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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of earliest event reported: December 3, 1998
PRESIDENT CASINOS, INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-20840 51-0341200
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(State or other (Commission File (I.R.S. Employer
jurisdiction of Number) Identification
organization) Number)
802 North First Street, St. Louis, Missouri 63102
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(Address of principal executive offices) (Zip code)
(314) 622-3000
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(Registrant's telephone number, including area code)
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Item 5. Other Events.
On December 4, 1998, President Casinos, Inc. ("President") announced that it
had repurchased $25 million of its 13% senior notes. The repurchased notes
will be used to satisfy the $25 million principal payment due September 15,
1999 on President's originally outstanding $100 million 13% senior notes. The
repurchase was funded by the issuance of $25 million of new 12% notes. The
new 12% notes have no mandatory redemption obligation, mature on September 15,
2001, and are to be secured by mortgages on two of the President's vessels,
the "Admiral" and the "New Yorker", as well as subsidiary guarantees.
Item 7. Financial Statements and Exhibits.
(a) Financial statements of businesses acquired. Not applicable.
(b) Pro forma financial information. Not applicable.
(c) Exhibits. See Exhibit Index.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: December 15, 1998
PRESIDENT CASINOS, INC.
By:/s/ James A. Zweifel
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James A. Zweifel, Executive Vice President
and Chief Financial Officer
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EXHIBIT INDEX
Exhibit
Number Description
10.1 Agreement to Exchange Securities, dated December 3, 1998 by and
among President Casinos, Inc., President Riverboat Casino-Iowa,
Inc., President Riverboat Casino-Missouri, Inc., The President
Riverboat Casino-Mississippi, Inc., TCG/Blackhawk, Inc., P.R.C.-
Louisiana, Inc., President Riverboat Casino-New York, Inc.,
President Casino New Yorker, Inc., PRC Holdings Corporation, PRC
Management, Inc., PRCX Corporation, President Riverboat Casino-
Philadelphia, Inc., Vegas, Vegas, Inc., and The Connelly Group,
L.P. and each holder of the Company's 13% Senior Exchange Notes due
2001.
10.2 Indenture dated as of December 3, 1998, among President Casinos,
Inc., President Riverboat Casino-Iowa, Inc., President Riverboat
Casino-Missouri, Inc., The President Riverboat Casino-Mississippi,
Inc., TCG/Blackhawk, Inc., P.R.C.-Louisiana, Inc., President
Riverboat Casino-New York, Inc., President Casino New Yorker, Inc.,
PRC Holdings Corporation, PRC Management, Inc., PRCX Corporation,
President Riverboat Casino-Philadelphia, Inc., Vegas, Vegas, Inc.
and The Connelly Group, L.P., and U.S. Trust Company of Texas,
N.A.
99 Press Release, dated December 4, 1998.
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EXHIBIT 10.1
PRESIDENT CASINOS, INC.
AGREEMENT TO EXCHANGE SECURITIES
December 3, 1998
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AGREEMENT TO EXCHANGE SECURITIES
THIS AGREEMENT TO EXCHANGE SECURITIES (this "Agreement") is made this 3rd
day of December, 1998 by and among President Casinos, Inc., a Delaware
corporation (the "Company"), President Riverboat Casino-Iowa, Inc., President
Riverboat Casino-Missouri, Inc., The President Riverboat Casino-Mississippi,
Inc., TCG/Blackhawk, Inc., P.R.C.-Louisiana, Inc., President Riverboat Casino-
New York, Inc., President Casino New Yorker, Inc., PRC Holdings Corporation,
PRC Management, Inc., PRCX Corporation, President Riverboat Casino-
Philadelphia, Inc., Vegas, Vegas, Inc., and The Connelly Group, L.P. (each a
"Subsidiary Guarantor," and collectively, the "Subsidiary Guarantors") and each
holder (each a "Holder," and collectively, the "Holders") of the Company's 13%
Senior Exchange Notes due 2001 (the "Senior Exchange Notes") listed on Exhibit
A attached hereto and made a part hereof.
WHEREAS, Section 3.08 of the Indenture dated August 26, 1994 governing the
Senior Exchange Notes (the "Senior Exchange Note Indenture") requires the
Company to redeem 25% of the aggregate principal amount of the Senior Exchange
Notes issued under the Senior Exchange Note Indenture on each of September 15,
1999 and September 15, 2000 at a redemption price equal to 100% of the
principal amount thereof, together with accrued but unpaid interest to the
date of redemption (the "Redemption Obligation");
WHEREAS, under the terms of the Senior Exchange Note Indenture, the
principal amount of Senior Exchange Notes the Company is required to redeem
pursuant to the Redemption Obligation is reduced by the aggregate principal
amount of Senior Exchange Notes acquired by the Company (through purchase,
redemption or exchange);
WHEREAS, pursuant to this Agreement, the Company and each Holder wish to set
forth the terms and conditions pursuant to which the Company shall repurchase
from each Holder the aggregate principal amount of Senior Exchange Notes set
forth opposite such Holder's name on Exhibit A hereto (the "Note Repurchase"),
and the Company shall issue and sell to each Holder, and each Holder shall
purchase from the Company, the principal amount of the Company's 12% Secured
Notes due 2001 (the "Secured Notes") set forth opposite such Holder's name on
Exhibit A attached hereto (the "Secured Note Issuance");
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants, representations and warranties hereinafter set forth, the parties
hereto, intending to be legally bound, hereby agree as follows:
1. Exchange of Securities. On the Closing Date (as defined below), the
Company shall repurchase from each Holder, and each Holder shall sell and
deliver to the Company, Senior Exchange Notes in the aggregate principal
amount set forth opposite such Holder's name on Exhibit A hereto for a
purchase price equal to 95% of such aggregate principal amount, together with
all accrued but unpaid interest to the Closing Date.
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Concurrently with the Note Repurchase, the Company shall issue and sell to
each Holder, and each Holder shall purchase from the Company, the aggregate
principal amount of Secured Notes set forth opposite such Holder's name on
Exhibit A hereto.
The Secured Notes are to be issued pursuant to an indenture substantially in
the form of Exhibit B attached hereto (the "Secured Note Indenture") to be
dated as of the Closing Date among the Company, the Subsidiary Guarantors and
United States Trust Company of Texas, N.A., as trustee (the "Trustee"). The
Secured Notes will be guaranteed in a manner substantially consistent with the
Subsidiary Guarantee attached as Exhibit B to the Secured Note Indenture (the
"Guarantees") by each of the Subsidiary Guarantors. The obligation of
President Riverboat Casino-Missouri, Inc. ("President Missouri") under the
Guarantee shall be secured by a first priority security interest in the vessel
known as the "Admiral" and related barges named "Admiral Barge One" and "Admiral
Barge Two" ("Admiral Barge Two" shall not be encumbered by a ship mortgage)
pursuant to that certain Security Agreement dated as of the date hereof and
substantially in the form attached hereto as Exhibit C and incorporated by
reference herein (the "Security Agreement") and that certain First Preferred
Fleet Mortgage dated as of the date hereof and substantially in the form
attached hereto as Exhibit D and incorporated by reference herein (the
"Mortgage" and, collectively with the Security Agreement and the Leasehold
Deed of Trust defined below, the "Security Documents"). In addition, as
provided in Sections 4(c) and (d) hereof the obligations of President Missouri
under the Guarantee shall be further secured pursuant to that certain Future
Advance Leasehold and Improvements Deed of Trust and Security Agreement and
Fixture Filing attached hereto as Exhibit E (the "Leasehold Deed of Trust"),
and the obligations of President Riverboat Casino-New York, Inc. ("PRC-NY")
under the Guarantee shall be further secured by a first priority security
interest in the vessel known as the "New Yorker." The Secured Notes are
collectively referred to herein as the "Securities" and the term "Securities"
shall also include the Guarantees thereof whenever the context permits. On
the Closing Date, the Company shall issue the Master Note (as defined below)
representing certain of the Secured Notes to be issued upon exchange
hereunder. The Master Note will be dated as of the Closing Date, will bear
interest from the Closing Date and will otherwise be in the form of Exhibit A
to the Secured Note Indenture.
Capitalized terms used but not defined herein shall have the meanings given
to such terms in the Secured Note Indenture.
The Secured Notes will be offered to each Holder pursuant to an exemption
from the registration requirements under the Securities Act of 1933, as
amended (the "Act"). Upon original issuance thereof, and until such time as
the same is no longer required under the applicable requirements of the
Secured Note Indenture, the Secured Notes shall bear a legend in substantially
the following form:
"THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS. NEITHER
THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED,
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SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN
THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM,
OR NOT SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL
OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR
OF SUCH SECURITY) ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT,
(C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE
144A, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO
WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE
144A, (D) TO AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH
(A), (1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS
ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN
"ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR
OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT, OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S OR
THE REGISTRAR (AS APPLICABLE) RIGHT PRIOR TO ANY SUCH OFFER, SALE OR
TRANSFER PURSUANT TO CLAUSE (D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION
OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION REASONABLY SATISFACTORY
TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF
TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY IS
COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE REGISTRAR. THIS LEGEND
WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION
TERMINATION DATE."
This Agreement, the Securities, the Guarantees, the Security Documents and
the Secured Note Indenture are hereinafter sometimes referred to collectively
as the "Operative Documents."
2. Disclosure Documents. Each Holder acknowledges receipt of the following
documents (collectively, the "Disclosure Documents"): (i) the Company's
Annual Report on Form 10-K for the fiscal year ended February 28, 1998; and
(ii) the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended
August 31, 1998 delivered by the Company to each Holder in connection with the
transactions contemplated hereby. Each Holder represents that it has had
adequate time and opportunity to review the information contained in the
Disclosure Documents and to ask questions of, and request information from,
the Company and each of the Subsidiary Guarantors with respect thereto.
3. Delivery and Payment. Unless otherwise agreed to the contrary, delivery
of the Senior Exchange Notes to the Company and of the Secured Notes to the
Holders (the "Closing") shall be made at 9:00 a.m., Eastern time, on December
3, 1998 (the "Closing Date") at the offices of United States Trust Company of
New York in New York, New York.
