<PAGE>
As filed with the Securities and Exchange Commission on August 13, 1999
Registration No. 333-82243
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------
AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------
ISLE OF CAPRI CASINOS, INC.
(Exact name of registrant as specified in its charter)
(For co-registrants, please see Table of Other Registrants on the following
page)
Delaware 7993 41-1659606
(State or other
jurisdictionof
incorporation or
organization)
(Primary standard industrial classification code number)
(I.R.S. Employer
Identification No.)
711 Dr. Martin Luther King Boulevard
Biloxi, Mississippi 39530
(228) 436-7000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
--------------
ALLAN B. SOLOMON
Executive Vice President, General Counsel and Secretary
2200 Corporate Boulevard, N.W., Suite 310
Boca Raton, Florida 33431
(561) 995-6660
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copy to:
Paul W. Theiss, Esq.
Mayer, Brown & Platt
190 South LaSalle Street
Chicago, Illinois 60603
(312) 782-0600
--------------
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this registration statement.
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [_]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act of 1933, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
--------------
The co-registrants hereby amend this registration statement on such date or
dates as may be necessary to delay its effective date until the co-registrants
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this registration statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF OTHER REGISTRANTS
<TABLE>
<CAPTION>
Exact name of registrant State of Primary standard
as specified in its incorporation I.R.S. Employer industrial classification
charter or organization Identification No. code number
- ------------------------ --------------- ------------------- -------------------------
<S> <C> <C> <C>
CSNO, Inc............... Louisiana 72-1228496 7993
Grand Palais Riverboat,
Inc.................... Louisiana 72-1235423 7993
IOC-Coahoma, Inc........ Mississippi Application Pending 7993
Isle of Capri Casino-
Tunica, Inc............ Mississippi 64-0907593 7993
Isle of Capri Casino
Colorado, Inc.......... Colorado 64-0863907 7993
Isle of Capri Hotels-
Bossier City, L.L.C.... Louisiana 72-1424108 7993
Louisiana Riverboat
Gaming Partnership..... Louisiana 72-1235811 7993
LRG Hotels, L.L.C....... Louisiana 72-1243404 7993
LRGP Holdings, Inc...... Louisiana 64-0863948 7993
PPI, Inc................ Florida 65-0585198 7993
Riverboat Corporation of
Mississippi............ Mississippi 64-0795563 7993
Riverboat Corporation of
Mississippi-Vicksburg.. Mississippi 42-1400605 7993
Riverboat Services,
Inc.................... Iowa 42-1360145 7993
St. Charles Gaming
Company, Inc........... Louisiana 72-1235262 7993
</TABLE>
----------------
c/o Isle of Capri Casinos, Inc.
711 Dr. Martin Luther King Boulevard
Biloxi, Mississippi 39530
(228) 436-7000
(Address, including zip code, and telephone number, including area code, of
each of the co-registrant's principal executive offices)
----------------
Allan B. Solomon
Executive Vice President, General Counsel and Secretary
2200 Corporate Boulevard, N.W., Suite 310
Boca Raton, Florida 33431
(561) 995-6660
(Name, address, including zip code, and telephone number, including area code,
of agent for service for each of the co-registrants)
----------------
Copy to:
Paul W. Theiss, Esq.
Mayer, Brown & Platt
190 South LaSalle Street
Chicago, Illinois 60603
(312) 782-0600
<PAGE>
PROSPECTUS
ISLE OF CAPRI CASINOS, INC.
Offer to Exchange up to $390,000,000 of its
8 3/4% Senior Subordinated Notes due 2009, Series B
for all of its outstanding
8 3/4% Senior Subordinated Notes due 2009, Series A
----------------
. The exchange offer expires at 5:00 p.m., New York City time, on September
13, 1999, unless extended.
. The exchange offer is subject only to the conditions that the exchange offer
will not violate any applicable law or any interpretation of applicable law
by the staff of the Securities and Exchange Commission.
. All outstanding notes that are validly tendered and not validly withdrawn
will be exchanged.
. Tenders of outstanding notes may be withdrawn at any time before 5:00 p.m.,
New York City time, on the expiration date of the exchange offer.
. The exchange of notes will not be a taxable exchange for U.S. federal income
tax purposes.
. We will not receive any proceeds from the exchange offer.
. The terms of the new notes to be issued are substantially identical to your
old notes, except that the new notes will not have transfer restrictions and
you will not have registration rights.
. There is no established trading market for the new notes, and we do not
intend to apply for listing of the new notes on any securities exchange.
----------------
For a discussion of factors that you should consider before you participate
in the exchange offer, see "Risk Factors" beginning on page 10 of this
prospectus.
----------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus is truthful and complete. Any representation to the contrary is
a criminal offense.
----------------
None of the Louisiana Gaming Control Board, the Mississippi Gaming
Commission, the Colorado Limited Gaming Control Commission or any other
regulatory agency has approved or disapproved of these securities or determined
if this prospectus is truthful or complete. Any representation to the contrary
is unlawful.
The date of this prospectus is August 13, 1999.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Incorporation of Information Isle of Capri Files with the SEC.............. i
Forward-Looking Statements................................................. ii
Where You Can Find More Information........................................ ii
Prospectus Summary......................................................... 1
Risk Factors............................................................... 10
Isle of Capri Casinos, Inc................................................. 17
Use of Proceeds............................................................ 17
The Exchange Offer......................................................... 18
Description of the Notes................................................... 28
Specific Federal Income Tax Considerations................................. 61
Plan of Distribution....................................................... 62
Legal Matters.............................................................. 62
Independent Auditors....................................................... 63
</TABLE>
----------------
You should rely only on the information contained in or incorporated by
reference into this prospectus. We have not authorized any other person to
provide you with different or additional information. If anyone provides you
with different or additional information, you should not rely on it. The
information in this prospectus is accurate as of the date on the front cover.
The information we have filed and will file with the Securities and Exchange
Commission that is incorporated by reference into this prospectus is accurate
as of the filing date of those documents. Our business, financial condition,
results of operations and prospects may have changed since those dates and may
change again.
INCORPORATION OF INFORMATION ISLE OF CAPRI FILES WITH THE SEC
This prospectus "incorporates by reference" important business and financial
information about our company that is not included in or delivered with the
prospectus. This means:
. incorporated documents are considered part of this prospectus;
. we can disclose important information to you by referring you to those
documents; and
. information that we file with the Securities and Exchange Commission
will automatically update and supersede this prospectus.
The following documents are incorporated into this prospectus by reference:
. our Annual Report on Form 10-K for the fiscal year ended April 25, 1999;
and
. all documents filed by us under Section 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934 after the date of this prospectus and
before the exchange offer is complete.
You may obtain copies of the information incorporated by reference into this
prospectus without charge upon oral or written request to: Isle of Capri
Casinos, Inc.; Attention: Chief Financial Officer; 711 Dr. Martin Luther King
Boulevard, Biloxi, Mississippi, 39530; Telephone: (228) 436-7000.
To obtain timely delivery of any of this information, you must make your
request at least five business days prior to the expiration of the exchange
offer. The date by which you must make your request is September 3, 1999.
i
<PAGE>
FORWARD-LOOKING STATEMENTS
This prospectus includes or incorporates by reference forward-looking
statements as they are defined in the Securities Act of 1933 and the Securities
Exchange Act of 1934. We based these forward-looking statements on our current
expectations and our projections about future events. These forward-looking
statements could be negatively affected by risks, uncertainties and assumptions
about us, including, among other things:
. the effect of general economic, credit and capital market conditions on
our business;
. competition in our existing and any future markets;
. changes in gaming laws and regulations;
. our failure to obtain or retain licenses or regulatory approvals;
. our failure to complete or successfully operate planned expansion
projects;
. our failure to obtain adequate financing to meet our goals; and
. the other factors described in the "Risk Factors" section.
All future written and oral forward-looking statements made by us or on our
behalf are also subject to these factors. We undertake no obligation to
publicly update or revise any forward-looking statements, whether as a result
of new information, future events or otherwise. In light of these risks,
uncertainties and assumptions, the forward-looking events discussed in or
incorporated by reference into this prospectus might not occur.
WHERE YOU CAN FIND MORE INFORMATION
You may read and copy the reports, statements and other information we file
with the Securities and Exchange Commission at the Securities and Exchange
Commission's public reference room at 450 Fifth Street, N.W., Washington, D.C.
20549. You can request copies of these documents by writing to the Securities
and Exchange Commission but must pay photocopying fees. Please call the
Securities and Exchange Commission at 1-800-SEC-0330 for further information on
the operation of the public reference rooms. Our Securities and Exchange
Commission filings are also available to the public on the Securities and
Exchange Commission's Internet site (http://www.sec.gov). These documents and
other information about our company that we file with the Securities Exchange
Commission are also available for viewing at the offices of the New York Stock
Exchange, 20 Broad Street, New York, New York 10005.
ii
<PAGE>
PROSPECTUS SUMMARY
This summary contains basic information about this exchange offer. This
summary does not contain all of the information that may be important to you in
deciding wether to participate in the exchange offer. We encourage you to read
the entire prospectus, including the information described under the heading
"Risk Factors," and the business and financial information incorporated by
reference into this prospectus before you participate in the exchange offer.
Unless the context otherwise requires, the terms "Isle of Capri," "we," "our,"
"us" and other similar terms mean Isle of Capri Casinos, Inc. and all of its
subsidiaries.
The Exchange Offer
We sold $390.0 million of our 8 3/4% Senior Subordinated Notes due 2009,
Series A, to the initial purchasers on April 23, 1999. The initial purchasers
resold those notes in reliance on Rule 144A, Regulation S and other exemptions
under the Securities Act of 1933.
We entered into a registration rights agreement with the initial purchasers
on April 23, 1999 in which we agreed, among other things, to:
. file a registration statement with the Securities and Exchange Commission
relating to the exchange offer on or before July 7, 1999;
. deliver to you this prospectus;
. cause the registration statement, which includes this prospectus, to
become effective on or before August 21, 1999; and
. complete the exchange offer within 30 business days after the
registration statement becomes effective.
You are entitled to exchange your old notes for new registered 8 3/4% Senior
Subordinated Notes due 2009, Series B, with substantially identical terms as
the old notes, except for transfer restrictions and registration rights. If we
do not complete the exchange offer on or before 30 business days after the
registration statement becomes effective, the interest rate on your notes will
be increased. You should read the discussion under the heading "The Exchange
Offer--Purpose and Effect; Registration Rights" and "Description of the Notes"
for further information regarding the new notes that we are offering in
exchange for your old notes.
We believe that you may resell the new notes issued in the exchange offer
without compliance with the registration and prospectus delivery provisions of
the Securities Act of 1933, subject to the conditions described under "The
Exchange Offer." You should read that section for further information regarding
the exchange offer.
Isle of Capri Casinos, Inc.
We are a leading developer, owner and operator of branded gaming and related
lodging and entertainment facilities in growing markets in the United States.
Our principal executive office is located at 711 Dr. Martin Luther King
Boulevard, Biloxi, Mississippi 39530. Our telephone number is (228) 436-7000.
We maintain an Internet web site at http://www.theislecorp.com.
1
<PAGE>
Terms of the Exchange Offer
The exchange offer relates to the exchange of up to $390.0 million aggregate
principal amount of old Series A notes for an equal aggregate principal amount
of new registered Series B notes. The new notes will be obligations of Isle of
Capri and will be governed by the same indenture that governs the old notes.
New Notes................... We are offering registered 8 3/4% Senior
Subordinated Notes due 2009, Series B, for your
notes. The terms of the new notes and your old
notes are substantially identical, except:
. the new notes will be registered under the
Securities Act of 1933;
. the new notes will not bear any legends
restricting transfer; and
. except under limited circumstances, your rights
under the registration rights agreement,
including your right to receive additional
interest, will terminate.
The Exchange Offer.......... We are offering to exchange $1,000 in principal
amount of the new notes for each $1,000 in
principal amount of your old notes. As of the
date of this prospectus, $390.0 million aggregate
principal amount of the old notes is outstanding.
Expiration Date.............
You have until 5:00 p.m., New York City time, on
September 13, 1999 to validly tender your old
notes if you want to exchange your old notes for
new notes. We may extend that date under certain
conditions.
Conditions of the Exchange
Offer; Extensions;
Amendments.................
You are not required to tender any minimum
principal amount of your old notes in order to
participate in the exchange offer. If you validly
tender and do not validly withdraw your old
notes, your old notes will be exchanged for new
notes as long as the exchange offer does not
violate any applicable law or any interpretation
of applicable law by the staff of the Securities
and Exchange Commission.
We may delay or extend the exchange offer and, if
either of the above conditions is not met, we may
terminate the exchange offer. We will notify you
of any delay, extension or termination of the
exchange offer.
We may also waive any condition or amend the
terms of the exchange offer. If we materially
amend the exchange offer, we will notify you.
Interest.................... You will receive interest on the new notes from
the date interest was last paid on your old
notes. If no interest was paid on your old notes,
you will receive interest from April 23, 1999. If
your old notes are exchanged for new notes, you
will not receive any accrued interest on your old
notes.
2
<PAGE>
Procedures for Tendering
Old Notes; Special
Procedures for Beneficial
Owners.....................
If you want to participate in the exchange offer,
you must transmit a properly completed and signed
letter of transmittal, and all other documents
required by the letter of transmittal, to the
exchange agent. Please send these materials to
the exchange agent at the address set forth in
the accompanying letter of transmittal prior to
5:00 p.m., New York City time, on the expiration
date. You must also send one of the following:
. certificates of your old notes;
. a timely confirmation of book-entry transfer of
your old notes into the exchange agent's
account at The Depository Trust Company; or
. the items required by the guaranteed delivery
procedures described below.
If you are a beneficial owner of your old notes
and your old notes are registered in the name of
a nominee, such as a broker, dealer, commercial
bank or trust company, and you wish to tender
your old notes in the exchange offer, you should
instruct your nominee to promptly tender the old
notes on your behalf.
If you are a beneficial owner and you want to
tender your old notes on your own behalf, you
must, before completing and executing the letter
of transmittal and delivering your old notes,
make appropriate arrangements to either register
ownership of your old notes in your name or
obtain a properly completed bond power from the
registered holder of your old notes.
By executing the letter of transmittal, you will
represent to us that:
. you are not our "affiliate" (as defined in Rule
405 under the Securities Act of 1933);
. you will acquire the new notes in the ordinary
course of your business;
. you are not a broker-dealer that acquired your
notes directly from us in order to resell them
pursuant to Rule 144A under the Securities Act
of 1933 or any other available exemption under
the Securities Act of 1933;
. if you are a broker-dealer that acquired your
notes as a result of market-making or other
trading activities, you will deliver a
prospectus in connection with any resale of new
notes; and
. you are not participating, do not intend to
participate and have no arrangement or
understanding with any person to participate in
the distribution of the new notes.
If your old notes are not accepted for exchange
for any reason, we will return your old notes to
you at our expense.
3
<PAGE>
Guaranteed Delivery If you wish to tender your old notes and:
Procedures.................
. your old notes are not immediately available;
. you are unable to deliver on time your old
notes or any other document that you are
required to deliver to the exchange agent; or
. you cannot complete the procedures for delivery
by book-entry transfer on time;
then you may tender your old notes according to
the guaranteed delivery procedures that are
discussed in the letter of transmittal and in
"The Exchange Offer--Guaranteed Delivery
Procedures."
Acceptance of Old Notes and
Delivery of New Notes......
We will accept all old notes that you have
properly tendered on time when all conditions of
the exchange offer are satisfied or waived. The
new notes will be delivered promptly after we
accept the old notes.
Withdrawal Rights........... Tenders of old notes may be withdrawn at any time
prior to 5:00 p.m., New York City time, on the
expiration date.
The Exchange Agent.......... State Street Bank and Trust Company is the
exchange agent. Its address and telephone number
are set forth in "The Exchange Offer--The
Exchange Agent; Assistance."
Fees and Expenses........... We will pay all expenses relating to the exchange
offer and compliance with the registration rights
agreement. We will also pay certain transfer
taxes, if applicable, relating to the exchange
offer.
Resales of New Notes........ We believe that the new notes may be offered for
resale, resold and otherwise transferred by you
without further compliance with the registration
and prospectus delivery requirements of the
Securities Act of 1933 if:
. you are not our "affiliate" (as defined in Rule
405 under the Securities Act of 1933);
. you acquire the new notes in the ordinary
course of your business;
. you are not a broker-dealer that purchased old
notes from us to resell them pursuant to Rule
144A under the Securities Act of 1933 or any
other available exemption under the Securities
Act of 1933; and
. you are not participating, and have no
arrangement or understanding with any person to
participate, in a distribution (within the
meaning of the Securities Act of 1933) of the
new notes.
You should read the information under the heading
"The Exchange Offer--Resales of the New Notes"
for a more complete
4
<PAGE>
description of why we believe that you can freely
transfer new notes received in the exchange offer
without registration or delivery of a prospectus.
All broker-dealers that are issued new notes for
their own accounts in exchange for old notes that
were acquired as a result of market-making or
other trading activities must acknowledge that
they will deliver a prospectus meeting the
requirements of the Securities Act of 1933 in
connection with any resale of the new notes. If
you are a broker-dealer and are required to
deliver a prospectus, you may use this prospectus
for an offer to resell, a resale or other
transfer of the new notes.
Federal Income Tax The issuance of the new notes will not constitute
Consequences............... a taxable exchange for U.S. federal income tax
purposes. You will not recognize any gain or loss
upon receipt of the new notes. See "Specific
Federal Income Tax Consequences."
Registration Rights In connection with the sale of the old notes, we
Agreement.................. entered into a registration rights agreement with
the initial purchasers of the old notes that
grants the holders of the old notes registration
rights. As a result of making and consummating
this exchange offer, we will have fulfilled most
of our obligations under the registration rights
agreement. If you do not tender your old notes in
the exchange offer, you will not have any further
registration rights under the registration rights
agreement or otherwise unless you were not
eligible to participate in the exchange offer or
do not receive freely transferrable new notes in
the exchange offer. See "The Exchange Offer--
Purpose and Effect; Registration Rights."
Consequences of Not Exchanging Old Notes
If you do not exchange your old notes for new notes in the exchange offer,
your old notes will continue to be subject to the restrictions on transfer
contained in the legend on the old notes. In general, the old notes may not be
offered or sold unless they are registered under the Securities Act of 1933.
However, you may offer or sell your old notes under an exemption from, or in a
transaction not subject to, the Securities Act of 1933 and applicable state
securities laws. We do not currently anticipate that we will register the old
notes under the Securities Act of 1933.
5
<PAGE>
Terms of the New Notes
Issuer...................... Isle of Capri Casinos, Inc.
Notes Offered............... $390,000,000 in principal amount of 8 3/4% Senior
Subordinated Notes due 2009, Series B.
Maturity.................... April 15, 2009.
Interest Payment Dates...... April 15 and October 15 of each year, commencing
October 15, 1999.
Guarantees.................. Our obligations under the new notes will be, and
our obligations under the indenture are, jointly,
severally and unconditionally guaranteed on an
unsecured senior subordinated basis by all of our
existing and future significant restricted
subsidiaries. Our restricted subsidiaries that
are not significant restricted subsidiaries and
our unrestricted subsidiaries that own and
operate our gaming facility located in Black
Hawk, Colorado will not be guarantors. See
"Description of the Notes--Subsidiary
Guarantees."
Ranking..................... The new notes will be unsecured senior
subordinated obligations and will be junior to
all of our existing and future senior debt.
The subsidiary guarantees will be unsecured
senior subordinated obligations of our
significant restricted subsidiaries and will be
junior to all existing and future senior debt of
those subsidiaries. The new notes will be
effectively junior to all debt and other
liabilities of our subsidiaries that are not
guarantors.
As of July 25, 1999, the new notes and the
guarantees:
. would have been junior to $64.7 million of our
and our restricted subsidiaries' senior debt;
and
. would have been effectively junior to $76.3
million of debt and other liabilities of our
subsidiaries that are not guarantors.
Optional Redemption......... On or after April 15, 2004, we may redeem some or
all of the new notes at any time at the
redemption prices listed in the section
"Description of the Notes--Redemption and
Repurchase Offers--Optional Redemption."
On or before April 15, 2002, we may redeem up to
35% of the new notes with the net proceeds of a
public equity offering if at least $253.5 million
aggregate principal amount of the new notes and
the old notes remains outstanding. See
"Description of the Notes--Redemption and
Repurchase Offers--Equity Proceeds Redemption."
Regulatory Redemption....... The new notes will be subject to mandatory
redemption in the event of certain determinations
by the gaming authorities in jurisdictions in
which we conduct gaming operations. See
"Description of the Notes--Redemption and
Repurchase Offers--Gaming Redemption."
6
<PAGE>
Change of Control Offer..... If we experience specific changes of control, we
must offer to repurchase the new notes at 101% of
their principal amount, plus accrued and unpaid
interest. See "Description of the Notes--
Redemption and Repurchase Offers--Change of
Control Repurchase Offer."
Certain Covenants........... The new notes will be governed by the same
indenture under which the old notes were issued.
The indenture, among other things, restricts our
ability and the ability of our restricted
subsidiaries to:
. borrow money;
. make restricted payments;
. use assets as security in other transactions;
. enter into transactions with affiliates;
. pay dividends on or repurchase our stock or our
restricted subsidiaries' stock;
. issue and sell capital stock of our
subsidiaries; and
. sell assets in excess of specified amounts or
merge with or into other companies.
Our subsidiaries that own and operate our gaming
facility located in Black Hawk, Colorado are not
subject to the covenants in the indenture. See
"Description of the Notes--Certain Covenants."
7
<PAGE>
Selected Historical Consolidated Financial Data
The following table presents our selected historical consolidated financial
data for the five fiscal years ended April 30, 1995, April 30, 1996, April 27,
1997, April 26, 1998 and April 25, 1999. This data is from our audited
consolidated financial statements and the notes to those statements. This
information should be read in conjunction with Item 7, "Management's Discussion
and Analysis of Financial Condition and Results of Operations," and the
financial statements and the related notes included in Item 8 of our Annual
Report on Form 10-K for the fiscal year ended April 25, 1999, which is
incorporated by reference into this prospectus. See "Incorporation of
Information Isle of Capri Files with the SEC."
<TABLE>
<CAPTION>
Fiscal Year Ended
-------------------------------------------------
April 30, April 30, April 27, April 26, April 25,
1995(1) 1996(1) 1997(1) 1998 1999
--------- --------- --------- --------- ---------
(dollars in millions)
<S> <C> <C> <C> <C> <C>
Income Statement Data:
Revenue:
Casino...................... $117.6 $123.9 $322.7 $388.2 $424.4
Pari-mutuel commissions and
fees....................... -- 15.1 19.4 22.6 21.4
Rooms, food, beverage and
other...................... 9.9 19.0 31.3 30.0 34.6
------ ------ ------ ------ ------
Total revenue.............. 127.5 158.0 373.4 440.8 480.4
Operating expenses:
Gaming taxes................ 13.9 15.1 61.8 78.6 86.9
Casino, rooms, food,
beverage and other......... 84.1 115.3 246.5 267.5 284.3
Valuation charge(2)......... -- 9.3 7.0 -- 5.1
Restructuring charge(3)..... -- 2.5 -- -- --
Accrued litigation
settlement (reversal)(4)... -- -- -- -- (4.2)
Preopening expenses(5)...... 0.5 1.3 2.5 -- 3.3
Depreciation and
amortization............... 8.9 12.1 27.1 33.6 36.3
------ ------ ------ ------ ------
Total operating expenses... 107.4 155.6 344.9 379.7 411.7
------ ------ ------ ------ ------
Operating income............. 20.1 2.4 28.5 61.1 68.7
Interest expense............. (14.0) (15.3) (40.3) (51.6) (48.6)
Interest income.............. 4.0 1.4 1.6 4.7 2.9
Minority interest............ -- -- -- 0.8 2.2
Equity in income (loss) of
unconsolidated joint
ventures(6)................. 19.9 16.4 (0.2) -- (1.3)
------ ------ ------ ------ ------
Income (loss) before income
taxes and extraordinary
item........................ 30.0 4.9 (10.4) 15.0 23.9
Income tax provision
(benefit)................... 11.9 3.3 (1.6) 7.5 11.8
------ ------ ------ ------ ------
Net income (loss) before
extraordinary item.......... 18.1 1.6 (8.8) 7.5 12.1
Extraordinary loss on
extinguishment of debt, net
of applicable tax benefit... -- -- (12.3) -- (36.3)
------ ------ ------ ------ ------
Net income (loss)............ $ 18.1 $ 1.6 $(21.1) $ 7.5 $(24.2)
====== ====== ====== ====== ======
Balance Sheet Data and Other
Data:
Cash and cash equivalents.... $ 19.0 $ 18.6 $ 51.8 $ 52.5 $ 85.1
Total assets................. 211.9 226.5 528.4 615.7 676.5
Long-term debt, including
current portion............. 138.9 139.8 379.5 442.1 532.8
Stockholders' equity......... 42.0 50.3 78.0 86.1 62.0
Ratio of earnings to fixed
charges(7).................. 1.7x -- -- 1.2x 1.3x
</TABLE>
Footnotes on following page
8
<PAGE>
- --------
(1) The operating results for fiscal years prior to fiscal 1998 are not
comparable to other periods presented because the Isle-Bossier City and the
Isle-Lake Charles were accounted for under the equity method until August
6, 1996, when the remaining interests in these facilities were acquired by
us. In addition, fiscal periods prior to 1996 do not include the operating
results of one of the two Lake Charles riverboats, as it was acquired in
May 1996.
(2) The valuation charge of $9.3 million in fiscal 1996 and $7.0 million in
fiscal 1997 related to the write-down of two riverboats, a barge and
certain gaming equipment, all of which were classified as held for sale.
The valuation charge of $5.1 million for the fiscal year ended April 25,
1999 includes (a) $2.4 million for the write-down of two original riverboat
casino vessels and land that we were planning to develop in Cripple Creek,
Colorado and (b) $2.7 million for future obligation under an operating
lease related to land leased by us in Cripple Creek, Colorado.
(3) The restructuring charge of $2.5 million in fiscal 1996 includes (a) $2.0
million related to costs associated with a change in executive management
and (b) $0.5 million related to costs associated with certain abandoned
projects.
(4) The reversal of an accrued litigation settlement of $4.2 million for the
fiscal year ended April 25, 1999 related to an accrued boarding tax
liability at the Isle-Bossier City for which it was determined that the
Isle-Bossier City was not liable.
(5) Preopening expenses of $0.5 million in fiscal 1995 related to costs
incurred in connection with the opening of the new floating pavilion at the
Isle-Vicksburg. Preopening expenses of $1.3 million in fiscal 1996 related
to costs incurred in connection with the opening of the hotel at the Isle-
Biloxi. Preopening expenses of $2.5 million in fiscal 1997 related to costs
incurred in connection with the opening of the Grand Palais riverboat in
Lake Charles. Preopening expenses of $3.3 million in fiscal 1999 related to
costs incurred in connection with the opening of the Isle-Black Hawk on
December 30, 1998.
(6) The equity in income (loss) of unconsolidated joint ventures represents the
unconsolidated operations of the Isle-Bossier City for fiscal 1995, 1996
and 1997 and the Isle-Lake Charles for fiscal 1996 and 1997. The equity in
income (loss) of unconsolidated joint ventures represents the loss from our
50% ownership interest in Capri Cruises for fiscal 1999.
(7) For purposes of determining the ratio of earnings to fixed charges,
earnings consist of earnings before provision for income taxes plus fixed
charges, excluding capitalized interest. Fixed charges consist of interest
on indebtedness, including capitalized interest, plus that portion of
rental expense that is considered to be interest. This ratio does not
include earnings and fixed charges of unconsolidated joint ventures.
Earnings were inadequate to cover fixed charges by $13.0 million for fiscal
1996 and $10.2 million for fiscal 1997.
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RISK FACTORS
You should consider carefully the risk factors below as well as the other
information in this prospectus before tendering your old notes in the exchange
offer.
You May Not Be Able to Sell Your Old Notes if You Do Not Exchange Them for
Registered Notes in the Exchange Offer
If you do not exchange your old notes for new notes in the exchange offer,
your old notes will continue to be subject to the restrictions on transfer as
stated in the legend on the old notes. In general, you may not offer or sell
the old notes unless they are:
. registered under the Securities Act of 1933;
. offered or sold pursuant to an exemption from the Securities Act of 1933
and applicable state securities laws; or
. offered or sold in a transaction not subject to the Securities Act of
1933 and applicable state securities laws.
We do not currently anticipate that we will register the old notes under the
Securities Act of 1933. In addition, holders who do not tender their old notes,
except for certain instances involving the initial purchasers or holders of old
notes who are not eligible to participate in the exchange offer or who do not
receive freely transferrable new notes pursuant to the exchange offer, will not
have any further registration rights under the registration rights agreement or
otherwise and will not have rights to receive additional interest.
