trust, specifically
pledged as security for and dedicated solely to the benefit of the Holders
(A) money, (B) U.S. Government Obligations which, through the payment of
interest thereon and principal thereof in accordance with their terms, will
provide money or (C) a combination of money and U.S. Government
Obligations, in an amount sufficient (without consideration of any
reinvestment of interest on such funds) in the opinion (with respect to (B)
and (C)) of a nationally recognized firm of independent public accountants
expressed in an Accountants' Certificate delivered to the Trustee to pay
and discharge all the principal of and interest on the Notes not later than
one day before the dates such payments are due in accordance with the terms
of the Notes;
(2) the Company must deliver to the Trustee:
(i) irrevocable instructions to apply such money or the proceeds
of such U.S. Government Obligations to the payment of principal of and
interest on the Notes at maturity or redemption, as the case may be;
(ii) an Officers' Certificate and an Opinion of Counsel, each
stating that all conditions precedent provided in Sections 301(c) and
301(d) have been complied with;
(iii) an Officers' Certificate certifying as to whether the
Notes are then listed on the New York Stock Exchange;
(iv) if the Notes are then listed on the New York Stock
Exchange, the Company shall have delivered to the Trustee an Opinion
of Counsel to the effect that the Company's exercise of its option
under this Section would not cause the Notes to be delisted;
35
<PAGE>
(v) an Opinion of Counsel to the effect that the deposit and
related defeasance would not cause the Holders of the Notes to
recognize income, gain, or loss for federal income tax purposes and
that the Holders will be subject to federal income tax on the same
amount and in the same manner and at the same times as would have been
the case if the deposit and related defeasance had not occurred and,
in the case of a Discharge pursuant to paragraph (b)(i) above,
accompanied by a revenue or private letter ruling to such effect
received from or published by the Internal Revenue Service; and
(vi) an Opinion of Counsel to the effect that (A) the trust
funds will not be subject to any rights of holders of Senior
Indebtedness, including, without limitation, those rights arising
under Article Ten of this Indenture; (B) in the case of a Discharge
pursuant to paragraph (b)(1) above and subject to customary exclusions
and exceptions reasonably acceptable to the Trustee, (1) the Company
has authorization to establish an irrevocable trust in favor of the
Trustee for the benefit of the Holders under applicable law and the
action in establishing the irrevocable trust has been duly and
properly authorized by the Company and such authorization has not been
revoked, (2) the Trustee is an Independent trustee with respect to the
irrevocable trust, (3) a valid trust is created at the time of such
irrevocable deposit and (4) the Holders will have the sole beneficial
ownership interest under applicable law in the money so deposited in
such trust; and (C) if a court of competent jurisdiction were to rule
under any Bankruptcy Laws that the trust funds remained property of
the Company, (1) the Trustee will hold, for the benefit of the
Holders, a valid and first priority perfected security interest in
such trust funds that, after the expiration of any applicable
preference period (as specified in such opinion), is not avoidable
under the Bankruptcy Laws of any jurisdiction, (2) the Holders will be
entitled to receive adequate protection of their interests in such
trust funds under 11 U.S.C. (S)(S) 361, 362, 363 and 364 and (3) no
property, rights in property or other interests granted to the Trustee
for the benefit of the Holders or to the Holders in exchange for or
with respect to any of such trust funds will be subject to any prior
rights of holders of Senior Indebtedness, including, without
limitation, those rights arising under Article Ten of this Indenture;
For the limited purpose of the Opinion of Counsel referred to in this
paragraph (c)(2)(vi), such opinion
36
<PAGE>
may contain (1) either (A) an assumption that the conclusions
contained in a letter by a nationally recognized appraisal firm that
(i) the value of the trust assets is reasonably equivalent to the
amount of Notes then Outstanding, plus accrued and unpaid interest
thereon, as of the date of the deposit and (ii) the Discharge or
defeasance pursuant to paragraph (b) above of the principal amount of
the Notes then Outstanding, plus accrued and unpaid interest thereon,
as of the date of the transfer, is fair consideration for the transfer
of the trust assets to the trust, are accurate, provided that such
--------
letter is also addressed and delivered to the Trustee, or (B) an
assumption that the conclusions contained in a customary valuation
letter by a nationally recognized appraisal firm, dated as of the date
of the deposit and taking into account such deposit, or, at counsel's
option, a customary alternative certificate reasonably acceptable to
the Trustee, to the effect that the Company, as a result of the
transfer, will not (i) be insolvent (either because its financial
condition is such that the sum of its debts is greater than all of its
assets, at a fair valuation, or because the present fair saleable
value of its assets will be less than the amount required to pay its
probable liability on its debts as they become absolute and matured),
(ii) have unreasonably small capital for the business in which it is
or will be engaged or (iii) have incurred or planned to incur debts
beyond its ability to pay as such debts mature, are accurate, provided
--------
that (x) such valuation letter is also addressed and delivered to the
Trustee and (y) the Company delivers to the Trustee a letter by a
nationally recognized appraisal firm to the effect that the value of
the trust assets is reasonably equivalent to the amount of the Notes
then Outstanding, plus accrued and unpaid interest thereon, as of the
date of the deposit; or (2) a representation that (A) the Notes are
the legal, valid, binding and enforceable obligations of the Company,
and the Company's payment obligations are not avoidable under any
Bankruptcy Laws, and (B) the trust funds are not subject to recapture
by or on behalf of the Company under any Bankruptcy Laws;
(3) no Default or Event of Default (including as a result of such
deposit) shall have occurred and be continuing on the date of such deposit
and such deposit will not result in a breach or violation of, or constitute
a default under, any other instrument to which the Company is a party or by
which it is bound, as evidenced to the Trustee in an Officers' Certificate
delivered to the Trustee concurrently with such deposit;
37
<PAGE>
(4) the Company shall have paid or duly provided for payment of all
sums payable by the Company under this Indenture and the Notes; and
(5) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that the Company's exercise of its option under this
provision will not result in the Company, the Trustee or the trust to be
required to register as an "investment company" under the Investment
Company Act.
(d) It is the intention of the parties hereto that a valid trust for
the benefit of the Holders be created at the time that the Company makes the
deposit pursuant to this Section 301. Solely as protection for the Holders in
the event that a court of competent jurisdiction were to determine in the future
either that (i) such trust had not been validly created or (ii) such trust is
not enforceable, the Company, at the time the Company makes such deposit, will
take any and all acts necessary to create and perfect, in favor of the Holders,
a first-priority security interest in the money so deposited and shall take any
other action and execute and deliver any other documents that may reasonably be
requested by the Trustee to effectuate such security interest, and shall do all
of the above at such appropriate time so that such security interest shall
attach to the deposit at the time such deposit is made.
SECTION 302. Application of Trust Money. All money and U.S.
--------------------------
Government Obligations deposited with the Trustee or such other trustee pursuant
to Section 301 shall be held in trust and applied by the Trustee or such other
trustee, in accordance with the provisions of the Notes and this Indenture, to
the payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent),as the Trustee or such other trustee may
determine, to the Persons entitled thereto, of the principal and interest for
whose payments such money and U.S. Government Obligations have been deposited
with the Trustee or such other trustee. All such money and U.S. Government
Obligations shall be segregated and held in a separate trust. Money, U.S.
Government Obligations and proceeds thereof so held in trust, to the extent
allocated for the payment of the Notes, shall not be subject to the provisions
of Article Ten (other than, in the case of a defeasance pursuant to Section
301(b)(ii), Section 1001).
SECTION 303. Repayment to the Company. Subject to Section 302, the
------------------------
Trustee and the Paying Agent shall promptly pay to the Company upon request any
excess money or U.S. Government Obligations held by them at any time and
thereupon shall be relieved from all liability with respect to such money. The
Trustee and the Paying Agent shall pay to the Company upon request any money
held by them for the payment of principal or interest that remains unclaimed for
two years; provided, however,
-------- -------
38
<PAGE>
that the Company shall, if requested by the Trustee or such Paying Agent, give
the Trustee or such Paying Agent satisfactory indemnification against any and
all liability which may be incurred by it by reason of such payment; and
provided, further, that the Trustee or such Paying Agent before being required
- - -------- -------
to make any payment shall at the expense of the Company cause to be published
once in a newspaper of general circulation in The City of New York and mail to
each Holder entitled to such money notice that such money remains unclaimed and
that, after a date specified therein, which shall be at least 30 days from the
date of such publication or mailing, any unclaimed balance of such money then
remaining will be repaid to the Company. After payment to the Company, Holders
entitled to such money must look to the Company for payment as general creditors
unless an applicable law designates another Person.
SECTION 304. Reinstatement. If the Trustee or Paying Agent is unable
-------------
to apply any money or U.S. Government Obligations in accordance with Section 302
by reason of any legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, the Company's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 301 until such time as the Trustee or Paying Agent is permitted to apply
all such money or U.S. Government Obligations in accordance with Section 302;
provided, however, that if the Company has made any payment of interest on or
- - -------- -------
principal of any Notes because of the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the money or U.S. Government Obligations held by the
Trustee or Paying Agent.
SECTION 305. Indemnity. The Company shall indemnify the Trustee and
---------
hold it harmless against any tax, fee or other charge imposed on or assessed
against the money or U.S. Government Obligations deposited with the Trustee
under this Article Three or any interest or other income derived therefrom.
ARTICLE FOUR
DEFAULTS AND REMEDIES
SECTION 401. Events of Default. "Events of Default," wherever used
-----------------
herein, means any one of the following events:
(1) The Company defaults in the payment of interest on any Note when
the same becomes due and payable and the default continues for a period of
30 days, whether or not such payment is prohibited by Article Ten;
39
<PAGE>
(2) The Company defaults in the payment of the principal of any Note
when the same becomes due and payable at maturity, upon redemption,
repayment pursuant to Section 711 or otherwise, whether or not such payment
is prohibited by Article Ten;
(3) The Company fails to observe, perform or comply with any of its
other agreements or covenants in or provisions of the Notes or this
Indenture and the failure to observe, perform or comply continues for the
period and after the notice specified below;
(4) A default or defaults occur under any mortgage, indenture, bond,
note, debenture or other instrument under which there may be issued or by
which there may be secured or evidenced any Indebtedness of the Company or
any of its Restricted Subsidiaries, whether such Indebtedness now exists or
shall be created hereafter, and such Indebtedness shall have been
accelerated (or shall have matured); provided that the principal amount of
--------
Indebtedness with respect to which any such default or defaults and
acceleration (or maturity) has occurred and is continuing, together with
the principal amount of all other Indebtedness with respect to which such a
default or defaults and acceleration (or maturity) has occurred and is
continuing, aggregates $5,000,000 or more;
(5) The Company or any of its Significant Subsidiaries pursuant to or
within the meaning of Title 11 of the United States Code or any similar
federal or state law for the relief of debtors or affecting creditors'
rights (collectively, "Bankruptcy Law"):
(i) commences a voluntary case or any other action or
proceeding,
(ii) consents by answer or otherwise to the commencement against
it of an involuntary case or any other action or proceeding,
(iii) seeks or consents to the appointment of a receiver,
trustee, assignee, liquidator, custodian or similar official
(collectively, a "Custodian") of it or for all or substantially all of
its Property,
(iv) makes a general assignment for the benefit of its
creditors, or
(v) generally is unable to pay its debts as the same become due;
40
<PAGE>
(6) A court of competent jurisdiction enters an order or decree under
any Bankruptcy Law or under any law affecting creditors' rights that is
similar to a Bankruptcy Law that:
(i) is for relief against the Company or any of its Significant
Subsidiaries in an involuntary case in bankruptcy or any other action
or proceeding for any other relief,
(ii) appoints a Custodian of the Company or any of its
Significant Subsidiaries or for all or substantially all of the
Property of the Company or any of its Significant Subsidiaries, or
(iii) orders the liquidation of the Company or any of its
Significant Subsidiaries, and in each case the order or decree remains
unstayed and in effect for 60 days, or any dismissal, stay, rescission
or termination ceases to remain in effect;
(7) one or more judgments or orders shall have been rendered against
the Company or any of its Restricted Subsidiaries in an aggregate amount in
excess of $5,000,000 and shall not have been discharged and either (x) an
enforcement proceeding shall have been commenced by any creditor upon any
such judgment or (y) there shall be any period of 90 consecutive days
during which a stay of enforcement of such judgments, by reason of a
pending appeal or otherwise, shall not be in effect; or
(8) Any Gaming License of the Company or any of its Subsidiaries is
revoked, terminated or suspended or otherwise ceases to be effective,
resulting in the cessation or suspension of operation for a period of more
than 90 days of the casino business of any casino hotel owned, leased, or
operated directly or indirectly by the Company or any of its Subsidiaries
(other than any voluntary relinquishment of a Gaming License if such
relinquishment is, in the judgment of the Company, both desirable in the
conduct of the business of the Company and its Subsidiaries, taken as a
whole, and not disadvantageous in any material respect to the holders).
A Default under clause (3) is not an Event of Default until the
Trustee or the Holders of at least 25% in principal amount of the Outstanding
Notes provide written notification to the Company (and the Trustee, in the case
of Holders giving notice) of the Default and the Company does not cure the
Default within 60 days after receipt of the notice. Any notice of Default must
specify the Default, demand that it be remedied and state that the notice is a
"Notice of Default." Such notice
41
<PAGE>
shall be given by the Trustee if so requested by Holders of at least 25% in
principal amount of the then Outstanding Notes.