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The Company shall deliver to each Holder Secured Notes in an aggregate
principal amount equal to the aggregate principal amount of Secured Notes set
forth opposite each Holder's name on Exhibit A hereto. All such Secured Notes
shall be in definitive form and registered in the name of the Holder (or in
such other name as the Holder may request upon at least two business days'
notice to the Company). Each Holder shall deliver to the Company Senior
Exchange Notes having an aggregate principal amount set forth next to such
Holder's name on Exhibit A hereto, with the Assignment Form attached thereto
duly executed to the order of the Company. One or more of the Secured Notes
(the "Master Note") may be registered in the name of Cede & Co., as the
nominee of The Depository Trust Company. The Secured Notes or the Master Note
in definitive form shall be made available to each Holder for inspection on
the business day immediately preceding the Closing Date.
If the Closing shall not have occurred on or before December 3, 1998, this
Agreement may be terminated by any party to this Agreement so long as such
party is, at the time of making such election to terminate, ready, willing and
able to perform all of its respective obligations under this Agreement.
4. Agreements of the Company and the Subsidiary Guarantors. The Company
and each of the Subsidiary Guarantors, jointly and severally, agrees with each
Holder as follows:
(a) For so long as any of the Secured Notes remain outstanding and during
any period in which the Company is not subject to Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), to make
available to any Qualified Institutional Buyer (as such term is defined under
Rule 144A under the Act) (a "QIB") or "accredited investor" (within the meaning
of subparagraph (a)(1), (2), (3) or (7) of Rule 501 under the Act) (an
"Institutional Accredited Investor") which beneficially owns Secured Notes,
prior to the registration thereof in connection with any sale thereof, and to
any prospective purchaser of such Secured Notes from such QIB or Institutional
Accredited Investor, the information required by Rule 144A(d)(4) under the
Act. The Company shall also keep available the "current public information"
referred to in Rule 144(c).
(b) During the period from the date hereof to the Closing Date, to take
all actions reasonably necessary or appropriate to cause their representations
and warranties contained in this Agreement and the other Operative Documents
to be true and correct in all material respects as of the Closing Date, after
giving effect to the transactions contemplated by this Agreement and the other
Operative Documents, as if made on and as of such date.
(c) Following the Closing Date, the Company and President Missouri shall
comply with each of the Security Documents and each use their commercially
reasonable best efforts to cause the obligations of President Missouri under
its Guarantee to be secured by the Leasehold Deed of Trust with respect to the
real property related to the vessel known as the "Admiral."
(d) Following the Closing Date, each of the Company and PRC-NY shall use
their respective commercially reasonable best efforts to cause the obligations
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of PRC-NY to be secured by a first priority security interest in the vessel
known as the "New Yorker" as soon as practicable following the expiration of
all applicable restrictions under the charter agreement dated July 1, 1998,
between PRC-NY and Sterling Shipping Two (the "Charter Agreement") pursuant to
which the "New Yorker" is currently chartered. The applicable fleet mortgage
therefor shall be substantially in the form attached as Exhibit D hereto.
PRC-NY shall not consent to the extension of any such restrictions.
(e) Until such time as a first preferred fleet mortgage is granted as to
the vessel "New Yorker," PRC-NY agrees to comply with its obligations under
Section 9 of the Charter Agreement currently in effect and to use its best
efforts to cause the charterer to preserve and maintain such vessel in as good
condition, working order and repair as the same is on the date hereof,
ordinary wear and tear excepted.
(f) PRC-NY will not sell or change the flag of the vessel "New Yorker"
without the prior written consent of a 60% majority-in-interest of the
Holders.
(g) PRC-NY covenants and agrees that it will use its best efforts to
cause the charterer, at its expense, to maintain or cause to be maintained in
effect for the vessel "New Yorker," in form, amount and with insurance
companies, underwriters, clubs or funds of recognized responsibility, all
reasonably acceptable to Holders, insurance of a kind, amount and character
customarily carried by persons operating like properties against risk of loss
and damage. When PRC-NY holds the "New Yorker" free of any charter, Holders
shall be named as additional loss payees on each policy.
5. Representations and Warranties. (a) The Company and each of the
Subsidiary Guarantors, jointly and severally, represents and warrants to each
Holder as of the date hereof and as of the Closing Date that:
(i) The Disclosure Documents do not, and any supplement or amendment to
them will not, contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
All financial statements contained therein comply with all applicable rules
and regulations of the Securities and Exchange Commission and generally
accepted accounting principles, consistently applied. No order has been
issued asserting that any of the transactions contemplated by this Agreement
are subject to the registration requirements of the Act. The Disclosure
Documents contain all the information specified in, and meeting the
requirements of, Rule 144A(d) (4) under the Act.
(ii) The Company and each of its Subsidiaries (as defined in the
Secured Note Indenture) has been duly organized, is validly existing as a
corporation, partnership, limited partnership or limited liability company, as
applicable, in good standing under the laws of its respective jurisdiction of
formation, has all requisite corporate or partnership power and authority to
carry on its business as it is currently being conducted and to own, lease and
operate its properties, and is duly qualified and in good standing as a
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foreign corporation or partnership authorized to do business in each
jurisdiction in which the nature of its business or its ownership or leasing
of property requires such qualification except where the failure to so qualify
could not be reasonably expected to result in a material adverse effect on the
properties, business, operations, earnings, assets, liabilities or financial
condition of the Company and its Subsidiaries taken as a whole or on the
ability of the Company and its Subsidiaries taken as a whole to perform their
respective obligations under this Agreement or any of the Operative Documents
(a "Material Adverse Effect").
(iii) The entities listed on Schedule I hereto are the only
subsidiaries, direct or indirect, of the Company and the only entities in
which the Company, directly or indirectly, owns any equity interest. Except
as disclosed in the Security Documents or on Schedule I, the Company owns,
directly or indirectly through other subsidiaries, 100% of the outstanding
capital stock or other securities evidencing equity ownership of such
Subsidiaries or other entities, free and clear of any security interest,
claim, lien or encumbrance; and all of such securities have been duly
authorized, validly issued, are fully paid and nonassessable and were not
issued in violation of any preemptive or similar rights. Except as disclosed
on Schedule I, there are no outstanding subscriptions, rights, warrants,
calls, commitments of sale or options to acquire, or instruments convertible
into or exchangeable for, any such shares of capital stock or other equity
interest of such Subsidiaries. As of the date hereof, there are no
Unrestricted Subsidiaries except Broadwater Hotel, Inc., President Broadwater,
LLC and President Mississippi Charter Corporation. The Company has invested
no more than $5,000,000 in Broadwater Hotel, Inc., President Broadwater, LLC
and President Mississippi Charter Corporation, which entities are permitted,
and qualify as, "Unrestricted Subsidiaries" under the Senior Exchange Note
Indenture.
(iv) The Company and each of the Subsidiary Guarantors has all
requisite corporate, partnership or limited liability company power and
authority to execute, deliver and perform its obligations under this
Agreement, the Secured Note Indenture, the Security Documents and the other
Operative Documents to which it is a party and to consummate the transactions
contemplated hereby and thereby, including, without limitation, with respect
to the Company, the corporate power and authority to issue, exchange and
deliver the Securities as provided herein and therein and no further
shareholder action or consent is required therefor.
(v) This Agreement has been duly and validly authorized, executed and
delivered by the Company and each of the Subsidiary Guarantors and is the
legally valid and binding agreement of each such person, enforceable against
each such person in accordance with its terms except as such enforceability
may be limited by the laws of bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights generally and general
equitable principles.
(vi) The Secured Note Indenture has been duly and validly authorized by
the Company and each of the Subsidiary Guarantors and, when duly executed and
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delivered by each such person, will be the legally valid and binding
obligation of each such person, enforceable against each such person in
accordance with its terms except as such enforceability may be limited by the
laws of bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors' rights generally and general equitable principles.
(vii) The Secured Notes have been duly and validly authorized for
issuance to the Holders by the Company pursuant to this Agreement and, when
issued and authenticated in accordance with the terms of the Secured Note
Indenture and delivered against payment therefor in accordance with the terms
hereof, will be the legally valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms and entitled to
the benefits of the Secured Note Indenture except as such enforceability may
be limited by the laws of bankruptcy, insolvency, reorganization, moratorium
or other laws affecting creditors' rights generally and general equitable
principles.
(viii) The Subsidiary Guarantees have been duly and validly authorized
by each of the Subsidiary Guarantors and, when duly executed and delivered by
each such Subsidiary Guarantor, will be the legally valid and binding
obligation of each such Subsidiary Guarantor, enforceable against each such
Subsidiary Guarantor in accordance with its terms except as such
enforceability may be limited by the laws of bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other laws affecting
creditors' rights generally and general equitable principles.
(ix) The Security Documents have been duly and validly authorized and,
when duly executed and delivered by President Missouri (assuming the due
execution and delivery thereof by the Trustee), will be the legally valid and
binding obligation of President Missouri, enforceable against President
Missouri in accordance with its terms except as such enforceability may be
limited by the laws of bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors' rights generally and general equitable
principles. The Company reasonably believes that assuming the execution by
PRC Holdings Corporation and PRC Management, Inc. of that certain letter
agreement dated the date hereof with respect thereto, and that such letter
agreement constitutes a valid and enforceable agreement, neither the execution
and delivery by President Missouri of its Guarantee and the Security
Documents, nor the commitment of PRC-NY to grant a mortgage on the "New
Yorker," constitutes a "fraudulent transfer" or "fraudulent conveyance" under
applicable law.
(x) Neither Company nor any of its Subsidiaries is in violation of its
respective charter, bylaws or other organizational documents and, except as
disclosed in the Disclosure Documents, and except as to defaults and
violations that, individually or in the aggregate, could not be reasonably
expected to have a Material Adverse Effect, is in default in the performance
of any bond, debenture, note, indenture, mortgage, deed of trust or other
agreement or instrument to which it is a party or by which it is bound or to
which any of its properties is subject, or is in violation of any law,
statute, rule, regulation, judgment or court decree applicable to the Company,
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any of its Subsidiaries or their assets or properties. There exists no
condition that, with notice, the passage of time or otherwise, would
constitute a default under any such document or instrument other than defaults
that, individually or in the aggregate, could not be reasonably expected to
have a Material Adverse Effect.