The Market for Old Notes May Be Significantly More Limited after the Exchange
Offer
If old notes are tendered and accepted for exchange pursuant to the exchange
offer, the trading market for old notes that remain outstanding may be
significantly more limited. As a result, the liquidity of the old notes not
tendered for exchange may be adversely affected. The extent of the market for
old notes and the availability of price quotations would depend upon a number
of factors, including the number of holders of old notes remaining outstanding
and the interest of securities firms in maintaining a market in the old notes.
An issue of securities with a similar outstanding market value available for
trading, which is called the "float," may command a lower price than would be
comparable to an issue of securities with a greater float. As a result, the
market price for old notes that are not exchanged in the exchange offer may be
affected adversely as old notes exchanged pursuant to the exchange offer reduce
the float. The reduced float also may make the trading price of the old notes
that are not exchanged more volatile.
We Have a Significant Amount of Debt
We have a significant amount of debt. The new notes will be junior to all of
our existing and future senior debt, including any amounts we borrow under our
senior credit facility and under our other lines of credit. As of July 25,
1999, the restricted group had $454.7 million of total debt outstanding, which
excludes $76.3 million of debt of our non-guarantor subsidiaries that is non-
recourse to us. We and our subsidiaries may incur substantial additional debt
in the future. The terms of the indenture and our senior credit facility do not
prohibit us or our subsidiaries from doing so. All borrowings under our credit
facilities will be senior to the notes and the subsidiary guarantees.
Our ability to make scheduled payments of principal and interest on and
refinance our debt, including the new notes, and fund planned expansions and
project developments depends on our future cash flow. We do not have complete
control over our future performance since it is subject to economic, financial,
competitive, regulatory and other factors affecting our operations and the
gaming industry generally. We may not generate sufficient cash flow from
operations to service our debt and to make planned capital expenditures. If
this occurs, we may have to alter, delay or abandon our expansion projects,
sell assets, restructure debt or issue
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more stock. We may not be able to do any of these things or may incur
significant expenses in doing them. Because we have a significant amount of
debt outstanding, we may not be able to obtain other financing to complete our
expansion projects, make capital expenditures, pursue new opportunities,
identify new markets, make acquisitions or respond to competition or changes in
our business. If new debt is added to our and our subsidiaries' current debt
levels, the related risks that we and they now face could increase.
The New Notes and Guarantees Are Junior to Senior Debt and Effectively Junior
to Debt and Other Liabilities of Our Non-Guarantor Subsidiaries
The new notes will be junior to all of our existing and future senior debt,
including any amounts we borrow under our senior credit facility or our other
lines of credit. We must use our operating cash to pay amounts due under debt
that ranks senior to the new notes before we can use operating cash to make
interest or principal payments on the new notes.
The subsidiary guarantees are junior to all existing and future senior debt
of the subsidiary guarantors. All subsidiaries that guarantee the new notes
also guarantee our senior credit facility. The subsidiary guarantors must use
their operating cash to pay amounts due under debt that ranks senior to the
guarantees before they can use their operating cash to make payments with
respect to the guarantees.
As of July 25, 1999, we and our significant restricted subsidiaries had
approximately $64.7 million of senior debt outstanding. Since some of our
subsidiaries will not guarantee the new notes, the new notes will be
effectively junior to all debt and other liabilities of these non-guarantor
subsidiaries. In the event of a bankruptcy, liquidation, reorganization or
similar proceeding relating to any of our non-guarantor subsidiaries, holders
of their debt and their trade creditors will generally be entitled to payment
of their claims from the assets of those subsidiaries before any assets are
made available for distribution to our creditors. As of July 25, 1999, the new
notes would have been effectively junior to approximately $76.3 million of debt
and other liabilities of our non-guarantor subsidiaries.
If there is a distribution to our creditors because of a bankruptcy,
liquidation, reorganization or similar proceeding relating to us or our
property, holders of debt that is senior to the new notes will be paid in full
before any payment may be made with respect to the new notes. Similarly, in the
event of a bankruptcy, liquidation, reorganization or similar proceeding
relating to any subsidiary guarantor, its assets would be available to pay
obligations under its guarantee only after all senior debt of that guarantor is
paid in full.
We are a holding company. Our subsidiaries conduct substantially all of our
operations and own substantially all of our assets. Our cash flow and our
ability to meet our debt service obligations depend upon the cash flow of our
subsidiaries and the payment of funds by our subsidiaries to us in the form of
management fees, loans and dividends. Our subsidiaries are not obligated to
make funds available to us for payment on the new notes. In addition, the
ability of our subsidiaries to make payments to us will depend on their
earnings, the terms of their debt, business and tax considerations and legal
restrictions.
The New Notes Are Unsecured--Your Right to Enforce Remedies is Limited by the
Rights of Holders of Secured Debt
The new notes will not be secured by any of our assets or any assets of our
subsidiaries. Our obligations under our senior credit facility are secured by
substantially all of our assets and the assets of our subsidiaries other than
our subsidiaries that own and operate our gaming facility located in Black
Hawk, Colorado. If we become insolvent or are liquidated, or if payment under
our senior credit facility is accelerated, the lenders under our senior credit
facility will be entitled to exercise the remedies available to a secured
lender under applicable law. These lenders will have a claim on our assets and
the assets of our subsidiaries before the holders of the new notes.
We Face Significant Competition from Other Gaming Operations
We face intense competition in each of the markets in which we operate. Our
existing gaming facilities compete directly with other gaming properties in
Louisiana, Mississippi and Colorado. We expect this
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competition to increase as new gaming operators enter our markets, existing
competitors expand their operations, gaming activities expand in existing
jurisdictions and gaming is legalized in new jurisdictions. Several of our
competitors have substantially better name recognition, marketing and financial
resources than we do. We cannot predict with any certainty the effects of
existing and future competition on our operating results.
The last available gaming license in Louisiana could be awarded to an
operator in either the Lake Charles or Bossier City/Shreveport market. The
Louisiana Gaming Control Board will accept applications for this license
through November 15, 1999 and the license may be awarded during the first half
of calendar 2000. Existing licenses could also be relocated to either of these
markets. There is no limit on the number of gaming licenses granted in
Mississippi. As a result, new licenses could be awarded to gaming facilities in
any Mississippi market in which we operate. An increase in the number of gaming
facilities in any market in which we operate could have an adverse effect on
our operating results.
Our existing casinos attract a significant number of their customers from
Houston and Dallas/Fort Worth, Texas; Mobile, Alabama; Jackson, Mississippi and
Denver, Colorado. The casino we recently opened in Tunica County, Mississippi
and the casino we plan to open in Coahoma County, Mississippi will attract a
significant number of their customers from the Memphis, Tennessee and Little
Rock, Arkansas areas. Our continued success depends upon drawing customers from
each of these geographic markets. Legalization of gaming in jurisdictions
closer to these geographic markets than the jurisdictions in which our
facilities are located would have a material adverse effect on our operating
results.
We also compete with other forms of gaming and entertainment, such as online
computer gambling, bingo, pull tab games, card parlors, sports books, pari-
mutuel or telephonic betting on horse racing and dog racing, state-sponsored
lotteries, jai-alai, video lottery terminals, video poker terminals and, in the
future, may compete with in-flight gaming or gaming at other venues.
Legislation was adopted in Louisiana in 1997, and approved by voters in Bossier
Parish, Louisiana, that, subject to passage of legislation assessing a tax,
would allow up to 15,000 square feet of slot machines to be located at
Louisiana Downs, which is located approximately six miles east of our Bossier
City, Louisiana casino. In the 1998 legislative session, the legislature failed
to enact legislation assessing a tax. However, the 1999 legislature passed a
bill that eliminated the need to assess a state tax prior to commencement of
slot operations by creating a local tax district. Therefore, slot operations
may commence shortly at Louisiana Downs, which could have an adverse effect on
our Bossier City, Louisiana casino.
We also compete with gaming operations in other gaming jurisdictions, such
as Las Vegas, Nevada and Atlantic City, New Jersey. Our competition also
includes casinos located on Native American reservations throughout the United
States, which have the advantages of being land-based and exempt from certain
state and federal taxes. Some Native American tribes are either in the process
of establishing or are considering the establishment of gaming at additional
locations. Expansion of existing gaming jurisdictions and the development of
new gaming jurisdictions and casinos on Native American-owned lands will
increase competition for our existing and future operations. In addition,
increased competition could limit new opportunities for us or result in the
saturation of certain gaming markets.
Our Senior Credit Facility and the Indenture Governing the Notes Restrict Our
Operations
We have made and will need to make significant capital expenditures to our
existing facilities to remain competitive with current and future competitors
in our markets. Our senior credit facility and the indenture that governs the
old notes, and will govern the new notes, contain operating and financial
restrictions that may limit our ability to obtain the financing to make these
capital expenditures.
Our senior credit facility, among other things, limits our ability to borrow
money, make capital expenditures, use assets as security in other transactions,
make restricted payments or restricted investments,
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incur contingent obligations, sell assets and enter into leases and
transactions with affiliates. In addition, our senior credit facility requires
us to meet financial ratios and tests, including:
. a minimum consolidated net worth test;
. a maximum consolidated total leverage test;
. a maximum consolidated senior leverage test; and
. a minimum consolidated fixed charge coverage test.
The indenture that governs the old notes, and will govern the new notes,
imposes operating and financial restrictions on us that limit our ability to:
. borrow money;
. make restricted payments;
. use assets as security in other transactions;
. enter into transactions with affiliates;
. pay dividends on or purchase our stock or our significant restricted
subsidiaries' stock;
. issue and sell stock of significant restricted subsidiaries; and
. sell assets in excess of specified amounts or merge with or into other
companies.
A breach of any restriction or covenant contained in our senior credit
facility or the indenture could cause a default under the new notes and other
debt and result in a significant portion of our debt becoming immediately due
and payable. We are not certain whether we would have, or would be able to
obtain, sufficient funds to make these accelerated payments, including payments
on the new notes. In addition, following the occurrence of certain events of
default under our senior credit facility, we may be prohibited from making
payments on the new notes. For more information regarding the restrictions
contained in the indenture, see "Description of the Notes--Certain Covenants."
We Are Subject to Changes in Gaming Regulations and Legislation
Licensing Requirements. As owners and operators of gaming facilities, we are
subject to extensive state and local regulation. State and local authorities
require us and our subsidiaries to demonstrate suitability to obtain and retain
various licenses and require that we have registrations, permits and approvals
to conduct gaming operations. Various regulatory authorities, including the
Louisiana Gaming Control Board, the Mississippi Gaming Commission and the
Colorado Limited Gaming Control Commission, may, for any reasonable cause,
limit, condition, suspend or revoke a license to conduct gaming operations or
prevent us from owning the securities of any of our gaming subsidiaries. Like
all gaming operators in the jurisdictions in which we operate, we must
periodically apply to renew our gaming licenses. We cannot assure you that we
will be able to obtain such renewals. Regulatory authorities may also levy
substantial fines against or seize the assets of our company, our subsidiaries
or the people involved in violating gaming laws or regulations. Any of these
events could have a material adverse effect on our business.
We have demonstrated suitability to obtain and have obtained all
governmental licenses, registrations, permits and approvals necessary for us to
operate our existing gaming facilities. We cannot assure you that we will be
able to retain them or demonstrate suitability to obtain any new licenses,
registrations, permits or approvals. If we expand our gaming operations in
Louisiana, Mississippi or Colorado or to new areas, we will have to meet
suitability requirements and obtain additional licenses, registrations, permits
and approvals from gaming authorities in these jurisdictions. The approval
process can be time-consuming and costly and there is no assurance that we will
be successful.
Gaming authorities can generally require that any beneficial owner of our
securities, including holders of the new notes, file an application for a
finding of suitability. If a gaming authority requires a record or
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beneficial owner of a new note to file a suitability application, the owner
must apply for a finding of suitability within 30 days or at an earlier time
prescribed by the gaming authority. The gaming authority has the power to
investigate an owner's suitability and the owner must pay all costs of the
investigation. If the owner is found unsuitable, then the owner may be
required, either by law or the terms of the new notes, to dispose of the new
notes. See "Description of the Notes--Redemption and Repurchase Offers--Gaming
Redemption."
Other Regulatory Restrictions. The Louisiana Gaming Control Board and the
Mississippi Gaming Commission must approve, in advance, any restrictions on,
transfers of, agreements not to encumber or pledges of equity securities that
are issued by a corporation that is registered as an intermediary company with,
or holds a gaming license issued by, the Louisiana Gaming Control Board or the
Mississippi Gaming Commission. If these restrictions are not approved in
advance, they will be invalid.
Potential Changes in Regulatory Environment. From time to time, legislators
and special interest groups have proposed legislation that would expand,
restrict or prevent gaming operations in the jurisdictions in which we operate.
For example, during 1998, certain anti-gaming groups proposed referenda that,
if adopted, would have banned gaming in Mississippi and required that gaming
entities cease operations within two years after the ban. The referenda were
declared illegal by Mississippi courts on constitutional and procedural
grounds. Any expansion of gaming or restriction on or prohibition of our gaming
operations could have a material adverse effect on our operating results.
National Gambling Impact Study Commission. The U.S. Congress has established
a National Gambling Impact Study Commission to comprehensively study the social
and economic impact of gambling in the United States. In June 1999, the
National Gambling Impact Study Commission issued a report containing its
findings and conclusions, together with recommendations for legislation and
administrative actions at the national, state, local and tribal levels. These
recommendations could result in new laws and/or new regulations that could
adversely affect our business and the gaming industry in general.
Taxes. From time to time, legislators have proposed a federal tax on gross
gaming revenues. This tax could have a material adverse effect on our business,
financial condition and results of operations.
We May Experience Difficulty in Expanding Our Operations
We plan to grow through expanding our existing facilities, developing new
properties and making strategic acquisitions. This strategy depends, among
other things, on our ability to:
. identify suitable locations and acquisition candidates;
. successfully compete for and obtain state and local licenses;
. successfully lobby for changes in existing laws or new laws;
. defeat referenda to ban, restrict or prohibit gaming; and
. obtain financing.
We may incur significant costs on projects that never materialize. Our
strategy may divert resources from existing operations, which may adversely
affect our operating results. In addition, we may experience difficulties in
integrating new properties we develop or acquire into our existing operations.
Regulatory or financial constraints and a number of other factors could
intervene, alter, delay or cause us to abandon our expansion plans. We will
need to attract additional employees to manage new projects. There is no
assurance that we will be successful in doing so. Failure to manage our growth
effectively and attract additional employees could materially adversely affect
our operating results.
Construction Risks Could Delay Our Growth
We have several projects under construction and have further development
plans. We believe that the construction and development of hotel facilities and
other capital improvement projects are important to the
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continued success of our existing locations and that development of new
facilities on a strategic basis is critical to our growth. Some of our existing
development plans are in the preliminary stages and are subject to further
refinement, which may cause our plans and the budgets related to our plans to
change materially. We face a number of risks when we undertake a construction
project, which may require us to substantially change our proposed plans or
alter initial time frames or budgets, possibly materially, and could affect our
ability to complete planned and future expansion and improvement projects,
including:
. potential shortages of materials and skilled labor, work stoppages or
labor disputes;
. problems with construction, equipment or staffing requirements;
. weather interference;
. unforeseen engineering, environmental or geological problems;
. difficulty in obtaining any of the necessary licenses, permits,
allocations or authorizations from regulatory authorities;
. difficulty in entering into leases and other agreements with third
parties; and
. unanticipated cost increases.
It is also possible that construction at existing operations could affect
our operating results by discouraging customers from visiting our facilities.
Weather and Other Conditions Could Seriously Disrupt Our Operations
Dockside and riverboat facilities in Louisiana and Mississippi are subject
to unique risks, including loss of service because of casualty, mechanical
failure, extended or extraordinary maintenance, flood, hurricane or other
severe weather. Cruising riverboats face additional risks from the movement of
vessels on waterways.
Areas along the Mississippi Gulf Coast, the Mississippi River, the Red River
and the Calcasieu River are subject to storms, hurricanes and flooding. In
September 1998, we shut down our gaming facility located in Biloxi, Mississippi
for almost one week when Hurricane Georges struck the Mississippi Gulf Coast
region. Our Biloxi property did not sustain any significant damage. We maintain
limited business interruption insurance, but the proceeds from any claim may be
insufficient to compensate us if one or more of our casinos can no longer
operate. Our loss of a dockside or riverboat casino from service for any period
of time could adversely affect our operating results.
A number of our facilities may be affected by road conditions, such as
construction and traffic. For example, planned construction on Interstate 10,
the primary route traveled by customers frequenting our Lake Charles, Louisiana
casino, may affect our operating results. In addition, severe weather, such as
high winds and blizzards, occasionally limits access to our Black Hawk,
Colorado casino.
We Depend on Our Management and Employees
We depend on the efforts and skills of a few key executive officers and the
experience of our property managers. The loss of any of them could adversely
affect our business. We do not maintain "key man" life insurance on any of our
employees. There is no assurance that we would be able to attract and hire
suitable replacements for any of our key employees. We need qualified
executives, managers and skilled employees with gaming industry experience to
continue to successfully operate our business. We believe there is a shortage
of skilled labor in the gaming industry. As a result, we may have difficulty
and incur significant expenses in attracting and retaining qualified employees.
We expect that increased competition in the gaming industry will intensify this
problem.
We Are Subject to Non-Gaming Regulation
The riverboats operated by our Lake Charles and Bossier City, Louisiana
gaming facilities must comply with U.S. Coast Guard requirements as to boat
design, on-board facilities, equipment, personnel and safety and
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must hold U.S. Coast Guard Certificates of Documentation and Inspection. The
U.S. Coast Guard requirements also set limits on the operation of the
riverboats and require licensing of certain personnel involved with the
operation of the riverboats. Loss of a riverboat's Certificate of Documentation
and Inspection could preclude its use as a riverboat casino. Each of our
riverboats is inspected annually and, every five years, is subject to
drydocking for inspection of its hull, which could result in a temporary loss
of service.
Permanently moored vessels such as our Biloxi and Vicksburg, Mississippi
casino barges are not required to hold Certificates of Documentation and
Inspection from the U.S. Coast Guard. However, the Mississippi Gaming
Commission has engaged third parties to inspect and certify all casino barges
for stability and single compartment flooding integrity. Our casino barges in
Mississippi must be inspected every two years. Our casino barges in Mississippi
must also meet the fire safety standards of the Mississippi Fire Prevention
Code and the Life Safety Code and the Standards for the Construction and Fire
Protection of Marine Terminals, Piers and Wharfs of the National Fire
Protection Association. We would incur additional costs if either of our
Mississippi gaming facilities were not in compliance with one or more of these
requirements.
We are also subject to certain federal, state and local environmental laws,
regulations and ordinances that apply to non-gaming businesses generally, such
as the Clean Air Act, the Clean Water Act, the Resource Conservation Recovery
Act, the Comprehensive Environmental Response, Compensation and Liability Act
and the Oil Pollution Act of 1990. Under various federal, state and local laws
and regulations, an owner or operator of real property may be held liable for
the costs of removal or remediation of certain hazardous or toxic substances or
wastes located on its property, regardless of whether or not the present owner
or operator knows of, or is responsible for, the presence of such substances or
wastes. We have not identified any issues associated with our properties that
could reasonably be expected to have an adverse effect on us or the results of
our operations. However, certain of our properties are located in industrial
areas or were used for industrial purposes for many years. As a consequence, it
is possible that historical or neighboring activities have affected one or more
of our properties and that, as a result, environmental issues could arise in
the future, the precise nature of which we cannot now predict. The coverage and
attendant compliance costs associated with these laws, regulations and
ordinances may result in future additional costs.
Regulations adopted by the Financial Crimes Enforcement Network of the U.S.
Treasury Department require us to report currency transactions in excess of
$10,000 occurring within a gaming day, including identification of the patron
by name and social security number. Substantial penalties can be imposed
against us if we fail to comply with these regulations.
The Guarantees May Be Unenforceable due to Fraudulent Conveyance Statutes
The obligations of the subsidiary guarantors may be subject to challenge
under state or federal fraudulent transfer laws. In general, under fraudulent
conveyance laws, a court can subordinate or avoid an obligation such as a
guarantee if it determines that the obligation was incurred with actual intent
to hinder, delay or defraud creditors or if the guarantor did not receive fair
consideration or reasonably equivalent value for the guarantee and:
. was insolvent or rendered insolvent as a result of the guarantee;
. was engaged in a business or transaction for which the guarantor's
remaining assets constituted unreasonably small capital; or
. intended to incur, or believed that it would incur, debts beyond its
ability to pay at maturity.
Generally, an entity is insolvent if:
. the sum of its debts, including contingent or unliquidated debts, is
greater than all of its property at a fair valuation; or
. the present fair salable value of its assets is less than the amount
required to pay its probable liability on existing debts as they become
due.
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We May Not Be Able to Repurchase Notes upon a Change of Control Offer
If specific change of control events occur, we must offer to repurchase all
outstanding old notes and new notes. Our senior credit facility prohibits us
from doing so until we have repaid the outstanding principal balance, accrued
interest and other amounts owed under the senior credit facility. Future
agreements may contain similar provisions. Restrictions in our senior credit
facility or the indenture that governs the old notes, and will govern the new
notes, may also prevent us from borrowing funds for the repurchase. In that
event, we could refinance our outstanding debt or obtain consents under
existing agreements. We may not be able to do so or may not be able to
negotiate favorable refinancing terms. If we cannot refinance our debt or do
not obtain the necessary consents, we will not be able to repurchase the old
notes or the new notes. Our failure to repurchase notes tendered upon a change
of control would cause us to default on the indenture, our senior credit
facility and other senior debt. In the event of a default, the indenture would
likely restrict payment to noteholders. See "Description of the Notes--
Redemption and Repurchase Offers."
We Experience Quarterly Fluctuations in Operating Results
Our quarterly operating results fluctuate because of seasonality and other
factors. We typically generate the majority of our income in our first and
fourth fiscal quarters, which end in July and April, respectively.
Our Year 2000 Compliance Efforts May Require Substantial Resources; Failure by
Us or Certain Third Parties to Be Year 2000 Compliant Poses Risks
Our business operations depend on our and our suppliers' Year 2000
readiness. We have completed an evaluation of our information technology
infrastructure for Year 2000 issues and have determined that most of this
infrastructure is Year 2000 compliant. We are changing to a casino player
tracking and table system that is Year 2000 compliant. We have also made
detailed inquiries as to the Year 2000 capability of our computer hardware and
software vendors and have received reasonable assurances from these vendors
that the material products we use are Year 2000 compliant.
We have not and do not expect to incur any material costs to become Year
2000 compliant. However, we may still be affected by Year 2000 difficulties.
For example, our results of operations and financial condition could be
materially adversely affected by a failure of a supplier or vendor to address
and resolve its Year 2000 issues. In addition, any Year 2000 difficulties
experienced by public utilities, the banking system, the postal system or other
similar infrastructure enterprises could adversely affect our operations. We do
not have a contingency plan in place in the event we are affected by Year 2000
difficulties.
ISLE OF CAPRI CASINOS, INC.
We are a leading developer, owner and operator of branded gaming and related
lodging and entertainment facilities in growing markets in the United States.
We wholly own and operate five gaming facilities located in Lake Charles and
Bossier City, Louisiana and Biloxi, Vicksburg and Tunica County, Mississippi.
We also own a 57% interest in and operate a gaming facility in Black Hawk,
Colorado, which opened on December 30, 1998. Each of these six gaming
facilities operates under the name "Isle of Capri" and features our distinctive
tropical island theme. In addition, we wholly own and operate a pari-mutuel
harness racing facility in Pompano Beach, Florida and own a 50% interest in and
operate gaming activities aboard a cruise ship based in New Orleans, Louisiana.
USE OF PROCEEDS
We will not receive any proceeds from the exchange offer. In consideration
for issuing the new notes, we will receive outstanding old notes in like
original principal amount at maturity. All old notes received in the exchange
offer will be canceled.
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THE EXCHANGE OFFER
Purpose and Effect; Registration Rights
We sold the old notes to the initial purchasers on April 23, 1999. The
initial purchasers then resold the old notes under an offering memorandum dated
April 20, 1999 in reliance on Rule 144A, Regulation S and other available
exemptions under the Securities Act of 1933. On April 23, 1999, we entered into
a registration rights agreement with the initial purchasers. Under the
registration rights agreement, we agreed to:
. file a registration statement with the Securities and Exchange Commission
relating to the exchange offer under the Securities Act of 1933 no later
than July 7, 1999;
. use our best efforts to cause the exchange offer registration statement
to be declared effective under the Securities Act of 1933 on or before
August 21, 1999;
. commence the exchange offer promptly after the exchange offer
registration statement is declared effective by the Securities and
Exchange Commission;
. keep the exchange offer open for acceptance for at least 20 business days
after notice of the exchange offer is mailed to holders of the old notes;
. cause the exchange offer to be consummated not later than 30 business
days following the date of the effectiveness of the exchange offer
registration statement;
. use our best efforts to promptly issue new notes in exchange for all old
notes that have been properly tendered for exchange prior to the
expiration of the exchange offer; and
. use our best efforts to keep the exchange offer registration statement
effective until the closing of the exchange offer and thereafter until we
have issued new notes in exchange for all old notes that have been
properly tendered for exchange prior to the expiration of the exchange
offer.
In the registration rights agreement, we agreed to file a shelf registration
statement if:
. we are not permitted to effect the exchange offer under applicable law or
applicable interpretations of law by the Securities and Exchange
Commission staff;
. for any reason, the exchange offer is not consummated by September 20,
1999;
. any holder of old notes notifies us that it (1) is not entitled to
participate in the exchange offer, (2) may not resell the new notes
required by it in the exchange offer to the public without delivering a
prospectus and this prospectus is not appropriate or available for
purposes of these resales or (3) is a broker-dealer and owns old notes
acquired directly from us or one of our affiliates; or
. the holders of a majority in aggregate principal amount of the old notes
are not eligible to participate in the exchange offer and to receive new
notes that they may resell to the public without volume restriction under
the Securities Act of 1933 and without similar restriction under
applicable blue sky or state securities laws.
If we are required to file a shelf registration statement, we must use our
best efforts to file the shelf registration statement relating to the old notes
on or before the 60th day after the obligation to file the shelf registration
statement arises. However, if our obligation arises because this exchange offer
has not been consummated by September 20, 1999, we must use our best efforts to
file the shelf registration statement by October 21, 1999. We will use our best
efforts to cause the shelf registration statement to be declared effective no
later than 120 days after the date that the obligation to file the shelf
registration statement arises.
If the shelf registration statement is filed, we will use our best efforts
to keep the shelf registration statement continuously effective, supplemented
and amended until the second anniversary of the effective date of the shelf
registration statement or a shorter period that will terminate when all the
notes covered by the shelf registration statement have been sold pursuant to
the shelf registration statement or otherwise cease to be outstanding.
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<PAGE>
A holder who sells old notes pursuant to the shelf registration statement
generally will be required to be named as a selling securityholder in the
prospectus and to deliver a copy of the prospectus to purchasers. If we are
required to file a shelf registration statement, we will provide to each holder
of the old notes copies of the prospectus that is a part of the shelf
registration statement and notify each such holder when the shelf registration
statement becomes effective. Such holder will be subject to some of the civil
liability provisions under the Securities Act of 1933 in connection with these
sales and will be bound by the provisions of the registration rights agreement
that are applicable to such holder (including certain indemnification and
contribution obligations).
The registration rights agreement requires us to pay the holders of the
notes additional interest if a registration default exists. A registration
default will exist if:
. we fail to file any of the registration statements required by the
registration rights agreement on or prior to the date specified for such
filing;
. any of such registration statements is not declared effective by the
Securities and Exchange Commission on or prior to the date specified for
such effectiveness;
. the exchange offer is required to be consummated under the registration
rights agreement and is not consummated by September 20, 1999;
. the shelf registration statement is declared effective but thereafter,
during the period for which we are required to maintain the effectiveness
of the shelf registration statement, it ceases to be effective or usable
in connection with the resale of the new notes covered by the shelf
registration statement; or
. the exchange offer registration statement is declared effective but
thereafter, during the period for which we have agreed to make this
prospectus available to broker-dealers for use in connection with the
resale of new notes, the exchange offer registration statement ceases to
be effective (or we restrict the use of the prospectus included in the
exchange offer registration statement).
If a registration default exists, the interest rate of the old notes will be
increased by 0.25% per year for the first 90-day period following the
registration default. The interest rate will increase by an additional 0.25%
per year at the beginning of each subsequent 90-day period (or portion thereof)
until all registration defaults have been remedied. The interest rate may not
be increased as a result of registration defaults by more than 1.00% per year.
Following the cure of all registration defaults, the accrual of additional
interest on the old notes will cease and the interest rate will revert to the
original rate.
The exchange offer is intended to satisfy our exchange offer obligations
under the registration rights agreement. The above summary of the registration
rights agreements is not complete and is subject to, and qualified by reference
to, all of the provisions of the registration rights agreement. A copy of the
registration rights agreement is filed as an exhibit to the registration
statement that includes this prospectus.