SECTION 402. Acceleration of Maturity; Rescission and Annulment. If
--------------------------------------------------
an Event of Default occurs and is continuing (other than an Event of Default as
defined in clauses (5) and (6) of Section 401), then and in every such case the
Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Notes may declare the principal of, and all accrued but unpaid
interest on, all the Notes to be due and payable by a notice, in writing, to the
Company (and the Trustee in the case of a notice given by Holders) and upon any
such declaration such principal and accrued interest shall become due and
payable immediately. In case an Event of Default as defined in clauses (5) and
(6) of Section 401 occurs, the principal of and interest on the Notes shall
become immediately due and payable without any declaration or act on the part of
the Holders or the Trustee.
In the event of a declaration of acceleration because an Event of
Default as defined in clause (4) of Section 401 has occurred, and is continuing,
such declaration and its consequences shall be automatically rescinded and
annulled if (x) in the case of Indebtedness that has been accelerated, the
holders of such Indebtedness shall have rescinded the declaration of
acceleration and the consequences thereof within 10 days of such declaration or,
in the case of Indebtedness that has matured, such Indebtedness has been
discharged in full within 10 days following maturity, (y) the Company shall have
delivered an Officers' Certificate certifying such rescission or discharge to
the Trustee and (z) no other Event of Default shall have occurred and be
continuing.
At any time after the Notes have been accelerated and before a
judgment or decree for payment of the money due has been obtained by the Trustee
as hereinafter in this Article Four provided, the Holders of not less than a
majority in principal amount of the Notes Outstanding, by notice to the Company
and the Trustee, may rescind and annul such acceleration and its consequences
if:
(1) there has been paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue installments of interest on all Notes,
(B) the principal of any Notes which have become due otherwise
than by such declaration of acceleration and interest thereon at the
rate borne by the Notes,
42
<PAGE>
(C) to the extent the payment of such interest is lawful,
interest upon overdue installments of interest at the rate borne by
the Notes, and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee and its agents and counsel;
(2) all Defaults and Events of Default, other than the non-payment of
the principal of and interest on the Notes that have become due solely by
such acceleration, have been cured or waived as provided in Section 413;
(3) the rescission would not conflict with any judgment or order of a
court of competent jurisdiction; and
(4) in the event of a cure or waiver of a Default or Event of Default
under clause (4) of Section 401, the Trustee shall have received an
Officers' Certificate of the Company and an Opinion of Counsel that the
default giving rise to such Default or Event of Default has been cured or
waived.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 403. Collection Suits by Trustee. If an Event of Default
---------------------------
specified in clause (1) or (2) of Section 401 occurs and is continuing, the
Trustee may recover judgment in its own name and as trustee of an express trust
against the Company or any other obligor on the Notes for the whole amount of
principal and accrued interest remaining unpaid, together with, to the extent
that payment of such interest is lawful, interest on overdue principal and
interest on overdue installments of interest, in each case at the rate per annum
--- -----
borne by the Notes and such further amount as shall be sufficient to cover the
costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.
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 and non-judicial proceedings as the Trustee
shall deem most effectual to protect and enforce any such rights, whether for
the specific enforcement of any covenant or agreement in this Indenture, the
Notes or in any other agreement or instrument or in aid of the exercise of any
power granted herein or therein, or to enforce any other proper remedy.
43
<PAGE>
SECTION 404. Trustee May File Proofs of Claim. (a) In the 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 Notes or to the
Property of the Company or of such other obligor, the Trustee (irrespective of
whether the principal of the Notes shall then be due and payable as therein
expressed or by declaration of acceleration or otherwise and irrespective of
whether the Trustee shall have made any demand on the Company or such other
obligor for the payment of overdue principal or interest) shall be entitled and
empowered, by intervention in such proceeding or otherwise,
(1) to file and prove a claim for the whole amount of principal and
interest owing and unpaid in respect of the Notes (including post-petition
interest) 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 agents and counsel) and of the Holders allowed in such
judicial proceeding, and
(2) to collect and receive any monies or other Property payable or
deliverable on any such claims and to distribute the same;
and any receiver, assignee, trustee, liquidator, sequestrator (or other similar
official) in any such judicial proceeding is hereby authorized by each Holder to
make such payments to the Trustee and, in the event that the Trustee shall
consent to the making of such payments directly to the Holders, to pay to the
Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 507.
(b) 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 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, except that the Trustee may
vote on behalf of the Holders for the appointment of a trustee in bankruptcy
without soliciting or canvassing any Holder for consent or approval.
SECTION 405. Trustee May Enforce Claims Without Possession of Notes.
------------------------------------------------------
All rights of action and claims under this Indenture or the Notes may be
prosecuted and enforced by the Trustee without the possession of any of the
Notes or the production thereof in any proceeding relating thereto, and any such
proceeding instituted by the Trustee shall be brought in its
44
<PAGE>
own name as trustee of an express trust, and any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Notes in respect of which such judgment
has been recovered.
SECTION 406. Application of Money Collected. Any money collected by
------------------------------
the Trustee pursuant to this Article Four shall be applied in the following
order, at the date or dates fixed by the Trustee and, in case of the
distribution of such money on account of principal or interest, upon
presentation of the Notes and the notation thereon of the payment if only
partially paid and upon surrender thereof if fully paid:
First: To the payment of all amounts due the Trustee under Section
507;
Second: To holders of Senior Indebtedness to the extent required by
Article Ten;
Third: To the payment of the amounts then due and unpaid upon the
Notes for principal and interest, in respect of which or for the benefit of
which such money has been collected, ratably, without preference or
priority of any kind, according to the amounts due and payable on such
Notes for principal and interest, respectively; and
Fourth: To the Company or any other obligor on the Notes, as their
interests may appear or as a court of competent jurisdiction may direct.
The Trustee may set a record date and payment date for any payment to
Holders pursuant to this Section.
SECTION 407. Limitation on Suits. No Holder shall have any right 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
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default,
(2) the Holders of not less than 25% in principal amount of the
Outstanding Notes have made written request to the Trustee to institute
proceedings in respect of such Event of Default in its own name as Trustee
hereunder,
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the losses, expenses and liabilities to be incurred in
compliance with such request,
45
<PAGE>
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding, and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of not less
than a majority in principal amount of the Outstanding Notes,
it being understood and intended that no one or more Holders shall have any
right in any manner by virtue of, or by availing itself of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the ratable benefit of all the Holders.
SECTION 408. Unconditional Right of Holders to Receive Principal and
-------------------------------------------------------
Interest. Notwithstanding any other provision in this Indenture, the Holder of
- - --------
any Note shall have the absolute and unconditional right to receive payment of
the principal of and interest on such Note on or after the respective dates
expressed in such Note and to institute suit for the enforcement of any such
payment, and such right shall not be impaired without the consent of such
Holder.
SECTION 409. 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 the Holder after
exhaustion of all rights to appeal, then and in every such case the Company, the
Trustee and the Holders shall, subject to any determination in such proceeding,
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.
SECTION 410. Rights and Remedies Cumulative. 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 411. Delay or Omission Not Waiver. No delay or omission of
----------------------------
the Trustee or of any Holder of any Note to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of
46
<PAGE>
any such Event of Default or an acquiescence therein. Every right and remedy
given by this Article or by law to the Trustee or to the Holders may be
exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by the Holders, as the case may be.
SECTION 412. Control by Holders. The Holders of not less than a
------------------
majority in principal amount of the Outstanding 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 on the
Trustee, provided that
--------
(1) such direction shall not be in conflict with any rule of law or
with this Indenture;
(2) the Trustee shall have the right to decline to follow any such
direction if the Trustee, being advised by counsel, determines that the
action so directed may not lawfully be taken or if the Trustee in good
faith shall, by a Trust Officer or Trust Officers, determine that the
proceedings so directed would involve it in personal liability or be unduly
prejudicial to the Holders not taking part in such direction; and
(3) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 413. Waiver of Past Defaults. The Holders of not less than a
-----------------------
majority in principal amount of the Outstanding Notes may on behalf of the
Holders of all the Notes waive any past Default hereunder and its consequences,
except a Default
(1) in the payment of the principal of or interest on any Note; or
(2) in respect of a covenant or provision hereof which under Article
Six cannot be modified or amended without the consent of the Holder of each
Outstanding Note affected;
provided, however, that no default in the payment of any amount due to the
- - -------- -------
Trustee under Section 507 or any other provision hereof may be waived by the
Holders without the Trustee's written consent.
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 any right consequent thereon.
47
<PAGE>
SECTION 414. Undertaking for Costs. All parties to this Indenture
---------------------
agree, and each Holder of any Note by his 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 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 shall not apply to any
suit instituted by the Trustee, to any suit instituted by one or more Holders
holding in the aggregate more than 10% in principal amount of the Outstanding
Notes, or to any suit instituted by any Holder pursuant to Section 408.
ARTICLE FIVE
THE TRUSTEE
SECTION 501. Certain Duties and Responsibilities. (a)
-----------------------------------
Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture; but in
the case of any such certificates or opinions which by any provision hereof
are specifically required to be furnished to the Trustee, the Trustee shall
examine the same to determine whether or not they appear to conform to the
requirements of this Indenture.
(b) In case 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.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that:
48
<PAGE>
(1) this subsection shall not be construed to limit the effect of
subsection (a) of this Section;
(2) The Trustee shall not be liable for any error of judgment made in
good faith, unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts;
(3) The Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction
of the Holders of a majority in principal amount of the Outstanding Notes
relating to 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, under this Indenture; and
(4) 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 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.
(d) The Trustee shall examine any certificates or other documents
furnished to it pursuant to the provisions of this Indenture to determine
whether or not such certificates or other documents conform to the requirements
of such provisions.
(e) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section 501.
SECTION 502. Notice of Defaults. Within 90 days after the occurrence
------------------
of any Default hereunder, the Trustee shall transmit to all Holders notice of
such Default hereunder known to the Trustee in the manner provided in Section
107, unless such Default shall have been cured or waived; provided, however,
-------- -------
that, except in the case of a default in the payment of the principal of or
interest on any Note, the Trustee shall be protected in withholding such notice
if and so long as the Board of Directors and/or Trust Officers of the Trustee in
good faith determine that the withholding of such notice is in the interest of
the Holders.
SECTION 503. Certain Rights of Trustee. Except as otherwise provided
-------------------------
in Section 501:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice,
49
<PAGE>
request, direction, consent, order, bond, debenture or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper party or parties;
(b) any request or direction of the Company shall be sufficiently
evidenced by a Company Request;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in good faith on its
part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders pursuant to this Indenture, unless such Holders shall
have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, 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, and, if the Trustee shall determine to make
such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or
attorney;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder;
(h) nothing in 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 or the exercise of any of its rights or
powers hereunder; and
50
<PAGE>
(i) The Trustee shall have no duty to inquire as to
the performance of the Company's covenants in Article Seven
hereof. In addition, the Trustee shall not be deemed to
have knowledge of any Default or Event of Default, except
(i) any Default or Event of Default occurring pursuant to
Section 401(1), 401(2) or 701, or (ii) any Default or
Event of Default of which the Trustee shall have received
written notification or obtained actual knowledge.
SECTION 504. Not Responsible for Recitals or Issuance of Notes. The
-------------------------------------------------
recitals contained herein and in the Notes (except the Trustee's certificate of
authentication) shall be taken as the statements of the Company and the Trustee
assumes no responsibility for their correctness. The Trustee makes no
representations as to validity or sufficiency of this Indenture or the Notes.
The Trustee shall not be accountable for the use or application by the Company
of the proceeds from the issuance of the Notes.
SECTION 505. May Hold Notes. The Trustee, any Paying Agent, any
--------------
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Notes and, subject to Sections 508
and 512, may otherwise deal with the Company with the same rights it would have
if it were not Trustee, Paying Agent, Registrar or such other agent.
SECTION 506. Money Held in Trust. Money held by the Trustee in trust
-------------------
hereunder need not be segregated from other funds except to the extent required
by law. The Trustee shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed with the Company. The
Trustee shall apply funds deposited with or transferred to it by or on behalf of
the Company for the purposes so deposited or transferred and in accordance with
the terms of this Indenture.
SECTION 507. Compensation and Reimbursement. The Company agrees:
------------------------------
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
51
<PAGE>
(3) to indemnify the Trustee for, and to hold it harmless against,
any loss, liability or expense incurred without negligence or bad faith on
its part, arising out of or in connection with the acceptance or
administration of this trust, including the costs and expenses of defending
itself against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder.
The Trustee shall promptly notify the Company of any claim asserted
against the Trustee for which it may seek indemnity.
As security for the performance of the obligations of the Company
under this Section 507, the Trustee shall have a Lien senior and prior to the
Notes upon all Property and funds held or collected by the Trustee as such,
except funds held in trust for the payment of principal of or interest on Notes.
Notwithstanding the satisfaction and discharge of the Indenture, the
obligations of the Company to the Trustee under this Section 507 shall survive.
When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in clause (5) or (6) of Section 401, the
expenses and the compensation for such services are intended to constitute
expenses of administration under any Bankruptcy Law.
SECTION 508. Eligibility; Disqualification. This Indenture shall
-----------------------------
always have a Trustee who satisfies the requirements of TIA (S) 310(a)(1) and
shall always have a combined capital and surplus of at least $50,000,000 as set
forth in its most recent published annual report of condition. If the Trustee
has or shall acquire any "conflicting interest" within the meaning of Section
310(b) of the TIA, the Trustee and the Company shall in all respects comply with
the provisions of Section 310(b) of the TIA.