(xi) The execution, delivery and performance by the Company and each of
the Subsidiary Guarantors of this Agreement and the other Operative Documents
to which it is a party, the issuance and exchange of the Securities, and the
consummation of the transactions contemplated hereby and thereby will not
violate, conflict with or constitute a breach of any of the terms or
provisions of, or a default under (or an event that with notice or the lapse
of time, or both, would constitute a default), or require consent under, or
result in the imposition of a lien or encumbrance on any properties of the
Company or any of its Subsidiaries, or an acceleration of indebtedness
pursuant to, (A) the charter, bylaws or other organizational documents of the
Company or any of its Subsidiaries, (B) any bond, debenture, note, indenture
(including, without limitation, the Senior Exchange Note Indenture), mortgage,
deed of trust or other agreement or instrument to which the Company or any of
its Subsidiaries is a party or by which any of them or their property is or
may be bound except for such conflicts, breaches, violations or defaults or
liens, charges or encumbrances which, individually or in the aggregate, could
not be reasonably expected to have a Material Adverse Effect, (C) any statute,
rule or regulation applicable to the Company, any of its Subsidiaries or any
of their assets or properties except for such conflicts, breaches, violations
or defaults or liens, charges or encumbrances which, individually or in the
aggregate, could not be reasonably expected to have a Material Adverse Effect,
or (D) any judgment, order or decree of any court or governmental agency or
authority having jurisdiction over the Company, any of its Subsidiaries or
their assets or properties. No consent, approval, authorization or order of,
or filing, registration, qualification, license or permit of or with, any
court or governmental agency, body or administrative agency that has not
already been obtained is required for the execution, delivery and performance
of this Agreement and the other Operative Documents (other than the Leasehold
Deed of Trust) and the consummation of the transactions contemplated hereby
and thereby, except such as have been obtained. No consents or waivers from
any other person that has not already been obtained are required for the
execution, delivery and performance of this Agreement and the other Operative
Documents (other than the Leasehold Deed of Trust) and the consummation of the
transactions contemplated hereby and thereby, other than such consents and
waivers as have been obtained.
(xii) Except as disclosed in the Disclosure Documents, there is (A) no
action, suit or proceeding before or by any court, arbitrator or governmental
agency, body or official, domestic or foreign, now pending or threatened or
contemplated to which the Company or any of its Subsidiaries is or may be a
party or to which the business or property of the Company or any of its
Subsidiaries is or may be subject, (B) no statute, rule, regulation or order
that has been enacted, adopted or issued by any governmental agency or that
has been proposed by any governmental body, (C) no injunction, restraining
order or order of any nature issued by a federal or state court or foreign
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court of competent jurisdiction to which the Company or any of its
Subsidiaries is or may be subject, that, in the case of clauses (A), (B) and
(C) above, (x) except as disclosed in the Disclosure Documents, individually
or in the aggregate, could reasonably be expected to result in a Material
Adverse Effect, (y) would interfere with or adversely affect the issuance of
the Securities or (z) in any manner draw into question the validity of this
Agreement, the Secured Note Indenture or any other Operative Document.
(xiii) To the best of each of the Company's and such Subsidiary
Guarantor's knowledge, no action has been taken and no statute, rule or
regulation or order has been enacted, adopted or issued by any governmental
agency that prevents the issuance of the Securities; no injunction,
restraining order or order of any nature by a federal or state court of
competent jurisdiction has been issued that prevents the issuance of the
Securities or suspends the exchange of the Securities in any jurisdiction in
which the Company intends to exchange Securities, and no action, suit or
proceeding is pending against or affecting or, to the best knowledge of the
Company and any of its Subsidiaries, threatened against, the Company or any of
its Subsidiaries before any court or arbitrator or any governmental body,
agency or official which, if adversely determined, would prohibit, interfere
with or adversely affect the issuance or marketability of the Securities or in
any manner draw into question the validity of any Operative Document; and
every request of any securities authority or agency of any jurisdiction for
additional information has been complied with in all material respects.
(xiv) Except as disclosed in the Disclosure Documents, there is (A) no
significant unfair labor practice complaint pending against the Company or any
of its Subsidiaries nor, to the best knowledge of the Company and its
Subsidiaries, threatened against any of them, before the National Labor
Relations Board, any state or local labor relations board or any foreign labor
relations board, and no significant grievance or significant arbitration
proceeding arising out of or under any collective bargaining agreement is so
pending against the Company or any or its Subsidiaries or, to the best
knowledge of the Company and its Subsidiaries, threatened against any of them,
(B) no significant strike, labor dispute, slowdown or stoppage pending against
the Company or any of its Subsidiaries nor, to the best knowledge of the
Company and its Subsidiaries, threatened against the Company or any of its
Subsidiaries and (C) to the best knowledge of the Company and its
Subsidiaries, no union representation question existing with respect to the
employees of the Company and its Subsidiaries and, to the best knowledge of
the Company and its Subsidiaries, no union organizing activities are taking
place, in the case of clauses (A), (B) or (C) above that, individually or in
the aggregate, could be reasonably expected to result in a Material Adverse
Effect. Neither the Company nor any of its Subsidiaries has violated any
federal, state or local law or foreign law relating to discrimination in
hiring, promotion or pay of employees, nor any applicable wage or hour laws,
nor any provision of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), or the rules and regulations thereunder, or analogous
foreign laws and regulations, that, individually or in the aggregate, could be
reasonably expected to result in a Material Adverse Effect.
11
<PAGE> 15
(xv) Each of the Company and its Subsidiaries has (A) good and marketable
title to all of the properties and assets described in the Disclosure
Documents as owned by it, free and clear of all liens, charges, encumbrances
and restrictions, (B) except as disclosed in the Disclosure Documents and
except for such exceptions which, individually or in the aggregate, could not
be reasonably expected to have a Material Adverse Effect, peaceful and
undisturbed possession under all leases to which it is party as lessee, (C)
except for such exceptions which, individually or in the aggregate, could not
be reasonably expected to have a Material Adverse Effect, all licenses,
certificates, permits, authorizations, approvals, franchises and other rights
from, and has made all declarations and filings with, all federal, state and
local authorities (including the gaming regulatory authorities in the States
of Iowa, Missouri and Mississippi), all self-regulatory authorities and all
courts and other tribunals (each an "Authorization") necessary to engage in
the business currently conducted by it in the manner described in the
Disclosure Documents and (D) except for such exceptions which, individually or
in the aggregate, could not be reasonably expected to have a Material Adverse
Effect, no reason to believe that any governmental body or agency (including
the gaming regulatory authorities in the States of Iowa, Missouri and
Mississippi) is considering limiting, suspending or revoking any such
Authorization in any material respect. All such Authorizations are valid and
in full force and effect and the Company and its Subsidiaries are in
compliance in all material respects with the terms and conditions of all such
Authorizations and with the rules and regulations of the regulatory
authorities having jurisdiction with respect thereto.
(xvi) Each of the Company and its Subsidiaries owns or possesses all
patents, patent rights, licenses, inventions, copyrights, know-how (including
trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service marks
and trade names (collectively, the "Intellectual Property") presently employed
by it in connection with the businesses now operated by it, and neither the
Company nor any of its Subsidiaries has received any notice of infringement of
or conflict with asserted rights of others with respect to any of the
foregoing except for such infringement or conflict which, individually or in
the aggregate, could not be reasonably expected to have a Material Adverse
Effect. The use of the Intellectual Property in connection with the business
and operations of the Company and its Subsidiaries does not infringe on the
rights of any person except for such infringement which could not be
reasonably expected to have a Material Adverse Effect.
(xvii) All tax returns required to be filed by the Company or any of
its Subsidiaries, in all jurisdictions, have been so filed except where the
failure to so file could not be reasonably expected to result in a Material
Adverse Effect. All taxes, including withholding taxes, penalties and
interest, assessments, fees and other charges due or claimed to be due from
such entities or that are due and payable have been paid, other than those
being contested in good faith and for which adequate reserves have been
provided or those currently payable without penalty or interest other than
such taxes which the failure to pay, individually or in the aggregate, could
not be reasonably expected to have a Material Adverse Effect. Neither the
12
<PAGE> 16
Company nor any of its Subsidiaries knows of any material proposed additional
tax assessments against it or any of its Subsidiaries.
(xviii) Neither the Company nor any of its Subsidiaries is (i) an
"investment company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940, as amended (the "Investment
Company Act"), or analogous foreign laws and regulations, or (ii) a "holding
company" or a "subsidiary company" or an "affiliate" of a holding company within
the meaning of the Public Utility Holding Company Act of 1935, as amended, or
analogous foreign laws and regulations.
(xix) The authorized, issued and outstanding capital stock of the
Company and each of the Subsidiary Guarantors has been duly and validly
authorized and issued, is fully paid and nonassessable and was not issued in
violation of or subject to any preemptive or similar rights. As of the date
hereof, the Company had authorized capital stock consisting of 100,000,000
shares of Common Stock par value $.06 per share (of which 5,032,926 shares
were issued and outstanding as of the date hereof and 5,032,926 shares were
outstanding on a fully diluted basis (calculated in accordance with generally
accepted accounting principles) as of October 31, 1998) and 10,000,000 shares
of Preferred Stock, $.01 par value, of which no shares were issued or
outstanding.
(xx) Each certificate signed by any officer of the Company or any of
the Subsidiary Guarantors and delivered to the Holders or counsel for the
Holders shall be deemed to be a representation and warranty by such Company or
Guarantor to each Holder as to the matters covered thereby.
(xxi) The Company and each of its Subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurance that:
(A) transactions are executed in accordance with management's general or
specific authorizations; (B) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (C) access to
assets is permitted only in accordance with management's general or specific
authorization and (D) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken
with respect thereto.
(xxii) The Company and each of its Subsidiaries maintains insurance
covering their properties, operations, personnel and businesses. Such
insurance insures against such losses and risks as are adequate in accordance
with customary industry practice to protect the Company and its Subsidiaries
and their businesses. To the best of their knowledge, neither the Company nor
any of its Subsidiaries has received notice from any insurer or agent of such
insurer that substantial capital improvements or other expenditures will have
to be made in order to continue such insurance. All such insurance is
outstanding and duly in force on the date hereof and will be outstanding and
duly in force on the Closing Date.
(xxiii) Neither the Company nor any of its Subsidiaries has (A) taken,
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<PAGE> 17
directly or indirectly, any action designed to, or that might reasonably be
expected to, cause or result in stabilization or manipulation of the price of
any security of the Company or any of its Subsidiaries to facilitate the sale
or resale of the Securities or (B) sold, bid for, purchased or paid any person
(other than Libra Investments, Inc. and the Holders) any compensation for
soliciting purchases of, the Securities.