If you participate in the exchange offer, you will, with limited exceptions,
receive notes that are freely tradeable and not subject to restrictions on
transfer. You should read this prospectus under the heading "--Resales of the
New Notes" for more information relating to your ability to transfer new notes.
The exchange offer is not being made to, nor will we accept tenders for
exchange from, holders of old notes in any jurisdiction in which the exchange
offer or the acceptance of the exchange offer would not be in compliance with
the securities laws or blue sky laws of such jurisdiction.
Expiration Date; Extensions
The expiration date at the exchange offer is September 13, 1999 at 5:00
p.m., New York City time. We may extend the exchange offer in our sole
discretion. If we extend the exchange offer, the expiration date will be the
latest date and time to which the exchange offer is extended. We will notify
the exchange agent of any extension by oral or written notice and will make a
public announcement of the extension no later than 9:00 a.m., New York City
time, on the next business day after the previously scheduled expiration date.
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<PAGE>
We expressly reserve the right, in our sole and absolute discretion:
. to delay accepting any old notes;
. to extend the exchange offer;
. if any of the conditions under "--Conditions of the Exchange Offer" have
not been satisfied, to terminate the exchange offer; and
. to waive any condition or otherwise amend the terms of the exchange offer
in any manner.
If the exchange offer is amended in a manner we deem to constitute a
material change, we will promptly disclose the amendment by means of a
prospectus supplement that will be distributed to the registered holders of the
old notes. Any delay in acceptance, extension, termination or amendment will be
followed promptly by an oral or written notice of the event to the exchange
agent. We will also make a public announcement of the event. Without limiting
the manner in which we may choose to make any pubic announcement and subject to
applicable law, we have no obligation to publish, advertise or otherwise
communicate any such pubic announcement other than by issuing a release to a
national news service.
Terms of the Exchange Offer
We are offering, upon the terms and subject to the conditions set forth in
this prospectus and in the accompanying letter of transmittal, to exchange
$1,000 in principal amount of new notes for each $1,000 in principal amount of
outstanding old notes. We will accept for exchange any and all old notes that
are validly tendered on or before 5:00 p.m., New York City time, on the
expiration date. Tenders of the old notes may be withdrawn at any time before
5:00 p.m., New York City time, on the expiration date. The exchange offer is
not conditioned upon any minimum principal amount of old notes being tendered
for exchange. However, the exchange offer is subject to the terms of the
registration rights agreement and the satisfaction of the conditions described
under "--Conditions of the Exchange Offer." Old notes may be tendered only in
multiples of $1,000. Holders may tender less than the aggregate principal
amount represented by their old notes if they appropriately indicate this fact
on the letter of transmittal accompanying the tendered old notes or indicate
this fact pursuant to the procedures for book-entry transfer described below.
As of the date of this prospectus, $390.0 million in aggregate principal
amount of the old notes were outstanding. Solely for reasons of administration,
we have fixed the close of business on August 10, 1999 as the record date for
purposes of determining the persons to whom this prospectus and the letter of
transmittal will be mailed initially. Only a holder of the old notes (or such
holder's legal representative or attorney-in-fact) whose ownership is reflected
in the records of State Street Bank and Trust Company, as registrar, or whose
notes are held of record by the depositary, may participate in the exchange
offer. There will be no fixed record date for determining the eligible holders
of the old notes who are entitled to participate in the exchange offer. We
believe that, as of the date of this prospectus, no holder is our "affiliate"
(as defined in Rule 405 under the Securities Act of 1933).
We will be deemed to have accepted validly tendered old notes when, as and
if we give oral or written notice of our acceptance to the exchange agent. The
exchange agent will act as agent for the tendering holders of old notes and for
purposes of receiving the new notes from us. If any tendered old notes are not
accepted for exchange because of an invalid tender or otherwise, certificates
for the unaccepted old notes will be returned, without expense, to the
tendering holder as promptly as practicable after the expiration date.
Holders of old notes do not have appraisal or dissenters' rights under
applicable law or the indenture as a result of the exchange offer. We intend to
conduct the exchange offer in accordance with the applicable requirements of
the Securities Exchange Act of 1934 and the rules and regulations under the
Securities Exchange Act of 1934, including Rule 14e-1.
Holders who tender their old notes in the exchange offer will not be
required to pay brokerage commissions or fees or, subject to the instructions
in the letter of transmittal, transfer taxes with respect to the
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<PAGE>
exchange of old notes pursuant to the exchange offer. We will pay all charges
and expenses, other than transfer taxes in certain circumstances, in connection
with the exchange offer. See "--Fees and Expenses."
Neither our company nor our board of directors makes any recommendation to
holders of old notes as to whether to tender any of their old notes pursuant to
the exchange offer. In addition, no one has been authorized to make any such
recommendation. Holders of old notes must make their own decision whether to
participate in the exchange offer and, if the holder chooses to participate in
the exchange offer, the aggregate principal amount of old notes to tender,
after reading carefully this prospectus and the letter of transmittal and
consulting with their advisors, if any, based on their own financial position
and requirements.
Conditions of the Exchange Offer
You must tender your old notes in accordance with the requirements of this
prospectus and the letter of transmittal in order to participate in the
exchange offer.
Notwithstanding any other provision of the exchange offer, or any extension
of the exchange offer, we will not be required to accept for exchange any old
notes, and we may terminate or amend the exchange offer if we are not permitted
to effect the exchange offer under applicable law or any interpretation of
applicable law by the staff of the Securities and Exchange Commission. If we
determine in our sole discretion that any of these events or conditions has
occurred, we may, subject to applicable law, terminate the exchange offer and
return all old notes tendered for exchange or may waive any condition or amend
the terms of the exchange offer.
We expect that the above conditions will be satisfied. The above conditions
are for our sole benefit and may be waived by us at any time in our sole
discretion. Our failure at any time to exercise any of the above rights will
not be a waiver of those rights and each right will be deemed an ongoing right
that may be asserted at any time. Any determination by us concerning the events
described above will be final and binding upon all parties.
Interest
Each new note will bear interest from the most recent date to which interest
has been paid or duly provided for on the old note surrendered in exchange for
such new note or, if no interest has been paid or duly provided for on such old
note, from April 23, 1999. Holders of the old notes whose old notes are
accepted for exchange will not receive accrued interest on their old notes for
any period from and after the last interest payment date to which interest has
been paid or duly provided for on their old notes prior to the original issue
date of the new notes or, if no such interest has been paid or duly provided
for, will not receive any accrued interest on their old notes, and will be
deemed to have waived the right to receive any interest on their old notes
accrued from and after such interest payment date or, if no such interest has
been paid or duly provided for, from and after April 23, 1999.
Procedures for Tendering Old Notes
The tender of a holder's old notes and our acceptance of old notes will
constitute a binding agreement between the tendering holder and us upon the
terms and conditions of this prospectus and the letter of transmittal. Unless a
holder tenders old notes according to the guaranteed delivery procedures or the
book-entry procedures described below, the holder must transmit the old notes,
together with a properly completed and executed letter of transmittal and all
other documents required by the letter of transmittal, to the exchange agent at
its address before 5:00 p.m., New York City time, on the expiration date. The
method of delivery of old notes, letters of transmittal and all other required
documents is at the election and risk of the tendering holder. If delivery is
by mail, we recommend delivery by registered mail, properly insured, with
return receipt requested. Instead of delivery of mail, we recommend that each
holder use an overnight or hand delivery service. In all cases, sufficient time
should be allowed to assure timely delivery.
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<PAGE>
Any beneficial owner of the old notes whose old notes are registered in the
name of a broker, dealer, commercial bank, trust company or other nominee and
who wishes to tender old notes in the exchange offer should contact that
registered holder promptly and instruct that registered holder to tender on its
behalf. If the beneficial owner wishes to tender directly, it must, prior to
completing and executing the letter of transmittal and tendering old notes,
make appropriate arrangements to register ownership of the old notes in its
name. Beneficial owners should be aware that the transfer of registered
ownership may take considerable time.
Any financial institution that is a participant in DTC's Book-Entry Transfer
Facility system may make book-entry delivery of the old notes by causing DTC to
transfer the old notes into the exchange agent's account in accordance with
DTC's procedures for such transfer. To be timely, book-entry delivery of old
notes requires receipt of a confirmation of a book-entry transfer before the
expiration date. Although delivery of the old notes may be effected through
book-entry transfer into the exchange agent's account at DTC, the letter of
transmittal, properly completed and executed, with any required signature
guarantees and any other required documents or an agent's message (as described
below), must in any case be delivered to and received by the exchange agent at
its address on or before the expiration date, or the guaranteed delivery
procedure set forth below must be complied with.
DTC has confirmed that the exchange offer is eligible for DTC's Automated
Tender Offer Program. Accordingly, participants in DTC's Automated Tender Offer
Program may, instead of physically completing and signing the applicable letter
of transmittal and delivering it to the exchange agent, electronically transmit
their acceptance of the exchange offer by causing DTC to transfer old notes to
the exchange agent in accordance with DTC's Automated Tender Offer Program
procedures for transfer. DTC will then send an agent's message to the exchange
agent.
The term "agent's message" means a message transmitted by DTC, received by
the exchange agent and forming part of the book-entry confirmation, which
states that DTC has received an express acknowledgment from a participant in
DTC's Automated Tender Offer Program that is tendering old notes that are the
subject of such book-entry confirmation; that the participant has received and
agrees to be bound by the terms of the applicable letter of transmittal or, in
the case of an agent's message relating to guaranteed delivery, that the
participant has received and agrees to be bound by the applicable notice of
guaranteed delivery; and that we may enforce such agreement against that
participant.
Each signature on a letter of transmittal or a notice of withdrawal must be
guaranteed unless the old notes are tendered:
. by a registered holder who has not completed the box entitled "Special
Delivery Instructions"; or
. for the account of an eligible institution (as described below).
If a signature on a letter of transmittal or a notice of withdrawal is
required to be guaranteed, the signature must be guaranteed by a participant in
a recognized Medallion Signature Program (a "Medallion Signature Guarantor").
If the letter of transmittal is signed by a person other than the registered
holder of the old notes, the old notes surrendered for exchange must be
endorsed by the registered holder, with the signature guaranteed by a Medallion
Signature Guarantor. If any letter of transmittal, endorsement, bond power,
power of attorney or any other document required by the letter of transmittal
is signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or
representative capacity, such person should sign in that capacity when signing.
Such person must submit to us evidence satisfactory, in our sole discretion, of
his or her authority to so act unless we waive such requirement.
As used in this prospectus with respect to the old notes, a "registered
holder" is any person in whose name the old notes are registered on the books
of the registrar. An "eligible institution" is a firm that is a member of a
registered national securities exchange or of the National Association of
Securities Dealers, Inc., a commercial bank or trust company having an office
or correspondent in the United States or any other "eligible guarantor
institution" as such term is defined in Rule 17Ad-15 under the Securities
Exchange Act of 1934.
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<PAGE>
We will determine in our sole discretion all questions as to the validity,
form, eligibility (including time of receipt), acceptance and withdrawal of old
notes tendered for exchange. Our determination will be final and binding. We
reserve the absolute right to reject old notes not properly tendered and to
reject any old notes if acceptance might, in our judgment or our counsel's
judgment, be unlawful. We also reserve the absolute right to waive any defects
or irregularities or conditions of the exchange offer as to particular old
notes at any time, including the right to waive the ineligibility of any holder
who seeks to tender old notes in the exchange offer.
Our interpretation of the terms and conditions of the exchange offer,
including the letter of transmittal and its instructions, will be final and
binding on all parties. Unless waived, any defects or irregularities in
connection with tenders of old notes for exchange must be cured within such
period of time as we determine. Neither our company nor the exchange agent is
under any duty to give notification of defects in such tenders or will incur
any liability for failure to give such notification. The exchange agent will
use reasonable efforts to give notification of defects or irregularities with
respect to tenders of old notes for exchange but will not incur any liability
for failure to give such notification. Tenders of old notes will not be deemed
to have been made until such irregularities have been cured or waived.
By tendering, you will represent to us that, among other things:
. you are not our "affiliate" (as defined in Rule 405 under the Securities
Act of 1933);
. you will acquire the new notes in the ordinary course of your business;
. you are not a broker-dealer that acquired your notes directly from us in
order to resell them pursuant to Rule 144A under the Securities Act of
1933 or any other available exemption under the Securities Act of 1933;
. if you are a broker-dealer that acquired your notes as a result of
market-making or other trading activities, you will deliver a prospectus
in connection with any resale of new notes; and
. you are not participating, do not intend to participate and have no
arrangement or understanding with any person to participate in the
distribution of the new notes.
In connection with a book-entry transfer, each participant will confirm that
it makes the representations and warranties contained in the letter of
transmittal.
Guaranteed Delivery Procedures
If you wish to tender your old notes and:
. your old notes are not immediately available;
. you are unable to deliver on time your old notes or any other document
that you are required to deliver to the exchange agent; or
. you cannot complete the procedures for delivery by book-entry transfer on
time;
you may tender your old notes according to the guaranteed delivery procedures
described in the letter of transmittal. Those procedures require that:
. tender must be made by or through an eligible institution and a notice of
guaranteed delivery must be signed by the holder;
. on or before the expiration date, the exchange agent must receive from
the holder and the eligible institution a properly completed and executed
notice of guaranteed delivery by mail or hand delivery setting forth the
name and address of the holder, the certificate number or numbers of the
tendered old notes and the principal amount of tendered old notes; and
. properly completed and executed documents required by the letter of
transmittal and the tendered old notes in proper form for transfer or
confirmation of a book-entry transfer of such old notes into the exchange
agent's account at DTC must be received by the exchange agent within four
business days after the expiration date of the exchange offer.
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<PAGE>
Any holder who wishes to tender old notes pursuant to the guaranteed
delivery procedures must ensure that the exchange agent receives the notice of
guaranteed delivery and letter of transmittal relating to such old notes before
5:00 p.m., New York City time, on the expiration date.
Acceptance of Old Notes for Exchange; Delivery of New Notes
Upon satisfaction or waiver of all the conditions to the exchange offer, we
will accept old notes that are properly tendered in the exchange offer prior to
5:00 p.m., New York City time, on the expiration date. The new notes will be
delivered promptly after acceptance of the old notes. For purposes of the
exchange offer, we will be deemed to have accepted validly tendered old notes
when, as and if we have given notice to the exchange agent.
Withdrawal Rights
Tenders of the old notes may be withdrawn by delivery of a written or
facsimile transmission notice to the exchange agent at its address set forth
under "--The Exchange Agent; Assistance" at any time before 5:00 p.m., New York
City time, on the expiration date. Any such notice of withdrawal must:
. specify the name of the person having deposited the old notes to be
withdrawn;
. identify the old notes to be withdrawn, including the certificate number
or numbers and principal amount of such old notes, or, in the case of old
notes transferred by book-entry transfer, the name and number of the
account at DTC to be credited;
. be signed by the holder in the same manner as the original signature on
the letter of transmittal by which old notes were tendered, including any
required signature guarantees, or be accompanied by a bond power in the
name of the person withdrawing the tender, in satisfactory form as
determined by us in our sole discretion, executed by the registered
holder, with the signature guaranteed by a Medallion Signature Guarantor,
together with the other documents required upon transfer by the
indenture; and
. specify the name in which the old notes are to be re-registered, if
different from the person who deposited the old notes.
All questions as to the validity, form and eligibility (including time of
receipt) of such notices will be determined by us, in our sole discretion. Any
old notes withdrawn will be deemed not to have been validly tendered for
exchange for purposes of the exchange offer and will be returned to the holder
without cost as soon as practicable after withdrawal. Properly withdrawn old
notes may be retendered pursuant to the procedures described under "--
Procedures for Tendering Old Notes" at any time on or before the expiration
date.
The Exchange Agent; Assistance
State Street Bank and Trust Company is the exchange agent. All tendered old
notes, executed letters of transmittal and other related documents should be
directed to the exchange agent. Questions and requests for assistance and
requests for additional copies of the prospectus, the letter of transmittal and
other related documents should be addressed to the exchange agent as follows:
<TABLE>
<CAPTION>
By Registered or Certified Mail: By Hand or Overnight Courier:
<S> <C>
State Street Bank and Trust Company State Street Bank and Trust Company
Corporate Trust Department Corporate Trust Window, 5th Floor
P.O. Box 778 2 Avenue de Lafayette
Boston, Massachusetts 02102-0778 Boston, Massachusetts 02111-1724
</TABLE>
By Telephone:
(617) 662-1525
Attn: Mackenzie Elijah
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<PAGE>
Fees and Expenses
We will bear the expenses of soliciting old notes for exchange. The
principal solicitation is being made by mail by the exchange agent. Additional
solicitation may be made by telephone, facsimile or in person by officers and
regular employees of our company and our affiliates and by persons so engaged
by the exchange agent.
We will pay the exchange agent reasonable and customary fees for its
services and will reimburse the exchange agent for its reasonable out-of-pocket
expenses in connection with its services and pay other registration expenses,
including fees and expenses of the trustee under the indenture, filing fees,
blue sky fees and printing and distribution expenses.
We have not retained any dealer-manager in connection with the exchange
offer and will not make any payments to brokers, dealers or others soliciting
acceptance of the exchange offer.
We will pay all transfer taxes, if any, applicable to the exchange of old
notes pursuant to the exchange offer. If, however, a transfer tax is imposed
for any reason other than the exchange of old notes pursuant to the exchange
offer, then the amount of those transfer taxes, whether imposed on the
registered holder or any other persons, will be payable by the tendering
holder. If satisfactory evidence of payment of those taxes or exemption is not
submitted with the letter of transmittal, the amount of those transfer taxes
will be billed directly to such tendering holder.
Accounting Treatment
The new notes will be recorded at the same carrying value as the old notes,
as reflected in our accounting records on the date of the exchange.
Accordingly, we will recognize no gain or loss for accounting purposes. The
expenses of the exchange offer will be amortized over the term of the new
notes.
Consequences of Not Exchanging Old Notes
As a result of this exchange offer, we will have fulfilled most of our
obligations under the registration rights agreement. Holders who do not tender
their old notes, except for certain instances involving the initial purchasers
or holders of old notes who are not eligible to participate in the exchange
offer or who do not receive freely transferrable new notes pursuant to the
exchange offer, will not have any further registration rights under the
registration rights agreement or otherwise and will not have rights to receive
additional interest. Accordingly, any holder who does not exchange its old
notes for new notes will continue to hold the untendered old notes and will be
entitled to all the rights and subject to all the limitations applicable under
the indenture, except to the extent that such rights or limitations, by their
terms, terminate or cease to have further effectiveness as a result of the
exchange offer.
Any old notes that are not exchanged for new notes pursuant to the exchange
offer will remain restricted securities within the meaning of the Securities
Act of 1933. In general, such old notes may be resold only:
. to our company or any of our subsidiaries;
. inside the United States to a "qualified institutional buyer" in
compliance with Rule 144A under the Securities Act of 1933;
. inside the United States to an institutional "accredited investor" (as
defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of
1933) or an "accredited investor" that, prior to such transfer, furnishes
or has furnished on its behalf by a U.S. broker-dealer to the trustee
under the indenture a signed letter containing certain representations
and agreements relating to the restrictions on transfer of the new notes,
the form of which letter can be obtained from the trustee;
. outside the United States in compliance with Rule 904 under the
Securities Act of 1933;
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<PAGE>
. pursuant to the exemption from registration provided by Rule 144 under
the Securities Act of 1933, if available; or
. pursuant to an effective registration statement under the Securities Act
of 1933.
Each accredited investor that is not a qualified institutional buyer and
that is an original purchaser of any of the old notes from the initial
purchasers will be required to sign a letter confirming that it is an
accredited investor under the Securities Act of 1933 and that it acknowledges
the transfer restrictions summarized above.
Resales of the New Notes
We are making the exchange offer in reliance on the position of the staff of
the Securities and Exchange Commission as set forth in interpretive letters
addressed to third parties in other transactions. However, we have not sought
our own interpretive letter. Although there has been no indication of any
change in the staff's position, we cannot assure you that the staff of the
Securities and Exchange Commission would make a similar determination with
respect to the exchange offer as it has in its interpretive letters to third
parties. Based on these interpretations by the staff, and except as provided
below, we believe that new notes may be offered for resale, resold and
otherwise transferred by a holder who participates in the exchange offer and is
not a broker-dealer without further compliance with the registration and
prospectus delivery provisions of the Securities Act of 1933. In order to
receive new notes that are freely tradeable, a holder must acquire the new
notes in the ordinary course of its business and may not participate, or have
any arrangement or understanding with any person to participate, in the
distribution (within the meaning of the Securities Act of 1933) of the new
notes. Holders wishing to participate in the exchange offer must make the
representations described in "--Procedures for Tendering Old Notes" above.
Any holder of old notes:
. who is our "affiliate" (as defined in Rule 405 under the Securities Act
of 1933);
. who did not acquire the new notes in the ordinary course of its business;
. who is a broker-dealer that purchased old notes from us to resell them
pursuant to Rule 144A under the Securities Act of 1933 or any other
available exemption under the Securities Act of 1933; or
. who intends to participate in the exchange offer for the purpose of
distributing (within the meaning of the Securities Act of 1933) new
notes;
will be subject to separate restrictions. Each holder in any of the above
categories:
. will not be able to rely on the interpretations of the staff of the
Securities Act of 1933 in the above-mentioned interpretive letters;
. will not be permitted or entitled to tender old notes in the exchange
offer; and
. must comply with the registration and prospectus delivery requirements of
the Securities Act of 1933 in connection with any sale or other transfer
of old notes, unless such sale is made pursuant to an exemption from such
requirements.
In addition, if you are a broker-dealer holding old notes acquired for your
own account, then you may be deemed a statutory "underwriter" within the
meaning of the Securities Act of 1933 and must deliver a prospectus meeting the
requirements of the Securities Act of 1933 in connection with any resales of
your new notes. Each broker-dealer that receives new notes for its own account
pursuant to the exchange offer must acknowledge that it acquired the old notes
for its own account as a result of market-making activities or other trading
activities and must agree that it will deliver a prospectus meeting the
requirements of the Securities Act of 1933 in connection with any resale of
those new notes. The letter of transmittal states that, by making the above
acknowledgment and by delivering a prospectus, a broker-dealer will not be
deemed to admit that it is an "underwriter" within the meaning of the
Securities Act of 1933.
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<PAGE>
Based on the position taken by the staff of the Securities and Exchange
Commission in the interpretive letters referred to above, we believe that
broker-dealers that acquired old notes for their own accounts, as a result of
market-making or other trading activities ("Participating Broker-Dealers"), may
fulfill their prospectus delivery requirements with respect to the new notes
received upon exchange of old notes (other than old notes that represent an
unsold allotment from the original sale of the old notes) with a prospectus
meeting the requirements of the Securities Act of 1933, which may be the
prospectus prepared for an exchange offer so long as it contains a description
of the plan of distribution with respect to the resale of such new notes.
Accordingly, this prospectus, as it may be amended or supplemented, may be used
by a Participating Broker-Dealer during the period referred to below in
connection with resales of new notes received in exchange for old notes where
such old notes were acquired by the Participating Broker-Dealer for its own
account as a result of market-making or other trading activities. Subject to
the provisions of the registration rights agreement, we have agreed that this
prospectus may be used by a Participating Broker-Dealer in connection with
resales of such new notes. See "Plan of Distribution." However, a Participating
Broker-Dealer that intends to use this prospectus in connection with the resale
of new notes received in exchange for old notes pursuant to the exchange offer
must notify us, or cause us to be notified, on or before the expiration date of
the exchange offer, that it is a Participating Broker-Dealer. Such notice may
be given in the space provided for that purpose in the letter of transmittal or
may be delivered to the exchange agent at the address set forth under "--The
Exchange Agent; Assistance." Any Participating Broker-Dealer that is our
"affiliate" may not rely on such interpretive letters and must comply with the
registration and prospectus delivery requirements of the Securities Act of 1933
in connection with any resale transaction.
Each Participating Broker-Dealer that tenders old notes pursuant to the
exchange offer will be deemed to have agreed, by execution of the letter of
transmittal, that upon receipt of notice from us of the occurrence of any event
or the discovery of any fact that makes any statement contained in this
prospectus untrue in any material respect or that causes this prospectus to
omit to state a material fact necessary in order to make the statements
contained herein, in light of the circumstances under which they were made, not
misleading or of the occurrence of other events specified in the registration
rights agreement, such Participating Broker-Dealer will suspend the sale of new
notes pursuant to this prospectus until we have amended or supplemented this
prospectus to correct such misstatement or omission and have furnished copies
of the amended or supplemented prospectus to the Participating Broker-Dealer or
we have given notice that the sale of the new notes may be resumed, as the case
may be.
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DESCRIPTION OF THE NOTES
The old notes were, and the new notes will be, issued as a single series of
securities under the Indenture, dated as of April 23, 1999, among Isle of
Capri, as issuer, certain of Isle of Capri's subsidiaries, as subsidiary
guarantors, and State Street Bank and Trust Company, as trustee. The form and
terms of the new notes are substantially identical to the form and terms of the
old notes, except that the new notes:
. will be registered under the Securities Act of 1933; and
. will not bear any legends restricting transfer.
The new notes will be issued solely in exchange for an equal principal
amount of old notes. As of the date of this prospectus, $390.0 million
aggregate principal amount of old notes is outstanding.
In the following summaries:
. ""new notes" refers to the registered notes being offered by this
prospectus;
. ""old notes" refers to your old notes that may be exchanged for new notes
in the exchange offer;
. ""notes'' refers collectively to the new notes and the old notes; and
. ""Isle of Capri" refers only to Isle of Capri Casinos, Inc. and not to
any of its Subsidiaries.
The following summaries of certain provisions of the indenture are not
complete and are subject to all the provisions of the indenture. Wherever we
refer to particular sections or defined terms used in the indenture, such
sections or defined terms are automatically incorporated into this prospectus.
We have filed a copy of the indenture with the Securities and Exchange
Commission and the indenture is incorporated by reference into the registration
statement. The meanings of some of the terms that are important in
understanding the following summaries are set forth below under the subheading
"Definitions."
Brief Description of the New Notes and the Guarantees
The New Notes
The new notes will be:
. general unsecured obligations of Isle of Capri;
. subordinated in right of payment to all existing and future Senior
Indebtedness of Isle of Capri;
. effectively subordinated to all secured Indebtedness of Isle of Capri;
. senior in right of payment to any future Indebtedness of Isle of Capri
that is specifically subordinated to the new notes; and
. unconditionally guaranteed by the Subsidiary Guarantors.
The Guarantees
The new notes will be guaranteed by each of the existing and future
Significant Restricted Subsidiaries of Isle of Capri, which are initially
substantially all of the subsidiaries of Isle of Capri except Casino America of
Colorado, Inc. and its 57%-owned subsidiary, Isle of Capri Black Hawk, L.L.C.
and its Subsidiaries.
The Subsidiary Guarantees of the new notes will be:
. general unsecured obligations of each Subsidiary Guarantor;
. subordinated in right of payment to all existing and future Senior
Indebtedness of each Subsidiary Guarantor;
. effectively subordinated to all secured Indebtedness of each Subsidiary
Guarantor; and
. senior in right of payment to any future Indebtedness of each Subsidiary
Guarantor that is specifically subordinated to the Subsidiary Guarantees.
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As of July 25, 1999, we and our Significant Restricted Subsidiaries had
approximately $64.7 million of Senior Indebtedness outstanding and our
subsidiaries that are not guarantors had approximately $76.3 million of debt
and other liabilities outstanding. As indicated above and as discussed in
detail below under the subheading "Subordination," payments on the new notes
will be subordinated to the payment of Senior Indebtedness of Isle of Capri and
payments under the Subsidiary Guarantees will be subordinated to the payment of
Senior Indebtedness of the Subsidiary Guarantors. The indenture will permit our
company and the Subsidiary Guarantors to incur additional Senior Indebtedness.
All of our Subsidiaries are currently "Restricted Subsidiaries," except for
Casino America of Colorado, Inc., Isle of Capri Black Hawk, L.L.C. and its
Subsidiaries, which are "Unrestricted Subsidiaries." However, under the
circumstances described below under the subheading "Restricted and Unrestricted
Subsidiaries," we are permitted to designate certain of our Subsidiaries as
"Unrestricted Subsidiaries." Unrestricted Subsidiaries are not subject to many
of the restrictive covenants in the indenture. Unrestricted Subsidiaries and
Restricted Subsidiaries that are not Significant Restricted Subsidiaries will
not guarantee the new notes.
Principal, Maturity and Interest
The new notes will be unsecured senior subordinated obligations of Isle of
Capri, limited in an aggregate principal amount to $390.0 million. The new
notes will mature on April 15, 2009, will accrue interest at the rate of 8 3/4%
per year and interest will be payable semiannually on each April 15 and October
15, commencing October 15, 1999.