SECTION 509. Resignation and Removal; Appointment of Successor. (a)
-------------------------------------------------
No resignation or removal of the Trustee and no appointment of a successor
Trustee pursuant to this Article Five shall become effective until the
acceptance of appointment by the successor Trustee under Section 510.
(b) The Trustee may resign at any time by giving written notice
thereof to the Company, the New Jersey Commission, the New Jersey Division, the
Nevada Commission and the Nevada Control Board and any other Gaming Authority at
least 30 days prior to the proposed resignation.
(c) The Trustee may be removed at any time by an Act
52
<PAGE>
of the Holders of a majority in principal amount of the
Outstanding Notes, delivered to the Trustee and to the Company.
(d) The Company, by action of an Authorized Officer, may remove the
Trustee at any time if:
(1) the Trustee fails to comply with Section 508;
(2) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any Bankruptcy Law;
(3) a Custodian or public officer takes charge of the
Trustee or its Property;
(4) the Trustee becomes incapable of acting; or
(5) the Trustee becomes disqualified under any applicable provision
of the New Jersey Act or is found unsuitable under any applicable provision
of the Nevada Act, or the Trustee's relationship with the Company may, in
the Company's discretion, jeopardize any material Gaming License or
franchise or right or approval granted thereto.
(e) If the Trustee fails to comply with Section 508, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
(f) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by action of an Authorized Officer, shall promptly appoint a successor
Trustee. Within one year after such resignation, removal or incapability, or
the occurrence of such vacancy, a successor Trustee to replace the successor
Trustee appointed by the Company may be appointed by an Act of the Holders of a
majority in principal amount of the Outstanding Notes delivered to the Company
and the retiring Trustee. If, within 30 days after the retiring Trustee resigns
or is removed, no successor Trustee shall have been so appointed by the Company
or the Holders and accepted appointment in the manner provided in Section 510,
the retiring Trustee, the Company or the Holders of at least 10% in aggregate
principal amount of the then Outstanding Notes may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(g) The Company shall give notice to all Holders in accordance with
Section 107 of each resignation and each removal of the Trustee and each
appointment of a successor Trustee. Each notice shall include the name of the
successor Trustee and the address of its Corporate Trust Office.
53
<PAGE>
SECTION 510. Acceptance of Appointment by Successor. Every successor
--------------------------------------
Trustee appointed hereunder shall execute, acknowledge and deliver to the
Company and to the retiring Trustee an instrument accepting such appointment,
and the successor Trustee and the Company shall enter into a supplemental
indenture, pursuant to Section 601 hereof, evidencing the appointment of the
successor Trustee. Thereupon, the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee. On request of the Company or the successor
Trustee, such retiring Trustee shall, upon payment of its charges, execute and
deliver an instrument transferring to such successor Trustee all the rights,
powers and trusts of the retiring Trustee. The retiring Trustee shall promptly
assign, transfer and deliver to such successor Trustee all property and money
held by such retiring Trustee hereunder, subject to the Lien, if any, provided
for in Section 507. Upon request of any such successor Trustee, the Company
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor Trustee all such rights, powers and trusts.
No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
this Article Five and under the TIA.
Notwithstanding the replacement of the Trustee pursuant to this
Section 510, the Company's obligations under Section 507 hereof shall continue
for the benefit of the retiring Trustee in connection with its rights and duties
hereunder prior to such replacement.
SECTION 511. Merger, Conversion, Consolidation or Succession to
--------------------------------------------------
Business. Any corporation into which the Trustee may be merged or converted or
- - --------
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article Five, without the execution or filing of any paper or any further act on
the part of any of the parties hereto. In case any Notes shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
Trustee by merger, conversion or consolidation to such authenticating Trustee
may adopt such authentication and deliver the Notes so authenticated with the
same effect as if such successor Trustee had itself authenticated such Notes.
54
<PAGE>
SECTION 512. Preferential Collection of Claims Against the Company.
-----------------------------------------------------
(a) The Trustee is subject to TIA (S) 311(a), excluding any creditor
relationship listed in TIA (S) 311(b). A Trustee who has resigned or been
removed shall be subject to TIA (S) 311(a) to the extent indicated therein.
(b) For the purposes of interpreting TIA (S) 311 under this Section
512 only:
(1) The term "cash transaction" means any transaction in which full
payment for goods or securities sold is made within seven days after
delivery of the goods or securities in currency or in checks or other
orders drawn upon banks or bankers and payable upon demand; and
(2) The term "self-liquidating paper" means any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated or
incurred by the Company for the purpose of financing the purchase,
processing, manufacturing, shipment, storage or sales of goods, wares or
merchandise and which is secured by documents evidencing title to,
possession of, or a Lien upon, the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods, wares or
merchandise previously constituting the security, provided the security is
received by the Trustee simultaneously with the creation of the creditor
relationship with the Company arising from the making, drawing, negotiation
or incurring of the draft, bill of exchange, acceptance or obligation.
SECTION 513. Reports by Trustee. (a) Within 60 days after May 15 of
------------------
each year, the Trustee shall transmit by mail to all Holders of Notes, as
provided in Subsection (c) of this Section, a brief report dated as of such May
15 if and to the extent required under TIA (S) 313(a).
(b) The Trustee shall also comply with TIA (S) 313(b) and (c).
(c) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange upon
which the Notes are listed, and with the SEC and the Company. The Company will
notify the Trustee when the Notes are listed on any stock exchange.
(d) The Trustee shall report the names of all Holders to the New
Jersey Division, the New Jersey Commission, the Nevada Control Board, the Nevada
Commission and, if requested in writing by the Company, each other Gaming
Authority so requested by the Company promptly after the initial issuance of the
Notes. The Trustee shall provide to the New Jersey Division, the New Jersey
Commission, the Nevada Control Board, the Nevada Commission and,
55
<PAGE>
if requested in writing by the Company, each other Gaming Authority so requested
by the Company copies of all written communications from the Trustee to all
Holders, notice of any Default, notice of any transfer or assignment of the
Trustee's rights under this Indenture within five Business Days thereof, a copy
of any amendment to this Indenture or the Notes and notice of any rescission,
annulment or waiver in respect of an Event of Default under this Indenture.
(e) The Trustee shall cooperate with the Company in providing
information relating to the Notes or the Holders to any Governmental Authority
pursuant to any Legal Requirement.
ARTICLE SIX
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 601. Without Consent of Holders. The Company, when duly
--------------------------
authorized by resolutions of its Board of Directors, and the Trustee, may amend
or supplement this Indenture or the Notes for the benefit of the Holders without
notice to or consent of any Holder:
(1) to evidence the succession of another Person to the Company, and
the assumption by any such successor of the covenants of the Company
contained herein and in the Notes;
(2) to evidence the succession of another Trustee, and the assumption
by any such successor Trustee of the obligations of the Trustee hereunder;
(3) 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;
(4) to cure any ambiguity, to correct or supplement any provision
herein or in the Notes which may be inconsistent with any other provision
herein or to make any other provisions with respect to matters or questions
arising under this Indenture or the Notes which shall not be inconsistent
with the provisions of this Indenture or the Notes;
(5) to provide for uncertificated Notes in addition to or in place of
certificated Notes; or
(6) to comply with any requirement of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA, as contemplated
by Section 109. Notwithstanding the above, the Trustee and the Company may
56
<PAGE>
not make any change that adversely affects the legal rights of any Holder
hereunder or under the Notes.
SECTION 602. With Consent. Subject to Section 408, the Company, when
------------
duly authorized by resolution of its Board of Directors, and the Trustee may
amend this Indenture or the Notes with the written consent of the Holders of at
least a majority in principal amount of the then Outstanding Notes.
Notwithstanding the provisions of this Section 602, without the
consent of each Holder affected, an amendment or waiver, including a waiver
pursuant to Section 413, may not:
(1) reduce the amount of Notes whose Holders must consent to an
amendment;
(2) reduce the rate of or change the time for or the manner of,
payment of interest, including Defaulted Interest, on any Note;
(3) reduce the principal, or change the Stated Maturity for the
payment of principal, of any Note, or reduce the Redemption Price of or
change the date on which any Note may be subject to redemption or alter any
other provision with respect to redemption pursuant to the terms of the
Notes;
(4) waive a Default in the payment of the principal of or interest on
or redemption of any Note;
(5) make any Note payable in money other than that stated in the
Note; or
(6) make any change in Section 408, 413 or this Section 602.
It shall not be necessary under this Section 602 for the consent of
the Holders to approve the particular form of any proposed amendment, supplement
or waiver, but it shall be sufficient if such consent approves the substance
thereof.
An amendment under Section 601 or 602 may not make any change that
adversely affects the rights under Article Ten of any holder of an issue of
Senior Indebtedness unless the holders of such issue pursuant to its terms
consent to the change or the change is otherwise permissible.
After an amendment under this Section 602 becomes effective, the
Company shall mail to Holders a notice briefly describing the amendment.
57
<PAGE>
SECTION 603. Compliance with Trust Indenture Act. Every amendment to
-----------------------------------
this Indenture or the Notes shall be set forth in a supplemental indenture that
complies with the TIA as then in effect.
SECTION 604. Revocation and Effect of Consents. (a) Until an
---------------------------------
amendment or waiver becomes effective, a consent to it by a Holder of a Note is
a continuing consent by the Holder and every subsequent Holder of a Note or
portion of a Note that evidences the same debt as the consenting Holder's Note,
even if notation of the consent is not made on any Note. However, any such
Holder or subsequent Holder may revoke the consent as to his Note or portion of
a Note if the Trustee receives written notice of revocation before the date on
which the Trustee receives an Officers' Certificate from the Company certifying
that the Holders of the requisite principal amount of Notes have consented to
such amendment or waiver. An amendment or waiver becomes effective upon receipt
by the Trustee of such Officers' Certificate and the written consents from the
Holders of the requisite percentage in principal amount of Notes.
(b) 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
or waiver. If a record date is fixed, then notwithstanding the second and third
sentence of paragraph (a) of this Section 604, those Persons who were Holders at
such record date (or their duly designated proxies), and only those Persons,
shall be entitled to consent to such amendment or waiver or 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 120 days after such record date.
(c) After an amendment or waiver becomes effective, it shall bind
every Holder.
SECTION 605. Notation on or Exchange of Notes; Effect of Supplemental
--------------------------------------------------------
Indenture. If an amendment, supplement or waiver changes the terms of the
- - ---------
Notes, the Trustee may require the Holders to deliver the Notes to the Trustee.
The Trustee may place an appropriate notation on the Notes concerning such
changed terms and return them to the Holders and the Trustee may place an
appropriate notation on any Note thereafter authenticated. Alternatively, if
the Company or the Trustee so determines, the Company in exchange for the Notes
shall issue and the Trustee shall authenticate new Notes that reflect such
changed terms.
Upon the execution of any supplemental indenture under this Article
Six, this Indenture and, to the extent applicable, the Notes, shall be modified
thereby, and every Holder of any Note authenticated and delivered hereunder,
whether before or
58
<PAGE>
after the execution of such supplemental indenture, shall be bound by this
Indenture, as so amended, modified or supplemented.
SECTION 606. Trustee Protected. The Trustee shall sign all
-----------------
supplemental indentures, except that the Trustee need not sign any supplemental
indenture that adversely affects its rights. In signing or refusing to sign
such amendment or supplemental indenture, the Trustee shall be entitled to
receive and, subject to Section 501, shall be fully protected in relying upon,
an Officers' Certificate of the Company and an Opinion of Counsel as conclusive
evidence that such amendment or supplemental indenture is authorized or
permitted by this Indenture, that it is not inconsistent herewith, that all
conditions precedent to the execution thereof have been met, that it will be
valid and binding upon the Company in accordance with its terms and that, after
the execution thereof, the Company will not be in Default and no Event of
Default will have occurred and be continuing.
ARTICLE SEVEN
COVENANTS
SECTION 701. Payment of Notes. The Company shall pay the principal
----------------
of and interest on the Notes on the dates and in the manner provided in the
Notes. An installment of principal or interest shall be considered paid on the
date due if the Trustee or Paying Agent holds on that date money designated for
and sufficient to pay such installment and is not prohibited from paying such
money to the Holders pursuant to the terms of this Indenture.
The Company shall pay interest on overdue principal at the rate borne
by the Notes; it shall pay interest on overdue installments of interest at the
same rate, to the extent lawful.
SECTION 702. Maintenance of Office or Agency. The Company will
-------------------------------
maintain in the Borough of Manhattan, The City of New York, an office or agency
where Notes may be surrendered for presentation for payment, registration of
transfer or exchange and where notices and demands to or upon the Company in
respect of the Notes and this Indenture may be served. The Company will give
prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations or surrenders may be made or served
at the Corporate Trust Office in the City of St. Paul as the office of the
Company for purposes of this paragraph. The Company may also from time to time
designate one or more other offices or agencies where the Notes may be presented
or
59
<PAGE>
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
-------- -------
any manner relieve the Company of its obligation to maintain an office or agency
in the Borough of Manhattan, The City of New York where Notes may be surrendered
for presentation for payment, for registration of transfer or exchange and where
notices and demands to or upon the Company in respect of the Notes and this
Indenture may be served. The Company will 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.
SECTION 703. Money for Note Payments to be Held in Trust. If the
-------------------------------------------
Company (or any other obligor on the Notes) or any Affiliate of the Company (or
any such other obligor) shall at any time act as the Company's Paying Agent, it
will, on or before each due date of the principal of or interest on any of the
Notes, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal or interest so becoming due until
such sums shall be paid to such Persons or otherwise disposed of as herein
provided, and will promptly notify the Trustee of its action or failure so to
act.