(xxiv) No registration under the Act of any of the Secured Notes is
required for the sale of the Secured Notes to the Holders as contemplated
hereby. The representation made by the Company and the Subsidiary Guarantors
in the preceding sentence is made in reliance upon and subject to the accuracy
of, and compliance with, the representations and covenants made by the Holders
in Section 5(b). No form of general solicitation or general advertising was
used by the Company or the Subsidiary Guarantors or any of their
representatives in connection with the offer and exchange of any of the
Secured Notes, including, but not limited to, articles, notices or other
communications published in any newspaper, magazine, or similar medium or
broadcast over television or radio, or any seminar or meeting whose attendees
have been invited by any general solicitation or general advertising. No
offers have been made by the Company or the Subsidiary Guarantors or any of
their respective officers, directors or employees other than to the Holders
herein. No securities of the same class as any of the Secured Notes have been
issued and sold by the Company or the Subsidiary Guarantors within the six-
month period immediately prior to the date hereof.
(xxv) There is no employee pension, benefit or health plan with respect
to which the Company or any corporation considered an affiliate of the Company
within the meaning of Section 407(d)(7) of ERISA (an "Affiliate") is a party
in interest or disqualified person. The execution and delivery of this
Agreement, the other Operative Documents and the exchange of the Secured Notes
to be purchased by the QIBs or Institutional Accredited Investors will not
involve any prohibited transaction within the meaning of Section 406 of ERISA
or Section 4975 of the Internal Revenue Code of 1986. The representation made
by the Company and the Subsidiary Guarantors in the preceding sentence is made
in reliance upon and subject to the accuracy of, and compliance with, the
representations and covenants made by the Holders in Section 5(b).
(xxvi) Subsequent to the respective dates as of which information is
given in the Disclosure Documents and up to the Closing Date, (A) neither the
Company nor any of its Subsidiaries has incurred any liabilities or
obligations, direct or contingent, which are material to the Company and its
Subsidiaries taken as a whole, nor entered into any transaction not in the
ordinary course of business; (B) there has not been, individually or in the
aggregate, any development which could reasonably be expected to have a
Material Adverse Effect; (C) neither the Company nor any Subsidiary Guarantor
has paid or declared any dividends or distributions of any kind on any class
of its capital stock; and (D) the Disclosure Documents disclose all of the
Company's and its Subsidiaries' material liabilities as of their respective
dates. Assuming the execution by PRC Holdings Corporation and PRC Management,
Inc. of that certain letter agreement dated the date hereof, and that such
letter agreement constitutes a valid and enforceable agreement, the Company
14
<PAGE> 18
reasonably believes that (i) the fair saleable value of the assets of each of
the Company and the Subsidiary Guarantors exceeds the amount that will be
required to be paid in respect of the existing debts of each such person as
they become due, (ii) each of the Company and the Subsidiary Guarantors is not
"insolvent" (as such term is defined under the Uniform Fraudulent Transfer
Act) and will not be so rendered by the transactions contemplated by this
Agreement and the other Operative Documents, and (iii) the transactions
contemplated by this Agreement and the other Operative Documents are being
made in exchange for reasonably equivalent value.
(xxvii) None of the Company, the Subsidiary Guarantors or any agent
thereof acting on the behalf of any of them has taken, and none of them will
take, any action that might cause this Agreement or the transactions
contemplated herein to violate, Regulation T (12 C.F.R. Part 220), Regulation
U (12 C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of the Board of
Governors of the Federal Reserve System or analogous foreign laws and
regulations.
(xxviii) The accountants which certified the financial statements and
supporting schedules included in the Company's Annual Report on Form 10-K for
the fiscal year ended February 28, 1998 are independent accountants. The
consolidated historical statements included in the Disclosure Documents fairly
present the consolidated financial condition and results of operations of the
Company and its Subsidiaries at the respective dates and for the respective
periods indicated, in accordance with generally accepted accounting principles
consistently applied throughout such periods, except as stated therein.
(xxix) Neither the Company nor the Subsidiary Guarantors have dealt
with any broker, finder, commission agent or other person in connection with
the exchange of the Securities and the transactions contemplated by this
Agreement and the other Operative Documents other than Libra Investments, Inc.
Neither the Company nor the Subsidiary Guarantors are under any obligation to
pay any broker's fee or commission in connection with such transactions, other
than a fee payable to Libra Investments, Inc. for financial advisory services
rendered in connection with such transactions.
(xxx) None of the Company nor its affiliates or agents has taken and
will not take, directly or indirectly, any actions designed to, or which has
constituted or which might reasonably be expected to, cause or result in the
stabilization or manipulation of the price of any security of the Company in
connection with the transactions contemplated by this Agreement.
(xxxi) The Company has filed all reports, schedules, forms and other
documents required to be filed by it with the Securities and Exchange
Commission. To the best of its knowledge, the Company has not provided to any
Holder any material nonpublic information.
(xxxii) The term "hazardous waste," "hazardous substance," "disposal,"
"release," and "threatened release," as used in this Agreement, shall have the
same meanings as set forth in the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601,
15
<PAGE> 19
et. seq., the Superfund Amendments and Reauthorization Act of 1986, Pub. L.
No. 99-499, the Hazardous Materials Transportation Act, 49 U.S.C. Section
1801, et. seq., the Resource Conservation and Recovery Act, 49 U.S.C. Section
6901, et seq., or other applicable state or federal laws, rules, or
regulations adopted pursuant to any of the foregoing. Except as disclosed in
the Disclosure Documents, each of the Company and each Subsidiary Guarantor
represents and warrants that: (i) to the best of its knowledge, during the
period of its ownership of (or leasehold interest in, as applicable) its
properties, there has been no use, generation, manufacture, storage,
treatment, disposal, release or threatened release of any hazardous waste or
substance by any person on or under any of the properties, except in strict
compliance with all applicable federal, state and local laws, regulations and
ordinances ("Environmental Laws"); (ii) it has no knowledge of, or reason to
believe that there has been (A) any use, generation, manufacture, storage,
treatment, disposal, release, or threatened release of any hazardous waste or
substance by any prior owners or occupants of any of the properties in
violation of any Environmental Laws, or (B) any actual or threatened
litigation or claims of any kind by any person relating to such matters; and
(iii) it shall not use, generate, manufacture, store, treat, dispose of, or
release any hazardous waste or substance on, under, or about any of the
properties, except in compliance with all Environmental Laws.
(xxxiii) PRC-NY represents that it is lawfully possessed of and is the
sole and lawful owner of the vessel "New Yorker" (with good and marketable
title thereto), and such vessel is and shall remain free and clear of any and
all liens, claims and encumbrances other than the Charter Agreement between
PRC-NY and Sterling Shipping Two, LLC and maritime liens for salvage, crew's
and stevedores' wages arising from time to time in the ordinary course of
business.
(b) Each Holder severally represents and warrants to the Company, the
Subsidiary Guarantors and the other Holders as of the date hereof and as of
the Closing Date and agrees that:
(i) Holder has all requisite corporate power and authority to execute,
deliver and perform its obligations under this Agreement and to consummate the
transactions contemplated hereby, including, without limitation, the corporate
power and authority to exchange and deliver the Senior Exchange Notes as
provided herein;
(ii) This Agreement has been duly and validly authorized, executed and
delivered by the Holder and are the legally valid and binding agreements of
each such Holder, enforceable against each such Holder in accordance with its
terms except as such enforceability may be limited by the laws of bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors'
rights generally and general equitable principles;
(iii) The execution, delivery and performance of this Agreement by
Holder, and the consummation of the transactions contemplated hereby, will not
violate or conflict with (A) any of the terms or provisions of Holder's
charter, bylaws or other formation documents, (B) any agreement or instrument
16
<PAGE> 20
to which Holder is a party, or (C) any statute, rule or regulation applicable
to Holder;
(iv) Holder has good and marketable title to Senior Exchange Notes in
the aggregate principal amount set forth opposite such Holder's name on
Exhibit A hereto and upon delivery of and payment for such Senior Exchange
Notes as contemplated by this Agreement, the Company will acquire good and
marketable title thereto, free and clear of all liens, charges, encumbrances
and restrictions whatsoever;
(v) Holder has not taken and will not take, directly or indirectly, any
action designed to, or which has constituted or which might reasonably be
expected to, cause or result in stabilization or manipulation of the price of
any security of the Company in connection with the transactions contemplated
by this Agreement;
(vi) Holder understands and acknowledges that the transactions
contemplated by this Agreement are of a confidential nature and that it will
use its best efforts (subject to applicable law) not to disclose any of the
terms of this Agreement or of any of the Operative Documents (other than (i)
to any principal it represents and (ii) those terms set forth in a press
release mutually acceptable to both Holder and the Company) until such time as
the Company publicly announces the consummation of the exchange of the Secured
Notes for Senior Exchange Notes as contemplated hereby;
(vii) Holder understands and acknowledges that the Secured Notes have
not been registered under the Act or any other applicable securities law and
unless so registered, the Secured Notes may not be offered, sold or otherwise
transferred except in compliance with the registration requirements of the Act
or any other applicable securities laws, pursuant to an exemption therefrom or
in a transaction not subject thereto and in each case in compliance with the
conditions for transfer set forth in subsection (x) below.
(viii) Holder is either a QIB or an Institutional Accredited Investor.
In the normal course of its business, it invests in or purchases securities
similar to the Secured Notes and it has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and
risks of the transactions contemplated by this Agreement. It is aware that it
(or any investor account) may be required to bear the economic risk of an
investment in the Secured Notes for an indefinite period of time and it (or
such account) is able to bear risk for an indefinite period;
(ix) Holder understands and acknowledges that neither the Company, any
Subsidiary Guarantor or any person representing the Company or any Subsidiary
Guarantor has made any representation to it with respect to the Company, any
Subsidiary Guarantor or the transactions contemplated by this Agreement, other
than the information contained in this Agreement, the Operative Documents and
the Disclosure Documents, all of which have been delivered to it and upon
which it is relying in making its investment decision with respect to the
Secured Notes. It has received all of the Disclosure Documents. It has had
access to such financial and other information concerning the Company, the
17
<PAGE> 21
Subsidiary Guarantors and the Secured Notes as it has deemed necessary in
connection with its decision to enter into this Agreement and to exchange its
Senior Exchange Notes for the Secured Notes, including an opportunity to ask
questions of and request information from the Company and the Subsidiary
Guarantors.