We will make interest payments to the holders of record of new notes at the
close of business on each April 1 and October 1 immediately preceding each
interest payment date. Each new note will bear interest from the most recent
date to which interest has been paid or duly provided for on the old note
surrendered in exchange for such new note or, if no interest has been paid or
duly provided for on such old note, from April 23, 1999. Interest will be
computed on the basis of a 360-day year comprised of twelve 30-day months.
The new notes will be issued only in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. Principal of,
premium, if any, and interest on the new notes will be payable, and the new
notes will be transferable, at the office or agency of Isle of Capri maintained
for such purposes in the City of New York. Until otherwise designated by Isle
of Capri, Isle of Capri's office or agency in New York will be the office of
the trustee maintained for such purpose. In addition, interest may be paid by
wire transfer or check mailed to the Person entitled thereto as shown on the
register for the new notes. No service charge will be made for any registration
of transfer or exchange of the new notes, except for any tax or other
governmental charge that may be imposed in connection with the registration of
transfer or exchange.
Ranking
The new notes will be junior in right of payment to all existing and future
Senior Indebtedness of Isle of Capri, senior in right of payment to all future
subordinated Indebtedness of Isle of Capri and equal in right of payment with
any other future senior subordinated Indebtedness of Isle of Capri. Under the
indenture, Isle of Capri and its Restricted Subsidiaries may incur additional
Indebtedness, including Indebtedness which is senior to or equal in right of
payment with the new notes, subject to the limitations set forth under the
subheading "Certain Covenants--Limitation on Indebtedness." Additional
Indebtedness in the form of permitted FF&E Financing or Capitalized Lease
Obligations and certain other Indebtedness may be secured by certain assets of
Isle of Capri or a Restricted Subsidiary, as applicable. See "Certain
Covenants--Limitation on Liens."
Subsidiary Guarantees
Isle of Capri's payment obligations under the new notes will be jointly,
severally, fully and unconditionally guaranteed on an unsecured senior
subordinated basis by each of Isle of Capri's existing and future Significant
Restricted Subsidiaries. The Subsidiary Guarantees will be subordinated in
right of payment
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to all existing and future Senior Indebtedness of the Subsidiary Guarantors.
The new notes are not guaranteed by Casino America of Colorado, Inc., Isle of
Capri Black Hawk, L.L.C. or their Subsidiaries, any future Unrestricted
Subsidiaries or any existing or future Restricted Subsidiaries that are not
Significant Restricted Subsidiaries.
The indenture contains provisions the intent of which is to provide that the
obligations of each Subsidiary Guarantor will be limited to the maximum amount
that will, after giving effect to all other contingent and fixed liabilities of
such Subsidiary Guarantor and after giving effect to any collections from,
rights to receive contributions from or payments made by or on behalf of, any
other Subsidiary Guarantor in respect of the obligations of such other
Subsidiary Guarantor under its Subsidiary Guarantee or pursuant to its
contribution obligations under the indenture, result in the obligations of such
Subsidiary Guarantor under its Subsidiary Guarantee not constituting a
fraudulent conveyance or fraudulent transfer under any applicable federal,
state or foreign law. Each Subsidiary Guarantor that makes a payment or
distribution under a Subsidiary Guarantee will be entitled to contribution from
each other Subsidiary Guarantor so long as the exercise of this right does not
impair the rights of the holders of the new notes. See "Risk Factors--The
Guarantees May Be Unenforceable due to Fraudulent Conveyance Statutes."
The indenture provides that in the event of:
(1) a sale or other disposition of all or substantially all of the
assets of any Subsidiary Guarantor or the sale of a Subsidiary Guarantor by
way of merger, consolidation or otherwise that, in each case, complies with
the provisions set forth under the subheading "Certain Covenants--
Limitation on Asset Sales and Events of Loss";
(2) a Subsidiary Guarantor becoming an Unrestricted Subsidiary pursuant
to the terms of the indenture; or
(3) a sale or other disposition of all of the Capital Stock of any
Subsidiary Guarantor that complies with the provisions set forth under the
subheading "Certain Covenants--Limitation on Asset Sales and Events of
Loss";
then such Subsidiary Guarantor or the corporation acquiring such assets, as
applicable, shall be immediately released and relieved of any obligations under
its Subsidiary Guarantee without any further action, provided that Isle of
Capri complies with the provisions of the covenant described under the
subheading "Certain Covenants--Limitation on Asset Sales and Events of Loss."
Redemption and Repurchase Offers
Optional Redemption. The new notes will be redeemable, in whole or in part,
at Isle of Capri's option, at any time on or after April 15, 2004 at the
redemption prices (expressed as percentages of principal amount) set forth
below plus accrued and unpaid interest to the applicable redemption date, if
redeemed during the 12-month period beginning on April 15 of the years
indicated below:
<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C>
2004.......................................................... 104.375%
2005.......................................................... 102.917%
2006.......................................................... 101.458%
2007 and thereafter........................................... 100.000%
</TABLE>
Equity Proceeds Redemption. In the event that Isle of Capri consummates a
Qualified Public Equity Offering on or before April 15, 2002, Isle of Capri may
redeem, at its option, up to 35% of the aggregate outstanding notes at a
redemption price of 108.75% of the principal amount of the notes so redeemed
plus accrued and unpaid interest to the redemption date, provided that, after
any such redemption, at least $253.5 million in aggregate principal amount of
notes remains outstanding.
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Change of Control Repurchase Offer. In the event that a Change of Control
shall occur, Isle of Capri is obligated to make an offer to purchase all
outstanding new notes at a redemption price of 101% of the principal amount
thereof, plus accrued and unpaid interest thereon to the repurchase date. There
can be no assurance, however, that Isle of Capri will have sufficient funds to
repurchase the new notes in that circumstance. If a Change of Control occurs,
Isle of Capri is obligated to notify the holders of new notes in writing of
such occurrence and to make an offer to purchase (the "Change of Control
Offer"), on a business day (the "Change of Control Payment Date") not later
than 60 days following the date of the Change of Control, all new notes then
outstanding at a purchase price equal to 101% of the principal amount thereof
plus accrued and unpaid interest, if any, to the Change of Control Payment
Date. The Change of Control Offer is required to remain open for at least 20
business days and until the close of business on the Change of Control Payment
Date. Neither the Board of Directors nor the trustee may waive or amend Isle of
Capri's obligation to so offer to purchase all outstanding new notes in the
event of a Change of Control without the holders of all of the outstanding
notes consenting to such waiver or amendment. See "Amendments and Waivers."
There can be no assurance that Isle of Capri's debt instruments will permit
a Change of Control Offer to be made. In particular, Isle of Capri's Senior
Credit Facility provides that prior to making any such offer Isle of Capri
would be required to (1) repay in full all obligations (including any unpaid
principal, interest, fees, costs and expenses owed by Isle of Capri under the
Senior Credit Facility) and terminate all commitments relating to the
Indebtedness under the Senior Credit Facility or offer to repay in full all
obligations (including any unpaid principal, interest, fees, costs and expenses
owing by Isle of Capri under the Senior Credit Facility and terminate all
commitments relating to the Indebtedness under the Senior Credit Facility and
to repay such obligations owed to each lender which has accepted such offer, or
(2) obtain the requisite consents under the Senior Credit Facility to permit
the prepayment of the new notes. Failure to make a Change of Control Offer upon
a Change of Control would constitute a default under the indenture, even if
such Change of Control Offer is prohibited by Isle of Capri's debt instruments.
Gaming Redemption. Notwithstanding any other provision of the indenture, if
any Gaming Authority requires that a holder or beneficial owner of new notes
must be licensed, qualified or found suitable under any applicable gaming law
and the holder or beneficial owner fails to apply for a license, qualification
or a finding of suitability within 30 days after being requested to do so in
such circumstance by the Gaming Authority or by Isle of Capri pursuant to an
order of the Gaming Authority, or if such holder or such beneficial owner is
not so licensed, qualified or found suitable, Isle of Capri shall have the
right, at its option:
(1) to require such holder or beneficial owner to dispose of such
holder's or beneficial owner's new notes within 30 days of receipt of such
notice or such finding by the applicable Gaming Authority or such earlier
date as may be ordered by such Gaming Authority; or
(2) to redeem the new notes of such holder or beneficial owner at a
redemption price equal to the lesser of:
(a) the principal amount thereof; and
(b) the price at which such holder or beneficial owner acquired the
new notes;
together with, in either case, accrued and unpaid interest, if any, to the
earlier of the date of redemption or the date of the finding of unsuitability,
if any, by such Gaming Authority, which may be less than 30 days following the
notice of redemption, if so ordered by such Gaming Authority. Isle of Capri
shall notify the trustee in writing of any such redemption as soon as
practicable. The holder or beneficial owner of new notes applying for a
license, qualification or a finding of suitability is obligated to pay all
costs of the licensure or investigation for such qualification or finding of
suitability.
Selection and Notice. In the event that less than all of the notes are to be
redeemed or repurchased at any time, selection of notes for redemption or
repurchase will be made by the trustee on a pro rata basis, by lot or by such
other method, if any, as the trustee shall deem fair and appropriate; provided
that no notes in a principal amount of $1,000 or less shall be redeemed or
repurchased in part. Unless otherwise specified herein,
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<PAGE>
notice of a redemption of or an offer to repurchase new notes shall be mailed
by first class mail not less than 30 days nor more than 60 days before the
redemption or purchase date to each holder of new notes at its registered
address. If any new note is to be redeemed or repurchased in part only, the
notice of redemption or offer to repurchase that relates to such new note shall
state the portion of the principal amount thereof to be redeemed or
repurchased. A new note in a principal amount equal to the unredeemed or
unpurchased portion thereof will be issued in the name of the holder thereof
upon cancellation of the original new note. On and after the redemption or
purchase date, interest will cease to accrue on new notes or portions thereof
redeemed or repurchased or called for redemption pursuant to the optional and
mandatory redemption provisions and not forwarded for redemption.
Isle of Capri will comply with Rule 14e-1 under the Securities Exchange Act
of 1934 in making any offer to repurchase new notes described above.
Certain instruments, agreements or other documents evidencing, governing or
otherwise relating to Indebtedness of Isle of Capri and its Subsidiaries may
prohibit any such repurchases or redemptions unless the Indebtedness has been
repaid in full and such instruments, agreements or other documents have been
terminated. In addition, a Change of Control might constitute an event of
default with respect to such Indebtedness permitting the holder (or an agent or
other representative of such holder on its behalf) to accelerate the maturity
thereof. In the event of a Change of Control, Isle of Capri will likely be
required to refinance such Indebtedness and may need to incur additional
Indebtedness in order to make payments for new notes to be redeemed or
repurchased. There can be no assurance that Isle of Capri will be able to
refinance such Indebtedness or to incur additional Indebtedness in order to
make such payments.
Restricted and Unrestricted Subsidiaries
The indenture provides that, subject to the exceptions described below, each
of Isle of Capri's Subsidiaries other than Casino America of Colorado, Inc. and
Isle of Capri Black Hawk, L.L.C. and its Subsidiaries, and any entity that
becomes a direct or indirect Subsidiary of Isle of Capri in the future will be
a Restricted Subsidiary unless Isle of Capri designates the Subsidiary to be an
Unrestricted Subsidiary. Except as provided below, Isle of Capri may designate
any existing or future Subsidiary of Isle of Capri as an Unrestricted
Subsidiary, provided that
(1) the Subsidiary to be so designated does not own any Indebtedness or
Capital Stock or own or hold any Lien on any asset or property of Isle of
Capri or any other Restricted Subsidiary;
(2) either (i) the Subsidiary to be so designated has total assets of
$100,000 or less or (ii) immediately before and after giving pro forma
effect to such designation
(a) Isle of Capri could incur $1.00 of Indebtedness pursuant to the
covenant described under the subheading "Certain Covenants--Limitation
on Indebtedness" (other than under clauses 2(a) through (2)(h)
thereof);
(b) no Default or Event of Default shall have occurred and be
continuing; and
(c) Isle of Capri could make, pursuant to the covenant described
under the subheading "Certain Covenants--Limitation on Restricted
Payments," the Restricted Payment arising from the designation as
described in the next paragraph; and
(3) all transactions between the Subsidiary to be so designated and its
Affiliates remaining in effect are permitted pursuant to the covenant
described under the subheading "Certain Covenants--Limitation on
Transactions with Affiliates."
Notwithstanding the foregoing, Isle of Capri may not designate any existing
or future Subsidiary that holds, owns or operates, directly or indirectly, any
assets or function directly relating to or necessary for the conduct of casino
gaming at the Isle-Biloxi, the Isle-Vicksburg, the Isle-Bossier City, the Isle-
Lake Charles or the Isle-Tunica as an Unrestricted Subsidiary. Any Investment
made by Isle of Capri or any Restricted Subsidiary in a Restricted Subsidiary
which is redesignated an Unrestricted Subsidiary shall thereafter be
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considered as having been a Restricted Payment (to the extent not previously
included as a Restricted Payment) made on the day such Subsidiary is designated
an Unrestricted Subsidiary in the amount of the greater of
(1) the sum of the Fair Market Value of the interest of Isle of Capri
and any of its Restricted Subsidiaries in such Subsidiary on such date as
determined in accordance with GAAP and the amount of any obligation of such
Subsidiary which Isle of Capri or any Restricted Subsidiary has guaranteed
or for which it is in any other manner liable; and
(2) the amount of the Investments made by Isle of Capri and any of its
Restricted Subsidiaries in such Subsidiary.
Any Subsidiary Guarantee entered into by a Restricted Subsidiary which is
subsequently redesignated an Unrestricted Subsidiary shall be automatically
released at such time as the Restricted Subsidiary becomes an Unrestricted
Subsidiary. Unless so designated as an Unrestricted Subsidiary, any Subsidiary
of Isle of Capri shall be classified as a Restricted Subsidiary.
An Unrestricted Subsidiary may be redesignated a Restricted Subsidiary,
provided that such designation shall be deemed to be an incurrence of
Indebtedness by a Restricted Subsidiary of Isle of Capri of any outstanding
Indebtedness of such Unrestricted Subsidiary and such designation shall only be
permitted if
(1) such Indebtedness is permitted to be incurred under the covenant
described under the subheading "Certain Covenants--Limitation on
Indebtedness" (other than under clauses 2(a) through 2(h) thereof); and
(2) no Default or Event of Default shall have occurred and be
continuing.
The designation of an Unrestricted Subsidiary or the removal of such
designation is required to be made by the Board of Directors of Isle of Capri
evidenced by a Board Resolution stating that the Board of Directors has made
the designation in accordance with the indenture. Isle of Capri is required to
deliver to the trustee this Board Resolution together with an Officers'
Certificate certifying that the designation complies with the indenture. The
designation will be effective as of the date specified in the applicable Board
Resolution, which may not be before the date the applicable Officers'
Certificate is delivered to the trustee.
Subordination
The payment of the principal of, premium, if any, and interest on and any
other amounts owing with respect to the new notes will be subordinated in right
of payment, as described below, to the prior payment in full of all Senior
Indebtedness.
The indenture provides that in the event of any insolvency or bankruptcy
case or proceeding, or any receivership, liquidation, reorganization or other
similar case or proceeding in connection therewith, relating to Isle of Capri,
or any liquidation, dissolution or other winding-up of Isle of Capri, whether
voluntary or involuntary, or any assignment for the benefit of creditors or
other marshaling of assets or liabilities of Isle of Capri,
(1) all Senior Indebtedness of Isle of Capri and Senior Indebtedness of
the Subsidiary Guarantors must be paid in full before any payment or
distribution (excluding any payment or distribution of certain permitted
equity or subordinated securities) is made on account of the principal of,
premium, if any, or interest on the new notes or the Subsidiary Guarantees,
respectively; and
(2) until all Senior Indebtedness is paid in full, any distribution to
which holders of the new notes would be entitled but for this provision
shall be made to holders of Senior Indebtedness as their interests may
appear, except that holders of the new notes may receive Capital Stock or
any debt securities that are subordinated to Senior Indebtedness to at
least the same extent as the new notes.
Similarly, in the event of a bankruptcy, liquidation, reorganization or
similar proceeding relating to any Subsidiary Guarantor, its assets would be
available to pay obligations under its Subsidiary Guarantee only after all
Senior Indebtedness of that Subsidiary Guarantor is paid in full.
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<PAGE>
During the continuance of any default in the payment of any Designated
Senior Indebtedness of Isle of Capri or a Subsidiary Guarantor at maturity or
pursuant to which the maturity thereof may immediately be accelerated beyond
any applicable grace period, no payment or distribution of any assets of Isle
of Capri or such Subsidiary Guarantor of any kind or character (excluding any
payment or distribution of certain permitted equity or subordinated securities
and other than payments from trusts previously created pursuant to the
provisions described under the subheading "Defeasance") shall be made on
account of the principal of, premium, if any, or interest on, or the purchase,
redemption or other acquisition of, the new notes unless and until such default
has been cured or waived or has ceased to exist or such Designated Senior
Indebtedness shall have been discharged or paid in full.
During the continuance of any non-payment default with respect to any
Designated Senior Indebtedness of Isle of Capri or a Subsidiary Guarantor
pursuant to which the maturity thereof may be accelerated (in accordance with
its terms a "Non-payment Default") and after the receipt by the trustee from
the representatives of holders of such Designated Senior Indebtedness of a
written notice of such Non-payment Default, no payment or distribution of any
assets of Isle of Capri or such Subsidiary Guarantor of any kind or character
(excluding any payment or distribution of certain permitted equity or
subordinated securities and other than payments from trusts previously created
pursuant to the provisions described under the subheading "Defeasance") may be
made by Isle of Capri or such Subsidiary Guarantor on account of the principal
of, premium, if any, or interest on, or the purchase, redemption or other
acquisition of, the new notes for the period specified below (the "Payment
Blockage Period").
The Payment Blockage Period will commence upon the receipt of written notice
of a Non-payment Default by the trustee from the representatives of holders of
Designated Senior Indebtedness specifying an election to effect a Payment
Blockage Period and will end on the earlier to occur of the following events:
(1) 179 days shall have elapsed since the receipt of such notice of a
Non-payment Default (provided that such Designated Senior Indebtedness
shall not theretofore have been accelerated);
(2) such default is cured or waived or ceases to exist or such
Designated Senior Indebtedness is discharged; or
(3) such Payment Blockage Period shall have been terminated by written
notice to Isle of Capri or the trustee from the representatives of holders
of Designated Senior Indebtedness initiating such Payment Blockage Period.
After the end of any Payment Blockage Period, Isle of Capri shall promptly
resume making any and all required payments in respect of the new notes,
including any missed payments. Notwithstanding anything in the subordination
provisions of the indenture or the new notes to the contrary,
(1) in no event shall a Payment Blockage Period extend beyond 179 days
from the date of the receipt by the trustee of the notice initiating such
Payment Blockage Period;
(2) there shall be a period of at least 186 consecutive days in each
365-day period when no Payment Blockage Period is in effect; and
(3) not more than one Payment Blockage Period with respect to the new
notes may be commenced within any period of 365 consecutive days.
A Non-payment Default with respect to Designated Senior Indebtedness that
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 cannot be made the basis for the commencement of a
second Payment Blockage Period, whether or not within a period of 365
consecutive days, unless such default has been cured or waived for a period of
not less than 90 consecutive days and subsequently recurs.
As used herein, the term "Designated Senior Indebtedness" means (1)
Indebtedness incurred under the Senior Credit Facility and (2) any other Senior
Indebtedness in a principal amount of at least $25.0 million outstanding which,
at the time of determination, is specifically designated in the instrument
governing such
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<PAGE>
Senior Indebtedness as "Designated Senior Indebtedness" by Isle of Capri and
is otherwise permitted to be "Designated Senior Indebtedness" under the Senior
Credit Facility.
If Isle of Capri fails to make any payment on the new notes when due or
within any applicable grace period, whether or not on account of the payment
blockage provisions referred to above, such failure would constitute an Event
of Default under the indenture and would enable the holders of the new notes
to accelerate the maturity thereof. See the information under the subheading
"Events of Default and Remedies."
By reason of such subordination, in the event of liquidation or insolvency,
creditors of Isle of Capri who are holders of Senior Indebtedness may recover
more, ratably, than the holders of the new notes and funds which would be
otherwise payable to the holders of the new notes will be paid to the holders
of Senior Indebtedness to the extent necessary to pay the Senior Indebtedness
in full, and Isle of Capri may be unable to meet its obligations fully with
respect to the new notes.
Certain Covenants
Set forth below are summaries of some of the covenants contained in the
indenture.
Limitation on Indebtedness. (1) Isle of Capri may not, and may not cause or
permit any Restricted Subsidiary to, directly or indirectly, create, incur,
assume, suffer to exist, guarantee or in any manner become liable for the
payment of ("incur") any Indebtedness (including any Acquired Indebtedness) or
any Disqualified Stock unless
(a) such Indebtedness or Disqualified Stock is incurred by Isle of Capri
or a Subsidiary Guarantor;
(b) no Default or Event of Default shall have occurred and be continuing
at the time of, or would occur after giving pro forma effect to, such
incurrence of Indebtedness or Disqualified Stock; and
(c) on the date of such incurrence (the "Incurrence Date"), the
Consolidated Coverage Ratio of Isle of Capri, after giving pro forma effect
to such incurrence of such Indebtedness, would be at least 2.0 to 1.0.
(2) Notwithstanding the foregoing, Isle of Capri and its Restricted
Subsidiaries may incur
(a) Indebtedness and Disqualified Stock issued to and held by Isle of
Capri or a wholly owned Restricted Subsidiary of Isle of Capri, provided
that (i) any subsequent issuance or transfer of any Capital Stock that
results in any such wholly owned Restricted Subsidiary ceasing to be a
wholly owned Restricted Subsidiary or (ii) any transfer of such
Indebtedness to a Person other than Isle of Capri or a wholly owned
Restricted Subsidiary of Isle of Capri, will be deemed to be the incurrence
of such Indebtedness or issuance of Disqualified Stock by the issuer
thereof;
(b) Indebtedness under the old notes and the new notes, the Subsidiary
Guarantees and the indenture;
(c) Indebtedness outstanding on April 23, 1999;
(d) FF&E Financing and Capitalized Lease Obligations to acquire or
refinance furniture, fixtures and equipment incident to and useful in the
operation of Casinos, Casino Hotels or any Casino Related Facility,
provided that the sum of the aggregate principal amount of FF&E Financing
and Capitalized Lease Obligations does not exceed, in the aggregate at any
time outstanding, the sum of
(i) the principal amount of FF&E Financing and Capitalized Lease
Obligations outstanding on April 23, 1999; plus
(ii) $15.0 million; plus
(iii) $10.0 million times the number of Casinos acquired or developed
by Isle of Capri and its Restricted Subsidiaries after April 23, 1999;
plus
(iv) $7.5 million times the number of Casino Hotels acquired or
developed by Isle of Capri and its Restricted Subsidiaries after April
23, 1999;
(e) Indebtedness in respect of performance bonds, letters of credit,
bankers' acceptances and surety and appeal bonds incurred in the ordinary
course of business, other than such Indebtedness outstanding on
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April 23, 1999 (or refinancings thereof permitted under clause (f) below),
in an amount not to exceed $15.0 million in the aggregate at any time
outstanding; Interest Rate and Currency Protection Obligations entered into
in connection with the incurrence of Indebtedness otherwise permitted under
the indenture; and Indebtedness arising under agreements providing for
indemnification, adjustment of purchase price and similar obligations in
connection with the disposition of property or assets;
(f) Indebtedness issued in exchange for or to repay, prepay, repurchase,
redeem, defease, retire or refinance ("refinance") any Indebtedness (x)
incurred pursuant to the provisions of Section 1 above or (y) permitted by
clauses (b) or (c) above or this clause (f) of this Section 2, provided
that
(i) if the principal amount of the Indebtedness so issued shall
exceed the sum of the principal amount of the Indebtedness so exchanged
or refinanced plus any prepayment premium and costs reasonably incurred
to effect the exchange or refinancing, then such excess shall be
permitted only to the extent that it is otherwise permitted to be
incurred under this covenant; and
(ii) the Indebtedness so issued
(A) has a Stated Maturity not earlier than the Stated Maturity of
the Indebtedness so exchanged or refinanced;
(B) has an average life to Stated Maturity equal to or greater
than the remaining average life to Stated Maturity of the
Indebtedness so exchanged or refinanced; and
(C) is subordinated to the notes to at least the same extent as
the Indebtedness so exchanged or refinanced if such Indebtedness
that is being exchanged or refinanced is subordinated to the notes.
(g) Indebtedness incurred by Isle of Capri and its Restricted
Subsidiaries under one or more Credit Facilities in an aggregate principal
amount at any one time outstanding not to exceed $200.0 million (less any
Indebtedness incurred pursuant to this clause (g) that is permanently
prepaid, repaid, redeemed, purchased or retired with Net Cash Proceeds from
any Asset Sale or Event of Loss pursuant to the terms of the covenant
described under the subheading "Limitation on Asset Sales and Events of
Loss"); and
(h) Indebtedness, other than Indebtedness permitted by clauses (a)
through (g) above, which does not exceed $25.0 million (less any
Indebtedness incurred pursuant to this clause (h) that is permanently
prepaid, repaid, redeemed, purchased or retired with Net Cash Proceeds from
any Asset Sale or Event of Loss pursuant to the terms of the covenant
described under the subheading "Limitation on Asset Sales and Events of
Loss") in the aggregate at any time outstanding.
Limitation on Liens. Isle of Capri may not, and may not cause or permit any
Restricted Subsidiary, directly or indirectly, to, create, incur, assume or
suffer to exist any Lien of any kind upon any of its existing or future
property or assets (including, without limitation, any income or profits) or
any proceeds therefrom, unless the new notes are equally and ratably secured
(except that Liens securing Subordinated Indebtedness shall be expressly
subordinate to the Liens securing the notes to the same extent such
Subordinated Indebtedness is subordinate to the notes), other than:
(1) Liens existing on April 23, 1999;
(2) Liens securing Senior Indebtedness of Isle of Capri and the
Subsidiary Guarantors permitted to be incurred under the indenture;
(3) Liens securing FF&E Financing or Capitalized Lease Obligations
permitted pursuant to clause (2)(d) of the covenant described under the
subheading "Limitation on Indebtedness" provided that
(a) the amount of such Indebtedness incurred in any individual case
secured by such a Lien, at the time such Indebtedness is incurred, does
not exceed the lesser of (i) the cost and (ii) the Fair Market Value of
the property or assets purchased or acquired with the proceeds of such
FF&E Financing or Capitalized Lease Obligation;
(b) the Indebtedness secured by such Lien shall have otherwise been
permitted to be incurred under the indenture;
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(c) such Lien shall attach to such property or assets upon their
acquisition; and
(d) such Lien (other than a Permitted Vessel Lien) shall not
encumber or attach to any other assets or property of Isle of Capri or
any of its other Restricted Subsidiaries;
(4) Liens securing Indebtedness incurred pursuant to clause (2)(h) of
the covenant described under the subheading "Limitation on Indebtedness";
(5) the replacement, extension or renewal of any Lien permitted by
clauses (1) through (4) upon or in the same property theretofore subject
thereto or the replacement, extension or renewal (without increase in the
principal amount), other than to pay any prepayment premium and costs
reasonably incurred to effect the replacement, extension or renewal, or
change in any direct or contingent obligor of the Indebtedness secured
thereby; and
(6) Permitted Liens.
Limitation on Restricted Payments. Isle of Capri may not make, directly or
indirectly, and may not permit any Restricted Subsidiary to make, directly or
indirectly, any Restricted Payment unless:
(1) no Default or Event of Default shall have occurred and be continuing
at the time of and after giving pro forma effect to such Restricted
Payment;
(2) immediately after giving effect to such Restricted Payment, Isle of
Capri could incur at least $1.00 of Indebtedness pursuant to the covenant
described under the subheading "Limitation on Indebtedness" (other than
under clauses (2)(a) through (2)(h) thereof); and
(3) the aggregate amount of all Restricted Payments declared or made
after April 23, 1999 does not exceed the sum of the following amounts,
without duplication:
(a) 50% of Consolidated Net Income (or in the event such
Consolidated Net Income shall be a deficit, minus 100% of such deficit)
accrued during the period (treated as one accounting period) beginning
on January 25, 1999 and ending on the last day of Isle of Capri's last
fiscal quarter ending before the date of such proposed Restricted
Payment; plus
(b) an amount equal to the aggregate Net Cash Proceeds received by
Isle of Capri from the issuance or sale (other than to a Subsidiary) of
its Capital Stock (excluding Disqualified Stock, but including Capital
Stock issued upon conversion of convertible Indebtedness and from the
exercise of options, warrants or rights to purchase Capital Stock
(other than Disqualified Stock) of Isle of Capri) on or after April 23,
1999; plus
(c) to the extent not otherwise included in Isle of Capri's
Consolidated Net Income, 100% of cash dividends, if applicable, or
distributions or the amount of the cash principal and interest payments
received since April 23, 1999 by Isle of Capri or any Restricted
Subsidiary from any Unrestricted Subsidiary or in respect of any
Investment constituting a Restricted Payment (other than dividends, if
applicable, or distributions to pay obligations owed to a Person other
than Isle of Capri or any Restricted Subsidiary by or with respect to
such Unrestricted Subsidiary, such as income taxes) until the entire
amount of the Investment in such Unrestricted Subsidiary has been
received or the entire amount of such Investment constituting a
Restricted Payment has been returned, as the case may be, and 50% of
such amounts thereafter;
provided that, if no Default or Event of Default shall have occurred and be
continuing at the time of and after giving effect to such Restricted
Payment, the foregoing provisions will not prohibit
(w) the payment of any dividend within 60 days after the date of its
declaration if, at the date of declaration, such payment would be
permitted by such provisions;
(x) the redemption or repurchase of any Capital Stock or
Indebtedness of Isle of Capri, including the new notes, if required by
any Gaming Authority or if determined, in the good faith judgment of
the Board of Directors, to be necessary to prevent the loss or to
secure the grant or reinstatement of any gaming license or other right
to conduct lawful gaming operations;
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(y) the repurchase of Capital Stock from directors, officers and
employees (or their respective estates or beneficiaries) upon death,
disability, retirement or termination of employment up to an amount not
to exceed an aggregate of $2.0 million in any fiscal year of Isle of
Capri; and
(z) Permitted Investments.