Whenever the Company shall have one or more Paying Agents, it will,
prior to each due date of the principal of or interest on any Notes, appoint a
lead Paying Agent and deposit with such lead Paying Agent a sum sufficient to
pay the principal or interest so becoming due, such sum to be held in trust for
the benefit of the Persons entitled to such principal or interest, and (unless
such lead Paying Agent is the Trustee) the Company will promptly notify the
Trustee of its action or failure so to act.
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent will
agree with the Trustee, subject to the provisions of this Section 703, that such
Paying Agent will:
(1) hold all sums held by it for the payment of the principal of or
interest on the Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise disposed
of as herein provided;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Notes including the Company) in the making of any
payment in respect of principal or interest; and
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith
60
<PAGE>
pay to the Trustee all sums so held in trust by such Paying Agent.
For the purpose of obtaining the satisfaction and discharge of this
Indenture pursuant to Article Three or for any other purpose, the Company may at
any time pay, or by a Company Request direct any Paying Agent to pay, to the
Trustee all sums held in trust by the Company or such Paying Agent,
respectively. Such sums are to be held by the Trustee upon the same trusts as
those upon which such sums were held by the Company or such Paying Agent. Upon
any such payment, the Company and any such Paying Agent shall be released from
all further liability with respect to such money.
SECTION 704. Limitation on Restricted Payments.
---------------------------------
(a) The Company will not, and will not permit any Restricted Subsidiary to,
directly or indirectly, (i) declare or pay any dividend on or make any
distribution or payment on its Capital Stock or to its stockholders (in their
capacity as stockholders) (other than dividends or distributions payable solely
in its Qualified Capital Stock and, in the case of a Restricted Subsidiary,
dividends or distributions payable to the Company or a Wholly Owned Subsidiary),
(ii) purchase, redeem or otherwise acquire or retire for value, any shares of
Capital Stock of the Company (except, in the case of a Restricted Subsidiary,
from the Company) or any Subsidiary of the Company (other than a Wholly Owned
Subsidiary), (iii) acquire, retire or redeem any Indebtedness of or otherwise
make any Investment in any Affiliate of the Company (other than a Wholly Owned
Subsidiary) or (iv) purchase, redeem or otherwise acquire or retire for value,
prior to any scheduled maturity, scheduled repayment or scheduled sinking fund
or mandatory redemption payment, Indebtedness of the Company or of any Affiliate
of the Company that is pari passu or subordinated (whether pursuant to its terms
---- -----
or by operation of law) in right of payment to the Notes and which is scheduled
to mature (after giving effect to any and all unconditional (other than as to
the giving of notice) options to extend the maturity thereof) on or after the
maturity date of the Notes, if at the time of any such declaration,
distribution, payment, purchase, redemption, acquisition or retirement
(collectively, the "Restricted Payments") and after giving effect thereto
(including, without limitation, in calculating on a pro forma basis, as if such
--- -----
proposed Restricted Payment had been made, the Consolidated Fixed Charge
Coverage Ratio of the Company for purposes of clause (y) below):
(x) any Event of Default shall have occurred and be continuing; or
(y) the Company could not incur at least $1.00 of additional
Indebtedness pursuant to Section 705(a); or
61
<PAGE>
(z) the aggregate amount of Restricted Payments for all such purposes
made subsequent to the Effective Date would exceed an amount equal to the
sum of (i) 50% of aggregate Consolidated Net Income (or if such aggregate
Consolidated Net Income shall be a deficit, minus 100% of such deficit)
accrued on a cumulative basis in the period commencing on the Effective
Date and ending on the last day of the fiscal quarter immediately preceding
the relevant Transaction Date, (ii) the aggregate net proceeds, including
cash and the fair market value of Property other than cash (as determined
in good faith by the Board of Directors of the Company, whose determination
shall be conclusive, and evidenced by a resolution of such Board of
Directors filed with the Trustee) received by the Company from the issuance
or sale to any Person (other than a Subsidiary of the Company) during the
period commencing on the Effective Date and ending on such Transaction Date
of Qualified Capital Stock of the Company (other than Capital Stock of the
Company issued upon conversion of or in exchange for securities of the
Company, except to the extent of any payment to the Company in addition to
the securities of the Company surrendered) and (iii) to the extent not
included in (ii) above, the aggregate net proceeds, including cash and the
fair market value of Property other than cash (as determined in good faith
by the Board of Directors of the Company, whose determination shall be
conclusive, and evidenced by a resolution of such Board of Directors filed
with the Trustee) received by the Company from the issuance or sale to any
Person (other than a Subsidiary of the Company) during the period
commencing on the Effective Date and ending on such Transaction Date, of
any debt securities evidencing Indebtedness of the Company or of any
Redeemable Stock of the Company, if, and to the extent that, as of such
Transaction Date such debt securities or Redeemable Stock, as the case may
be, have been converted into, exchanged for or satisfied by the issuance of
Qualified Capital Stock of the Company; provided, however, that, if the
-------- -------
Company and its Restricted Subsidiaries have made any Investments during
the period commencing on the Effective Date and ending on such Transaction
Date, the proceeds of which Investments were used, directly or indirectly,
by the recipients thereof to purchase Qualified Capital Stock of the
Company or other securities that have been converted into, exchanged for or
satisfied by the issuance of Qualified Capital Stock of the Company, the
aggregate amount determined under clauses (ii) and (iii) shall be net of
the aggregate amount of such Investments.
(b) The provisions of this Section 704 shall not prohibit:
62
<PAGE>
(i) the Company or any Restricted Subsidiary from paying a dividend
on its own Capital Stock within 60 days after the declaration thereof if,
on the date when the dividend was declared, the Company or such Restricted
Subsidiary, as the case may be, could have paid such dividend in compliance
with the other provisions of this Section 704;
(ii) the Company or any Restricted Subsidiary from redeeming or
repurchasing its securities in the event that the holder of such securities
has failed to qualify or to be found suitable or otherwise eligible under a
Gaming Jurisdiction Law to remain as a holder of such securities;
(iii) Holdings from redeeming, or the Company or any Restricted
Subsidiary from purchasing, for an amount not exceeding $750,000 in the
aggregate, all or a portion of the shares of preferred stock, Series A, of
Holdings outstanding on the Effective Date; or
(iv) the Company and its Restricted Subsidiaries from acquiring
shares of Capital Stock of the Company solely in exchange for other shares
of Capital Stock of the Company that is not Redeemable Stock and that is
not exchangeable for Redeemable Stock whether upon conversion or otherwise;
provided, however, that the aggregate amount of any payment, dividend,
- - -------- -------
acquisition, redemption or distribution made by the Company or any Restricted
Subsidiary pursuant to subsection (b)(i) or (ii) shall be included in any
computation under Section 704(a) of the aggregate amount of Restricted Payments
made by the Company and its Restricted Subsidiaries, and the aggregate amount of
any payment, dividend, acquisition, redemption or distribution made by the
Company or any Restricted Subsidiary pursuant to subsection (b)(iii) or (iv)
shall not be included in any such computation.
(c) So long as no Event of Default shall have occurred and be
continuing, the provisions of this Section 704 shall not prohibit the Company
and its Restricted Subsidiaries from:
(i) acquiring shares of Capital Stock of the Company (A) to eliminate
fractional shares, (B) from an employee who has purchased or otherwise
acquired shares of Capital Stock of the Company under an employee stock
option or employee stock purchase agreement or other plan or agreement
reserving to the Company the option to repurchase the shares but in no
event for a price greater than the higher of fair market value or the price
at which such securities were sold by the Company and (C) pursuant to a
court order, provided that the aggregate consideration paid by the Company
--------
and its Restricted Subsidiaries pursuant to subclauses (A) and (B)
63
<PAGE>
above shall not exceed $250,000 in any fiscal year of the Company;
(ii) declaring or paying any dividend on, or redeeming or
repurchasing, shares of the Series B Preferred Stock, provided that the
--------
aggregate amount paid by the Company and its Restricted Subsidiaries in all
such redemptions and repurchases from and after the Effective Date shall
not exceed $10,000,000;
(iii) redeeming or purchasing the Preferred Share Purchase Rights at
a price not exceeding $0.01 per right and $2,000,000 in the aggregate;
(iv) acquiring, retiring or redeeming any Indebtedness of, or
otherwise making any Investment in, Tropicana Enterprises in connection
with the Tropicana Security Deposit or the Tropicana Loan, except to the
extent that the aggregate amount of any such Investment in Tropicana
Enterprises in connection with the Tropicana Loan exceeds the outstanding
principal amount owed to third parties under the Tropicana Loan at the
Effective Date;
(v) purchasing the Tropicana or the Jaffe Partnership Interest; or
(vi) making any Restricted Payment not otherwise permitted by this
Section 704, provided that the aggregate amount of Restricted Payments made
--------
pursuant to this clause (vi) from and after the Effective Date shall not
exceed $30,000,000;
provided, however, that the aggregate amount of any payment, dividend,
- - -------- -------
acquisition, redemption or distribution made by the Company or any Restricted
Subsidiary pursuant to subsection (C)(i), (ii), (iii) or (vi) shall be included
in any computation under Section 704(a) of the aggregate amount of Restricted
Payments made by the Company and its Restricted Subsidiaries, and the aggregate
amount of any payment, dividend, acquisition, redemption or distribution made by
the Company or any Restricted Subsidiary pursuant to subsection (c)(iv) or (v)
shall not be included in any such computation.
SECTION 705. Limitation on Indebtedness. (a) The Company will not,
--------------------------
and will not permit any Restricted Subsidiary to, create, incur, assume,
guarantee or otherwise become liable with respect to, or become responsible for
the payment of, any Indebtedness unless, after giving effect thereto, the
Consolidated Fixed Charge Coverage Ratio of the Company is greater than 1.9 to
1.
64
<PAGE>
(b) Notwithstanding the foregoing, the Company and its Restricted
Subsidiaries may incur, create, assume, guarantee or otherwise become liable
with respect to any or all of the following: (i) Indebtedness not otherwise
permitted pursuant to clauses (ii) through (xi) below in an aggregate amount at
any time outstanding of up to $20,000,000; (ii) Indebtedness evidenced by the
Notes or the 11% Senior Subordinated Notes Due 2002 of the Company; (iii)
Indebtedness of the Company and its Restricted Subsidiaries remaining
outstanding immediately after the issuance of the Notes and application of the
proceeds thereof; (iv) Indebtedness to the Company or to a Restricted
Subsidiary; (v) Indebtedness incurred by the Company or any Restricted
Subsidiary in connection with (a) the construction of any new facility or
facilities related to the gaming business or any related business of the Company
or any Restricted Subsidiary or in connection with the expansion by the Company
or any Restricted Subsidiary of any of its existing facilities; provided,
--------
however, that the aggregate principal amount of all such Indebtedness incurred
- - -------
on and subsequent to the Effective Date shall not exceed $100,000,000, (b) the
maintenance, refurbishment or replacement by the Company or any Restricted
Subsidiary in the ordinary course of business of assets related to the gaming
business or any related business of the Company or any Restricted Subsidiary or
(c) the acquisition of slot machines, gaming tables or other similar gaming
equipment; (vi) Indebtedness under any Credit Facilities in an aggregate amount
of up to $112,300,000; (vii) Indebtedness incurred to purchase the Tropicana or
the Jaffe Partnership Interest or in connection with any Tropicana Loan
Refinancings; (viii) Indebtedness incurred in respect of the Tropicana Security
Deposit; (ix) Indebtedness under Currency Agreements or Interest Swap
Obligations (including any Interest Swap Obligation, the purpose of which is to
alter or replace, or lengthen or shorten the maturity of, any Interest Swap
Obligation previously incurred pursuant to this clause (ix)), provided that such
--------
Currency Agreements or Interest Swap Obligations are related to payment
obligations on Indebtedness otherwise permitted by this Section 705; (x)
Indebtedness incurred in respect of performance bonds, bankers' acceptances,
letters of credit and surety bonds provided by the Company or any Restricted
Subsidiary in the ordinary course of business; and (xi) Indebtedness
("Replacement Indebtedness") the proceeds of which are used to refinance (a) all
or a portion of the Notes, (b) any other permitted Indebtedness of the Company
and its Restricted Subsidiaries or (c) permitted successor or replacement
Indebtedness, in each case in a principal amount (or, if such Replacement
Indebtedness does not require cash payments prior to maturity, with an original
issue price) not to exceed an amount equal to the aggregate of the principal
amount plus any prepayment penalties, premiums and accrued and unpaid interest
on the Indebtedness so refinanced and customary fees, expenses and costs related
to the incurrence of such Replacement Indebtedness, provided that, in the case
--------
of this
65
<PAGE>
clause (xi), (1) if the Notes are refinanced in part, such Replacement
Indebtedness is expressly made pari passu or subordinate in right of payment to
---- -----
the remaining Notes, (2) if the Indebtedness to be refinanced is subordinate in
right of payment to the Notes, such Replacement Indebtedness is subordinate in
right of payment to the Notes at least to the extent that the Indebtedness to be
refinanced is subordinate to the Notes, (3) if the Indebtedness to be refinanced
is pari passu in right of payment to the Notes, such Replacement Indebtedness is
---- -----
pari passu or subordinate in right of payment to the Notes at least to the
- - ---- -----
extent that the Indebtedness to be refinanced is pari passu to the Notes and (4)
---- -----
if the Notes are refinanced in part or if the Indebtedness to be refinanced is
subordinate in right of payment to the Notes and scheduled to mature after the
maturity date of the Notes, such Replacement Indebtedness determined as of the
date of incurrence does not mature prior to the final scheduled maturity date of
the Notes and the Average Life of such Replacement Indebtedness is equal to or
greater than the Average Life of the remaining Notes.