(x) Holder is acquiring the Secured Notes for its own account (or the
account of any principal it represents in acquiring the Secured Notes), for
investment, and not with a view to, or for offer or sale in connection with,
any distribution thereof in violation of the Act, subject to any requirement
of law that the disposition of its property or the property of such investor
account or accounts be at all times within its or their control and subject to
its or their ability to resell the Secured Notes pursuant to Rule 144A or to
resell the Secured Notes pursuant to any other applicable exemption from
registration available under the Act. It agrees, and each subsequent holder
of the Secured Notes by its acceptance thereof will agree, to offer, sell or
otherwise transfer such Securities only (A) to the Company, (B) pursuant to a
registration statement which has been declared effective under the Act, (C) in
the case of the Secured Notes, for so long as the Secured Notes are eligible
for resale pursuant to Rule 144A, to a person it reasonably believes is a QIB
that purchases for its own account or for the account of a QIB to whom notice
is given that the transfer is being made in reliance on Rule 144A, (D) to an
Institutional Accredited Investor that is purchasing for his own account or
for the account of such an Institutional Accredited Investor or (E) pursuant
to any other available exemption from the registration requirements of the
Act, subject in each of the foregoing cases to any requirement of law that the
disposition of its property or the property of such investor account or
accounts be at all times within its or their control. The foregoing
restrictions on resale will not apply to the transfer of Secured Notes
subsequent to the date which is two years after the later of the date of
original issue and the last date that the Company or any affiliate of the
Company was the owner of such Secured Notes (the "Resale Restriction
Termination Date"). If any resale or other transaction of the Secured Notes
is proposed to be made pursuant to clause (D) above prior to the Resale
Restriction Termination Date, the transferor shall deliver a letter from the
transferee substantially in the form of Exhibit F hereto to the Company and
the Trustee, which shall provide, among other things, that the transferee is
an "accredited investor" within the meaning of subparagraph (a) (1), (2), (3)
or (7) of Rule 501 under the Act and that it is acquiring such Securities for
investment purposes and not for distribution in violation of the Act. Each
Holder acknowledges that the Company and the Trustee reserve the right prior
to any offer, sale or other transfer (prior to the Resale Restriction
Termination Date, in the case of the Secured Notes) of Securities pursuant to
clauses (D) or (E) above to require the delivery of an opinion of counsel,
certifications and/or other information reasonably satisfactory to the Company
and the Trustee. Each Holder acknowledges that each Secured Note will contain
a legend substantially to the effect set forth in Section 1 hereof.
(xi) Holder represents that the exchange of the Senior Exchange Notes
and the acquisition of the Secured Notes pursuant to the terms of this
Agreement will either (a) not constitute a violation by Holder of Section 406
18
<PAGE> 22
of ERISA or a prohibited transaction, as such term is defined in Section 4975
of the Code, which could result in either a civil penalty assessed pursuant to
section 502 of ERISA or a tax imposed by Section 4975 of the Code, or (b) be
exempt from the prohibited transaction penalties or taxes as the result of a
prohibited transaction class exemption issued by the Department of Labor.
Such Holder acknowledges that the Company, each of the Subsidiary
Guarantors, counsel for the Company and the Subsidiary Guarantors and others
will rely upon the truth and accuracy of the foregoing acknowledgments,
representations and agreements of such Holder and agrees that, if any of the
acknowledgments, representations or warranties made herein are no longer
accurate prior to Closing, it shall promptly notify the Company in writing.
If a signatory on behalf of a Holder selling Senior Exchange Notes pursuant to
the terms of this Agreement is acting as a fiduciary or agent for one or more
investor accounts, it represents that it has sole investment discretion with
respect to each such account and that it has full power to make the foregoing
acknowledgments, representations and agreements on behalf of each such
account, in which case such Holder and not such signatory shall be responsible
for compliance therewith.
6. Conditions of Holders' Obligations. The several obligations of each
Holder under this Agreement are subject to the satisfaction of each of the
following conditions:
(a) All of the representations and warranties of the Company and the
Subsidiary Guarantors contained in this Agreement and all Operative Documents
shall be true and correct in all material respects on the date hereof and on
the Closing Date with the same force and effect as if made on and as of the
date hereof and the Closing Date, respectively. The Company and the
Subsidiary Guarantors shall have performed or complied in all material
respects with all of the agreements herein contained and required to be
performed or complied with by them at or prior to the Closing Date.
(b) No action shall have been taken and no statute, rule, regulation,
judgment or order shall have been enacted, adopted or issued by any
governmental agency which would, as of the Closing Date, prevent the issuance
of any of the Secured Notes; no action, suit or proceeding shall be pending
against or affecting or, to the knowledge of the Company or any Subsidiary
Guarantor, threatened against, the Company or any Subsidiary Guarantor or any
of their respective Subsidiaries before any court or arbitrator or any
governmental body, agency or official that, if adversely determined, would
prohibit, interfere with or materially and adversely affect the issuance of
the Secured Notes or would have a Material Adverse Effect, or in any manner
draw into question the validity of this Agreement, the Secured Note Indenture,
the Securities or any other Operative Document; and no order asserting that
any of the transactions contemplated by this Agreement are subject to the
registration requirements of the Act shall have been issued.
(c) Since August 31, 1998, (i) there shall not have been any material
change or any development that is reasonably likely to result in a material
change, in the capital stock or the long-term debt, or material increase in
19
<PAGE> 23
the short-term debt, of the Company or any of its Subsidiaries from that set
forth in the Disclosure Documents (as they may be amended or supplemented),
(ii) no dividend or distribution of any kind shall have been declared, paid or
made by the Company or any if its Subsidiaries on any class of its capital
stock (other than dividends or distributions payable or made to the Company or
a Restricted Subsidiary), and (iii) neither the Company nor any of its
Subsidiaries shall have incurred any liabilities or obligations, direct or
contingent, that are material, individually or in the aggregate, to the
Company and its Subsidiaries, taken as a whole, and that are required to be
disclosed on a balance sheet in accordance with generally accepted accounting
principles and are not disclosed in the Disclosure Documents. Since the date
hereof and since the dates as of which information is given in the Disclosure
Documents (as they may be amended or supplemented), there shall not have been
any other change in the business, prospects, properties or management of the
Company and its Subsidiaries which, individually or in the aggregate, could be
reasonably expected to have a Material Adverse Effect.
(d) The Company and each Subsidiary Guarantor shall deliver to each
Holder certificates, dated the Closing Date, signed by (i) the President or
any Vice President and (ii) a principal financial or accounting officer of the
Company and each of the Subsidiary Guarantors confirming, as of the Closing
Date, the matters set forth in paragraphs (a), (b) and (c) of this Section 7.
(e) The Company shall deliver to each Holder on the Closing Date an
opinion, dated the Closing Date, of Thompson Coburn, counsel for the Company
and the Subsidiary Guarantors, substantially in the form attached hereto as
Exhibit G.
(f) The Company, the Subsidiary Guarantors and the Trustee shall have
entered into the Secured Note Indenture and delivered to each Holder a
counterpart, conformed as executed, thereof.
(g) The Company, the Subsidiary Guarantors and the Trustee shall have
entered into the Security Documents (other than the Leasehold Deed of Trust)
and delivered to each Holder a counterpart, conformed as executed, thereof and
shall have taken all actions so that Holders' delivery to the Company of the
Senior Exchange Notes to be delivered hereunder, the Holders shall receive a
valid, perfected security interest in the collateral referred to therein.
(h) The Company and the Subsidiary Guarantors shall have received all
consents, permits and other authorizations, and made all such filings and
declarations, as may be required pursuant to any law, statute, regulation or
rule (Federal, state, local or foreign), contemplated by this Agreement and
the other Operative Documents, including the issuance and transfer of the
Securities to the Holders, and pursuant to all other agreements, orders and
decrees to which any of them is a party or to which any of them is subject, in
connection with the transactions to be consummated on or prior to the Closing
Date contemplated by this Agreement and the other Operative Documents.
(i) All corporate, partnership and limited liability company proceedings
taken in connection with the exchange of the Securities and all Operative
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<PAGE> 24
Documents, shall be reasonably satisfactory in form and substance to the
Holders.
7. Conditions of Company's and Subsidiary Guarantors' Obligations. The
obligations of the Company and each of the Subsidiary Guarantors under this
Agreement with respect to any Holder are subject to the satisfaction of each
of the following conditions:
(a) All of the representations and warranties of such Holder contained in
this Agreement shall be true and correct in all material respects on the date
hereof and on the Closing Date with the same force and effect as if made on
and as of the date hereof and the Closing Date, respectively. Holder shall
have performed or complied in all material respects with all of the agreements
herein contained and required to be performed or complied with by it at or
prior to the Closing Date.
(b) No action shall have been taken and no statute, rule, regulation or
order shall have been enacted, adopted or issued by any governmental agency
which would, as of the Closing Date, prevent the issuance of any of the
Secured Notes; no action, suit or proceeding shall be pending against or
affecting or, to the knowledge of the Company or any Subsidiary Guarantor,
threatened against, the Company or any Subsidiary Guarantor or any of their
respective Subsidiaries before any court or arbitrator or any governmental
body, agency or official that, if adversely determined, would prohibit,
interfere with or materially and adversely affect the issuance of the Secured
Notes or would have a Material Adverse Effect, or in any manner draw into
question the validity of this Agreement, the Secured Note Indenture, the
Securities or any other Operative Document; and no order asserting that any of
the transactions contemplated by this Agreement are subject to the
registration requirements of the Act shall have been issued.
8. Effective Date of Agreement. This Agreement shall become effective upon
execution hereof.
9. Miscellaneous.
(a) Notices given pursuant to any provision of this Agreement shall be
addressed as follows and sent by overnight courier or certified or registered
mail, return receipt requested: (a) if to either Company or any Guarantor,
President Casinos, Inc., 802 North First Street, St. Louis, Missouri, 63102,
Attention: President, with a facsimile copy to Thompson Coburn, One Mercantile
Center, St. Louis, Missouri 63101, Attention: Gerard K. Sandweg, Jr. (314-552-
7104), and (b) if to a Holder, the address of such Holder indicated on Exhibit
A hereto, or in any case to such other address as the person to be notified
may have requested in writing, with a facsimile copy to Kleinberg, Kaplan,
Wolff & Cohen, 551 Fifth Avenue, New York, New York 10176, Attention: Martin
Sklar, Esq. (212-986-8866).