The full amount of any Restricted Payment made pursuant to the foregoing
clause (w) or clause (x) or clause (2) of the definition of Permitted
Investments, however, will be included in the calculation of the aggregate
amount of Restricted Payments available to be made pursuant to clause (c)
above.
Limitation on Dividends and Other Payment Restrictions Affecting Restricted
Subsidiaries. Isle of Capri may not, directly or indirectly, and may not permit
any Restricted Subsidiary to, directly or indirectly, create or otherwise cause
or suffer to exist or enter into any agreement with any Person that would cause
any consensual encumbrance or restriction of any kind on the ability of any
Restricted Subsidiary to
(1) pay dividends, in cash or otherwise, or make any other distributions
on its Capital Stock or any other interest or participation in, or measured
by, its profits owned by, or pay any Indebtedness owed to, Isle of Capri or
a Restricted Subsidiary;
(2) make any loans or advances to Isle of Capri or any Restricted
Subsidiary; or
(3) transfer any of its properties or assets to Isle of Capri or any
Restricted Subsidiary, except in each case for
(a) restrictions imposed by the notes, the indenture and the
Subsidiary Guarantees;
(b) customary non-assignment provisions restricting subletting or
assignment of any lease entered into in the ordinary course of
business, consistent with industry practices;
(c) restrictions imposed by applicable gaming laws or any applicable
Gaming Authority;
(d) restrictions under any agreement relating to any property,
assets or business acquired by Isle of Capri or its Restricted
Subsidiaries, which restrictions existed at the time of acquisition,
were not put in place in anticipation of such acquisition and are not
applicable to any Person other than the Person acquired, or to any
property, assets or business other than the property, assets and
business of the Person acquired;
(e) any such contractual encumbrance in existence as of April 23,
1999 or imposed by or in connection with the incurrence of any FF&E
Financing or Capitalized Lease Obligations permitted pursuant to clause
(2)(d) of the covenant described under the subheading "Limitation on
Indebtedness," provided such encumbrance does not have the effect of
restricting the payment of dividends to Isle of Capri or any Restricted
Subsidiary or the payment of Indebtedness owed to Isle of Capri or any
Restricted Subsidiary or reducing the amount of any such dividends or
payments;
(f) any restrictions with respect to Capital Stock or assets,
respectively, of a Restricted Subsidiary of Isle of Capri imposed
pursuant to an agreement that has been entered into for the sale or
disposition of all or substantially all of the Capital Stock or assets
of such Restricted Subsidiary;
(g) restrictions imposed by the Senior Credit Facility; and
(h) replacements of restrictions imposed pursuant to clauses (a)
through (g) that are no more restrictive than those being replaced.
Limitation on Asset Sales and Events of Loss. Isle of Capri may not,
directly or indirectly, and may not permit any Restricted Subsidiary to,
directly or indirectly, make any Asset Sale unless
(1) at the time of such Asset Sale, Isle of Capri or such Restricted
Subsidiary, as the case may be, receives consideration at least equal to
the Fair Market Value of the assets sold or otherwise disposed of;
(2) the proceeds therefrom consist of at least 75% cash or Cash
Equivalents; and
(3) no Default or Event of Default shall have occurred and be continuing
at the time of or after giving pro forma effect to such Asset Sale.
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Isle of Capri and its Restricted Subsidiaries may, on or before the 180th
day after the date on which Isle of Capri or such Restricted Subsidiary
consummates an Asset Sale or suffers an Event of Loss, apply 100% of the Net
Cash Proceeds therefrom to either (1) prepay, repay, redeem or purchase and
permanently reduce the commitments under any Senior Indebtedness or (2) make a
Permitted Related Investment or enter into a binding agreement to make a
Permitted Related Investment. The amount of such Net Cash Proceeds not so
applied to either prepay, repay, redeem or purchase any Senior Indebtedness or
make a Permitted Related Investment will constitute "Excess Sale/Loss
Proceeds." When the aggregate amount of Excess Sale/Loss Proceeds equals $10.0
million, Isle of Capri is obligated to make an offer to purchase (a "Excess
Sale/Loss Proceeds Offer") from all holders of the notes in accordance with
the procedures set forth in the indenture up to a maximum principal amount
(expressed as a multiple of $1,000) of notes equal to such Excess Sale/Loss
Proceeds, less the accrued and unpaid interest on such notes. The offer price
for the notes will be payable in cash in an amount equal to 100% of the
principal amount of the notes plus accrued and unpaid interest, if any, to the
date of repurchase. Each Excess Sale/Loss Proceeds Offer shall remain open for
a period of at least 20 business days. To the extent an Excess Sale/Loss
Proceeds Offer is not fully subscribed to by the holders of the notes, Isle of
Capri may retain such unutilized portion of the Excess Sale/Loss Proceeds for
any application or use not prohibited by the terms of the indenture.
Limitation on Disposition of Stock of Restricted Subsidiaries. Isle of
Capri shall not, and shall not permit any Restricted Subsidiary to, directly
or indirectly, issue, transfer, convey, sell, lease or otherwise dispose of
any shares of Capital Stock of a Restricted Subsidiary to any Person (other
than to Isle of Capri or a wholly owned Subsidiary), unless (1) (a) such
transfer, conveyance, sale, lease or other disposition is of all of the
Capital Stock of such Restricted Subsidiary or (b) after giving effect to such
transfer, conveyance, sale, lease or other disposition, Isle of Capri or the
applicable Subsidiary Guarantor remains the owner of a majority of the Capital
Stock of such Restricted Subsidiary and (2) the Net Cash Proceeds from such
transfer, conveyance, sale, lease or other disposition are applied in
accordance with the covenant described under the subheading "Limitation on
Asset Sales and Events of Loss." No Restricted Subsidiary shall issue any
preferred stock or other Capital Stock having a preference as to dividends,
upon liquidation or otherwise over the Capital Stock of such Restricted
Subsidiary owned, directly or indirectly, by Isle of Capri.
Limitation on Transactions with Affiliates. Isle of Capri may not, and Isle
of Capri may not permit, cause or suffer any Restricted Subsidiary to, conduct
any business or enter into any transaction or series of transactions
(including, without limitation, the sale, transfer, disposition, purchase,
exchange, lease or use of assets, property or services) or enter into any
contract, agreement, understanding, loan, advance or guarantee with or for the
benefit of any of their respective Affiliates, including, without limitation,
any Unrestricted Subsidiary, other than Isle of Capri or another Restricted
Subsidiary (each an "Affiliate Transaction"), except
(1) such transactions that are set forth in writing and are entered into
in good faith and on terms that are no less favorable to Isle of Capri or
such Restricted Subsidiary, as the case may be, than those that could have
been obtained in a comparable transaction on an arm's-length basis from a
Person not an Affiliate of Isle of Capri or such Restricted Subsidiary or,
if in the reasonable opinion of a majority of the Independent directors of
Isle of Capri, such standard is inapplicable to the subject Affiliate
Transaction, then such Affiliate Transaction is fair to Isle of Capri or
the Restricted Subsidiary, as the case may be (or to the stockholders as a
group in the case of a pro rata dividend or other distribution to
stockholders permitted under the subheading "Limitation on Restricted
Payments"), from a financial point of view;
(2) such transactions that were existing as of April 23, 1999; and
(3) reasonable and customary compensation and indemnification of
directors, officers and employees.
In addition, Isle of Capri and its Restricted Subsidiaries may not enter
into any Affiliate Transaction (or series of related Affiliate Transactions
that are part of a common plan) under clause (1) above involving aggregate
payments or other Fair Market Value
(1) in excess of $5.0 million unless, prior to the consummation thereof,
the transaction is approved by the Board of Directors of Isle of Capri,
including a majority of the disinterested directors, such
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approval to be evidenced by a Board Resolution delivered to the trustee
with an Officers' Certificate stating that the Board of Directors has
determined that the Affiliate Transaction complies with clause (1) above;
and
(2) in excess of $15.0 million unless, prior to the consummation
thereof, Isle of Capri shall have received an opinion, from an independent
nationally recognized firm experienced in the appraisal or similar review
of similar types of transactions, that such transaction or series of
related transactions is on terms which are fair, from a financial point of
view, to Isle of Capri or such Restricted Subsidiary.
Change In Nature of Business. Isle of Capri may not, and may not permit any
of its Restricted Subsidiaries to, own, manage or conduct any operation other
than a Permitted Line of Business.
Consolidation, Merger, Conveyance, Transfer or Lease. Neither Isle of Capri
nor any Restricted Subsidiary may consolidate with or merge with or into or
sell, assign, convey, lease or transfer all or substantially all of its
properties and assets to any Person or group of affiliated Persons in a single
transaction or through a series of transactions, except that:
(1) Isle of Capri may consolidate with or merge with or into or sell,
assign, convey, lease or transfer all or substantially all of its
properties and assets to any Person or group of affiliated Persons in a
single transaction or through a series of transactions if:
(a) Isle of Capri is the continuing Person or the resulting,
surviving or transferee Person (the "surviving entity") is a
corporation organized and existing under the laws of the United States
or any State thereof or the District of Columbia;
(b) the surviving entity expressly assumes, by a supplemental
indenture or similar instrument executed and delivered to the trustee,
in form and substance reasonably satisfactory to the trustee, all of
the obligations of Isle of Capri under the notes and the indenture;
(c) immediately before and immediately after giving pro forma effect
to such transaction, or series of transactions (including, without
limitation, any Indebtedness incurred or anticipated to be incurred in
connection with or in respect of such transaction or series of
transactions), no Default or Event of Default shall have occurred and
be continuing;
(d) if the transaction or series of transactions involves Isle of
Capri, Isle of Capri or the surviving entity, immediately before and
after giving effect to such transaction or series of transactions
(including, without limitation, any Indebtedness incurred or
anticipated to be incurred in connection with or in respect of the
transaction or series of transactions), has a Consolidated Net Worth
equal to or greater than the Consolidated Net Worth of Isle of Capri
immediately prior to such transaction or series of transactions;
(e) if the transaction or series of transactions involves Isle of
Capri, immediately after giving effect to such transaction or series of
transactions on a pro forma basis, Isle of Capri or the surviving
entity could incur at least $1.00 of Indebtedness pursuant to the
covenant described under the subheading "Limitation on Indebtedness"
(other than under clauses (2)(a) through (2)(h) thereof);
(f) Isle of Capri or the surviving entity has delivered to the
trustee an Officers' Certificate stating that such consolidation,
merger, conveyance, transfer or lease and, if a supplemental indenture
is required in connection with such transaction or series of
transactions, such supplemental indenture complies with this covenant
and that all conditions precedent in the indenture relating to the
transaction or series of transactions have been satisfied;
(g) such transaction will not result in the loss of any gaming or
other license necessary for the continued operation of any Restricted
Subsidiary as conducted immediately prior to such consolidation,
merger, conveyance, transfer or lease;
(h) if any property of Isle of Capri or any Restricted Subsidiary
would thereupon become subject to any Lien, the covenant described
under the subheading "Limitation on Liens" is complied with; and
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(2) a Restricted Subsidiary may consolidate with or merge into or sell,
assign, convey, lease or transfer all or substantially all of its
properties and assets to Isle of Capri or to any Restricted Subsidiary if:
(a) the surviving entity is Isle of Capri or a Restricted
Subsidiary;
(b) the surviving entity expressly assumes, by a supplemental
indenture or similar instrument executed and delivered to the trustee,
in form and substance reasonably satisfactory to the trustee, all of
the obligations of such Restricted Subsidiary under the notes, the
Subsidiary Guarantees, if applicable, and the indenture; and
(c) such transaction will not result in the loss of any gaming or
other license necessary for the continued operation of any Restricted
Subsidiary as conducted immediately prior to such sale, assignment,
conveyance, transfer or lease.
Reports To Holders Of New Notes. Whether or not Isle of Capri is subject to
the periodic reporting requirements under the Securities Exchange Act of 1934,
it shall deliver to the trustee and each holder of new notes (1) all quarterly
and annual financial information that would be required to be contained in a
filing with the Commission on Forms 10-Q and 10-K if Isle of Capri was required
to file such forms, including a "Management's Discussion and Analysis of
Financial Condition and Results of Operations" that describes the financial
condition and results of operations of Isle of Capri and its Consolidated
Subsidiaries (provided that, such reports shall show in reasonable detail,
either on the face of the financial statements or in the footnotes thereto, the
financial condition and results of operations of Isle of Capri and its
Significant Restricted Subsidiaries separate from the financial condition and
results of operations of the Unrestricted Subsidiaries and other Subsidiaries
of Isle of Capri that are not Subsidiary Guarantors with such reasonable detail
as required by the Securities and Exchange Commission or as would be required
by the Securities and Exchange Commission if Isle of Capri was subject to the
periodic reporting requirements of the Securities Exchange Act of 1934) and,
with respect to the annual information only, a report thereon by Isle of
Capri's certified independent accountants and (2) all current reports that
would be required to be filed with the Securities and Exchange Commission on
Form 8-K if Isle of Capri was required to file such reports, in each case
within the time periods specified in the Securities and Exchange Commission's
rules and regulations. Following the consummation of this exchange offer,
whether or not required by the rules and regulations of the Securities and
Exchange Commission, Isle of Capri will file a copy of all such information and
reports with the Securities and Exchange Commission for public availability
within the time periods specified in the Securities and Exchange Commission's
rules and regulations (unless the Securities and Exchange Commission will not
accept such a filing) and make such information available to securities
analysts and prospective investors upon request. In addition, Isle of Capri has
agreed that, for so long as any notes remain outstanding, it will furnish to
the holders of the notes and to securities analysts and prospective investors,
upon their request, the information required to be delivered pursuant to Rule
144A(d)(4) under the Securities Act of 1933.
Limitation on Other Senior Subordinated Indebtedness. Isle of Capri shall
not, and shall not cause or permit any of the Restricted Subsidiaries to,
create, incur, assume, guarantee or in any other manner become liable with
respect to any Indebtedness other than the notes and the Subsidiary Guarantees
that is subordinate in right of payment to any Senior Indebtedness of Isle of
Capri or such Restricted Subsidiary, as applicable, unless such Indebtedness is
either (1) equal right of payment with the notes or the Subsidiary Guarantee,
as applicable, or (2) subordinate in right of payment to the notes or the
Subsidiary Guarantee, as applicable, in the same manner and at least to the
same extent as the notes are subordinated to Senior Indebtedness of Isle of
Capri or as such Subsidiary Guarantee is subordinated to Senior Indebtedness of
such Subsidiary Guarantor, as applicable.
Events of Default and Remedies
Events of Default. Any one of the following events will be an "Event of
Default" under the terms of the indenture:
(1) a default in the payment of any interest on the notes when it
becomes due and payable and the continuance of any such default for a
period of 30 days; or
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(2) a default in the payment of the principal of or premium, if any, on
the notes when due at maturity, upon acceleration, optional redemption,
required repurchase or otherwise; or
(3) the default by Isle of Capri or any Subsidiary Guarantor in the
performance, or breach, of any term, covenant or agreement in the indenture
(other than defaults specified in clause (1) or (2) above or clause (4)
below), and the continuance of such default or breach for a period of 30
days after written notice to Isle of Capri by the trustee or to Isle of
Capri and the trustee by the holders of at least 25% in aggregate principal
amount of the outstanding notes; or
(4) the default by Isle of Capri or any Subsidiary Guarantor in the
performance, or breach, of the covenant described under the subheading
"Certain Covenants--Consolidation, Merger, Conveyance, Transfer or Lease";
the failure of Isle of Capri to make or consummate an Excess Sale/Loss
Proceeds Offer in accordance with the covenant described under the
subheading "Certain Covenants--Limitation on Asset Sales and Events of
Loss"; or the failure of Isle of Capri to make or consummate a Change of
Control Offer in accordance with the provisions described under the
subheading "Redemption and Repurchase Offers--Change of Control Repurchase
Offer"; or
(5) the failure by Isle of Capri or any Restricted Subsidiary, after any
applicable grace period, to make any payment when due of principal of,
premium in respect of or interest on any other Indebtedness, other than
Non-Recourse Indebtedness, in an aggregate principal amount of $10.0
million or more, or the acceleration of the maturity of other Indebtedness,
other than Non-Recourse Indebtedness, in an aggregate principal amount of
$10.0 million or more for any other reason; or
(6) one or more final judgments, orders or decrees for the payment of
money not covered by insurance in excess of $10.0 million, either
individually or in an aggregate amount, shall be entered against Isle of
Capri or any Restricted Subsidiary or any of their respective properties
and not discharged, and there shall have been a period of 60 days during
which a stay of enforcement of such judgment or order, by reason of pending
appeal or otherwise, shall not be in effect; or
(7) certain events of bankruptcy, insolvency or reorganization with
respect to Isle of Capri or any of its Significant Restricted Subsidiaries
shall have occurred; or
(8) the revocation, termination, suspension or cessation to be effective
of any gaming license or other right to conduct lawful gaming operations at
any Casino in any jurisdiction of Isle of Capri or any Subsidiary which
shall continue for more than 90 consecutive days other than the voluntary
relinquishment of any such gaming license or right if, in the reasonable
opinion of Isle of Capri (as evidenced by an Officers' Certificate) such
relinquishment (a) is in the best interest of Isle of Capri and its
Subsidiaries, taken as a whole and (b) does not adversely affect the
holders of the notes in any material respect and (c) is not reasonably
expected to have, nor are the reasons therefor reasonably expected to have,
any material adverse effect on the effectiveness of any gaming license or
similar right, or any right to renewal thereof, or on the prospective
receipt of any such license or right, in each case, in Mississippi,
Louisiana or such other jurisdiction in which any Material Operations of
Isle of Capri or its Subsidiaries are located; or
(9) any of (a) a default or material breach by any Restricted Subsidiary
of its obligations under any Subsidiary Guarantee which continues for a
period of 30 days after written notice to Isle of Capri by the trustee or
to Isle of Capri and the trustee by the holders of at least 25% in
aggregate principal amount of the outstanding notes, (b) the repudiation by
any Restricted Subsidiary of its obligations under the Subsidiary
Guarantees or (c) a judgment or decree by a court or governmental agency of
competent jurisdiction declaring the unenforceability of the payment
obligations under the Subsidiary Guarantee.
Acceleration. If an Event of Default other than an Event of Default
specified in clause (7) above occurs, then the trustee or the holders of at
least 25% in aggregate principal amount of the outstanding notes may, by
written notice, and the trustee upon the request of the holders of not less
than 25% in aggregate principal amount of the outstanding notes is obligated
to, declare the principal of and accrued interest on all the notes to be due
and payable immediately, provided that so long as the Senior Credit Facility is
in effect, such acceleration shall not be effective until the earlier of (1)
five business days following the delivery of notice of acceleration to the
agent under the Senior Credit Facility and (2) the acceleration of any
Indebtedness under the
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Senior Credit Facility. If an Event of Default specified in clause (7) above
occurs, then the principal of and accrued interest on all the notes ipso facto
becomes and is immediately due and payable without any declaration or other act
on the part of the trustee or any holder.
After a declaration of acceleration, the holders of a majority in aggregate
principal amount of outstanding notes may, by notice to the trustee, rescind
such declaration of acceleration if all existing Events of Default have been
cured or waived, other than nonpayment of principal of and accrued interest on
the notes that has become due solely as a result of such acceleration and if
the rescission of acceleration would not conflict with any judgment or decree.
The holders of a majority in aggregate principal amount of the outstanding
notes also have the right to waive past defaults under the indenture except a
default in the payment of the principal of or interest on any note, or in
respect of a covenant or a provision which cannot be modified or amended
without the consent of all holders.
In the event of a declaration of acceleration in respect of the notes
because an Event of Default specified in clause (5) above shall have occurred
and be continuing, such declaration of acceleration shall be automatically
annulled if the Indebtedness that is the subject of such Event of Default has
been discharged or the holders thereof have rescinded their declaration of
acceleration in respect of such Indebtedness, and written notice of such
discharge or rescission, as the case may be, shall have been given to the
trustee by Isle of Capri and countersigned by the holders of such Indebtedness
or a trustee, fiduciary or agent for such holders, within 30 days after such
declaration of acceleration in respect of the notes, and no other Event of
Default has occurred during such 30-day period which has not been cured or
waived during such period.
No holder of any of the notes has any right to institute any proceeding with
respect to the indenture or any remedy thereunder, unless the holders of at
least 25% in aggregate principal amount of the outstanding notes have made
written request, and offered reasonable indemnity, to the trustee to institute
such proceeding as trustee, the trustee has failed to institute such proceeding
within 15 days after receipt of such notice and the trustee has not within such
15-day period received directions inconsistent with such written request by
holders of a majority in aggregate principal amount of the outstanding notes.
Such limitations do not apply, however, to a suit instituted by a holder of a
note for the enforcement of the payment of the principal of, premium, if any,
or accrued interest on, such note on or after the Stated Maturity thereof.
Defeasance
Isle of Capri may at any time terminate all of its obligations with respect
to the notes ("defeasance"), except for certain obligations, including those
regarding any trust established for a defeasance and obligations to register
the transfer or exchange of the notes, to replace mutilated, destroyed, lost or
stolen notes and to maintain agencies in respect of notes. Isle of Capri may at
any time terminate its obligations under certain covenants set forth in the
indenture, including all of those described under the subheading "Certain
Covenants," and any omission to comply with such obligations will not
constitute a Default or an Event of Default with respect to the notes issued
under the indenture ("covenant defeasance"). In order to exercise either
defeasance or covenant defeasance, Isle of Capri must irrevocably deposit with
the trustee, in trust, for the benefit of the holders of the notes, money or
United States Government Obligations, or a combination thereof, in such amounts
as will be sufficient to pay the principal of and premium, if any, and interest
on the notes to redemption or maturity, together with all other sums payable by
it under the indenture, and comply with certain other conditions, including the
delivery of an opinion as to certain tax matters. Defeasance of the notes will
result in the termination of the obligations of the Subsidiary Guarantors under
their respective Subsidiary Guarantees.
Satisfaction and Discharge
The indenture will be discharged and will cease to be of further effect,
except as to surviving rights or registration of transfer or exchange of notes,
as to all outstanding notes when either
(1) all notes theretofore authenticated and delivered (except lost,
stolen or destroyed notes which have been replaced or paid and notes for
whose payment money has theretofore been deposited in trust or
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segregated and held in trust by Isle of Capri and thereafter repaid to Isle
of Capri or discharged from such trust) have been delivered to the trustee
for cancellation; or
(2)(a) all such notes not theretofore delivered to the trustee for
cancellation have become due and payable and Isle of Capri has irrevocably
deposited or caused to be deposited with the trustee as trust funds in
trust for this purpose an amount of money sufficient to pay and discharge
the entire Indebtedness on the notes not theretofore delivered to the
trustee for cancellation, for principal, premium, if any, and accrued
interest to the date of such deposit;
(b) Isle of Capri has paid all sums payable by it under the indenture;
and
(c) Isle of Capri has delivered irrevocable instructions to the trustee
to apply the deposited money toward the payment of the notes at maturity or
the redemption date, as the case may be. In addition, Isle of Capri must
deliver an Officers' Certificate and an Opinion of Counsel stating that all
conditions precedent to satisfaction and discharge have been complied with.
Amendments and Waivers
From time to time Isle of Capri, when authorized by resolutions of its Board
of Directors, and the trustee may, without the consent of the holders of the
notes, amend, waive or supplement the indenture, the notes or the Subsidiary
Guarantees for certain specified purposes, including, among other things,
curing ambiguities, defects or inconsistencies and making any change that does
not adversely affect the rights of any holder. Other amendments and
modifications of the indenture or the notes may be made by Isle of Capri and
the trustee with the consent of the holders of not less than a majority of the
aggregate principal amount of the outstanding notes; provided that no such
modification or amendment may, without the consent of the holder of each
outstanding new note affected thereby,
(1) reduce the principal amount outstanding of, change the Stated
Maturity of, or alter the redemption provisions of, the notes;
(2) change the currency in which any notes or any premium or the accrued
interest thereon is payable;
(3) reduce the percentage in principal amount outstanding of notes whose
holders must consent to an amendment, supplement or waiver or consent to
take any action under the indenture or the notes;
(4) impair the right to institute suit for the enforcement of any
payment on or with respect to the notes;
(5) modify the ability to waive defaults or specified covenants, except
to increase the percentage of notes required to effect a waiver;
(6) reduce the rate of or change the time for, payment of interest on
the notes;
(7) modify or change any provision of the indenture or the related
definitions affecting the subordination or ranking of the notes or any
Subsidiary Guarantee in any manner that materially and adversely affects
the holders; or
(8) amend, change or modify the obligation of Isle of Capri to make and
consummate a Change of Control Offer in the event of a Change of Control or
make and consummate an Excess Sale/Loss Proceeds Offer with respect to any
Asset Sale or Event of Loss or modify any of the provisions or definitions
with respect thereto.
In addition to the foregoing, no modification or amendment may, without the
consent of the holders of at least 66 2/3% of the aggregate principal amount of
the outstanding notes, modify the terms of or release any of the Subsidiary
Guarantees except as provided under the subheading "Subsidiary Guarantees" and
"Restricted and Unrestricted Subsidiaries."
Regarding the Trustee
State Street Bank and Trust Company is the trustee under the indenture.
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Definitions
Set forth below are the meanings of some of the terms that are important in
understanding the above description of the new notes and the terms contained in
the indenture.
"Acquired Indebtedness" means Indebtedness of a Person existing at the time
such Person becomes a Subsidiary of Isle of Capri or that is assumed in
connection with an Asset Acquisition by such Person, but not Indebtedness
incurred in connection with, or in anticipation of, such Person becoming a
Subsidiary of Isle of Capri or such acquisition.
"Affiliate" of any Person means any other Person that, directly or
indirectly, controls, is controlled by or is under direct or indirect common
control with, such Person and with respect to any natural Person, any other
immediate family member of such natural Person. For the purposes of this
definition, "control" when used with respect to any Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of Voting Stock or other equity interests, by
contract or otherwise, and the terms "controlling" and "controlled" have
meanings correlative to the foregoing; provided that, in any event, any Person
that owns directly or indirectly 10% or more of the securities having ordinary
voting power for the election of directors or other governing body of a
corporation or 10% or more of the partnership or other ownership interests of
any other Person (other than as a limited partner of such other Person) will be
deemed to control such corporation or other Person.
"Airplane" means the King Air 200 airplane owned by Isle of Capri on April
23, 1999.
"Asset Acquisition" means (1) any capital contribution (including, without
limitation, transfers of cash or other property to others or payments for
property or services for the account or use of others, or otherwise), or
purchase or acquisition of Capital Stock or other similar ownership or profit
interest, by Isle of Capri or any of its Subsidiaries in any other Person, in
either case pursuant to which such Person shall become a Subsidiary of Isle of
Capri or any of its Subsidiaries or shall be merged with or into Isle of Capri
or any of its Subsidiaries or (2) any acquisition by Isle of Capri or any of
its Subsidiaries of the assets of any Person which constitute substantially all
of an operating unit or business of such Person.
"Assets Held for Sale or Development" means
(1) the FFC Preferred Stock;
(2) the Airplane;
(3) the Real Estate Options;
(4) the Cripple Creek Land; and
(5) the Discontinued Assets.