SECTION 706. Limitation on Liens. The Company will not, directly or
-------------------
indirectly, create, incur, assume or suffer to exist, or permit any Restricted
Subsidiary to create, incur, assume or suffer to exist, any Lien on or with
respect to any of its Property or Capital Stock, whether now owned or hereafter
acquired, or assign, or permit any Restricted Subsidiary to assign, any right to
receive income, other than: (i) Liens existing as of the date of this Indenture
or arising hereafter pursuant to the Credit Facility; (ii) Liens securing Senior
Indebtedness; (iii) Liens in favor of the Company; (iv) Liens securing
Indebtedness (including, without limitation, any obligation, contingent or
otherwise, for borrowed money of any Person secured by any Lien in respect of
Property of the Company or any Restricted Subsidiary, even though neither the
Company nor any Restricted Subsidiary has assumed or become liable for payment
of such obligation) of the Company (other than Senior Indebtedness) or any
Restricted Subsidiary, provided that, with respect to any Indebtedness that is
--------
pari passu with the Notes, the Notes are secured by Liens equal and ratable to
- - ---- -----
such Liens and, with respect to Indebtedness that is subordinated to the Notes,
the Notes are secured by Liens that are senior to such Liens; and (v) Permitted
Liens. Notwithstanding the foregoing, this provision shall not be applicable to
any Lien on Capital Stock issued by any Restricted Subsidiary that holds,
directly or indirectly, a license, or is a holding company, under the Nevada
Act.
SECTION 707. Limitation on Payment Restrictions Affecting Restricted
-------------------------------------------------------
Subsidiaries. The Company will not, and will not permit any Restricted
- - ------------
Subsidiary to, create or otherwise cause or suffer to exist or become effective
any consensual encumbrance or restriction which by its terms expressly restricts
66
<PAGE>
the ability of any Restricted Subsidiary to (i) pay dividends or make any other
distributions on such Restricted Subsidiary's Capital Stock or pay any
Indebtedness owed to the Company or any Restricted Subsidiary (except that
payment of dividends by Adamar of Nevada may be suspended if required by Section
6.A. of the Stock Pledge), (ii) make any loans or advances to the Company or any
Restricted Subsidiary or (iii) transfer any of its Property to the Company or
any Restricted Subsidiary, except that (A) clauses (ii) and (iii) shall be
deemed not to apply to any such encumbrances or restrictions contained in any
agreement or instrument (a) relating to any Indebtedness of the Company or any
Restricted Subsidiary existing on the Effective Date or to the Credit Facility;
(b) relating to any Property acquired by the Company or any Restricted
Subsidiary after the Effective Date, provided that such encumbrance or
--------
restriction relates only to the Property which is acquired; (c) relating to (x)
any industrial revenue or development bonds, (y) any obligation of the Company
or any Restricted Subsidiary incurred in the ordinary course of business to pay
the purchase price of Property acquired by the Company or such Restricted
Subsidiary and (z) any lease of Property by the Company or any Restricted
Subsidiary in the ordinary course of business, provided that such encumbrance or
--------
restriction relates only to the Property which is the subject of such industrial
revenue or development bond, such Property purchased or such Property leased and
any such lease, as the case may be; (d) relating to any Indebtedness of any
Restricted Subsidiary at the date of acquisition of such Restricted Subsidiary
by the Company or any Restricted Subsidiary, provided that such Indebtedness was
--------
not incurred in connection with or in anticipation of such acquisition; and (e)
replacing or refinancing agreements or instruments referred to in clauses (a),
(b) and (c), provided that the provisions relating to such encumbrance or
--------
restriction contained in such replacing or refinancing agreement or instrument
are no more restrictive than the provisions relating to such encumbrance or
restriction contained in the original agreement or instrument, (B) clauses (i),
(ii) and (iii) shall be deemed not to apply to any such encumbrances or
restrictions imposed by the New Jersey Commission, the New Jersey Division, the
Nevada Commission, the Nevada Control Board or any other Gaming Authority and
(C) clause (iii) shall be deemed not to apply to the transfer of Property that
is used to secure Indebtedness, provided that such Indebtedness is permitted to
--------
be incurred under the Indenture.
SECTION 708. Limitation on Capital Stock of Restricted Subsidiaries.
------------------------------------------------------
The Company will not (i) permit any of its Restricted Subsidiaries to issue any
Capital Stock to any Person (other than the Company or any Wholly Owned
Subsidiary) that shall entitle the holder of such Capital Stock to a preference
in right of payment in the event of liquidation, dissolution or winding-up of
such Restricted Subsidiary or with respect to dividends of such Restricted
Subsidiary or (ii) permit any Person
67
<PAGE>
(other than the Company or any Wholly Owned Subsidiary) to hold any such Capital
Stock.
SECTION 709. Transactions with Affiliates. The Company will not, and
----------------------------
will not permit any of its Restricted Subsidiaries to, enter into any
transaction (including, without limitation, the purchase, sale or exchange of
Property, the making of any Investment, the giving of any guarantee or the
rendering of any service) with any Affiliate of the Company or any Subsidiary of
the Company (other than a Restricted Subsidiary) unless (i) the Board of
Directors of the Company believes, in its reasonable good faith judgment, based
on full disclosure of all relevant facts and circumstances, that such
transaction is in the best interests of the Company or such Restricted
Subsidiary and (ii) such transaction is on terms no less favorable to the
Company or such Restricted Subsidiary than those that could be obtained in a
comparable arm's length transaction with an entity that is not an Affiliate of
the Company or such Restricted Subsidiary, provided that this Section 709 shall
--------
not be applicable for so long as the Company's common stock is listed for
trading on the New York Stock Exchange or the American Stock Exchange or is
quoted on the National Association of Securities Dealers Automated Quotation
System and designated as a "national market system security."
SECTION 710. Restriction on Incurrence of Certain Indebtedness. The
-------------------------------------------------
Company will not incur, create, issue, assume, guarantee or otherwise become
liable for any Indebtedness that is subordinate or junior in right of payment to
Senior Indebtedness and senior in any respect in right of payment to the Notes.
The Company agrees that the Notes will not be subordinate in right of payment to
any other Indebtedness of the Company, other than Senior Indebtedness.
SECTION 711. Change of Control. (a) Upon the occurrence of a Change
-----------------
of Control, each Holder shall have the right to require that the Company
repurchase each such Holder's Notes pursuant to the offer described in
paragraphs (b) and (c) below (the "Change of Control Offer") at a purchase price
in cash equal to the principal amount thereof plus accrued and unpaid interest
thereon, if any, to the date of repurchase.
(b) Within 30 days following any Change of Control, the Company shall
mail a notice to each Holder and to the Trustee stating:
(1) that the Change of Control Offer is being made pursuant to this
Section 711, that such Holder has the right to require the Company to
repurchase such Holder's Notes at a purchase price in cash equal to the
principal amount thereof plus accrued and unpaid interest, if any, to the
68
<PAGE>
date of repurchase and that all Notes tendered will be accepted for
payment;
(2) the purchase price and the purchase date (which shall be no
earlier than 30 days and no later than 60 days from the date such notice is
mailed) (the "Change of Control Payment Date");
(3) that any Note not tendered will continue to accrue interest;
(4) that, unless the Company defaults in making repurchase payments,
any Note accepted for payment pursuant to the Change of Control Offer shall
cease to accrue interest after the Change of Control Payment Date;
(5) that Holders electing to have a Note purchased pursuant to the
Change of Control Offer will be required to surrender the Note, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of the
Note completed to the Paying Agent at the address specified in the notice
prior to the close of business on the Business Day prior to the Change of
Control Payment Date; provided, however that in the case of Notes
-------- -------
registered in the name of the Depository Trust Company ("DTC") or its
nominee, a Note will be deemed surrendered at the time that it is
transferred by DTC to the account of the Paying Agent by book-entry credit
if such Note is physically transferred to the Paying Agent within five
Business Days after such transfer by book-entry credit in accordance with
DTC's normal procedures;
(6) that Holders whose Notes are purchased only in part will be
issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered; and
(7) the CUSIP number, if any, relating to the Notes to be
repurchased.
The notice to Holders shall contain all instructions and materials
necessary to enable such Holders to tender Notes.
(c) On the Change of Control Payment Date, the Company shall (i)
accept for payment Notes or portions thereof tendered pursuant to the Change of
Control Offer, (ii) deposit with the Paying Agent money sufficient to pay the
purchase price of all Notes or portions thereof so tendered and (iii) deliver or
cause to be delivered to the Trustee Notes so accepted together with an
Officers' Certificate stating the Notes or portions thereof tendered to the
Company. The Paying Agent shall promptly mail to the Holder of Notes so
accepted payment in an amount equal to the purchase price, and the Trustee shall
promptly authenticate and mail to such Holders a new Note equal in principal
amount to any
69
<PAGE>
unpurchased portion of the Note surrendered. The Company will publicly announce
the results of the Change of Control Offer on or as soon as practicable after
the Change of Control Payment Date. For purposes of this Section 711, only the
Trustee or its agent shall act as the Paying Agent.
SECTION 712. SEC Reports. The Company shall file with the Trustee
-----------
copies of the annual reports and of the information, documents and other reports
(or copies of such portions of any of the foregoing as the SEC may by rules and
regulations prescribe) that the Company is required to file with the SEC
pursuant to Section 13 or 15(d) of the Exchange Act or otherwise within five
days after such annual reports, information, documents and other reports are
required to be filed with the SEC and, upon request of any Holder, shall
promptly mail such annual reports, information, documents and other reports to
such Holder; provided, however, that if the Company is not subject to Section 13
-------- -------
or 15(d) of the Exchange Act, the Company shall nonetheless file with the SEC
and the Trustee on a timely basis, and, upon request of any Holder, promptly
mail to such Holder, the annual reports, information, documents and other
reports that the Company would be required to file if the Company were subject
to the requirements of Section 13 or 15(d) of the Exchange Act. The Company
shall comply with the provisions of TIA (S) 314(a).
SECTION 713. Compliance Certificates. The Company will deliver to
-----------------------
the Trustee, within 90 days after the end of each fiscal quarter and within 120
days after the end of each fiscal year, an Officers' Certificate stating that a
review of the activities of the Company and 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, that to the best of
his knowledge the Company has kept, observed, performed and fulfilled each and
every covenant contained in this Indenture applicable to it and is not in
default in the performance or observance of any of the terms, provisions and
conditions hereof applicable to it (or, if a Default or Event of Default shall
have occurred, describing all such Defaults or Events of Default of which he may
have knowledge) and that to the best of his knowledge no event has occurred and
remains in existence by reason of which payments on account of the principal of
or interest on the Notes are prohibited.
The Company will deliver to the Trustee forthwith upon becoming aware
of any Default, Event of Default or default in the performance of any covenant,
agreement or condition contained in this Indenture, an Officers' Certificate
specifying such Default, Event of Default or default.
70
<PAGE>
SECTION 714. Continued Existence and Rights. Subject to Article
------------------------------
Eight, the Company will, and the Company will cause each of its Restricted
Subsidiaries and Significant Subsidiaries to, do or cause to be done all things
necessary to preserve and keep in full force and effect its existence as a
corporation and its rights and franchises; provided, however, that nothing in
-------- -------
this Section 714 shall prevent the loss of the corporate existence of any such
Subsidiary or any such right or franchise if such loss is, in the judgment of
the Company both desirable in the conduct of the business of the Company and its
Subsidiaries, taken as a whole, and not disadvantageous in any material respect
to the Holders.
SECTION 715. Maintenance of Properties and Other Matters. The
-------------------------------------------
Company will, and will cause each of its Subsidiaries to, maintain its
Properties in good working order and condition and make all necessary repairs,
renewals and replacements; provided, however, that, subject to Article Eight,
-------- -------
nothing in this Section 715 shall prevent the Company or any of its Subsidiaries
from discontinuing the operation and maintenance of any of its Properties, if
such discontinuance is, in the judgment of the Company or the Subsidiary, as the
case may be, both desirable in the conduct of its respective business and not
disadvantageous in any material respect to the Holders.
The Company will insure and keep insured, and will cause each
Subsidiary to insure and keep insured, with financially sound and reputable
insurers, so much of their respective Properties and in such amounts as is
usually and customarily insured by companies engaged in a similar business with
respect to Properties of a similar character against loss by fire and the
extended coverage perils. None of the Company or any of its Subsidiaries will
maintain a system of self insurance in lieu of or in combination with the
foregoing, provided that deductibles under the insurance policy or policies of
--------
the Company and its Subsidiaries shall not be considered to be self insurance as
long as such deductibles accord with financially sound and approved practices of
companies owning or operating Properties of a similar character and maintaining
similar insurance coverage. The Trustee shall not be required to see that such
insurance is effected or maintained.
The Company will keep, and will cause each of its Subsidiaries to
keep, proper books and records of accounts in which full and correct entries
will be made of all its business transactions in accordance with generally
accepted accounting principles. The Company shall cause the books and records
of accounts of the Company and its Subsidiaries to be examined, either on a
consolidated or on an individual basis, by one or more firms of independent
public accountants not less frequently than annually. The Company shall, and
shall cause each of its
71
<PAGE>
Subsidiaries to, prepare its financial statements in accordance with generally
accepted accounting principles.