(b) This Agreement shall not be cancelled, altered, modified or amended
in any way except by an instrument in writing signed by authorized
representatives of the Company, the Subsidiary Guarantors and each Holder of
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<PAGE> 25
the Senior Exchange Notes to be repurchased pursuant to this Agreement. All
amendments or modifications of this Agreement shall be binding upon the
parties despite any lack of consideration so long as the same shall be in
writing and executed by the parties hereto.
(c) Performance of any obligation required of a party hereunder may be
waived only by a written waiver signed by the party for whose benefit such
obligation was to be performed, which waiver shall be effective only with
respect to the specific obligation described therein. The waiver by any party
of any breach of this Agreement in any one or more instances by another party
shall in no way be construed as a waiver of any subsequent breach (whether or
not of a similar nature) of this Agreement by any other party.
(d) If any provision contained in this Agreement is found void, invalid
or unenforceable, it will not affect the validity or enforceability of any
other provision of this Agreement which shall remain valid and enforceable
according to its terms, and such provision shall be deemed rewritten to the
extent necessary to eliminate such voidness, invalidity or unenforceability.
(e) Titles and headings of Sections of this Agreement are for convenience
of reference only and shall not affect the construction of any provision of
this Agreement.
(f) Each of the Schedules and Exhibits referred to herein and attached
hereto is an integral part of this Agreement and is incorporated herein by
this reference.
(g) The representations and warranties of the parties contained herein
shall survive the Closing hereunder.
(h) This Agreement shall inure to the benefit of and be binding upon the
successors and assigns of each of the parties, and their respective heirs,
personal representatives, successors and assigns and no other persons shall
acquire or have any right under or by virtue of this Agreement.
(i) This Agreement may be executed in any number of counterparts and by
the parties hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
(j) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED
WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAW. FOR PURPOSES OF THIS AGREEMENT THE COMPANY AND THE SUBSIDIARY GUARANTORS
HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF ANY NEW YORK STATE COURT
SITTING IN THE COUNTY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE COUNTY
OF NEW YORK IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE
JURISDICTION OF THE AFORESAID COURTS. NOTHING HEREIN SHALL AFFECT THE RIGHT
OF ANY HOLDERS TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW OR TO COMMENCE
LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE COMPANY OR THE SUBSIDIARY
GUARANTORS IN ANY OTHER JURISDICTION.
22
<PAGE> 26
(k) This Agreement, together with the other Operative Documents and the
Securities are intended by the parties as a final expression of their
agreement and intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject
matter contained herein and therein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
and therein. This Agreement, together with the other Operative Documents and
the Securities, supersedes all prior agreement and understandings between the
parties with respect to such subject matter.
(l) The Company agrees to reimburse the Holders for their reasonable
legal and due diligence fees related to the preparation and negotiation of
this Agreement and related documents, in an amount not to exceed $50,000 in
the aggregate. Such expenses incurred through the Closing Date shall be
reimbursed on the Closing Date.
23
<PAGE> 27
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered by their proper and duly authorized officers as of the date
first above written.
COMPANY: PRESIDENT CASINOS, INC.
By: /s/ John S. Aylsworth
---------------------------------------
Name:
Title:
SUBSIDIARY GUARANTORS: PRESIDENT RIVERBOAT CASINO-IOWA, INC.
By: /s/ John S. Aylsworth
---------------------------------------
Name:
Title:
PRESIDENT RIVERBOAT CASINO-MISSOURI, INC.
By: /s/ John S. Aylsworth
---------------------------------------
Name:
Title:
THE PRESIDENT RIVERBOAT CASINO-
MISSISSIPPI, INC.
By: /s/ John S. Aylsworth
---------------------------------------
Name:
Title:
TCG/BLACKHAWK, INC.
By: /s/ John S. Aylsworth
---------------------------------------
Name:
Title:
[Signature pages continued on next page]
24
<PAGE> 28
P.R.C.-LOUISIANA, INC.
By: /s/ John S. Aylsworth
---------------------------------------
Name:
Title:
PRESIDENT RIVERBOAT CASINO-NEW YORK, INC.
By: /s/ John S. Aylsworth
---------------------------------------
Name:
Title:
PRC HOLDINGS CORPORATION
By: /s/ John S. Aylsworth
---------------------------------------
Name:
Title:
PRC MANAGEMENT, INC.
By: /s/ John S. Aylsworth
---------------------------------------
Name:
Title:
PRCX CORPORATION
By: /s/ John S. Aylsworth
---------------------------------------
Name:
Title:
PRESIDENT CASINO NEW YORKER, INC.
By: /s/ John S. Aylsworth
---------------------------------------
Name:
Title:
[Signature pages continued on next page]
25
<PAGE> 29
PRESIDENT RIVERBOAT CASINO-
PHILADELPHIA, INC.
By: /s/ John S. Aylsworth
---------------------------------------
Name:
Title:
VEGAS, VEGAS, INC.
By: /s/ John S. Aylsworth
---------------------------------------
Name:
Title:
THE CONNELLY GROUP, L.P.
By: /s/ John S. Aylsworth
---------------------------------------
Name:
Title:
[Signature pages continued on next page]
26
<PAGE> 30
THE MAINSTAY FUNDS, ON BEHALF OF ITS
STRATEGIC INCOME FUND SERIES
By: MacKay-Shields Financial Corporation
Its: Investment Advisor
By: /s/ Jeffry B. Platt
---------------------------------------
Name: Jeffry B. Platt
Title: Director
THE BROWN & WILLIAMSON MASTER
RETIREMENT TRUST
By: MacKay-Shields Financial Corporation
Its: Investment Advisor
By: /s/ Jeffry B. Platt
---------------------------------------
Name: Jeffry B. Platt
Title: Director
HIGHBRIDGE CAPITAL CORPORATION
By: MacKay-Shields Financial Corporation
Its: Investment Advisor
By: /s/ Jeffry B. Platt
---------------------------------------
Name: Jeffry B. Platt
Title: Director
THE MAINSTAY FUNDS, ON BEHALF OF ITS
HIGH YIELD CORPORATE BOND FUND
SERIES
[Signature pages continued on next page]
27
<PAGE> 31
By: MacKay-Shields Financial Corporation
Its: Investment Advisor
By: /s/ Jeffry B. Platt
---------------------------------------
Name: Jeffry B. Platt
Title: Director
MAINSTAY VP SERIES FUND INC., ON
BEHALF OF ITS HIGH YIELD CORPORATE
BOND PORTFOLIO
By: MacKay-Shields Financial Corporation
Its: Investment Advisor
By: /s/ Jeffry B. Platt
---------------------------------------
Name: Jeffry B. Platt
Title: Director
POLICE OFFICERS PENSION SYSTEM OF THE
CITY OF HOUSTON
By: MacKay-Shields Financial Corporation
Its: Investment Advisor
By: /s/ Jeffry B. Platt
---------------------------------------
Name: Jeffry B. Platt
Title: Director
VULCAN MATERIALS COMPANY HIGH
YIELD ACCOUNT
By: MacKay-Shields Financial Corporation
Its: Investment Advisor
By: /s/ Jeffry B. Platt
---------------------------------------
Name: Jeffry B. Platt
Title: Director
[Signature pages continued on next page]
28
<PAGE> 32
SUNAMERICA CBO LIMITED
By: /s/ Kevin Buckle
---------------------------------------
Name: Kevin Buckle
Title: Vice President,
SunAmerica Investment Advisors
SUNAMERICA LIFE INSURANCE COMPANY
By: /s/ Kevin Buckle
---------------------------------------
Name: Kevin Buckle
Title: Authorized Agent
LIBRA INVESTMENTS, INC.
By: /s/ Jess M. Ravich
---------------------------------------
Name: Jess M. Ravich
Title: Chairman & Co-CEO
29
<PAGE> 33
SCHEDULE I
SUBSIDIARIES
1. President Riverboat Casino-Iowa, Inc .(1)
2. TCG/Blackhawk, Inc. (1)
3. President Riverboat Casino-Missouri, Inc. (1)
4. The President Riverboat Casino-Mississippi, Inc. (1)
5. P.R.C.-Louisiana, Inc. (1)
6. PRCX Corporation (1)
7. President Riverboat Casino-New York, Inc. (1)
8. PRC Management, Inc. (1)
9. PRC Holdings Corporation (1)
10. The Connelly Group, L.P. (1) (2)
11. President Riverboat Casino-Philadelphia, Inc. (1)
12. President Casino New York, Inc. (1)
13. Vegas, Vegas, Inc. (1)
14. President Casino New Yorker, Inc. (1)
15. Broadwater Hotel, Inc.
16. President Broadwater, LLC (3)
17. Mississippi Charter Corporation
- -----------------------------------
(1) The Company's interest in such entity is pledged to secure the
obligations of the Company under the Senior Exchange Notes.
(2) President Riverboat Casino-Iowa, Inc. is the General Partner and the
holder of a 95% Interest (as defined in the Amended and Restated
Agreement of Limited Partnership of The Connelly Group, L.P.). An
unrelated third party holds the remaining 5% Interest.
(3) President Casinos, Inc. owns all of the issued and outstanding Class A
membership interest of this entity.