"Asset Sale" means any direct or indirect sale, conveyance, transfer, lease
(other than an operating lease relating to assets the fair market value of
which, determined in the good faith judgment of the Board of Directors, does
not exceed $2.0 million) assignment, issuance or other disposition (including,
without limitation, by means of a sale-leaseback transaction) by Isle of Capri
or any Restricted Subsidiary to any Person (other than Isle of Capri or a
wholly owned Restricted Subsidiary), in one transaction or a series of related
transactions, of
(1) any Capital Stock of any Restricted Subsidiary or other similar
equity interest; or
(2) any other property or asset of Isle of Capri or any Restricted
Subsidiary other than
(a) Assets Held for Sale or Development;
(b) any Excess Land;
(c) current assets, as defined in accordance with GAAP, in the
ordinary course of business;
(d) damaged, worn out or other obsolete property in the ordinary
course of business if such property is no longer necessary for the
proper conduct of such business;
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(e) property no longer used or useful in the ordinary course of
business or property replaced with similar property of similar utility
in the ordinary course of business;
(f) each other disposition (or series of related dispositions) that
results in Net Cash Proceeds to Isle of Capri and its Restricted
Subsidiaries of less than or equal to $1.0 million; and
(g) an Investment permitted under the covenant described under the
subheading "Certain Covenants--Limitation on Restricted Payments" or a
disposition made in accordance with the covenant described under the
subheading "Certain Covenants--Consolidation, Merger, Conveyance,
Transfer or Lease."
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of Isle of Capri to have been duly adopted by the
Board of Directors of Isle of Capri or any duly authorized committee thereof
and to be in full force and effect on the date of such certification, and
delivered to the trustee.
"Capital Stock" means, with respect to any Person, any and all shares,
interests (including partnership and other equity interests), participations,
rights in or other equivalents (however designated and whether voting or
nonvoting) of, such Person's capital stock, whether outstanding on April 23,
1999 or issued after such date, and any and all rights, warrants or options
exchangeable for or convertible into such capital stock.
"Capitalized Lease Obligation" means any obligation to pay rent or other
amounts under a lease of (or other agreement conveying the right to use) any
property, whether real, personal or mixed, that is required to be classified
and accounted for as a capital lease obligation under GAAP and, for the purpose
of the indenture, the amount of such obligation at any date of determination
shall be the capitalized amount thereof at such date, determined in accordance
with GAAP.
"Cash Equivalents" means any of the following, to the extent owned by Isle
of Capri or any of its Restricted Subsidiaries free and clear of all Liens and
having a maturity of not greater than 270 days from the date of acquisition:
(1) any evidence of Indebtedness issued or directly and fully guaranteed
or insured by the United States of America or any agency or instrumentality
thereof (provided that the full faith and credit of the United States of
America is pledged in support thereof);
(2) insured certificates of deposit or acceptances of any commercial
bank that is a member of the Federal Reserve System, that issues (or the
parent of which issues) commercial paper rated as described in clause (3)
below and that has combined capital and surplus and undivided profits of
not less than $500.0 million;
(3) commercial paper issued by a corporation (except an Affiliate of
Isle of Capri) organized under the laws of any state of the United States
or the District of Columbia and rated at least A-1 or the then equivalent
grade by Standard & Poor's Corporation or at least Prime-1 or the then
equivalent grade by Moody's Investors Service, Inc.; and
(4) repurchase agreements and reverse repurchase agreements relating to
marketable direct obligations issued or unconditionally guaranteed by the
United States government or any agency or other instrumentality thereof
(provided that the full faith and credit of the United States of America is
pledged in support thereof), provided that the terms of such repurchase and
reverse repurchase agreements comply with the guidelines set forth in the
Federal Financial Agreements of Depository Institutions with Securities
Dealers and Others, as adopted by the Comptroller of the Currency.
"Casino" means a gaming establishment owned by Isle of Capri or a Restricted
Subsidiary and containing at least 600 slot machines and 10,000 square feet of
space dedicated to the operation of games of chance.
"Casino Hotel" means any hotel or similar hospitality facility with at least
100 rooms owned by Isle of Capri or a Restricted Subsidiary and serving a
Casino.
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"Casino Related Facility" means any building, restaurant, theater,
amusement park or other entertainment facility, parking or recreational
vehicle facilities or retail shops located at or adjacent to, and directly
ancillary to, a Casino and used or to be used in connection with such Casino,
other than a Casino Hotel.
"Change of Control" means an event or series of events by which:
(1) any "person" or "group" (as such terms are used in Section 13(d) and
14(d) of the Securities Exchange Act of 1934) (other than the Permitted
Equity Holders) is or becomes the "beneficial owner" (as defined in Rules
13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a
person or group shall be deemed to have "beneficial ownership" of all
shares that any such person or group has the right to acquire, whether such
right is exercisable immediately or only after the passage of time),
directly or indirectly, of securities representing the greater of
(a) that percentage of the combined voting power of Isle of Capri's
outstanding Voting Stock held by Permitted Equity Holders (including
shares as to which Isle of Capri or a Permitted Equity Holder holds an
effective proxy to vote); or
(b) 35% or more of the combined voting power of Isle of Capri's
outstanding Voting Stock;
but excluding in each case from the percentage of voting power held by any
group, the voting power of shares owned by the Permitted Equity Holders who
are deemed to be members of the group provided that such Permitted Equity
Holders beneficially own a majority of the voting power of the Voting Stock
held by such group, and at such time the Permitted Equity Holders together
shall fail to beneficially own, directly or indirectly, securities
representing at least the same percentage of voting power of such Voting
Stock as the percentage "beneficially owned" by such person or group; or
(2) during any period of 24 consecutive months, individuals who at the
beginning of such period constituted the Board of Directors (together with
any new or replacement directors whose election by the Board of Directors,
or whose nomination for election by Isle of Capri's shareholders, was
approved by a vote of at least a majority of the directors then still in
office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for
any reason to constitute a majority of the directors then in office; or
(3) Isle of Capri consolidates with or merges with or into any Person or
conveys, transfers or leases all or substantially all of its assets to any
Person, pursuant to a transaction in which the outstanding Voting Stock of
Isle of Capri is changed into or exchanged for cash, securities or other
property (other than any such transaction where the outstanding Voting
Stock of Isle of Capri is (a) changed only to the extent necessary to
reflect a change in the jurisdiction of incorporation of Isle of Capri or
(b) is exchanged for (i) Voting Stock of the surviving corporation which is
not Disqualified Stock or (ii) cash, securities and other property (other
than Capital Stock of the surviving corporation) in an amount which could
be paid by Isle of Capri as a Restricted Payment as described under the
subheading "Certain Covenants--Limitation on Restricted Payments" (and such
amount shall be treated as a Restricted Payment) and no person or group,
other than Permitted Equity Holders, including any Permitted Equity Holders
who are part of a group where such Permitted Equity Holders beneficially
own a majority of the voting power of the Voting Stock held by such group,
owns immediately after such transaction, directly or indirectly, more than
35% of the combined voting power of the outstanding Voting Stock of the
surviving corporation; or
(4) Isle of Capri is liquidated or dissolved or adopts a plan of
liquidation or dissolution other than in a transaction which complies with
the provisions described under the subheading "Certain Covenants--
Consolidation, Merger, Conveyance, Transfer or Lease."
"Consolidated" refers to the consolidation of accounts in accordance with
GAAP.
"Consolidated Cash Flow" means, for any period, the sum of
(1) the Consolidated Net Income of Isle of Capri and its Restricted
Subsidiaries for such period; plus
(2) the sum of the following items to the extent deducted in determining
Consolidated Net Income in accordance with GAAP and without duplication:
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(a) all Consolidated Interest Expense;
(b) Consolidated Non-cash Charges;
(c) Consolidated Income Tax Expense;
(d) all extraordinary losses as determined in accordance with GAAP;
and
(e) any pre-opening expenses.
"Consolidated Coverage Ratio" means the ratio of
(1) Consolidated Cash Flow of Isle of Capri and its Restricted
Subsidiaries for the period (the "Reference Period") consisting of the four
full fiscal quarters for which financial statements are available that
immediately precede the date of the transaction or other circumstances
giving rise to the need to calculate the Consolidated Coverage Ratio (the
"Transaction Date") to
(2) the Consolidated Interest Expense for such Reference Period based
upon the pro forma amount of Indebtedness of Isle of Capri and its
Restricted Subsidiaries outstanding on the Transaction Date and after
giving effect to the transaction in question, unless otherwise provided in
the indenture.
For purposes of this definition, if the Transaction Date occurs before the
date on which Isle of Capri's consolidated financial statements for the four
full fiscal quarters after April 23, 1999 are available, Consolidated Cash Flow
and Consolidated Interest Expense shall be calculated, in the case of Isle of
Capri and its Restricted Subsidiaries, after giving effect on a pro forma basis
as if the notes outstanding on the Transaction Date were issued on the first
day of such four full fiscal quarter period.
In addition, Consolidated Cash Flow and Consolidated Interest Expense shall
be calculated after giving effect on a pro forma basis for the period of such
calculation to
(1) the incurrence or retirement of any Indebtedness of Isle of Capri
and its Restricted Subsidiaries at any time during the Reference Period or
subsequent to such Reference Period but prior to the Transaction Date,
including, without limitation, the incurrence of the Indebtedness giving
rise to the need to make such calculation (unless otherwise provided in the
indenture), as if such Indebtedness were incurred or retired on the first
day of the Reference Period; provided that if Isle of Capri or any of its
Restricted Subsidiaries directly or indirectly guarantees Indebtedness of a
third Person, the above clause shall give effect to the incurrence of such
guaranteed Indebtedness as if Isle of Capri or such Restricted Subsidiary
had directly incurred such guaranteed Indebtedness; and
(2) any Asset Sale, Event of Loss or Asset Acquisition (including,
without limitation, any Asset Acquisition giving rise to the need to make
such calculation as a result of Isle of Capri or any of its Restricted
Subsidiaries (including any Person who becomes a Subsidiary as result of
the Asset Acquisition) incurring Acquired Indebtedness) occurring during
the Reference Period or subsequent to such Reference Period but prior to
the Transaction Date, and any permanent prepayment, repayment, redemption,
purchase or retirement of Indebtedness in connection with such Asset Sale,
Event of Loss, Asset Acquisition, as if such Asset Sale, Event of Loss or
Asset Acquisition and/or retirement occurred on the first day of the
Reference Period.
Furthermore, in calculating Consolidated Interest Expense for purposes of
this "Consolidated Coverage Ratio," interest on Indebtedness determined on a
fluctuating basis shall be deemed to accrue at the rate in effect on the
Transaction Date for such entire period.
"Consolidated Income Tax Expense" means, as applied to any Person for any
period, federal, state, local and foreign income taxes (including franchise
taxes imposed in lieu of or as additional income tax) of such Person and its
Restricted Subsidiaries for such period, determined in accordance with GAAP;
provided, that for purposes hereof, "income taxes" shall specifically exclude
any taxes paid to or imposed by a Gaming Authority.
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"Consolidated Interest Expense" means as applied to any Person for any
period the sum of the following items, without duplication:
(1) the aggregate amount of interest recognized by such Person and its
Restricted Subsidiaries in respect of their Consolidated Indebtedness,
including all interest capitalized by such Person and its Restricted
Subsidiaries during such period and all commissions, discounts and other
similar fees and charges owed by such Person or any of its Restricted
Subsidiaries for letters of credit and bankers' acceptance financing and
the net costs associated with Interest Rate and Currency Protection
Obligations of such Person and its Restricted Subsidiaries, but excluding
other financing costs, amortization of deferred financing cost and debt
discount or premium;
(2) the aggregate amount of the interest component of rentals in respect
of Capitalized Lease Obligations recognized by such Person and its
Restricted Subsidiaries;
(3) to the extent any Indebtedness of any other Person is guaranteed by
such Person or any of its Restricted Subsidiaries, the aggregate amount of
interest paid or accrued by such other Person during such period
attributable to any such guaranteed Indebtedness;
(4) the interest portion of any deferred payment obligation;
(5) an amount equal to 1/3 of the base rental expense (i.e., not any
rent expense paid as a percentage of revenues) attributable to such Person
and its Restricted Subsidiaries; and
(6) the amount of dividends payable by such Person and its Restricted
Subsidiaries in respect of Disqualified Stock (other than such dividends
payable to such Restricted Subsidiaries).
"Consolidated Net Income" means, for any period, the aggregate of the
consolidated Net Income or net loss of Isle of Capri and its Restricted
Subsidiaries determined in accordance with GAAP, less (to the extent included
in such consolidated Net Income)
(1) the Net Income or net loss of any Person (the "other Person")
(a) other than a Restricted Subsidiary, except in each such case
such Net Income shall be included to the extent of the amount of
management fees or cash dividends or other cash distributions in
respect of Capital Stock or other interest owned actually paid (out of
funds legally available therefor) to and received by Isle of Capri or
its Restricted Subsidiaries, other than dividends, if applicable, or
other distributions to pay obligations of or with respect to such
Unrestricted Subsidiary, such as income taxes; or
(b) in which Isle of Capri or any of its Restricted Subsidiaries has
a joint interest with a third party (which interest of a third party
causes the Net Income or net loss of such other Person not to be
consolidated into the Net Income or net loss of Isle of Capri and its
Restricted Subsidiaries in accordance with GAAP), except in each such
case such Net Income or net loss shall be included to the extent of the
amount of management fees or cash dividends or other cash distributions
in respect of Capital Stock or other interest owned actually paid (out
of funds legally available therefor) to and received by Isle of Capri
or its Restricted Subsidiaries, other than dividends, if applicable, or
other distributions to pay obligations of or with respect to such
Unrestricted Subsidiary, such as income taxes;
(2) items classified as extraordinary, other than the tax benefit of the
utilization of net operating loss carry forwards or alternative minimum tax
credits;
(3) except to the extent includable in clause (1) above, the Net Income
or loss of any other Person accrued or attributable to any period before
the date on which it becomes a Restricted Subsidiary or is merged into or
consolidated with Isle of Capri or any of its Restricted Subsidiaries or
such other Person's property or Capital Stock (or a portion thereof) is
acquired by Isle of Capri or any of its Restricted Subsidiaries; and
(4) the Net Income of any Restricted Subsidiary to the extent that the
declaration of dividends or similar distributions by such Restricted
Subsidiary of that income is not at the time permitted, directly or
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indirectly, by operation of the terms of its charter or any agreement,
instrument, judgement, decree, order, statute, law, rule or governmental
regulations applicable to that Restricted Subsidiary or its stockholders.
"Consolidated Net Worth" means, at any date of determination, the sum of
(1) the consolidated equity of the common stockholders of such Person
and its Restricted Subsidiaries on such date plus
(2) the respective amounts reported on such Person's most recent balance
sheet with respect to any series of preferred stock (other than
Disqualified Stock) that by its terms is not entitled to the payment of
dividends unless such dividends may be declared and paid only out of net
earnings in respect of the year of such declaration and payment, but only
to the extent of any cash received by such Person upon issuance of such
preferred stock less
(a) all write-ups (other than write-ups resulting from foreign
currency translations and write-ups of tangible assets of a going
concern business made within 12 months after the acquisition of such
business) subsequent to the date of the indenture in the book value of
any asset owned by such Person or a Restricted Subsidiary of such
Person;
(b) all investments in Persons that are not Restricted Subsidiaries;
and
(c) all unamortized debt discount and expense and unamortized
deferred charges, all of the foregoing determined in accordance with
GAAP.
"Consolidated Non-cash Charges" of any Person means, for any period, the
aggregate depreciation, amortization and other non-cash charges of such Person
and its Restricted Subsidiaries on a consolidated basis for such period, as
determined in accordance with GAAP (excluding any non-cash charge which
requires an accrual or reserve for cash charges for any future period).
"Credit Facility" means one or more debt or commercial paper facilities
with banks or other institutional lenders (including the Senior Credit
Facility) providing for revolving credit loans, term loans or letters of
credit, in each case together with any amendments, supplements, modifications
(including by any extension of the maturity thereof), substitutions,
refinancings or replacements thereof by a lender or a syndicate of lenders in
one or more successive transactions (including any such transaction that
changes the amount available thereunder, replaces such agreement or document
or provides for other agents or lenders).
"Cripple Creek Land" means the real estate owned or leased by Isle of Capri
in Cripple Creek, Colorado.
"Default" means any Event of Default or an event that would constitute an
Event of Default but for the requirement that notice be given or time elapse
or both.
"Discontinued Assets" means the following assets held for sale by Isle of
Capri as of April 23, 1999:
(1) the Emerald Lady riverboat and the Diamond Lady riverboat;
(2) the Lucky Seven barge and one other barge (vessel number 511360);
and
(3) gaming equipment held for sale.
"Disqualified Stock" means, with respect to any Person, any Capital Stock
or other similar ownership or profit interest that, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is
exchangeable for Indebtedness, or is redeemable at the option of the holder
thereof, in whole or in part, on or before the Maturity Date of the notes.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Event of Loss" means, with respect to any property or asset (tangible or
intangible, real or personal) that has a Fair Market Value of $5.0 million or
more, any of the following:
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(1) any loss, destruction or damage of such property or asset;
(2) any institution of any proceedings for the condemnation or seizure
of such property or asset or for the exercise of any right of eminent
domain or navigational servitude; or
(3) any actual condemnation, seizure or taking, by exercise of the power
of eminent domain or otherwise, of such property or asset, or confiscation
of such property or asset or the requisition of the use of such property or
asset.
"Excess Land" means the following real and personal property:
(1) approximately 12 acres of land owned by Isle of Capri or its
Restricted Subsidiaries as of April 23, 1999 adjacent to the Isle-Bossier
City; and
(2) approximately 7 acres of land owned by the U.S. Department of
Housing and Urban Development as of April 23, 1999 in proximity to the
Isle-Bossier City, in the event such property is acquired by Isle of Capri
or its Restricted Subsidiaries.
"Excess Sale/Loss Proceeds" and "Excess Sale/Loss Proceeds Offer" have the
meanings set forth in the covenant described under the subheading "Certain
Covenants--Limitation on Asset Sales and Events of Loss."
"Fair Market Value" or "fair value" means, with respect to any asset or
property, the price which could be reasonably expected to be negotiated in an
arm's-length free market transaction, for cash, between a willing seller and a
willing buyer, neither of whom is under undue pressure or compulsion to
complete the transaction. Unless otherwise specified by the indenture, Fair
Market Value shall be determined by the Board of Directors of Isle of Capri
acting in good faith and shall be evidenced by a Board Resolution delivered to
the trustee.
"FFC Preferred Stock" means the shares of preferred stock, $100 par value,
of Freedom Financial Corporation owned by Isle of Capri.
"FF&E" means furniture, fixtures and equipment used in the ordinary course
of business in the operation of a Permitted Line of Business.
"FF&E Financing" means Indebtedness, the proceeds of which will be used
solely to finance or refinance the acquisition or lease by Isle of Capri or a
Restricted Subsidiary of FF&E.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board that are applicable from time to time.
"Gaming Authority" means any agency, authority, board, bureau, commission,
department, office or instrumentality of any nature whatsoever of the United
States federal or any foreign government, any state, province or any city or
other political subdivision or otherwise and whether now or hereafter in
existence, or any officer or official thereof, with authority to regulate any
gaming operation (or proposed gaming operation) owned, managed, or operated by
Isle of Capri or any of its Subsidiaries.
"Indebtedness" of any Person means
(1) any liability, contingent or otherwise, of such Person
(a) 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) evidenced by a note, bond, debenture or similar instrument,
letters of credit, bankers' acceptances or other similar facilities,
other than a trade payable or other than a current liability incurred
in the ordinary course of business; or
(c) for the payment of money relating to a Capitalized Lease
Obligation or other obligation relating to the deferred purchase price
of property or services (including a purchase money obligation but not
including any docking fees payable to Louisiana Downs, Inc. or
guarantees thereof);
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(2) any liability of others of the kind described in the preceding
clause (1) which such Person has guaranteed or which is otherwise its legal
liability, including, without limitation, any obligation
(a) to pay or purchase such liability;
(b) to supply funds to or in any other manner invest in the debtor
(including an agreement to pay for property or services irrespective of
whether such property is received or such services are rendered); and
(c) to purchase or lease (other than pursuant to an operating lease
of hotel rooms or similar lodging facilities entered into for the
principal purpose of providing lodging at or near the site of a Casino,
which facilities are reasonably expected to be beneficial to Isle of
Capri's operating results) property or to purchase services;
in each such case primarily for the purpose of enabling a debtor to make a
payment of such Indebtedness or to assure the holder or such Indebtedness
against loss;
(3) any obligation secured by a Lien to which the property or assets of
such Person are subject, whether or not the obligations secured thereby
shall have been assumed by or shall otherwise be such Person's legal
liability;
(4) all obligations of such Person to purchase, redeem, retire, defease
or otherwise make any payment in respect of any Capital Stock of or other
ownership or profit interest in such Person or any of its Affiliates or any
warrants, rights or options to acquire such Capital Stock, valued, in the
case of Disqualified Stock, at the greater of its voluntary or involuntary
liquidation preference plus accrued and unpaid dividends;
(5) all Interest Rate and Currency Protection Obligations; and
(6) any and all deferrals, renewals, extensions and refundings of, or
amendments, modifications or supplements to, any liability of the kind
described in any of the preceding clauses.
"Interest Rate and Currency Protection Obligations" means the obligations of
any Person pursuant to any interest rate swap, cap or collar agreement,
interest rate future or option contract, currency swap agreement, currency
future or option contract and other similar agreement designed to hedge against
fluctuations in interest rates or foreign exchange rates.
"Investment" in any Person means any direct or indirect loan, advance,
guarantee or other extension of credit or capital contribution to (by means of
transfers of cash or other property to others or payments for property or
services for the account or use of others or otherwise), or purchase or
acquisition of Capital Stock, warrants, rights, options, bonds, notes,
debentures or other securities or evidences of Indebtedness issued by, such
Person or Indebtedness of any other Person secured by (or for which the holder
of such Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien (including, without limitation, accounts and contract
rights) owned by such Person, even though such Person has not assumed or become
liable for the payment of such Indebtedness. The amount of any Investment shall
be the original cost of such Investment, plus the cost of all additions
thereto, and minus the amount of any portion of such Investment repaid to the
Person making such Investment in cash as a repayment of principal or a return
of capital, as the case may be, but without any other adjustments for increases
or decreases in value, or write-ups, write-downs or write-offs with respect to
such Investment. In determining the amount of any Investment involving a
transfer of any property other than cash, such property shall be valued at its
fair value at the time of such transfer, as determined in good faith by the
Board of Directors of the Person making such transfer, whose determination will
be conclusive absent manifest error.
"Isle-Biloxi" means Isle of Capri Casino located in Biloxi, Mississippi.
"Isle-Bossier City" means Isle of Capri Casino located in Bossier City,
Louisiana.
"Isle-Lake Charles" means Isle of Capri Casino located in Lake Charles,
Louisiana.
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"Isle-Tunica" means Isle of Capri Casino located in Tunica, Mississippi.
"Isle-Vicksburg" means Isle of Capri Casino located in Vicksburg,
Mississippi.
"Lien" means any mortgage, lien (statutory or other), pledge, security
interest, encumbrance, claim, hypothecation, assignment for security, deposit
arrangement or preference or other security agreement of any kind or nature
whatsoever. For purposes of the indenture, a Person is deemed to own subject
to a Lien any property which the Person has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement relating to such Person.
"Marketable Securities" means Cash Equivalents or any fund investing
primarily in Cash Equivalents.
"Material Operations" means assets or operations of Isle of Capri or its
Subsidiaries that (1) exceed 5% of the assets of Isle of Capri and its
Consolidated Subsidiaries or (2) contributed more than 5% of the income from
continuing operations of Isle of Capri and its Consolidated Subsidiaries
(before income taxes, extraordinary items and intercompany management or
similar fees) for the most recently completed four fiscal quarters of Isle of
Capri for which financial statements are available.
"Maturity" or "Maturity Date" when used with respect to any note, means the
date specified in such note as the fixed date on which the last installment of
principal of such note is due and payable.
"Net Cash Proceeds" means, with respect to any Asset Sale, Event of Loss,
issuance or sale by Isle of Capri of its Capital Stock or incurrence of
Indebtedness, as the case may be, the proceeds thereof in the form of cash or
Cash Equivalents received by Isle of Capri or any of its Restricted
Subsidiaries (whether as initial consideration, through the payment or
disposition of deferred compensation or the release of reserves), after
deducting therefrom (without duplication) (1) reasonable and customary
brokerage commissions, underwriting fees and discounts, legal fees, finders
fees and other similar fees and expenses incurred in connection with such
Asset Sale or Event of Loss, (2) provisions for all taxes payable as a result
of such Asset Sale or Event of Loss, (3) payments made to retire and
permanently reduce any commitment with respect to any Indebtedness (other than
payments on the notes) secured by the assets subject to such Asset Sale or
Event of Loss to the extent required pursuant to the terms of such
Indebtedness and (4) appropriate amounts to be provided by Isle of Capri or
any of its Restricted Subsidiaries, as the case may be, as a reserve in
accordance with GAAP, against any liabilities associated with such Asset Sale
or Event of Loss and retained by Isle of Capri or any of its Restricted
Subsidiaries, as the case may be, after such Asset Sale or Event of Loss,
including, without limitation, pension and other post-employment benefit
liabilities, liabilities related to environmental matters and liabilities
under any indemnification obligations associated with such Asset Sale or Event
of Loss, in each case to the extent, but only to the extent, that the amounts
so deducted are, at the time of receipt of such cash or Cash Equivalents,
actually paid to a Person that is not an Affiliate of Isle of Capri or, in the
case of reserves, are actually established and, in each case, are properly
attributable to such Asset Sale or Event of Loss.
"Net Income" means, with respect to any Person for any period, the net
income or loss of such Person determined in accordance with GAAP.
"Non-Recourse Indebtedness" means Indebtedness (1) as to which none of Isle
of Capri or any of its Restricted Subsidiaries provides any credit support or
is directly or indirectly liable for the payment of principal or interest
thereof and a default with respect to which would not entitle any party to
cause any other Indebtedness of Isle of Capri or a Restricted Subsidiary to be
accelerated or (2) incurred by Isle of Capri or a Restricted Subsidiary to
purchase one or more assets from the lending source, provided that the
lender's only remedy against the obligor in the event of a default with
respect to such Indebtedness, whether as a result of the failure to pay
principal or interest when due or any other reason, is limited to repossession
of such assets purchased.
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"Permitted Equity Holders" means Bernard Goldstein, Irene Goldstein and
their lineal descendants (including adopted children and their lineal
descendants) and any entity the equity interests of which are owned by only
such Persons or which was established for the exclusive benefit of, or the
estate of, any of the foregoing.
"Permitted Investments" means:
(1) Investments in Marketable Securities;
(2) loans or advances to employees not to exceed an aggregate of
$250,000 in any fiscal year of Isle of Capri and $1.0 million in the
aggregate at any one time outstanding;
(3) Investments in Isle of Capri Black Hawk, L.L.C. by Isle of Capri or
a Restricted Subsidiary in an aggregate amount not to exceed the sum of
$10.0 million; and
(4) Investments in a Permitted Line of Business by Isle of Capri or a
Restricted Subsidiary made in one or more Persons in an aggregate amount
not to exceed the sum of (a) $25.0 million and (b) up to $5.0 million of
the amount permitted to be invested pursuant to clause (3) above that is
not so invested.
"Permitted Liens" means:
(1) Liens on property acquired by Isle of Capri or any Restricted
Subsidiary (including an indirect acquisition of property by way of a
merger of a Person with or into Isle of Capri or any Restricted Subsidiary
or the acquisition of a Person), provided that such Liens were in existence
prior to the contemplation of such acquisition, merger or consolidation,
and were not created in connection therewith or in anticipation thereof,
and provided that such Liens do not extend to any additional property or
assets of Isle of Capri or any Restricted Subsidiary;
(2) statutory Liens (other than those arising under ERISA) to secure the
performance of obligations, surety or appeal bonds, performance bonds or
other obligations of a like nature, maritime Liens for crew wages, salvage,
suppliers and providers of services incurred in the ordinary course of
business (exclusive of obligations in respect of the payment of borrowed
money), or for taxes, assessments or governmental charges or claims,
provided that in each case the obligations are not yet delinquent or are
being contested in good faith by appropriate proceedings promptly
instituted and diligently conducted and any reserve or other adequate
provision as shall be required in conformity with GAAP shall have been made
therefor;
(3) leases or subleases granted to others not interfering in any
material respect with the business of Isle of Capri or any Restricted
Subsidiary;
(4) any charter of a Vessel, provided that (a) in the good faith
judgment of the Board of Directors of Isle of Capri, such Vessel is not
necessary for the conduct of the business of Isle of Capri or any of its
Restricted Subsidiaries as conducted immediately prior thereto; (b) the
terms of the charter are commercially reasonable and represent the Fair
Market Value of the charter and (c) the Person chartering the assets agrees
to maintain the Vessel and evidences such agreement by delivering such an
undertaking to the trustee;
(5) with respect to the property involved, easements, rights-of-way,
navigational servitudes, restrictions, minor defects or irregularities in
title and other similar charges or encumbrances which do not interfere in
any material respect with the ordinary conduct of business of Isle of Capri
and its Subsidiaries as now conducted or as contemplated in the indenture;
(6) Liens arising in the ordinary course of business in connection with
workers' compensation, unemployment insurance or other types of social
security (other than those arising under ERISA);
(7) any interest or title of a lessor in property subject to any
Capitalized Lease Obligation or an operating lease;
(8) Liens arising from the filing of Uniform Commercial Code financing
statements with respect to leases;
(9) Liens arising from any final judgment or order not constituting an
Event of Default;
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(10) Liens on documents or property under or in connection with letters
of credit in the ordinary course of business, if and to the extent that the
related Indebtedness is permitted under clause (1)(e) of the covenant
described under the subheading "Certain Covenants--Limitation on
Indebtedness"; and
(11) Liens arising out of conditional sale, title retention,
consignment or similar arrangements for the sale of goods in the ordinary
course of business.