The Company will, and will cause each of its Subsidiaries to, comply
with all Legal Requirements and to obtain any licenses, permits, franchises or
other governmental authorizations necessary to the ownership or operation of its
Properties or to the conduct of its business including, without limitation, all
Gaming Licenses.
Notwithstanding the foregoing provisions in this Section 715, failure
by the Company or any of its Subsidiaries to comply with such provisions shall
not be deemed to be a breach of such provisions to the extent that such failure
would not have a material adverse effect on the Company and its Subsidiaries,
taken as a whole.
SECTION 716. Taxes and Claims. The Company will, and will cause each
----------------
of its Subsidiaries to, pay (or, if appropriate, withhold and pay over) prior
to delinquency:
(1) all taxes, assessments and governmental charges or levies imposed
upon it or its Property (or that it is required to withhold and pay over)
and
(2) all claims or demands of materialmen, mechanics, carriers,
warehousemen, landlords and other like Persons which if unpaid might result
in the creation of a Lien upon its Properties;
provided, however, that the foregoing need not be paid while being contested in
- - -------- -------
good faith (and by appropriate proceedings in the opinion of the Company's
independent counsel in any case involving more than $500,000) if (1) adequate
provision for the foregoing has been made and (2) the failure to make such
payments is not adverse in any material respect to the Holders.
SECTION 717. Waiver of Stay, Extension and Usury Laws. The Company
----------------------------------------
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, plead, or in any manner whatsoever claim or take the benefit
or advantage of, and will actively resist any attempts to claim the benefit of,
any stay or extension law or any usury or other law that would prohibit or
forgive the Company from paying all or any portion of the principal of or
interest on the 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 (to the extent that it may lawfully do so) the Company
hereby expressly waives all benefit or advantage of any such law, and covenants
that it will not hinder, delay or impede the execution of any power herein
granted to the Trustee, but will suffer and
72
<PAGE>
permit the execution of every such power as though no such law had been enacted.
SECTION 718. Investment Company Act. The Company shall not, and the
----------------------
Company shall not permit any Subsidiary of the Company to, become an investment
company within the meaning of the Investment Company Act as such statute and the
regulations thereunder and any successor statute or regulations thereto may from
time to time be in effect, unless the Company or such Subsidiary is exempted
under the Investment Company Act from any requirement to register as an
"investment company."
ARTICLE EIGHT
MERGER, CONSOLIDATION AND SALE OF ASSETS
SECTION 801. When the Company May Merge, etc. (a) The Company shall
-------------------------------
not consolidate or merge with or into any Person, or transfer, sell, lease or
otherwise dispose of all or substantially all of its assets as an entirety to
any Person unless:
(1) the entity formed by or surviving any such consolidation or
merger (if other than the Company), or to which such sale or transfer shall
have been made, is a corporation organized and existing under the laws of
the United States, any state thereof or the District of Columbia;
(2) (x) the corporation formed by or surviving any such consolidation
or merger (if other than the Company), or to which such sale or transfer
shall have been made, unconditionally assumes by supplemental indenture all
the obligations of the Company under the Notes and this Indenture and (y)
such corporation has all Gaming Licenses required to operate the casino
hotels to be owned by the surviving entity;
(3) immediately before and immediately after giving effect to such
transaction, no Default or Event of Default exists;
(4) immediately after giving effect to such transaction on a pro
---
forma basis, as if such transaction had occurred, the Consolidated Net
-----
Worth of the surviving entity (including the Company) would be at least
equal to the Consolidated Net Worth of the Company immediately prior to
such transaction; and
(5) immediately after giving effect to such transaction involving the
incurrence by the Company or any
73
<PAGE>
Subsidiary, directly or indirectly, of additional Indebtedness (and
treating any Indebtedness not previously an obligation of the Company or
any of its Subsidiaries incurred in connection with or as a result of such
transaction as having been incurred at the time of such transaction), the
Company (if it is the continuing corporation) or such other entity could
incur at least $1.00 of additional Indebtedness pursuant to Section 705(a).
(b) In connection with any consolidation, merger, transfer or lease
contemplated by this provision, the Company shall deliver, or cause to be
delivered, to the Trustee, in form and substance reasonably satisfactory to the
Trustee, an Officers' Certificate of the Company and Opinion of Counsel stating
that such consolidation, merger, transfer or lease and the supplemental
indenture in respect thereto comply with this section and that all conditions
precedent herein provided for relating to such transaction have been complied
with and an Accountants' Certificate with respect to compliance with clauses (4)
and (5) of Section 801(a).
SECTION 802. Successor Corporation Substituted. Upon any
---------------------------------
consolidation or merger or any transfer of all or substantially all of the
assets of the Company in accordance with Section 801, the successor corporation
formed by such consolidation or into which the Company 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 under this Indenture with the same
effect as if such successor corporation had been named as the Company herein.
When a successor corporation assumes all of the obligations of the Company under
the Notes and this Indenture pursuant to this Article Eight, the applicable
predecessor corporation shall be released from the obligations so assumed.
ARTICLE NINE
REDEMPTION
SECTION 901. Notices to Trustee. If the Company desires to redeem
------------------
Notes in whole or in part in accordance with the terms hereof or thereof, it
shall notify the Trustee in writing of the Redemption Date and the principal
amount of Notes to be so redeemed.
If the Company desires to credit Notes it has not previously delivered
to the Trustee for cancellation against the principal amount of Notes to be
redeemed, it shall so notify the Trustee and it shall deliver the Notes with the
notice.
Except as provided below, the Company shall give each notice provided
for in this Section 901 by a Company Order at
74
<PAGE>
least 45 days before the Redemption Date (except for the notice provided in the
event of a Change of Control pursuant to Section 711 or unless a shorter notice
period shall be satisfactory to the Trustee).
SECTION 902. Selection of Notes to Be Redeemed. If less than all of
---------------------------------
the Notes are to be redeemed, the Trustee shall select the Notes to be redeemed
pro rata or by lot or by any other means that the Trustee determines to be fair
- - --- ----
and appropriate. The Trustee shall make the selection from the Notes
Outstanding and not previously called for redemption. Notes in denominations of
$1,000 may be redeemed only in whole. The Trustee may select for redemption
portions (equal to $1,000 or any integral multiple thereof) of the principal
amount of Notes that have denominations larger than $1,000. Provisions of this
Indenture that apply to Notes called for redemption in whole also apply to Notes
called for redemption in part.
SECTION 903. Notice of Redemption. At least 30 days but not more
--------------------
than 60 days before a Redemption Date, the Company shall give notice of
redemption, mailed by first-class mail, to each Holder whose Notes are to be
redeemed at such Holders' last address as it appears upon the Register.
The notice shall identify the Notes to be redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) the name and address of the Paying Agent;
(4) that Notes called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price;
(5) that, unless the Company defaults in making the redemption
payment, interest on Notes called for redemption ceases to accrue on and
after the Redemption Date and the only remaining right of the Holders is to
receive payment of the Redemption Price, together with accrued interest to
the Redemption Date, upon surrender to the Trustee of the Notes;
(6) if any Note is being redeemed in part, the portion of the
principal amount (in integral multiples of $1,000) of such Note to be
redeemed and that, on and after the Redemption Date, upon surrender of such
Note, a new Note or Notes in principal amount equal to the unredeemed
Portion thereof will be issued in the name of the Holder thereof;
75
<PAGE>
(7) the provision of the Notes or this Indenture pursuant to which
Notes are being redeemed; and
(8) the CUSIP number, if any, relating to the Notes to be redeemed.
Pursuant to a Company Request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense.
SECTION 904. Effect of Notice of Redemption. Once notice of
------------------------------
redemption is given, Notes called for redemption become due and payable on the
Redemption Date and at the Redemption Price. Upon surrender to the Paying
Agent, such Notes shall be paid at the Redemption Price plus accrued interest to
the Redemption Date.
SECTION 905. Deposit of Redemption Price. Prior to the Redemption
---------------------------
Date, the Company shall deposit with the Paying Agent money sufficient to pay
the Redemption Price of and accrued interest on all Notes to be redeemed on the
Redemption Date other than Notes or portions thereof called for redemption on
the Redemption Date that have been delivered by the Company to the Trustee for
cancellation.
SECTION 906. Notes Redeemed in Part. Upon surrender of a Note that
----------------------
is redeemed in part, the Trustee shall authenticate for the Holder a new Note
equal in principal amount to the unredeemed portion of the Note surrendered.
SECTION 907. Redemption Pursuant to Gaming Jurisdiction Law. (a)
----------------------------------------------
Notwithstanding the other provisions of this Article Nine, if the New Jersey
Commission does not waive the requirement that a Holder or beneficial owner of
Notes must be licensed or found qualified or suitable to hold or own the Notes
under the New Jersey Act, and if such Holder or such beneficial owner does not
become so licensed or is not found qualified or suitable within any time period
specified by the New Jersey Commission or the New Jersey Act, or if the Nevada
Commission finds a Holder or beneficial owner to be unsuitable under the Nevada
Act or regulations of the Nevada Commission, or if any other Gaming Authority
requires that Holders or beneficial owners of Notes be licensed or found
qualified or suitable and such Gaming Authority fails to waive such requirement
or any beneficial owner or Holder of Notes does not become so licensed or is not
found qualified or suitable within the applicable time period, the Company shall
have the right, at its option, (i) to require such Holder or beneficial owner to
dispose of all or a portion of such Holder's or beneficial owner's Notes within
120 days after receipt of notice by such Holder or beneficial owner of such
finding by the New Jersey Commission, the Nevada Commission or such other Gaming
Authority, as the case may be (or
76
<PAGE>
such different period as may be prescribed by the New Jersey Commission or the
Nevada Commission or such other Gaming Authority), or (ii) to call for
redemption the Notes of such Holder or beneficial owner, on not less than 30 nor
more than 60 days' notice (or such different period as may be prescribed by the
applicable Gaming Authority).
(b) If such Holder or beneficial owner, having been given the
opportunity by the Company to dispose of such Holder's or beneficial owner's
Notes, shall have failed to do so within the prescribed time period, the Company
shall have the right to redeem such Holder's or beneficial owner's Notes on five
days' notice.
(c) On any redemption of Notes pursuant to this Section 907, the
Redemption Price shall be without premium and the lower of (i) the price at
which such Holder or beneficial owner acquired the Notes, together with (if
permitted by the New Jersey Act or the Nevada Act or other applicable Gaming
Jurisdiction Law, or by the orders of the New Jersey Commission or the Nevada
Commission or other relevant Gaming Authority, as the case may be) accrued
interest to the Redemption Date, and (ii) the lowest closing sale price of the
Notes between the date of the notice given by the New Jersey Commission or the
Nevada Commission or such other Gaming Authority and the date 10 days after such
date, unless a Redemption Price or other payment, remuneration or related terms
or restrictions are required by the New Jersey Commission or the Nevada
Commission or such other Gaming Authority, as the case may be, in which event
such price, terms and restrictions shall be the Redemption Price and terms of
redemption. Each Holder and beneficial owner by accepting a Note agrees to the
provisions of this Section 907 and of Paragraph 7 of the Notes and agrees to
inform the Company upon request made pursuant to this Section 907 of the price
at which such Holder or beneficial owner acquired such Holder's or beneficial
owner's Notes.
(d) Any redemption notice given by the Company under this Section 907
shall also be provided to the Trustee at the same time and shall state (i) that
the Notes are being called for redemption as a result of the Holder's or
beneficial owner's status under the New Jersey Act or with the New Jersey
Commission, or under the Nevada Act or with the Nevada Commission, or under
another Gaming Jurisdiction Law or with the relevant Gaming Authority, as the
case may be, (ii) whether accrued interest is payable to the Holder under the
New Jersey Act or the Nevada Act or such other Gaming Jurisdiction Law and, if
so, the information required by paragraph (5) of Section 903 hereof and (iii)
the information required by paragraphs (1), (2), (3), (4), (7) and (8) of
Section 903.
77
<PAGE>
(e) The Trustee shall have no duty to verify a Holder's or beneficial
owner's status under the New Jersey Act or Nevada Act or any other applicable
Gaming Jurisdiction Law or to verify the price at which a Holder or beneficial
owner acquired Notes.
ARTICLE TEN
SUBORDINATION
SECTION 1001. Agreement to Subordinate. The Company agrees, and each
------------------------
Holder by accepting a Note agrees, that the Indebtedness evidenced by the Notes
is subordinated in right of payment, to the extent and in the manner provided in
this Article Ten, to the prior payment in full of all Senior Indebtedness and
that the subordination is for the benefit of the holders of Senior Indebtedness,
and authorizes and directs the Trustee to take such action as may be necessary
or appropriate to acknowledge or effectuate the subordination as provided in
this Article Ten and appoints the Trustee as attorney-in-fact for any and all
such purposes.
This Article Ten shall remain in full force and effect as long as any
Senior Indebtedness is outstanding.
SECTION 1002. Liquidation; Dissolution; Bankruptcy. Upon any payment
------------------------------------
or distribution, whether of cash, securities or other Property, to creditors of
the Company in a liquidation (total or partial), reorganization or dissolution
of the Company, whether voluntary or involuntary, or in a bankruptcy,
reorganization, insolvency, receivership, assignment for the benefit of
creditors, marshalling of assets or similar proceeding relating to the Company
or its Property:
(1) holders of Senior Indebtedness shall be entitled to receive
payment in full, in cash or cash equivalents, of such Senior Indebtedness
before Holders shall be entitled to receive any payment of principal of, or
interest on, or any other distribution with respect to, the Notes; and
(2) until all Senior Indebtedness is paid in full in cash or cash
equivalents as provided in Section 1002(1), any distribution to which
Holders would be entitled but for this Article Ten shall be made to the
holders of Senior Indebtedness as their interests may appear;
in each case except that Holders may receive securities that are subordinated to
Senior Indebtedness to at least the same extent and pursuant to the same or more
stringent terms as are the Notes.