30
<PAGE> 34
EXHIBIT A
Holders
Principal Amount of Principal Amount
Name and Address Senior Exchange Notes of Secured Notes
- ---------------- --------------------- ----------------
Sun America CBO Limited $12,850,000 --
SunAmerica Life Insurance
Company -- $13,150,000
Libra Investments, Inc. $575,000 --
The Brown & Williamson $197,000 $202,000
Master Retirement Trust
c/o MacKay-Shields Financial
Corporation
9 West 57th Street
New York, New York 10019
Highbridge Capital Corporation $115,000 $118,000
c/o MacKay-Shields Financial
Corporation
9 West 57th Street
New York, New York 10019
Police Officers Pension $175,000 $179,000
System of the City of Houston
c/o MacKay-Shields Financial
Corporation
9 West 57th Street
New York, New York 10019
Vulcan Materials Company Master $26,000 $27,000
Trust High Yield Account
c/o MacKay-Shields Financial
Corporation
9 West 57th Street
New York, New York 10019
The Mainstay Funds, on behalf $9,864,000 $10,097,000
of its High Yield Corporate
Bond Fund Series
c/o MacKay-Shields Financial
Corporation
9 West 57th Street
New York, New York 10019
31
<PAGE> 35
The Mainstay Funds, on behalf $46,000 $47,000
of its Strategic Income
Fund Series
c/o MacKay-Shields Financial
Corporation
9 West 57th Street
New York, New York 10019
Mainstay VP Series Fund, Inc., $1,152,000 $1,180,000
on behalf of its High Yield
Corporate Bond Fund Portfolio
c/o MacKay-Shields Financial
Corporation
9 West 57th Street
New York, New York 10019
EXHIBIT 10.2
INDENTURE
PRESIDENT CASINOS, INC.
AND
PRESIDENT RIVERBOAT CASINO-IOWA, INC.
PRESIDENT RIVERBOAT CASINO-MISSOURI, INC.
THE PRESIDENT RIVERBOAT CASINO-MISSISSIPPI, INC.
TCG/BLACKHAWK, INC.
P.R.C.-LOUISIANA, INC.
PRESIDENT RIVERBOAT CASINO-NEW YORK, INC.
PRESIDENT CASINO NEW YORKER, INC.
PRC HOLDINGS CORPORATION
PRC MANAGEMENT, INC.
PRCX CORPORATION
PRESIDENT RIVERBOAT CASINO-PHILADELPHIA, INC.
VEGAS VEGAS, INC.
THE CONNELLY GROUP, L.P.,
as Joint and Several Obligors
$25,000,000
12% Notes
due September 15, 2001
U.S. TRUST COMPANY OF TEXAS, N.A.
-------------------------------------
Trustee
Dated as of December 3, 1998
<PAGE> 37
TABLE OF CONTENTS
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions.................................................1
Section 1.02. Other Definitions..........................................12
Section 1.03. Incorporation by Reference of Trust Indenture Act..........13
Section 1.04. Rules of Construction......................................13
ARTICLE 2
THE SECURITIES
Section 2.01. Form and Dating............................................14
Section 2.02. Execution and Authentication...............................14
Section 2.03. Registrar and Paying Agent.................................15
Section 2.04. Paying Agent to Hold Money in Trust........................16
Section 2.05. Securityholder Lists.......................................16
Section 2.06. Transfer and Exchange......................................16
Section 2.07. Replacement Securities.....................................21
Section 2.08. Outstanding Securities.....................................22
Section 2.09. Treasury Securities........................................22
Section 2.10. Temporary Securities.......................................22
Section 2.11. Cancellation...............................................23
Section 2.12. Defaulted Interest.........................................23
ARTICLE 3
REDEMPTION
Section 3.01. Notices to Trustee.........................................23
Section 3.02. Selection of Securities to Be Redeemed.....................24
Section 3.03. Notice of Redemption.......................................24
Section 3.04. Effect of Notice of Redemption.............................25
Section 3.05. Deposit of Redemption Price................................25
Section 3.06. Securities Redeemed in Part................................26
Section 3.07. Optional Redemption........................................26
Section 3.08. Mandatory Redemption.......................................26
Section 3.09. Offer to Redeem by Application of Net Proceeds.............26
ARTICLE 4
COVENANTS
Section 4.01. Payment of Securities......................................27
Section 4.02. Maintenance of Office or Agency............................27
Section 4.03. SEC Reports................................................28
Section 4.04. Compliance Certificate.....................................29
Section 4.05. Taxes......................................................29
Section 4.06. Stay, Extension and Usury Laws.............................30
Section 4.07. Limitation on Restricted Payments..........................30
<PAGE> 38
Section 4.08. Limitation on Dividend and Other Payment Restrictions
Affecting Restricted Subsidiaries........................32
Section 4.09. Limitation on Incurrence of Indebtedness and Issuance of
Disqualified Stock.......................................32
Section 4.10. Sale of Assets.............................................34
Section 4.11. Limitation on Transactions With Affiliates.................35
Section 4.12. Limitation on Liens........................................36
Section 4.13. Corporate Existence........................................37
Section 4.14. Liquidation................................................38
Section 4.15. Change of Control..........................................38
Section 4.16. Notice By Company..........................................40
ARTICLE 5
SUCCESSORS
Section 5.01. When the Company May Merge, etc............................40
Section 5.02. Successor Corporation Substituted..........................41
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default..........................................41
Section 6.02. Acceleration...............................................44
Section 6.03. Other Remedies.............................................44
Section 6.04. Waiver of Past Defaults....................................45
Section 6.05. Control by Majority........................................45
Section 6.06. Limitation on Suits........................................45
Section 6.07. Rights of Holders to Receive Payment.......................46
Section 6.08. Collection Suit by Trustee.................................46
Section 6.09. Trustee May File Proofs of Claim...........................46
Section 6.10. Priorities.................................................47
Section 6.11. Undertaking for Costs......................................47
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee..........................................47
Section 7.02. Rights of Trustee..........................................48
Section 7.03. Individual Rights of Trustee...............................49
Section 7.04. Trustee's Disclaimer.......................................49
Section 7.05. Notice of Defaults.........................................49
Section 7.06. Notice By Trustee..........................................50
Section 7.07. Compensation and Indemnity.................................50
Section 7.08. Replacement of Trustee.....................................51
Section 7.09. Successor Trustee by Merger, etc...........................52
Section 7.10. Eligibility; Disqualification..............................52
<PAGE> 39
ARTICLE 8
DISCHARGE OF INDENTURE
Section 8.01. Termination of Company's and Subsidiary Guarantors'
Obligations..............................................52
Section 8.02. Application of Trust Money.................................53
Section 8.03. Repayment to Company.......................................54
Section 8.04. Reinstatement..............................................54
ARTICLE 9
AMENDMENTS
Section 9.01. Without Consent of Holders.................................54
Section 9.02. With Consent of Holders....................................55
Section 9.03. Compliance with Trust Indenture Act........................56
Section 9.04. Revocation and Effect of Consents..........................56
Section 9.05. Notation on or Exchange of Securities......................56
Section 9.06. Trustee to Sign Amendments, etc............................56
ARTICLE 10
COLLATERAL AND SECURITY
Section 10.01. Agreement to Secure Securities.............................57
Section 10.02. Recording and Opinions.....................................58
Section 10.03. Release of Collateral......................................58
ARTICLE 11
SUBSIDIARY GUARANTEE
Section 11.01. Subsidiary Guarantee.......................................58
Section 11.02. Additional Subsidiary Guarantees...........................60
Section 11.03. Execution and Delivery of Subsidiary Guarantee.............61
Section 11.04. Subsidiary Guarantors May Consolidate, etc., on Certain
Terms....................................................61
Section 11.05. Releases Following Sale of Assets..........................62
Section 11.06. "Trustee" to Include Paying Agent..........................63
ARTICLE 12
MISCELLANEOUS
Section 12.01. Trust Indenture Act Controls...............................63
Section 12.02. Notices....................................................63
Section 12.03. Communication by Holders with Other Holders................64
Section 12.04. Certificate and Opinion as to Conditions Precedent.........64
Section 12.05. Statements Required in Certificate or Opinion..............65
Section 12.06. Rules by Trustee and Agents................................65
Section 12.07. Legal Holidays.............................................65
Section 12.08. No Recourse Against Others.................................65
Section 12.09. Duplicate Originals........................................65
Section 12.10. Governing Law..............................................65
Section 12.11. No Adverse Interpretation of Other Agreements..............66
<PAGE> 40
Section 12.12. Successors.................................................66
Section 12.13. Severability...............................................66
Section 12.14. Counterpart Originals......................................66
Section 12.15. Table of Contents, Headings, etc...........................66
Exhibits
A Form of Note
B Form of Subsidiary Guarantee
C Form of Certificate to be Delivered Upon Exchange or Registration of
Transfer of Securities
<PAGE> 41
INDENTURE dated as of December 3,1998, among President Casinos, Inc., a
Delaware corporation (the "Company"), President Riverboat Casino-Iowa, Inc.,
President Riverboat Casino-Missouri, Inc., The President Riverboat Casino-
Mississippi, Inc., TCG/Blackhawk, Inc., P.R.C.-Louisiana, Inc., President
Riverboat Casino-New York, Inc., President Casino New Yorker, Inc., PRC
Holdings Corporation, PRC Management, Inc., PRCX Corporation, President
Riverboat Casino-Philadelphia, Inc., Vegas, Vegas, Inc. and The Connelly
Group, L.P., (each a "Subsidiary Guarantor," and collectively, the "Subsidiary
Guarantors"), and U.S. Trust Company of Texas, N.A., a national banking
association organized under the laws of the United States of America, as
trustee (the "Trustee").
The Company and each Subsidiary Guarantor, jointly and severally, and the
Trustee agree as follows for the benefit of each other and for the equal and
ratable benefit of the Holders of the 12% Notes due September 15, 2001 (the
"Notes" and/or the "Securities"):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions.
"Acquired Debt" means, with respect to any specified Person, Indebtedness of
any other Person existing at the time such other Person merged with or into or
became a Subsidiary of such specified Person, including Indebtedness incurred
in connection with, or in contemplation of, such other Person merging with or
into or becoming a Subsidiary of such specified Person.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such Person,
whether through the ownership of voting securities, by agreement or otherwise;
provided, however, that beneficial ownership of 10% or more of the voting
securities of a Person shall be deemed to be control.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Board of Directors" means the Board of Directors of the Company or the
Subsidiary Guarantors, as the case may be, or any authorized committee of the
Board of Directors.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that
1
<PAGE> 42
would at such time be so required to be capitalized on the balance sheet in
accordance with GAAP.
"Capital Stock" means any and all shares, interests, participations, rights
or other equivalents (however designated) of corporate stock, including,
without limitation, partnership and limited liability company interests.