"Permitted Line of Business" means, with respect to any Person, any casino
gaming business of such Person or any business that is related to, ancillary to
or supportive of, connected with or arising out of the gaming business of such
Person (including, without limitation, developing and operating lodging,
dining, amusement, sports or entertainment facilities, transportation services
or other related activities or enterprises and any additions or improvements
thereto).
"Permitted Related Investment" means the acquisition of property or assets
by a Person to be used in connection with a Permitted Line of Business of such
Person.
"Permitted Vessel Liens" means a Lien on a Vessel to secure FF&E Financing
or Capitalized Lease Obligations where the holder or holders (or an agent,
trustee or other representative for such holder or holders):
(1) agrees to release such Lien upon satisfaction of such FF&E
Financing;
(2) agrees to release such Lien upon payment or promise of payment to
such holder or holders (or such representative) of that portion of the
proceeds of the sale of such Vessel attributable to the related FF&E; and
(3) acknowledges that such Lien does not create rights on the hull and
other equipment constituting such Vessel (other than the related FF&E).
"Person" means an individual, partnership, corporation (including a business
trust), joint stock company, limited liability company, trust, unincorporated
association, joint venture or other entity, or a government or any political
subdivision or agency thereof.
"Qualified Public Equity Offering" means a firm commitment underwritten
public offering of Common Stock of Isle of Capri for which Isle of Capri
receives net proceeds of at least $30.0 million and after which the Common
Stock is traded on a national securities exchange or quoted on the NASDAQ Stock
Market.
"Real Estate Options" means:
(1) all options held by Isle of Capri or its Restricted Subsidiaries,
directly or indirectly, at April 23, 1999 for an amount, in each case, not
exceeding $1.0 million to purchase or lease land; and
(2) all options acquired by Isle of Capri, directly or indirectly, after
April 23, 1999 for an amount, in each case, not exceeding $2.0 million, to
purchase or lease land.
"Redeemable Capital Stock" means any class or series of Capital Stock to the
extent that, either by its terms, by the terms of any security into which it is
convertible or exchangeable, or by contract or otherwise, is or upon the
happening of an event or passage of time would be, required to be redeemed
prior to the final Stated Maturity of the notes or is redeemable at the option
of the holder thereof at any time prior to such Stated Maturity, or is
convertible into or exchangeable for debt securities at any time prior to such
Stated Maturity.
"Restricted Payment" means any of:
(1) the declaration or payment of any dividend or any other distribution
on Capital Stock of Isle of Capri or any Subsidiary or any payment made to
the direct or indirect holders (in their capacities as such) of Capital
Stock of Isle of Capri or any Subsidiary, other than (a) dividends or
distributions payable solely in Capital Stock (other than Disqualified
Stock) otherwise permitted by the indenture and (b) in the case of a
Subsidiary, dividends or distributions payable to Isle of Capri or to a
Restricted Subsidiary of Isle of Capri;
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(2) the purchase, defeasance, redemption or other acquisition or
retirement for value of any Capital Stock of Isle of Capri or any
Subsidiary, other than Capital Stock of such Subsidiary held by Isle of
Capri or any of its Restricted Subsidiaries;
(3) the making of any principal payment on, or the purchase, defeasance,
repurchase, redemption or other acquisition or retirement for value, before
any scheduled maturity, scheduled repayment or scheduled sinking fund
payment of, any Indebtedness which is subordinated in any manner in right
of payment to the notes, other than Indebtedness acquired in anticipation
of satisfying a sinking fund obligation, principal installment or final
maturity, in each case due within one year of the date of acquisition; and
(4) the making of any Investment or guarantee of any Investment by Isle
of Capri or any Subsidiary in any Person other than
(a) in a Person that would be, directly or indirectly, a Restricted
Subsidiary of Isle of Capri immediately after giving effect to such
Investment; or
(b) under a plan of reorganization or similar proceeding under
applicable bankruptcy law or in connection with a workout involving
creditors of such Person in exchange for Indebtedness owing by such
Person that did not violate the limitations set forth under the
subheading "Certain Covenants--Limitation on Restricted Payments."
"Restricted Subsidiary" means any Subsidiary of Isle of Capri that has not
been designated as an Unrestricted Subsidiary pursuant to and in compliance
with the provisions described under "Restricted and Unrestricted Subsidiaries,"
or a Subsidiary that has been designated as a Restricted Subsidiary pursuant to
and in compliance with the provisions described under "Restricted and
Unrestricted Subsidiaries."
"Senior Credit Facility" means the Credit Agreement, dated as of April 23,
1999, among Isle of Capri, the lenders listed therein and Canadian Imperial
Bank of Commerce, as Administrative Agent and Issuing Lender, including any
notes, guarantees, collateral documents, instruments and agreements executed in
connection therewith, and in each case as amended (including any amendment and
restatement thereof), modified, extended, deferred, refunded, substituted,
replaced or refinanced from time to time, including any agreement extending the
maturity of, refinancing, replacing or otherwise restructuring (including
increasing the amount of available borrowings thereunder or adding Subsidiaries
of Isle of Capri as additional borrowers or guarantors thereunder) all or any
portion of the Indebtedness under such agreement or any successor or
replacement agreement and whether by the same or any other agent, creditor,
lender or group of creditors or lenders.
"Senior Indebtedness" means (1) the principal of, premium, if any, and
interest (including post-petition interest) on, and all fees, costs, expenses
and other amounts payable with respect to the Indebtedness under the Senior
Credit Facility and (2) the principal of, premium, if any, and interest on any
Indebtedness of Isle of Capri or the Subsidiary Guarantors, whether outstanding
on April 23, 1999 or thereafter created, incurred or assumed, unless, in the
case of any particular Indebtedness, the instrument creating or evidencing the
same or pursuant to which the same is outstanding expressly provides that such
Indebtedness shall not be senior in right of payment to any Indebtedness of
Isle of Capri or the Subsidiary Guarantors, as applicable. Notwithstanding the
foregoing, "Senior Indebtedness" shall not include, to the extent constituting
Indebtedness,
(1) Indebtedness evidenced by the notes or the Subsidiary Guarantees;
(2) Indebtedness that is subordinate or junior in right of payment to
any Indebtedness of Isle of Capri or the Subsidiary Guarantors;
(3) Indebtedness which, when incurred and without respect to any
election under Section 1111(b) of Title 11, U.S. Code, is without recourse
to Isle of Capri or the Subsidiary Guarantors;
(4) Indebtedness which is represented by Redeemable Capital Stock;
(5) Indebtedness for goods, materials or services purchased in the
ordinary course of business or Indebtedness consisting of trade payables or
other current liabilities other than any current liabilities owing
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under the Senior Credit Facility or the current portion of any long-term
Indebtedness which would constitute Senior Indebtedness but for the
operation of this clause (5);
(6) Indebtedness of or amounts owed by Isle of Capri or the Subsidiary
Guarantors for compensation to employees or for services rendered to Isle
of Capri or the Subsidiary Guarantors;
(7) Indebtedness of or amounts owed by Isle of Capri or a Restricted
Subsidiary to Isle of Capri or another Restricted Subsidiary;
(8) any liability for federal, state, local or other taxes owed or owing
by Isle of Capri or the Subsidiary Guarantors;
(9) Indebtedness of Isle of Capri or a Subsidiary Guarantor to any other
Subsidiary of Isle of Capri; and
(10) that portion of any Indebtedness which at the time of issuance is
issued in violation of the indenture.
"Significant Restricted Subsidiary" means any Restricted Subsidiary that is
a guarantor of Isle of Capri's obligations under the Senior Credit Facility or
any other Credit Facility.
"Stated Maturity" means, with respect to any security, the date specified in
such security as the fixed date on which the principal of such security is due
and payable, including pursuant to any mandatory redemption provisions but
excluding any provision providing for the repurchase of such security at the
option of the holder thereof.
"Subordinated Indebtedness" means Indebtedness that is subordinated in right
of payment to the notes in all respects, matures at a date later than the
Maturity Date of the notes and has an average life longer than that applicable
to the notes.
"Subsidiary" of any Person means any corporation, partnership, joint
venture, trust or estate of which (or in which) more than 50% of (1) the issued
and outstanding Capital Stock having ordinary voting power to elect a majority
of the Board of Directors or similar governing body of such corporation or
other entity (irrespective of whether at the time Capital Stock of any other
class or classes of such corporation shall or might have voting power upon the
occurrence of any contingency), (2) the interest in the capital or profits of
such partnership or joint venture or (3) the beneficial interest in such trust
or estate is at the time directly or indirectly owned or controlled by such
Person.
"Subsidiary Guarantees" means the guarantees of the Subsidiary Guarantors
with respect to Isle of Capri's obligations under the notes and the indenture.
"Subsidiary Guarantors" means each existing and future Significant
Restricted Subsidiary of Isle of Capri and any other Subsidiary that executes a
Subsidiary Guarantee.
"United States Government Obligations" means securities that are
(1) direct obligations of the United States of America for the payment
of which its full faith and credit is pledged; or
(2) obligations of a Person, the payment of which is unconditionally
guaranteed as a full faith and credit obligation by the United States of
America.
"Unrestricted Subsidiary" means any Subsidiary of Isle of Capri that
(1) Isle of Capri has designated, pursuant to provisions described under
the subheading "Restricted and Unrestricted Subsidiaries" as an
Unrestricted Subsidiary and that has not been redesignated as a Restricted
Subsidiary pursuant to such paragraph; and
(2) any Subsidiary of any such Unrestricted Subsidiary.
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"Vessel" means any riverboat or barge, whether now owned or hereafter
acquired by Isle of Capri or any Restricted Subsidiary, useful for gaming,
administrative, entertainment or any other purpose whatsoever.
"Voting Stock" of any Person means Capital Stock of such Person which
ordinarily has voting power for the election of directors (or Persons
performing similar functions) of such Person, whether at all times or only as
long as no senior class of securities has such voting power by reason of any
contingency.
"wholly owned" with respect to a Subsidiary of any Person means (1) with
respect to a Subsidiary that is a partnership, limited liability company or
similar entity, a Subsidiary whose capital or other equity interest is 99% or
greater beneficially owned by such Person and (2) with respect to a Subsidiary
that is other than a partnership, limited liability company or similar entity,
a Subsidiary whose capital stock or other equity interest is 100% beneficially
owned by such Person.
Book-Entry Notes
The old notes offered and sold to qualified institutional buyers (as defined
under Rule 144A of the Securities Act of 1933) or "QIBs" were each registered
in book-entry form and are represented by two global notes in fully registered
form without interest coupons. These global notes were deposited with the
trustee as custodian for The Depository Trust Company or "DTC" and registered
in the name of Cede & Co.
The old notes offered and sold to persons outside the United States who
received such old notes pursuant to sales in accordance with Regulation S under
the Securities Act of 1933 were initially represented by a global note in fully
registered form without interest coupons. This global note was deposited with
the trustee as custodian for DTC and registered in the name of Cede & Co.
Before the expiration of the "40-day restricted period" (within the meaning of
Rule 903 of Regulation S), transfers of interest in this global note were only
effected through records maintained by DTC, Cedel Bank, societe anonyme
("CEDEL") or the Euroclear System ("Euroclear").
Except as described below, the new notes will be represented by one or more
global notes. We will deposit the global notes representing the new notes with
DTC. The global notes will be registered in the name of DTC or its nominee.
Except as provided below, the new notes will not be issued in definitive form.
One certificate will be issued in the principal amount of $200 million and one
certificate will be issued in the principal amount of $190 million.
Holders of new notes who elect to take physical delivery of their
certificates instead of holding their interest through the global notes will be
issued a certificated new note in registered form. Upon the transfer of any
certificated new note initially issued to such holders, such certificated new
note will, unless the transferee requests otherwise or the global notes have
previously been exchanged in whole for certificated new notes, be exchanged for
an interest in the global notes representing the new notes.
The Depository Trust Company is a limited-purpose trust company organized
under the New York Banking Law. It is a "banking organization" within the
meaning of the New York Banking Law, a member of the Federal Reserve System, a
"clearing corporation" within the meaning of the New York Uniform Commercial
Code and a "clearing agency" registered pursuant to the provisions of Section
17A of the Securities Exchange Act of 1934. DTC holds securities that its
participants (including CEDEL and Euroclear) deposit with it. DTC also
facilitates the settlement among participants of securities transactions, such
as transfers and pledges, in deposited securities through electronic book-entry
changes in participants' accounts, which eliminates the need for physical
movement of certificates. Direct participants include securities brokers and
dealers, banks, trust companies, clearing corporations and other organizations.
DTC is owned by a number of its direct participants and by the New York Stock
Exchange, Inc., the American Stock Exchange, Inc. and the National Association
of Securities Dealers, Inc. Access to DTC's book entry system is also available
to others, such as securities brokers and dealers, banks and trust companies
that clear through or maintain a custodial relationship with a direct
participant, either directly or indirectly. These other entities are referred
to
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as "indirect participants." The rules applicable to DTC and its participants
are on file with the Securities and Exchange Commission.
Purchases of new notes represented by a global note under DTC's system must
be made by or through direct participants. Direct participants will receive a
credit for the new notes on DTC's records. The ownership interest of each
actual purchaser of each new note will be recorded on the direct and indirect
participants' records. Each actual purchaser is referred to as a "beneficial
owner." Beneficial owners will not receive written confirmation from DTC of
their purchase, but beneficial owners are expected to receive written
confirmations providing details of the transaction and periodic statements of
their holdings from the direct or indirect participant through which the
beneficial owner entered into the transaction.
Transfers of ownership interests in the new notes will be accomplished by
entries made on the books of participants acting on behalf of beneficial
owners. Beneficial owners will not receive certificates representing their
ownership interests in the new notes, except if use of the book-entry system
for the new notes is discontinued. All beneficial ownership interests in the
global notes, including those held through Euroclear or CEDEL, will be subject
to the procedures and requirements of DTC and, where applicable, Euroclear or
CEDEL.
The laws of some states require that certain purchasers of notes take
physical delivery of securities in definitive form. These limits and laws may
impair the ability to transfer beneficial interests in the global notes.
So long as the depository for the global notes, or its nominee, is the
registered owner of the global notes, it will be considered the sole owner or
holder of the notes represented by the global notes. Except as provided below,
owners of beneficial interests in the new notes represented by the global notes
will not be entitled to have their new notes represented by such global notes
registered in their names, will not receive or be entitled to receive physical
delivery of the new notes in definitive form and will not be considered the
owners or holders of the notes under the indenture.
To facilitate subsequent transfers, all notes deposited by participants with
DTC are registered in the name of DTC's partnership nominee, Cede & Co. The
deposit of the new notes with DTC and their registration in the name of Cede &
Co. cause no change in beneficial ownership. DTC has no knowledge of the actual
beneficial owners of the new note. DTC's records reflect only the identity of
the direct participants to whose accounts the notes are credited, which may or
may not be the beneficial owners. The participants will remain responsible for
keeping account of their holdings on behalf of their customers. Conveyance of
notices and other communications by DTC to direct participants, by direct
participants to indirect participants and by direct participants and indirect
participants to beneficial owners will be governed by arrangements among them.
Those arrangements are subject to any applicable statutory or regulatory
requirements.
Neither DTC nor Cede & Co. will consent or vote with respect to the new
notes. Under its usual procedures, DTC mails an omnibus proxy to us as soon as
possible after the record date. The omnibus proxy assigns Cede & Co.'s
consenting or voting rights to direct participants whose accounts the new notes
are credited on the record date. Those direct participants are identified in a
listing attached to the omnibus proxy.
We will make payments of principal, any premium and interest on the global
notes through the trustee or a paying agent to the depository, as the
registered owner of the global notes. None of the trustee, the paying agent or
our company will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of the global notes or for maintaining, supervising or reviewing any
records relating to beneficial ownership interests.
DTC has advised us that, upon its receipt of any payment in respect of a
global note, it will credit direct participants' accounts on the payable date
in accordance with their respective holdings shown on DTC's records unless it
has reason to believe that it will not receive payment on the payable date.
Payments by participants to beneficial owners will be governed by standing
instructions and customary practices, as is the
59
<PAGE>
case with notes held for the accounts of customers in bearer form or registered
in "street name." These payments will be the responsibility of the participant
and not of DTC, the paying agent or our company, subject to any applicable
statutory or regulatory requirements.
It is our responsibility or the paying agent's responsibility to make
payments to DTC. It is the responsibility of DTC to disburse the payments to
direct participants. It is the responsibility of direct and indirect
participants to disburse the payments to beneficial owners.
Transfer between participants in DTC will be effected in the ordinary way in
accordance with DTC rules. If a holder requires physical delivery of
certificated notes for any reason, including to sell notes to persons in states
which require physical delivery of such notes or to pledge such notes, the
holder must transfer its interest in the global note in accordance with the
normal procedures of DTC and the procedures set forth in the indenture.
Transfers between participants in Euroclear and CEDEL will be effected in the
ordinary way in accordance with their respective rules and operating
procedures.
Cross-market transfers between DTC, on the one hand, and directly or
indirectly through Euroclear or CEDEL participants, on the other, will be
effected by DTC in accordance with DTC rules on behalf of Euroclear or CEDEL,
as the case may be, by its respective depository. However, such cross-market
transactions will require delivery of instructions to Euroclear or CEDEL, as
the case may be, by the counterparty in such system in accordance with its
rules and procedures and within its established deadlines (Brussels time).
Euroclear or CEDEL, as the case may be, will, if the transaction meets its
settlement requirements, deliver instructions to its respective depository to
take action to effect final settlement on its behalf by delivering or receiving
interests in the global note in DTC and making or receiving payment in
accordance with normal procedures for same-day funds settlements applicable to
DTC. CEDEL participants and Euroclear participants may not deliver instructions
directly to the depositories for CEDEL or Euroclear.
Because of time zone differences, the securities account of a Euroclear or
CEDEL participant purchasing an interest in a global note from a DTC
participant will be credited during the securities settlement processing day
(which must be a business day for Euroclear and CEDEL) immediately following
the DTC settlement date. The credit of any transactions in interests in a
global note settled during such processing day will be reported to the relevant
Euroclear or CEDEL participant on such day. Cash received in Euroclear or CEDEL
as a result of sales of interests in a global note by or through a Euroclear or
CEDEL participant to a DTC participant will be received for value on the DTC
settlement date but will be available in the relevant Euroclear or CEDEL cash
account only as of the business day following DTC settlement date.
Subject to certain conditions, any person having a beneficial interest in a
global note may, upon request to the trustee, exchange its beneficial interest
for certificated notes. Upon any such issuance of certificated notes, the
trustee is required to register such certificated notes in the name of, and
cause the same to be delivered to, the person or persons who requested
certificated notes or its nominee. In addition, if DTC is at any time unwilling
or unable to continue as a depositary for the global notes and a successor
depositary is not appointed by us within 90 days, we will issue certificated
notes in exchange for the global notes. If there is an event of default under
the indenture, DTC will exchange the global notes for certificated notes, which
it will distribute to its participants.
DTC has informed us that is management is aware that some computer
applications, systems and the like for processing data may encounter "Year 2000
problems." DTC has informed us that it has informed its participants and other
members of the financial community that it has developed and is implementing a
program so that DTC's systems, as they relate to the timely payments of
distributions, including principal and income payments, to securityholders,
book-entry deliveries and settlement of trades, continue to function
appropriately. According to DTC, this program includes a complete technical
assessment and a complete remediation plan. DTC has also informed us that its
plan includes a testing phase, which is expected to be completed within
appropriate time frames.
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<PAGE>
DTC has further informed us that its ability to perform properly its
services is also dependent upon other parties, including issuers and their
agents, and third party vendors that license software and hardware and provide
information or services, including telecommunications and electrical utility
services. DTC has informed us that it is contacting, and will continue to
contact, third party vendors that provide services to impress upon them the
importance of those services being Year 2000 compliant and determine the extent
of their efforts for Year 2000 remediation and testing of their services. In
addition, DTC has informed us that it is in the process of developing
contingency plans it deems appropriate.
According to DTC, the above information has been provided to its
participants and other members of the financial community for informational
purposes only and is not intended to serve as a representation, warranty or
contract modification of any kind.
The information in this section concerning DTC and its book-entry system has
been obtained from sources that we believe to be reliable. However, we take no
responsibility for the accuracy of that information.
SPECIFIC FEDERAL INCOME TAX CONSIDERATIONS
The following discussion summarizes the material federal income tax
considerations of the issuance of the new notes and the exchange offer. This
summary does not discuss all aspects of federal income taxation that may be
relevant to particular holders of new notes, especially in light of a holder's
personal investment circumstances, or to certain types of holders subject to
special treatment under the federal income tax laws (for example, life
insurance companies, tax-exempt organizations and foreign corporations and
individuals who are not citizens or residents of the United States) and does
not discuss any aspects of state, local or foreign taxation. This discussion is
limited to those holders who will hold the new notes as "capital assets"
(generally, property held for investment) within the meaning of Section 1221 of
the Internal Revenue Code of 1986, as amended (the "Code").
This summary is based upon laws, regulations, rulings and decisions now in
effect and upon proposed regulations, all of which are subject to change,
possibly with retroactive effect, by legislation, administrative action or
judicial decision.
Exchange Offer. The exchange of old notes for new notes pursuant to the
exchange offer should not be treated as a taxable "exchange" because the new
notes should not be considered to differ materially in kind or extent from the
old notes. Rather, the new notes received by a holder of the old notes should
be treated as a continuation of the old notes. As a result, there should be no
gain or loss to holders exchanging the old notes for the new notes pursuant to
the exchange offer.
Interest. A holder will be required to include in gross income the stated
interest on the old notes or the new notes in accordance with the holder's
method of tax accounting.
Tax Basis. Generally, a holder's tax basis in a note will initially be the
holder's purchase price for the note and will be decreased by the amount of any
principal payments received. If a holder exchanges an old note for a new note
pursuant to the exchange offer, the tax basis of the new note immediately after
such exchange should equal the holder's tax basis in the old note immediately
prior to the exchange.
Sale. The sale, exchange or other disposition of a note (other than pursuant
to the exchange offer) generally will be taxable event. A holder generally will
recognize gain or loss equal to the difference between (1) the amount of cash
plus the fair market value of any property received upon such sale, exchange or
other taxable disposition of a note, other than in respect of accrued interest
on the note, and (2) the holder's adjusted tax basis in such note. Such gain or
loss will be capital gain or loss and would be long-term capital gain or loss
if the notes were held by the holder for the applicable holding period
(currently more than one year) at the time of such sale or other disposition.
The holding period of each new note would include the holding period of the old
notes exchanged for the new note.
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<PAGE>
Purchasers of Notes at Other than Original Issuance. The above summary does
not discuss special rules that may affect the treatment of purchasers that
acquire notes other than at original issuance, including those provisions of
the Code relating to the treatment of "market discount" and "acquisition
premium." Any such purchaser should consult its tax advisor as to the
consequences to the purchaser of the acquisition, ownership and disposition of
notes.
Backup Withholding. Unless a holder or other payee provides his correct
taxpayer identification number (employer identification number or social
security number) to us, as payor, and certifies that such number is correct
under the federal income tax backup withholding rules, generally 31% of (1) the
interest paid on the notes and (2) the proceeds of sale or other disposition of
the notes must be withheld and remitted to the United States Department of
Treasury. Therefore, each holder should complete and sign the Substitute Form
W-9 so as to provide the information and certification necessary to avoid
backup withholding. Certain exchanging holders, including, among others,
certain foreign individuals, are not subject to these backup withholding and
reporting requirements. In order for a foreign individual to qualify as an
exempt foreign recipient, that exchanging holder must submit a statement,
signed under penalty of perjury, attesting to that individual's exempt foreign
status.
Withholding is not an additional federal income tax. Rather, the federal
income tax liability of a person subject to withholding will be reduced by the
amount of tax withheld. If withholding results in an overpayment of taxes, a
refund may be obtained from the Internal Revenue Service.
The foregoing summary is included for general information only. Each holder
of old notes should consult its tax advisor as to the specific tax consequences
to it of the exchange offer, including the application of and effect of state,
local, foreign and other tax laws.
PLAN OF DISTRIBUTION
Each broker-dealer that receives new notes for its own account as a result
of market-making activities or other trading activities in connection with the
exchange offer must acknowledge that it will deliver a prospectus in connection
with any resale of new notes. This prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of new notes received in exchange for old notes where such old
notes were acquired as a result of market-making activities or other trading
activities.
We will receive no proceeds in connection with the exchange offer or any
sale of new notes by broker-dealers. New notes received by broker-dealers for
their own account pursuant to the exchange offer may be sold from time to time
in one or more transactions in the over-the-counter market, in negotiated
transactions, through the writing of options on the new notes or a combination
of these methods of resale, at market prices prevailing at the time of resale,
at prices related to prevailing market prices or at negotiated prices. Any such
resale may be made directly to purchasers or to or through brokers or dealers
that may receive compensation in the form of commissions or concessions from
the broker-dealers or the purchasers of any new notes. Any broker-dealer that
resells new notes that were received by it for its own account pursuant to the
exchange offer and any broker or dealer that participates in a distribution of
new notes may be deemed to be an "underwriter" within the meaning of the
Securities Act of 1933, and any profit on any resale of new notes and any
commissions or concessions received by any such persons may be deemed to be
underwriting compensation under the Securities Act of 1933. The letter of
transmittal states that by acknowledging that it will deliver, and by
delivering, a prospectus, a broker-dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act of 1933.
LEGAL MATTERS
Mayer, Brown & Platt, Chicago, Illinois will pass on the validity of, and
certain legal matters concerning, the new notes.
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INDEPENDENT AUDITORS
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements included in our Annual Report on Form 10-K as of April 25,
1999 and April 26, 1998 and for the years ended April 25, 1999, April 26, 1998
and April 27, 1997, as set forth in their report, which is incorporated by
reference into this prospectus and elsewhere in the registration statement. Our
consolidated financial statements are incorporated by reference in reliance on
Ernst & Young LLP's report, given on their authority as experts in accounting
and auditing.
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- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
$390,000,000
Exchange Offer
ISLE OF CAPRI CASINOS, INC.
8 3/4% Senior Subordinated Notes due 2009
----------------
PROSPECTUS
----------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers
(a) Section 145 of the Delaware General Corporation Law; Section 83 of the
Louisiana Business Corporation Law; Article 8, Subarticle E of the Mississippi
Business Corporation Law; Article 109 of the Colorado Business Corporation Act;
and Division VIII, Part E of the Iowa Business Corporation Act: (1) give
corporations organized in those states broad powers to indemnify their present
and former directors and officers and those of affiliated corporations against
expenses incurred in the defense of any lawsuit to which they are made parties
by reason of being or having been such directors or officers, subject to
specified conditions and exclusions, (2) give a director or officer who
successfully defends an action the right to be so indemnified and (3) authorize
the co-registrants to buy directors' and officers' liability insurance.
(b) Article 8 of Isle of Capri's Certificate of Incorporation provides for
indemnification of directors and officers to the fullest extent permitted by
law.
In accordance with Section 102(b)(7) of the Delaware General Corporation
Law, Isle of Capri's Certificate of Incorporation provides that directors shall
not be personally liable for monetary damages for breaches of their fiduciary
duty as directors except for (1) breaches of their duty of loyalty to the
registrant or its stockholders, (2) acts or omissions not in good faith or that
involve intentional misconduct or knowing violations of law, (3) unlawful
payment of dividends as prohibited by Section 174 of the Delaware General
Corporation Law or (4) transactions from which a director derives an improper
personal benefit.
Various provisions contained in the Articles of Incorporation, By-laws or
other organizational documents of the other co-registrants provide for
indemnification of the directors and officers of those co-registrants and, in
some cases, limit or eliminate the personal liability of the directors of those
co-registrants in accordance with the laws of the states in which those co-
registrants are organized.
Item 21. Exhibits and Financial Statement Schedules
(a) A list of exhibits filed with this registration statement is contained
in the index to exhibits, which is incorporated by reference.
(b) None required or applicable.
(c) Not applicable.
Item 22. Undertakings
Each of the undersigned registrants hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) that, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Securities and Exchange Commission pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price represent no more
than a 20% change in the
II-1
<PAGE>
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered that remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that
is incorporated by reference in this registration statement shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(5) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the provisions described
in Item 20 or otherwise, the registrant has been advised that, in the
opinion of the Securities and Exchange Commission, such indemnification is
against public policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of
expenses incurred or paid by a director, officer or controlling person of
the registrant in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in connection
with the securities being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as expressed in
the Securities Act of 1933 and will be governed by the final adjudication
of such issue.