78
<PAGE>
Upon any distribution of assets of the Company referred to in this
Section 1002, the Trustee and the Holders shall be entitled to rely upon any
order or decree of a court of competent jurisdiction in which such bankruptcy,
reorganization, insolvency, receivership, assignment for the benefit of
creditors, marshalling of assets or similar proceeding is pending for the
purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of Senior Indebtedness, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Section 1002, and the Trustee and the Holders shall
be entitled to rely upon a certificate of the liquidating trustee or agent or
other such Person making any distribution to the Trustee or to the Holders for
the purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of Senior Indebtedness, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Section 1002. The Trustee shall be entitled to
rely on the delivery to it of a written notice by a Person representing himself
to be a Representative or a holder of Senior Indebtedness, as the case may be,
to establish that such notice has been given by a Representative or a holder of
Senior Indebtedness, as the case may be. In the event that the Trustee
determines, in good faith, that further evidence is required with respect to the
right of any Person, as a holder of Senior Indebtedness, to participate in any
payment or distribution pursuant to this Section 1002, the Trustee may request
such Person to furnish evidence to the reasonable satisfaction of the Trustee as
to the amount of Senior Indebtedness held by such Person, as to the extent to
which such Person is entitled to participate in such payment or distribution and
as to other facts pertinent to the rights of such Person under this Section
1002, and, if such evidence is not furnished, the Trustee may defer any payment
to such Person pending judicial determination as to the right of such Person to
receive such payment.
SECTION 1003. Default on Senior Indebtedness. No direct or indirect
------------------------------
payment by or on behalf of the Company of principal of or interest on the Notes,
whether pursuant to the terms of the Notes or upon acceleration or otherwise,
shall be made if at the time of such payment there exists a default in the
payment of all or any portion of principal of or interest on Designated Senior
Indebtedness pursuant to which the maturity of such Designated Senior
Indebtedness may be accelerated (and the Trustee has received written notice
thereof) and such default shall not have been cured or waived or the benefits of
this sentence waived by or on behalf of the holders of such Designated Senior
Indebtedness (and the Trustee has received written notice thereof). In
addition, during the continuance of any other event of default with respect to
Designated Senior Indebtedness pursuant to which the maturity of such Designated
Senior
79
<PAGE>
Indebtedness may be accelerated, upon the occurrence of (a) receipt by the
Trustee of written notice from the Representative with respect to, or from the
holders of at least a majority in aggregate principal amount of, such Designated
Senior Indebtedness then outstanding or (b) if such event of default results
from the acceleration of the Notes, such acceleration, no such payment may be
made by the Company upon or in respect of the Notes for a period (a "Payment
Blockage Period") commencing on the earlier of the date of receipt of such
notice by the Trustee or the date of such acceleration and ending 179 days
thereafter (unless such Payment Blockage Period shall be terminated by written
notice to the Trustee from such Representative or such holders). Not more than
one Payment Blockage Period may be commenced with respect to the Notes during
any period of 360 consecutive days; in no event will a Payment Blockage Period
extend beyond 179 days from the date the payment on the Notes was due; and there
must be 180 days in any 360 day period in which no Payment Blockage Period is in
effect. For all purposes of this Section 1003, no default or event of default
which existed or was continuing on the date of the commencement of any Payment
Blockage Period with respect to the Designated Senior Indebtedness initiating
such Payment Blockage Period shall be, or be made, the basis for the
commencement of a subsequent Payment Blockage Period by the Representative or
requisite holders of such Designated Senior Indebtedness whether or not within a
period of 360 consecutive days unless such default or event of default shall
have been cured or waived for a period of not less than 90 consecutive days.
SECTION 1004. When Distribution Must Be Paid Over. In the event that
-----------------------------------
the Company shall make any payment to the Trustee on account of the principal of
or interest on the Notes at a time when such payment is prohibited by Section
1002 or 1003, such payment shall be held by the Trustee, in trust for the
benefit of, and shall be paid forthwith over and delivered to, the holders of
Senior Indebtedness (pro rata as to each of such holders on the basis of the
--- ----
respective amounts of Senior Indebtedness held by them) or their
Representatives, as their respective interests may appear, for application to
the payment of all Senior Indebtedness remaining unpaid to the extent necessary
to pay all Senior Indebtedness in full in accordance with its terms, after
giving effect to any concurrent payment or distribution to or for the holders of
Senior Indebtedness.
If a distribution is made to Holders that because of this Article Ten
should not have been made to them, the Holders who receive the distribution
shall hold it in trust for holders of Senior Indebtedness and pay it over to
them as their interests may appear.
SECTION 1005. Notice by the Company. The Company shall promptly
---------------------
notify the Trustee and any Paying Agent by an
80
<PAGE>
appropriate Officers' Certificate of the Company delivered to a Trust Officer
and the Paying Agent of any facts known to the Company that would cause a
payment of principal of or interest on the Notes to violate this Article Ten,
but failure to give such notice shall not affect the subordination of the Notes
to the Senior Indebtedness provided in this Article Ten.
SECTION 1006. Subrogation. After all Senior Indebtedness is paid in
-----------
cash or cash equivalents in full and until the Notes are paid in full, Holders
shall be subrogated to the rights of holders of Senior Indebtedness to receive
distributions applicable to Senior Indebtedness to the extent that distributions
otherwise payable to Holders have been applied to payment of Senior
Indebtedness. A distribution made under this Article Ten to holders of Senior
Indebtedness which otherwise would have been made to Holders is not, as between
the Company and the Holders, a payment by the Company on Senior Indebtedness.
SECTION 1007. Relative Rights. This Article Ten defines the relative
---------------
rights of Holders and holders of Senior Indebtedness. Nothing in this Indenture
shall:
(1) impair, as between the Company and the Holders, the obligation of
the Company, which is absolute and unconditional, to pay principal of and
interest on the Notes in accordance with their terms;
(2) affect the relative rights of Holders and creditors of the
Company other than such creditors as are holders of Senior Indebtedness;
(3) prevent the Trustee or any Holder from exercising its available
remedies upon a Default or Event of Default, subject to the rights of
holders of Senior Indebtedness to receive distributions otherwise payable
to Holders; or
(4) create or imply the existence of any commitment on the part of
the holders of Senior Indebtedness to extend credit to the Company, other
than as set forth in the terms governing such Senior Indebtedness.
SECTION 1008. Subordination May Not Be Impaired by the Company. No
------------------------------------------------
right of any present or future holder of Senior Indebtedness to enforce the
subordination of the Indebtedness evidenced by the Notes shall be impaired by
any act or failure to act by the Company or anyone in custody of its assets or
property or by its failure to comply with this Indenture.
SECTION 1009. Distribution or Notice to Representatives. Whenever a
-----------------------------------------
distribution is to be made or a notice given to holders of Senior Indebtedness,
the distribution
81
<PAGE>
may be made and the notice given to their Representatives, if any.
SECTION 1010. Rights of Trustee and Paying Agent. The Trustee or any
----------------------------------
Paying Agent may continue to make payments on the Notes unless, in the case of
the Trustee, a Trust Officer or, in the case of a Paying Agent other than the
Trustee, an officer of such Paying Agent, shall have received, at least three
Business Days prior to the date such payments are due and payable, written
notice of facts that would cause a payment of principal of or interest on the
Notes to violate this Article Ten. Only the Company or a Representative with
respect to or holders of at least a majority in principal amount of an issue of
Designated Senior Indebtedness may give such notice. Nothing contained in this
Section 1010 shall limit the right of any holder of Senior Indebtedness to
recover payments as contemplated by Section 1004.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights.
SECTION 1011. Trustee Entitled to Assume Payments Not Prohibited in
-----------------------------------------------------
Absence of Notice. Notwithstanding any of the provisions of this Article Ten or
- - -----------------
any other provision of this Indenture, unless a Trust Officer has received a
written notice pursuant to Section 1010, the Trustee shall not at any time be
charged with knowledge of the existence of any facts which would prohibit the
making of any payment to or by the Trustee.
SECTION 1012. Application by Trustee of Monies Deposited With It.
--------------------------------------------------
Nothing contained in this Article Ten or elsewhere in this Indenture, or in the
Notes, shall (i) affect the obligation of the Company to make, or prevent the
Company from making, at any time except as specified in Section 1002 or 1003 to
the extent provided therein, payments at any time with respect to the Notes,
(ii) prevent the application by the Trustee or any Paying Agent of any monies
held by the Trustee or such Paying Agent in trust for the benefit of the Holders
of Notes as to which notice of redemption shall have been mailed or published,
to the payment of or on account of the principal of or interest on the Notes if,
at the time of such mailing or publishing, such payment would not have been
prohibited by the foregoing provisions of this Article Ten or (iii) prevent the
application by the Trustee or any Paying Agent of any monies deposited with it
hereunder to the payment of or on account of the Notes if, at the time of such
deposit, such payment would not have been prohibited by the foregoing provisions
of this Article Ten and, if such monies have been deposited by the Company, the
Trustee shall not have received with respect to such monies the written notice
provided for in Section 1010.
SECTION 1013. Trustee's Compensation Not Prejudiced.
-------------------------------------
82
<PAGE>
Nothing in this Article Ten shall apply to claims of, or payments to, the
Trustee pursuant to Section 507.
SECTION 1014. Officers' Certificate. If there occurs an event
---------------------
referred to in Section 1002, the Company shall promptly give to the Trustee an
Officers' Certificate (on which the Trustee may conclusively rely) identifying
all holders of Senior Indebtedness and the principal amount of Senior
Indebtedness then outstanding held by each such holder and stating the reasons
why such Officers' Certificate is being delivered to the Trustee.
SECTION 1015. Certain Payments. Nothing in this Article Ten shall
----------------
prevent or delay (i) the Company or any of its Subsidiaries from or in
purchasing or redeeming any of the Notes pursuant to any Legal Requirement
relating to the Company's gaming business or (ii) the receipt by the Holders of
payments of principal of and interest on the Notes as provided in Section 302.
SECTION 1016. Names of Representatives. The Company shall, upon
------------------------
request of the Trustee, provide to the Trustee an Officers' Certificate setting
forth the name and address of each Representative of all outstanding Senior
Indebtedness.
SECTION 1017. No Fiduciary Duty Created to Holders of Senior
----------------------------------------------
Indebtedness. With respect to the holders of Senior Indebtedness, the Trustee
- - ------------
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article Ten, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness, and, subject to the
provisions of Article Five, the Trustee shall not be liable to any holder of
Senior Indebtedness if it shall mistakenly pay over or deliver to Holders, the
Company or any other Person, monies or assets to which any holder of Senior
Indebtedness shall be entitled by virtue of this Article Ten or otherwise.
83
<PAGE>
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed and have caused their respective corporate seals to be hereunto
affixed and attested, all as of the date first written above.
AZTAR CORPORATION
By:
------------------------------
Name:
Title:
SEAL
Attest:
-----------------------
AMERICAN BANK NATIONAL
ASSOCIATION
By:
------------------------------
Name:
Title:
SEAL
Attest:
-----------------------
84
<PAGE>
EXHIBIT A
[Face of Note]
No. $
AZTAR CORPORATION
Incorporated under the laws of the State
of Delaware
13 3/4% Senior Subordinated Note Due 2004
AZTAR CORPORATION promises to pay to _________________ or registered
assigns, the principal sum of _____________ Dollars on October 1, 2004 and to
pay interest thereon semiannually in arrears at the rate of 13 3/4% per annum on
April 1 and October 1 of each year until the principal hereof is paid or made
available for payment. Payment of principal and interest shall be made in the
manner and subject to the terms set forth in provisions appearing on the reverse
hereof, which provisions, in their entirety, shall for all purposes have the
same effect as if set forth at this place.
IN WITNESS WHEREOF, AZTAR CORPORATION has caused this instrument to be
duly executed in its corporate name under its corporate seal.
AZTAR CORPORATION
By:
------------------------------------
Attest:
-----------------------
[SEAL]
A-1
<PAGE>
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the 13 3/4% Senior Subordinated Notes Due 2004 issued
under the within-mentioned Indenture.
Dated:
AMERICAN BANK NATIONAL ASSOCIATION,
as Trustee
By:
---------------------------------
Authorized Signature
A-2
<PAGE>
(Back of Note)
AZTAR CORPORATION
13 3/4% Senior Subordinated Note Due 2004
1. Interest. AZTAR CORPORATION (the "Company"), a Delaware
--------
corporation, promises to pay interest on the principal amount of this Note at
the rate per annum shown above. The Company will pay interest semiannually in
arrears on April 1 and October 1 of each year. Interest on this Note will
accrue from the most recent date on which interest has been paid or, if no
interest has been paid, from October 4, 1994. The Company will pay interest on
overdue principal and premium, if any, and, to the extent lawful, on overdue
installments of interest at the rate per annum borne by this Note shown above.