(6) To respond to requests for information that is incorporated by
reference into the prospectus pursuant to Item 4, 10(b), 11 or 13 of this
form within one business day of receipt of such request and to send the
incorporated documents by first class mail or other equally prompt means.
This includes information contained in documents filed subsequent to the
effective date of this registration statement through the date of
responding to the request.
(7) To supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein,
that was not the subject of and included in this registration statement
when it became effective.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, each of the
registrants has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Biloxi,
State of Mississippi, on August 13, 1999.
Isle of Capri Casinos, Inc.
/s/ Bernard Goldstein
By: _________________________________
Bernard Goldstein
Chairman, Chief Executive Officer
and Director
CSNO, Inc.; Grand Palais Riverboat,
Inc.; IOC-COAHOMA, Inc.; Isle of
Capri Casino-Tunica, Inc.; Isle of
Capri Casino Colorado, Inc.; Isle of
Capri Hotels-Bossier City, L.L.C.;
Louisiana Riverboat Gaming
Partnership; LRG Hotels, L.L.C.;
LRGP Holdings, Inc.; Riverboat
Corporation of Mississippi;
Riverboat Corporation of
Mississippi-Vicksburg; Riverboat
Services, Inc.; St. Charles Gaming
Company, Inc.
/s/ Bernard Goldstein
By: _________________________________
Bernard Goldstein
Chairman, Chief Executive Officer
and Director
PPI, Inc.
/s/ Bernard Goldstein
By: _________________________________
Bernard Goldstein
Chairman, President, Chief
Executive Officer and Director
II-3
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<C> <S> <C>
/s/ Bernard Goldstein Chairman, Chief Executive August 13, 1999
__________________________ Officer and Director--Isle of
Bernard Goldstein Capri Casinos, Inc.; CSNO,
Inc.; Grand Palais Riverboat,
Inc.; IOC-Coahoma, Inc.; Isle
of Capri Casino-Tunica, Inc.;
Isle of Capri Casino Colorado,
Inc.; Isle of Capri Hotels-
Bossier City, L.L.C.; Louisiana
Riverboat Gaming Partnership;
LRG Hotels, L.L.C.; LRGP
Holdings, Inc.; Riverboat
Corporation of Mississippi;
Riverboat Corporation of
Mississippi-Vicksburg;
Riverboat Services, Inc.; St.
Charles Gaming Company, Inc.
(Principal Executive Officer)
Chairman, President, Chief
Executive Officer and
Director--PPI, Inc. (Principal
Executive Officer)
/s/ John M. Gallaway President, Chief Operating August 13, 1999
__________________________ Officer and Director--Isle of
John M. Gallaway Capri Casinos, Inc.; CSNO,
Inc.; Grand Palais Riverboat,
Inc.; IOC-Coahoma, Inc.; Isle
of Capri Casino-Tunica, Inc.;
Isle of Capri Casino Colorado,
Inc.; Isle of Capri Hotels-
Bossier City, L.L.C.; Louisiana
Riverboat Gaming Partnership;
LRG Hotels, L.L.C.; LRGP
Holdings, Inc.; Riverboat
Corporation of Mississippi;
Riverboat Corporation of
Mississippi-Vicksburg;
Riverboat Services, Inc.; St.
Charles Gaming Company, Inc.
Director--PPI, Inc.
/s/ Allan B. Solomon Executive Vice President, August 13, 1999
__________________________ Secretary, General Counsel and
Allan B. Solomon Director--Isle of Capri
Casinos, Inc.; CSNO, Inc.;
Grand Palais Riverboat, Inc.;
IOC-Coahoma, Inc.; Isle of
Capri Casino-Tunica, Inc.; Isle
of Capri Casino Colorado, Inc.;
Isle of Capri Hotels-Bossier
City, L.L.C.; Louisiana
Riverboat Gaming Partnership;
LRG Hotels, L.L.C.; LRGP
Holdings, Inc.; Riverboat
Corporation of Mississippi;
Riverboat Corporation of
Mississippi-Vicksburg;
Riverboat Services, Inc.; St.
Charles Gaming Company, Inc.
Secretary and Director--PPI,
Inc.
/s/ James Patten* Director--PPI, Inc. August 13, 1999
__________________________
James Patten
/s/ Robert S. Goldstein Director--Isle of Capri Casinos, August 13, 1999
__________________________ Inc.
Robert S. Goldstein
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
<C> <S> <C>
/s/ Alan J. Glazer Director--Isle of Capri Casinos, August 13, 1999
__________________________ Inc.
Alan J. Glazer
/s/ Emanuel Crystal* Director--Isle of Capri Casinos, August 13, 1999
__________________________ Inc.
Emanuel Crystal
/s/ Randolph Baker* Director--Isle of Capri Casinos, August 13, 1999
__________________________ Inc.
Randolph Baker
/s/ Rexford A. Yeisley Vice President, Chief Financial August 13, 1999
__________________________ Officer, Treasurer and
Rexford A. Yeisley Assistant Secretary--Isle of
Capri Casinos, Inc.; CSNO,
Inc.; Grand Palais Riverboat,
Inc.; IOC-Coahoma, Inc.; Isle
of Capri Casino-Tunica, Inc.;
Isle of Capri Casino Colorado,
Inc.; Isle of Capri Hotels-
Bossier City, L.L.C.; Louisiana
Riverboat Gaming Partnership;
LRG Hotels, L.L.C.; LRGP
Holdings, Inc.; Riverboat
Corporation of Mississippi;
Riverboat Corporation of
Mississippi-Vicksburg;
Riverboat Services, Inc.; St.
Charles Gaming Company, Inc.
(Principal Financial and
Accounting Officer)
Treasurer--PPI, Inc. (Principal
Financial and Accounting
Officer)
</TABLE>
/s/ Rexford A. Yeisley
*By:______________________ August 13, 1999
Rexford A. Yeisley
Attorney-in-fact
II-5
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
1.1 Purchase Agreement, dated as of April 20, 1999, among Isle of Capri
Casinos, Inc., the subsidiary guarantors named therein and Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated and
Wasserstein Perella Securities, Inc., for themselves and as
representatives of the other initial purchasers(20)
3.1A Certificate of Incorporation of Casino America, Inc.(5)
3.1B Amendment to Certificate of Incorporation of Casino America, Inc.(20)
3.2A By-laws of Casino America, Inc.(5)
3.2B Amendments to By-laws of Casino America, Inc., dated February 7,
1997(13)
*3.3 Articles of Incorporation of CSNO, Inc.
*3.4 By-laws of CSNO, Inc.
*3.5 Amended and Restated Articles of Incorporation of Grand Palais
Riverboat, Inc.
*3.6 By-laws of Grand Palais Riverboat, Inc.
*3.7 Articles of Incorporation of IOC-Coahoma, Inc.
*3.8 By-laws of IOC-Coahoma, Inc.
*3.9 Articles of Incorporation of Isle of Capri Casino-Tunica, Inc.
*3.10 By-laws of Isle Capri Casino-Tunica, Inc.
*3.11 Articles of Incorporation of Isle of Capri Casino Colorado, Inc.
*3.12 By-laws of Isle of Capri Casino Colorado, Inc.
*3.13 Articles of Organization of Isle of Capri Hotels-Bossier City, L.L.C.
*3.14 Operating Agreement of Isle of Capri Hotels-Bossier City, L.L.C.
*3.15 Amended and Restated Partnership Agreement of Louisiana Riverboat
Gaming Partnership
*3.16 Articles of Organization of LRG Hotels, L.L.C.
*3.17 Amended and Restated Operating Agreement of LRG Hotels, L.L.C.
*3.18 Articles of Incorporation of LRGP Holdings, Inc.
*3.19 By-laws of LRGP Holdings, Inc.
*3.20 Articles of Incorporation of PPI, Inc.
*3.21 By-laws of PPI, Inc.
*3.22 Articles of Incorporation of Riverboat Corporation of Mississippi
*3.23 By-laws of Riverboat Corporation of Mississippi
*3.24 Articles of Incorporation of Riverboat Corporation of Mississippi-
Vicksburg
*3.25 By-laws of Riverboat Corporation of Mississippi-Vicksburg
*3.26 Articles of Incorporation of Riverboat Services, Inc.
*3.27 By-laws of Riverboat Services, Inc.
*3.28 Articles of Incorporation of St. Charles Gaming Company, Inc.
*3.29 By-laws of St. Charles Gaming Company, Inc.
4.1 Specimen Certificate of Common Stock(2)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
4.3A Specimen Warrant Agreement with respect to warrants to purchase
900,000 shares of Isle of Capri Casinos, Inc.'s common stock(3)
4.3B Form of Warrant Agreement with respect to warrants to purchase 500,000
shares of Isle of Capri Casinos, Inc.'s common stock(12)
4.4A Warrant, dated June 9, 1995, of Crown Casino Corporation to purchase
up to 416,667 shares of Isle of Capri Casinos, Inc.'s common stock(7)
4.4B Warrant, dated May 3, 1996, of Crown Casino Corporation to purchase up
to 416,667 shares of Isle Capri Casinos, Inc.'s common stock(8)
4.5A Indenture, dated as of November 1, 1993, between Casino America, Inc.
and Shawmut Bank Connecticut, National Association, as trustee(4)
4.5B First Supplemental Indenture, dated as of April 29, 1994, between
Casino America, Inc. and Shawmut Bank Connecticut, National
Association, as trustee(4)
4.5C Second Supplemental Indenture, dated as of March 8, 1995, between
Casino America, Inc. and Shawmut Bank Connecticut, National
Association, as trustee(7)
4.5D Third Supplemental Indenture, dated as of May 3, 1996, between Casino
America, Inc. and Fleet National Bank, as trustee(8)
4.5E Fourth Supplemental Indenture, dated as of July 26, 1996, between
Casino America, Inc. and Fleet National Bank, as trustee(8)
4.6A Indenture, dated as of August 1, 1996, between Casino America, Inc.
and Fleet National Bank, as trustee(8)
4.6B First Supplemental Indenture, dated as of April 21, 1999, between Isle
of Capri Casinos, Inc. and Fleet National Bank, as trustee(20)
4.7 Isle of Capri Casinos, Inc. agrees to furnish to the Securities and
Exchange Commission, upon its request, the instruments defining the
rights of holders of long term debt where the total amount of
securities authorized thereunder does not exceed 10% of Isle of Capri
Casinos, Inc.'s total consolidated assets
4.8 Rights Agreement, dated as of February 7, 1997, between Casino
America, Inc. and Norwest Bank Minnesota, N.A., as rights agent(13)
4.9 Indenture, dated as of April 23, 1999, among Isle of Capri Casinos,
Inc. the subsidiary guarantors named therein and State Street Bank and
Trust Company, as trustee(20)
4.10 Registration Rights Agreement, dated as of April 23, 1999, among Isle
of Capri Casinos, Inc., the subsidiary guarantors named therein and
Merrill Lynch, Pierce, Fenner & Smith Incorporated and Wasserstein
Perella Securities, Inc., for themselves and on behalf of the other
initial purchasers(20)
*5.1 Opinion of Mayer, Brown & Platt as to the legality of the securities
being registered
10.1 Amended and Restated Berth Rental Agreement, dated as of May 12, 1992,
between the Biloxi Port Commission and Riverboat Corporation of
Mississippi(2)
10.2A Biloxi Waterfront Project Lease, dated as of May 12, 1986, among the
City of Biloxi, Mississippi, Point Cadet Development Corporation and
Riverboat Corporation of Mississippi(2)
10.2B Addendum to Lease Agreement, dated as of August 1, 1992, among the
City of Biloxi, Mississippi, Point Cadet Development Corporation and
Riverboat Corporation of Mississippi(4)
10.2C Second Addendum to Lease, dated as of April 9, 1994, among the City of
Biloxi, Mississippi, Point Cadet Development Corporation, the Biloxi
Port Commission and Riverboat Corporation of Mississippi(4)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
10.2D Third Addendum to Casino Lease, dated as of April 26, 1995, among the
City of Biloxi, Mississippi, Point Cadet Development Corporation, the
Biloxi Port Commission and Riverboat Corporation of Mississippi(7)
10.3 Declaration of Shared Facilities Agreement for the Isle of Capri
Casino and Hotel, Biloxi, Mississippi, dated as of April 26, 1995,
made by Riverboat Corporation of Mississippi(7)
10.4 Intercreditor Agreement, dated as of May 1, 1995, by and among The
Peoples Bank, Shawmut Bank of Connecticut, N.A. and Riverboat
Corporation of Mississippi(7)
10.5 Agreement for Sale and Purchase, dated as of November 8, 1994, by and
between Casino America, Inc. and Pompano Park Associates, Limited
Partnership(7)
10.6 Variable Gaming Adjustment Covenant, made as of June 30, 1995 by PPI,
Inc., in favor of Pompano Park Associates, Limited Partnership(7)
10.7 Casino America, Inc. 1992 Stock Option Plan(1)
10.8 Casino America, Inc. 1992 Stock Option Plan Amendment(3)
10.9 Casino America, Inc. 1993 Stock Option Plan, as amended(7)
10.10 Casino America, Inc. description of Employee Bonus Plan(3)
10.11 Amended and Restated Partnership Agreement, dated as of May 15, 1997,
of Louisiana Riverboat Gaming Partnership (see exhibit 3.15)
10.12 Management Agreement, dated as of January 4, 1993, between Riverboat
Services, Inc. and Louisiana Riverboat Gaming Partnership(3)
10.13 Management Agreement, dated as of March 2, 1995, between Riverboat
Services, Inc. and St. Charles Gaming Company, Inc(7)
10.14 Casino America, Inc. Retirement Trust and Savings Plan(3)
10.15A Deed of Trust, Leasehold Deed of Trust, Assignment of Rents, Fixture
Filing, Security Agreement and Financing Statement, dated as of
November 15, 1993, in a Principal Amount of $105,000,000 by Riverboat
Corporation of Mississippi to J. Morton Matrick, as trustee for the
benefit of Shawmut Bank Connecticut, National Association, as
indenture trustee(4)
10.15B Deed of Trust, Leasehold Deed of Trust, Assignment of Rents, Fixture
Filing, Security Agreement and Financing Statement, dated as of
November 15, 1993, in a Principal Amount of $105,000,000 by Riverboat
Corporation of Mississippi to J. Morton Matrick, as trustee for the
benefit of Shawmut Bank Connecticut, National Association, as
indenture trustee(4)
10.16 Security Agreement, dated as of November 16, 1993, from Casino
America, Inc. and the Collateral Grantors party thereto to Shawmut
Bank Connecticut, National Association, as trustee(4)
10.17 First Preferred Fleet Mortgage, dated as of November 15, 1993, by
Riverboat Corporation of Mississippi to Shawmut Bank Connecticut,
National Association, as trustee(4)
10.18 Security Agreement Supplement No. 2, dated as of January 4, 1994,
between Casino America, Inc. and Shawmut Bank Connecticut, National
Association, as trustee(4)
10.19 First Amendment to First Preferred Fleet Mortgage, dated as of January
6, 1994, by Riverboat Corporation of Mississippi to Shawmut Bank
Connecticut, National Association, as trustee(4)
10.20 Director's Option Plan(6)
10.21A Biloxi Waterfront Project Lease, dated as of April 9, 1994, by and
between the City of Biloxi, Mississippi and Riverboat Corporation of
Mississippi(4)
10.21B First Amendment to Biloxi Waterfront Project Lease (Hotel Lease),
dated as of April 26, 1995, by and between the City of Biloxi,
Mississippi and Riverboat Corporation of Mississippi(7)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
10.22 Settlement Agreement, dated as of April 14, 1994, among the City of
Biloxi, Mississippi, Point Cadet Development Corporation, Riverboat
Corporation of Mississippi, Casino America, Inc., Sea Harvest, Inc.
and Wayne Hicks and Terryss Hicks(4)
10.23 Management Agreement, dated as of December 23, 1994, between Riverboat
Corporation of Mississippi and Mississippi Innkeepers, Inc.(7)
10.24 Amended Stock Purchase Agreement, dated as of June 2, 1995, among
Crown Casino Corporation, St. Charles Gaming Company, Inc. and
Louisiana Riverboat Gaming Partnership(7)
10.25 Crowne Plaza Resort New Development License Agreement, dated as of
December 30, 1994, between Holiday Inns Franchising, Inc. and
Riverboat Corporation of Mississippi(7)
10.26 Security Agreement-Pledge, dated as of June 9, 1995, between Louisiana
Riverboat Gaming Partnership and Crown Casino Corporation(7)
10.27 Shareholders Agreement, dated as of June 9, 1995, by and between Crown
Casino Corporation and Louisiana Riverboat Gaming Partnership(7)
10.28 Amended and Restated Lease, dated as of April 19, 1999, among Port
Resources, Inc. and CRU, Inc., as landlords, and St. Charles Gaming
Company, Inc., as tenant(20)
10.29 Bareboat Charter Party Agreement, dated as of March 20, 1995, between
Riverboat Chartering Company, L.C. and Riverboat Corporation of
Mississippi(7)
10.30 Purchase Option Agreement, dated as of March 20, 1995, between
Riverboat Chartering Company, L.C. and Riverboat Corporation of
Mississippi(7)
10.31 Guaranty Agreement, dated as of March 20, 1995, between Riverboat
Chartering Company, L.C. and Riverboat Corporation of Mississippi(7)
10.32 Development Agreement, dated as of June 5, 1995, between St. Charles
Gaming Company, Inc. and Calcasieu Parish Police Jury(7)
10.33 Note Purchase Agreement, dated as of July 20, 1995, by and among
Louisiana Riverboat Gaming Partnership, St. Charles Gaming Company,
Inc., Nomura Holding America Inc. and First National Bank of
Commerce(7)
10.34 Lease, dated as of July 1, 1995, between Pompano Park Associates,
Inc., as lessor, and Casino America, Inc., as lessee(7)
10.35 Ground Lease with Option to Purchase, dated as of February 9, 1995,
between Iron Dukes, Inc. and Isle of Capri Casino Colorado, Inc.(7)
10.36 Promissory Note, dated June 29, 1995, by and between PPI, Inc. and
Capital Bank(9)
10.37 Florida Real Estate Mortgage, Assignment of Rents, and Security
Agreement, dated as of June 29, 1995, by and between PPI, Inc. and
Capital Bank(9)
10.38 Employment Agreement, dated as of January 6, 1999, between Isle of
Capri Casinos, Inc. and John M. Gallaway(20)
10.39 Employment Agreement, dated as of January 6, 1999, between Isle of
Capri Casinos, Inc. and Allan B. Solomon(20)
10.40 Employment Agreement, dated as of January 6, 1999, between Isle of
Capri Casinos, Inc. and Rexford A. Yeisley(20)
10.41 Stock Purchase Agreement, dated as of February 27, 1996, by and
between Casino America, Inc., on the one hand, and Bernard Goldstein,
Robert Goldstein, Richard Goldstein and Jeffrey Goldstein, on the
other hand(10)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
10.42 Stock Purchase and Sale Agreement pursuant to a Plan of
Reorganization, dated as of December 29, 1995, between Casino
America, Inc. and Grand Palais Riverboat, Inc.(10)
10.43 Form of Stock Purchase Agreement, dated as of January 19, 1996,
between Casino America, Inc. and Crown Casino Corporation(10)
10.44 Purchase Agreement, dated as of July 2, 1996, by and among CSNO,
Inc., LRGP Holdings, Inc. and Louisiana River Site Development,
Inc.(12)
10.45 Escrow Agreement, dated as of July 2, 1996, by and among LRGP
Holdings, Inc., Casino America, Inc., Louisiana River Site
Development, Inc., Louisiana Downs, Inc. and Boult, Cummings, Conners
& Berry, PLC(12)
10.46 Employment Agreement, dated as of January 6, 1999, between Isle of
Capri Casinos, Inc. and Edward Reese(20)
10.47 Employment Agreement, dated as of January 6, 1999, between Isle of
Capri Casinos, Inc. and Robert Boone(20)
10.48 Employment Agreement, dated as of January 6, 1999, between Isle of
Capri Casinos, Inc. and James Guay(20)
10.49 Employment Agreement, dated as of January 6, 1999, by and between
Isle of Capri Casinos, Inc. and Timothy M. Hinkley(20)
10.50 Management Agreement, dated as of April 28, 1997, between Casino
America, Inc. and Riverboat Corporation of Mississippi(14)
10.51 Management Agreement, dated as of April 28, 1997, between Casino
America, Inc. and Riverboat Corporation of Mississippi-Vicksburg(14)
10.52 Management Agreement, dated as of April 25, 1997, between Casino
America, Inc. and ICB, L.L.C.(14)
10.53 Operating Agreement of ICB, L.L.C., dated as of April 25, 1997,
between Casino America of Colorado, Inc. and Blackhawk Gold, Ltd.(14)
10.54 Amended Casino America, Inc. 1992 Stock Option Plan(11)
10.55 Amended Casino America, Inc. l993 Stock Option Plan(11)
10.56 Management Agreement, dated as of July 29, 1997, between Casino
America, Inc. and Isle of Capri Black Hawk, L.L.C.(16)
10.57 Joint Venture Agreement of Capri Cruises, between Commodore Cruises
Limited and Isle of Capri Casino Corporation(18)
10.58 Amended Casino America, Inc. 1993 Stock Option Plan(15)
10.59 Amended Casino America, Inc. 1993 Stock Option Plan(17)
10.60 Lease, dated as of March 1, 1999, by and among R. M. Leatherman, Jr.,
et al. and Isle of Capri-Tunica, Inc.(19)
10.61 Asset Purchase Agreement, dated as of October 7, 1998, by and among
Tunica Partners, LP and Isle of Capri Casino-Tunica, Inc. and Isle of
Capri Casinos, Inc.(19)
10.62 Amendment No. 1 to Asset Purchase Agreement, dated as of December 7,
1998, by and among Tunica Partners, LP and Isle of Capri Casino-
Tunica, Inc. and Isle of Capri Casinos, Inc.(19)
10.63 Amendment No. 2 to Asset Purchase Agreement, dated as of February 24,
1999, by and among Tunica Partners, LP and Isle of Capri Casino-
Tunica, Inc. and Isle of Capri Casinos, Inc.(19)
10.64 Employment Agreement, dated as of January 6, 1999, between Isle of
Capri Casinos, Inc. and Bernie Goldstein(20)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
10.65 Employment Agreement, dated as of January 25, 1999, between Isle of
Capri Casinos, Inc. and Gregory D. Guida(20)
10.66 Employment Agreement, dated as of January 6, 1999, between Isle of
Capri Casinos, Inc. and William C. Kilduff, Jr.(20)
10.67 Employment Agreement, dated as of January 6, 1999, between Isle of
Capri Casinos, Inc. and Roger Deaton(20)
10.68 Employment Agreement, dated as of January 6, 1999, between Isle of
Capri Casinos, Inc. and Mark Fulton(20)
10.69 Employment Agreement, dated as of January 6, 1999, between Isle of
Capri Casinos, Inc. and Mike Howard(20)
10.70 Employment Agreement, dated as of January 6, 1999, between Isle of
Capri Casinos, Inc. and Bob Fiore(20)
10.71 Employment Agreement, dated as of March 1, 1999, between Isle of Capri
Casinos, Inc. and Robert Griffin(20)
10.72 Credit Agreement, dated as of April 23, 1999, among Isle of Capri
Casinos, Inc., the lenders listed therein, Canadian Imperial Bank of
Commerce, as administrative agent and issuing lender, Bank One of
Louisiana, N.A., as syndication agent and Wells Fargo Bank, N.A., as
documentation agent(20)
*12.1 Computation of ratio of earnings to fixed charges
21.1 Subsidiaries of Isle of Capri Casinos, Inc.(20)
**23.1 Consent of Ernst & Young LLP
*23.2 Consent of Mayer, Brown & Platt (contained in Exhibit 5.1)
*24.1 Powers of attorney
*25.1 Form T-1 Statement of eligibility under the Trust Indenture Act of
1939 of State Street Bank and Trust Company
*99.1 Form of Letter of Transmittal
*99.2 Form of Notice of Guaranteed Delivery
</TABLE>
- --------
*Filed as an exhibit to the Registration Statement filed on July 2, 1999.
**Filed as an exhibit to this Amendment No. 1 to the Registration Statement.
(1) Filed as an exhibit to Casino America, Inc.'s Current Report on Form 8-K
filed June 17, 1992 (File No. 0-20538) and incorporated herein by
reference.
(2) Filed as an exhibit to Casino America, Inc.'s Annual Report on Form 10-K
for the fiscal year ended April 30, 1992 (File No. 0-20538) and
incorporated herein by reference.
(3) Filed as an exhibit to Casino America, Inc.'s Annual Report on Form 10-K
for the fiscal year ended April 30, 1993 (File No. 0-20538) and
incorporated herein by reference.
(4) Filed as an exhibit to Casino America, Inc.'s Annual Report on Form 10-K
for the fiscal year ended April 30, 1994 (File No. 0-20538) and
incorporated herein by reference.
(5) Filed as an exhibit to Casino America, Inc.'s Registration Statement on
Form S-1 filed September 3, 1993, as amended (Reg. No. 33-68434), and
incorporated herein by reference.
(6) Filed as an exhibit to Casino America, Inc.'s Registration Statement on
Form S-8 filed June 30, 1994 (File No. 33-80918) and incorporated herein
by reference.
(7) Filed as an exhibit to Casino America, Inc.'s Annual Report on Form 10-K
for the fiscal year ended April 30, 1995 (File No. 0-20538) and
incorporated herein by reference.
(8) Filed as an exhibit to Casino America, Inc.'s Registration Statement on
Form S-3 filed March 21, 1996 (No. 333-02610) and incorporated herein by
reference.
(9) Filed as an exhibit to Casino America, Inc.'s Quarterly Report on Form 10-
Q for the fiscal quarter ended October 31, 1995 (File No. 0-20538) and
incorporated herein by reference.
(10) Filed as an exhibit to Casino America, Inc.'s Quarterly Report on Form 10-
Q for the fiscal quarter ended January 30, 1996 (File No. 0-20538) and
incorporated herein by reference.
<PAGE>
(11) Filed as an exhibit to Casino America, Inc.'s Proxy Statement for the
fiscal year ended April 30, 1996 (File No. 0-20538) and incorporated
herein by reference.
(12) Filed as an exhibit to Casino America, Inc.'s Annual Report on Form 10-K
for the fiscal year ended April 30, 1996 (File No. 0-20538) and
incorporated herein by reference.
(13) Filed as an exhibit to Casino America, Inc.'s Current Report on Form 8-K
filed on February 14, 1997 (File No. 0-20538) and incorporated herein by
reference.
(14) Filed as an exhibit to Casino America, Inc.'s Annual Report on Form 10-K
for the fiscal year ended April 27, 1997 (File No. 0-20538) and
incorporated herein by reference.
(15) Filed as an exhibit to Casino America, Inc.'s Proxy Statement for the
fiscal year ended April 27, 1997 (File No. 0-20538) and incorporated
herein by reference.
(16) Filed as an exhibit to the Isle of Capri Black Hawk L.L.C./Isle of Capri
Black Hawk Capital Corp. Registration Statement on Form S-4 (Reg. No. 333-
38093) and incorporated herein by reference.
(17) Filed as an exhibit to Casino America, Inc.'s Proxy Statement for the
fiscal year ended April 26, 1998 (File No. 0-20538) and incorporated
herein by reference.
(18) Filed as an exhibit to Casino America, Inc.'s Annual Report on Form 10-K
for the fiscal year ended April 26, 1998 (File No. 0-20538) and
incorporated herein by reference.
(19) Filed as an exhibit to Isle of Capri Casinos, Inc.'s Quarterly Report on
Form 10-Q for the fiscal quarter ended January 24, 1999 (File No. 0-20538)
and incorporated herein by reference.
(20) Filed as an exhibit to Isle of Capri Casinos, Inc.'s Annual Report on Form
10-K for the fiscal year ended April 25, 1999 (File No. 0-20538) and
incorporated herein by reference.
<PAGE>
EXHIBIT 23.1
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in Amendment
No. 1 to the Registration Statement No. 333-82243 (Form S-4) of Isle of Capri
Casinos, Inc. for the offer to exchange up to $390,000,000 of its 8 3/4% Senior
Subordinated Notes due 2009, Series B, for all of its outstanding 8 3/4% Senior
Subordinated Notes due 2009, Series A, and to the incorporation by reference
therein of our report dated June 10, 1999, with respect to the consolidated
financial statements of Isle of Capri Casinos, Inc. incorporated by reference in
its Annual Report (Form 10-K) at April 25, 1999 and April 26, 1998 and for the
years ended April 25, 1999, April 26, 1998 and April 27, 1997, filed with the
Securities and Exchange Commission.
/s/ Ernst & Young LLP
New Orleans, Louisiana
August 13, 1999