--- -----
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
2. Method of Payment. The Company will pay interest on this Note
-----------------
(except Defaulted Interest) to the Person who is the registered Holder of this
Note at the close of business on the Regular Record Date, which shall be the
March 15 and September 15, as the case may be, next preceding the Interest
Payment Date even though this Note is cancelled after the Regular Record Date
and on or before the Interest Payment Date. Any such interest not so punctually
paid or duly provided for, and any interest payable on such Defaulted Interest
(to the extent lawful), will forthwith cease to be payable to the Holder of this
Note on such Regular Record Date and shall be payable to the Person in whose
name this Note is registered at the close of business on a Special Record Date
for the payment of such Defaulted Interest to be fixed by the Trustee, notice of
which shall be given to Holders not less than 15 days prior to such Special
Record Date. The Holder must surrender this Note to a Paying Agent to collect
principal payments. The Company will pay principal, premium, if any, and
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts. However, the Company may pay
principal, premium, if any, and interest by check payable in such money. The
Company may mail an interest check to a Holder's registered address. If a
payment date is a Legal Holiday at a place of payment, payment may be made at
that place on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue for the intervening period.
3. Paying Agent and Registrar. American Bank National Association
--------------------------
(the "Trustee") will act as Paying Agent and Registrar. The Company may change
any Paying Agent or Registrar without notice to any Holder. The Company may act
in any such capacity.
A-3
<PAGE>
4. Indenture. The Company has issued the Notes under an indenture
---------
dated as of October 1, 1994 (the "Indenture") among the Company and the Trustee.
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 (15 U.S.C.
(S)(S) 77aaa-bbbb) as in effect on the date of the Indenture. The Notes are
subject to all such terms, and Holders are referred to the Indenture and such
Act for a statement of such terms. The Notes are unsecured senior subordinated
obligations of the Company limited to $180,000,000 in aggregate principal
amount. Unless otherwise defined herein, all capitalized terms shall have the
meanings assigned to them in the Indenture.
5. Denominations, Transfer, Exchange. The Notes are in registered
---------------------------------
form without coupons in denominations of $1,000 and integral multiples thereof.
The transfer of Notes may be registered and Notes may be exchanged as provided
in 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
exchange or register the transfer of any Note or portion of a Note selected for
redemption. Also, it need not exchange or register the transfer of any Notes
for a period of 15 days before a selection of Notes to be redeemed.
6. Optional Redemption. The Notes may not be redeemed prior to
-------------------
October 1, 1999. On or after such date, the Notes may be redeemed at the
election of the Company in whole at any time or in part from time to time at the
Redemption Prices (expressed in percentages of principal amount) set forth below
plus accrued and unpaid interest, if any, to the Redemption Date, if redeemed
during the 12-month period beginning October 1 of the years indicated below:
<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C>
1999 106.875
2000 105.156
2001 103.437
2002 101.719
2003 and thereafter 100.000
</TABLE>
Notice of redemption will be mailed at least 30 days but not more than
60 days before the Redemption Date to each Holder of Notes to be redeemed, at
such Holder's last address, as it appears on the Register. Notes in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000. On and after the Redemption Date interest ceases to accrue
on Notes or portions of them called for redemption.
A-4
<PAGE>
If less than all the Notes are to be redeemed, selection of the Notes
will be made by the Trustee, pro rata or by lot or by any other means that the
--- ----
Trustee determines to be fair and appropriate.
7. Redemption Pursuant to Gaming Jurisdiction Law. The Company is
----------------------------------------------
subject to the New Jersey Casino Control Act (the "New Jersey Act") and the
Nevada Gaming Control Act (the "Nevada Act") and may become subject to
applicable gaming laws, statutes, ordinances, codes, regulations, constitutional
provisions, rule, orders, directives or other enforcement requirements in other
jurisdictions in which it from time to time operates (any such jurisdiction,
including New Jersey and Nevada, a "Gaming Jurisdiction" and any such provision,
including the New Jersey Act and the Nevada Act, a "Gaming Jurisdiction Law").
If the New Jersey Casino Control Commission (the "New Jersey Commission") does
not waive the requirement that a Holder or beneficial owner of the Notes must be
licensed or found qualified or suitable to hold or own the Notes under the New
Jersey Act, and if such Holder or such beneficial owner does not become so
licensed or is not found qualified or suitable within any time period specified
by the New Jersey Commission or the New Jersey Act, or if the Nevada Gaming
Commission (the "Nevada Commission") finds a Holder or beneficial owner to be
unsuitable under the Nevada Act or regulations of the Nevada Commission, or if
any other gaming authority of any other Gaming Jurisdiction (a "Gaming
Authority") requires that Holders or beneficial owners of the Notes be licensed
or found qualified or suitable and such Gaming Authority fails to waive such
requirement or such Holder or beneficial owner does not become so licensed or is
not found qualified or suitable within the applicable time period, the Company
shall have the right, at its option, (i) to require such Holder or beneficial
owner to dispose of all or a portion of such Holder's or beneficial owner's
Notes within 120 days after receipt of notice by such Holder or beneficial owner
of such finding by the New Jersey Commission or the Nevada Commission or such
other Gaming Authority, as the case may be (or such different period as may be
prescribed by the New Jersey Commission or the Nevada Commission or such other
Gaming Authority), or (ii) to call for redemption the Notes of such Holder or
beneficial owner, on not less than 30 nor more than 60 days' notice (or such
different period as may be prescribed by the applicable Gaming Authority). If
such Holder or beneficial owner, having been given the opportunity by the
Company to dispose of such Holder's or beneficial owner's Notes, shall have
failed to do so within the prescribed time period, the Company shall have the
right to redeem such Holder's or beneficial owner's Notes on five days' notice.
On any redemption of Notes pursuant to this provision, the Redemption Price
shall be without premium and the lower of (i) the price at which such Holder or
beneficial owner acquired the Notes, together with (if permitted by the New
Jersey Act or the Nevada Act or other applicable Gaming Jurisdiction Law, or by
A-5
<PAGE>
the orders of the New Jersey Commission or the Nevada Commission or the relevant
Gaming Authority, as the case may be) accrued interest to the Redemption Date,
and (ii) the lowest closing sale price of the Notes between the date of the
notice given by the New Jersey Commission or the Nevada Commission or such other
Gaming Authority and the date 10 days after such date, unless a Redemption Price
or other payment, remuneration or related terms or restrictions are required by
the New Jersey Commission or the Nevada Commission or such other Gaming
Authority, as the case may be, in which event such price, terms and restrictions
shall be the Redemption Price and terms of redemption. Each Holder and
beneficial owner by accepting this Note agrees to the provisions set forth in
this Paragraph and in the Indenture and agrees to inform the Company upon
request of the price at which such Holder or beneficial owner acquired this
Note.
8. Persons Deemed Owners. The registered Holder of this Note may be
---------------------
treated as its owner for all purposes.
9. Amendments and Waivers. Subject to certain exceptions, the
----------------------
Indenture or the Notes may be amended with the consent of the Holders of at
least a majority in principal amount of the then Outstanding Notes. Without the
consent of any Holder, the Indenture or the Notes may be amended to cure any
ambiguity, defect or inconsistency, to provide for assumption of the Company's
obligations to Holders, to provide for uncertificated Notes or to make any
change that does not adversely affect the rights of any Holder.
10. Defaults and Remedies. An Event of Default, as defined in the
---------------------
Indenture, is: (i) default for 30 days in payment of interest on the Notes;
(ii) default in payment of principal of, or premium on, the Notes; (iii) failure
by the Company for 60 days after notice to comply with any of its other
agreements or covenants in the Indenture or the Notes; (iv) default under any
mortgage, indenture or other instrument under which there may be secured or
evidenced any other Indebtedness of the Company or any of its Restricted
Subsidiaries and such Indebtedness shall have been accelerated (or shall have
matured), provided that the principal amount of all such Indebtedness with
--------
respect to which such events of default have occurred and are continuing
aggregates $5,000,000 or more; (v) judgments in an aggregate amount in excess of
$5,000,000 have been rendered against the Company or a Restricted Subsidiary and
either an enforcement proceeding shall have been commenced by any creditor upon
any judgment or there shall be a period of 90 consecutive days during which a
stay of enforcement of any such judgment shall not be in effect; (vi) certain
events of bankruptcy, insolvency or reorganization; and (vii) any revocation,
suspension or loss (with certain exceptions) of any Gaming License which results
in the cessation or suspension of operation for a period of more than 90 days of
the casino business of any casino hotel owned,
A-6
<PAGE>
leased or operated directly or indirectly by the Company or any of its
Subsidiaries. If an Event of Default occurs and is continuing, the Trustee or
the Holders of at least 25% in principal amount of the then Outstanding Notes
may declare all the Notes to be due and payable immediately, except that in the
case of an Event of Default arising from certain events of bankruptcy,
insolvency or reorganization, all Outstanding Notes shall become due and payable
immediately without further action or notice. In the event of a declaration of
acceleration because an Event of Default as defined in clause (iv) above has
occurred, and is continuing, such declaration and its consequences shall be
automatically rescinded and annulled if (a) in the case of Indebtedness that has
been accelerated, the holders of such Indebtedness shall have rescinded the
declaration of acceleration and the consequences thereof within 10 days of such
declaration or, in the case of Indebtedness that has matured, such Indebtedness
has been discharged in full within 10 days following maturity, (b) the Company
shall have delivered a notice of such rescission or discharge to the Trustee and
(c) no other Event of Default shall have occurred and be continuing. Holders
may not enforce the Indenture or the Notes except as provided in the Indenture.
The Trustee may require indemnity satisfactory to it before it enforces the
Indenture or the Notes. Subject to certain limitations, Holders of a majority
in principal amount of the then Outstanding Notes may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Holders notice of
any continuing default (except a default in payment of principal or interest) if
it determines that withholding notice is in their interest. The Company must
furnish annual compliance certificates to the Trustee.
11. Discharge or Defeasance Prior to Redemption or Maturity. Subject
-------------------------------------------------------
to certain conditions, including delivery of an Opinion of Counsel regarding
certain tax matters, if the Company deposits with the Trustee money or U.S.
Government Obligations sufficient to pay principal of, premium, if applicable,
and accrued interest on the Notes to redemption or maturity, the Company will be
Discharged (to the extent provided in the Indenture) from the Notes and the
Indenture or the Company need not comply with certain terms of the Indenture.
12. Restrictive Covenants. The Indenture imposes certain limitations
---------------------
on the ability of the Company and its Subsidiaries to, among other things, pay
dividends, create or incur Indebtedness, create Liens, merge or consolidate with
any other Person or sell, lease or otherwise transfer any of their properties or
assets.
13. Successor Corporation. When a successor Person or other entity
---------------------
assumes all the obligations of its predecessor under the Notes and the
Indenture, the predecessor Person will be released from those obligations.
A-7
<PAGE>
14. Trustee Dealings with Company. The Trustee, in its individual or
-----------------------------
any other capacity, may make loans to, accept deposits from, and perform
services for the Company or any of its Subsidiaries or Affiliates, and may
otherwise deal with the Company or its Subsidiaries or Affiliates, as if it were
not the Trustee.
15. No Recourse Against Others. A director, officer, employee or
--------------------------
stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Notes or the Indenture or for any claim
based on, in respect of or by reason of such obligations or their creation.
Each Holder by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for the issue of the Notes.
16. Unclaimed Money. If money for the payment of principal of or
---------------
interest on any Note remains unclaimed for two years after the date on which
such payment shall have come due, the Trustee or Paying Agent will pay the money
back to the Company at the Company's written request. After that, Holders
entitled to this money must look to the Company for payment, unless applicable
law designates another Person.
17. Discharge Upon Redemption or Maturity. Subject to the terms of
-------------------------------------
the Indenture, the Indenture will be discharged and cancelled upon the payment
of all Notes.
18. Authentication. This Note shall not be valid until authenticated
--------------
by the manual signature of the Trustee or an authenticating agent.
19. Governing Law. This Note shall be construed in accordance with
-------------
and governed by the laws of the State of New York without regard to principles
of conflict of law.
20. Abbreviations. Customary abbreviations may be used in the name
-------------
of a Holder 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 UNIF GIFT MIN ACT (=
Uniform Gifts to Minors Act).
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture, which has in it the text of this Note,
in larger type. Requests may be made to Aztar Corporation, 2390 E. Camelback
Road, Suite 400, Phoenix, Arizona 85016, Attn: Corporate Secretary.
A-8
<PAGE>
ASSIGNMENT FORM
To assign this Note, fill in the form below: I or we assign and
transfer this Note to
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________ agent to transfer this Note on
the books of the Company. The agent may substitute another to act for him.
________________________________________________________________________________
Date:_________________ Your signature:_______________________
______________________
(Sign exactly as your name appears on the other side of
this security)
Signature Guaranteed
By:___________________________________
A-9
<PAGE>
OPTION OF HOLDER TO ELECT REPURCHASE
The undersigned hereby irrevocably requests and instructs the Company
to repay this Note pursuant to its terms at a price equal to the principal
amount hereof, together with accrued and unpaid interest to the Change of
Control Payment Date, to the undersigned at ____________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or type name and address of the undersigned)
For this Note to be repaid, the Company must receive this Note with
this "Option of Holder to Elect Repurchase" form duly completed at an office or
agency of the Company maintained for that purpose in the Borough of Manhattan in
The City of New York within the time periods for such repurchase set forth in
the Indenture.
If less than the entire principal of the within Note is to be repaid,
specify the portion thereof (which shall be $1,000 or an integral multiple of
$1,000) which the Holder elects to have repaid:_______________________________
Dated:__________________
_____________________________________________________
Note: The signature must correspond with the name as
written upon the face of the Note in every particular
without alteration or enlargement.
A-10