"Cash Equivalents" means (a) United States dollars, (b) securities issued or
directly and fully guaranteed or insured by the United States government or
any agency or instrumentality thereof having maturities of not more than 12
months from the date of acquisition, (c) money market funds, certificates of
deposit and eurodollar time deposits with maturities of 12 months or less from
the date of acquisition, bankers' acceptances with maturities not exceeding 12
months and overnight bank deposits, in each case with any lender party to a
credit facility with the Company or any Restricted Subsidiary or with any
domestic commercial bank having capital and surplus in excess of $500 million,
(d) repurchase obligations with a term of not more than 7 days for underlying
securities of the types described in clauses (b) and (c) entered into with any
financial institution meeting the qualifications specified in clause (c)
above, (e) commercial paper rated A-1 or the equivalent thereof by Moody's
Investors Service, Inc. or Standard & Poor's Corporation and in each case
maturing within 270 days after the date of acquisition, and (f) short-term
loan participations offered through financial institutions meeting the
qualifications set forth in clause (c) in which the borrower has a short-term
commercial paper rating specified in clause (e).
"Company" means the party named as such in this Indenture, unless and until
replaced by a successor in accordance with Article 5 hereof and thereafter
means such successor.
"Consolidated Cash Flow" means, with respect to any Person for any period,
the Consolidated Net Income of such Person for such period plus (a) an amount
equal to any extraordinary loss plus any net loss realized in connection with
an Asset Sale (to the extent such losses were deducted in computing
Consolidated Net Income), plus (b) provision for taxes based on income or
profits to the extent such provision for taxes was included in computing
Consolidated Net Income, plus (c) consolidated interest expense of such Person
for such period, whether paid or accrued (including amortization of original
issue discount, non-cash interest payments and the interest component of
Capital Lease Obligations), to the extent such expense was deducted in
computing Consolidated Net Income, plus (d) depreciation, amortization
(including amortization of goodwill and other intangibles) and other non-cash
charges (excluding any such non-cash charge that requires an accrual of or
reserve for cash charges for any future period) of such Person for such period
to the extent such depreciation, amortization and other non-cash charges were
deducted in computing Consolidated Net Income, in each case, on a consolidated
basis and determined in accordance with GAAP.
"Consolidated Fixed Charge Coverage Ratio" means, with respect to the
Company and its Subsidiaries for any period, the ratio of the Consolidated
Cash Flow of the Company and its Subsidiaries for such period to the Fixed
2
<PAGE> 43
Charges of the Company and its Subsidiaries for such period, calculated on a
consolidated basis in accordance with GAAP. If the Company or any of its
Subsidiaries incurs, assumes, guarantees or redeems any Indebtedness (other
than revolving credit borrowings) or issues preferred stock subsequent to the
commencement of the period for which the Consolidated Fixed Charge Coverage
Ratio is being calculated but prior to the event for which the calculation of
the Consolidated Fixed Charge Coverage Ratio is made, then the Consolidated
Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to
such incurrence, assumption, guarantee or redemption of Indebtedness, or such
issuance or redemption of preferred stock, as if the same had occurred at the
beginning of the applicable four-quarter period.
"Consolidated Net Income" means, with respect to any Person for any period,
the aggregate of the Net Income of such Person and its Subsidiaries for such
period, on a consolidated basis, determined in accordance with GAAP; provided,
that (a) the Net Income of any Person (whether or not a Subsidiary) that is
not a Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid to the referent Person or a Restricted Subsidiary, (b) the
Net Income of any Person acquired in a pooling of interests transaction for
any period prior to the date of such acquisition shall be excluded and (c) the
cumulative effect of a change in accounting principles shall be excluded.
Solely for purposes of calculating the Consolidated Fixed Charge Coverage
Ratio, "Consolidated Net Income" means, with respect to the Company and its
Subsidiaries for any period, the aggregate of the Net Income of the Company
and its Subsidiaries for such period, on a consolidated basis, determined in
accordance with GAAP; provided, that (a) the Net Income of any Person that is
not a Subsidiary shall be included only to the extent of the amount of
dividends or distributions paid to the Company or a Restricted Subsidiary
thereof, (b) the Net Income of any Person acquired in a pooling of interests
transaction for any period prior to the date of such acquisition shall be
excluded and (c) the cumulative effect of a change in accounting principles
shall be excluded.
"Consolidated Net Worth" means, with respect to any Person, the sum of (a)
the consolidated equity of the common stockholders of such Person and its
consolidated Restricted Subsidiaries plus (b) 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 (x) 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 September 23, 1993, in the book value of any
asset owned by such Person or a consolidated Restricted Subsidiary of such
Person, (y) all investments in Unrestricted Subsidiaries and in Persons that
are not Subsidiaries (except, in each case, Permitted Investments), and (z)
all unamortized debt discount and expense and unamortized deferred charges,
all of the foregoing determined in accordance with GAAP.
3
<PAGE> 44
"Continuing Directors" means, as of any date of determination, any member of
the Board of Directors of the Company who (a) was a member of such Board of
Directors on the date of this Indenture or (b) was nominated for election or
elected to such Board of Directors with the affirmative vote of a majority of
the Continuing Directors who were members of such Board at the time of such
nomination or election.
"Contributions" means any loans, cash advances, capital contributions,
investments or other transfers of assets by the Company or any of its
Subsidiaries to any Affiliate of the Company or its Subsidiaries, but not
including: (a) sales of assets on terms that are not less favorable to the
Company or the relevant Subsidiary than those that could have been obtained in
a comparable transaction by the Company or such Subsidiary from an unrelated
Person, (b) any Contribution from the Company or any Subsidiary Guarantor to
the Company or any other Subsidiary Guarantor, or (c) advances made to
employees of the Company or its Subsidiaries in the ordinary course of
business in connection with their employment.
"Corporate Trust Office" means the office of the Trustee at which the
corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, at the date as of which this
Indenture is originally dated, located at 114 West 47th Street, New York, New
York 10036-1532, Attention: Corporate Trust Administration.
"Default" means any event that is or with the passage of time or the giving
of notice or both would be an Event of Default.
"Definitive Securities" means Securities that are in the form of Note
attached hereto as Exhibit A, that does not include the information called for
by footnotes 1 and 2 thereof.
"Depositary" means, with respect to the Securities issuable or issued in
whole or in part in global form, the Person specified in Section 2.03 hereof
as the Depositary with respect to the Securities, until a successor shall have
been appointed and become such pursuant to the applicable provision of this
Indenture, and, thereafter, "Depositary" shall mean or include such successor.
"Disqualified Stock" means any Capital Stock 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 redeemable
at the option of the holder thereof, in whole or in part, on or prior to,
September 15, 2001.
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
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"Existing Indebtedness" means Indebtedness of the Company and its Restricted
Subsidiaries in existence on August 26, 1994, until such amounts are repaid.
"Existing Productive Assets" means The President Riverboat Casino and
President Casino Mississippi.
"Financing Debt" means: (i) Indebtedness for borrowed money; (ii)
Indebtedness evidenced by notes or other instruments; (iii) Indebtedness in
respect of Capitalized Leases; (iv) Indebtedness for the deferred purchase
price of property; and (v) Indebtedness in respect of capital stock (or other
equity) with mandatory redemption, repurchase or dividend rights.
"Fixed Charges" means, with respect to any Person for any period, the sum of
(a) consolidated interest expense of such Person for such period, whether paid
or accrued, to the extent such expense was deducted in computing Consolidated
Net Income (including amortization of original issue discount, non-cash
interest payments, the interest component of capital leases and net payments,
if any, pursuant to Hedging Obligations but excluding amortization of deferred
financing fees) and (b) the product of (i) all cash dividend payments (and
non-cash dividend payments in the case of a Person that is a Subsidiary) on
any series of preferred stock of such Person, times (ii) a fraction, the
numerator of which is one and the denominator of which is one minus the then
current combined federal, state and local statutory tax rate of such Person,
expressed as a decimal, in each case, on a consolidated basis and in
accordance with GAAP.
"Fixed Charge Coverage Ratio" means, with respect to any Person for any
period, the ratio of the Consolidated Cash Flow of such Person for such period
to the Fixed Charges of such Person for such period. If the Company or any of
its Restricted Subsidiaries incurs, assumes, guarantees or redeems any
Indebtedness (other than revolving credit borrowings) or issues preferred
stock subsequent to the commencement of the period for which the Fixed Charge
Coverage Ratio is being calculated but prior to the event for which the
calculation of the Fixed Charge Coverage Ratio is made, then the Fixed Charge
Coverage Ratio shall be calculated giving pro forma effect to such incurrence,
assumption, guarantee or redemption of Indebtedness, or such issuance or
redemption of preferred stock, as if the same had occurred at the beginning of
the applicable four-quarter period.
"GAAP" means, as of any date, generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as approved by a significant segment of the
accounting profession, which are in effect from time to time.
"Gaming Authority" means the Iowa Racing and Gaming Commission, the
Mississippi Gaming Commission, the Missouri Gaming Commission or any agency of
any state, county, city or other political subdivision that has, or may at any
time after the date of this Indenture may have, jurisdiction over all or any
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portion of the Company or any of its Subsidiaries or any successor to such
authority.
"Gaming Laws" means the gaming laws of a jurisdiction or jurisdictions to
which the Company, any Subsidiary or any Gaming Venture is, or may at any time
after the date of this Indenture be subject.
"Gaming License" means every license, franchise or other authorization on
the date of this Indenture or thereafter required to own, lease, operate or
otherwise conduct gaming operations at or on The President Riverboat Casino,
The Admiral or any other Gaming Venture or gaming activities of the Company or
any Subsidiary.
"Gaming Venture" means any corporation, partnership, joint venture or
limited liability company engaged primarily in gaming operations or the
management thereof, in which the Company or any Restricted Subsidiary has a
direct (but not indirect) equity or participation interest, whether through
the record or beneficial ownership of Capital Stock, partnership interests,
membership interests or other participation rights, provided that the equity
or participation interest owned by the Company or such Restricted Subsidiary
shall constitute at least a 20%, and not more than a 95.1%, interest in the
outstanding equity interests of such corporation, partnership, joint venture
or limited liability company and, further provided, that the Company or
Restricted Subsidiary, as the case may be, must exercise substantial
management responsibility and authority over the gaming or management
operations conducted by such corporation, partnership, joint venture, or
limited liability company and further provided, that neither the Principal nor
his Related Parties shall have any interest in such corporation, partnership,
joint venture or limited liability company at any time during which (i) such
Principal (or Related Party) is a director of, or employed in an executive
capacity by, the Company or any Subsidiary, or (ii) such Principal (or Related
Party) is the beneficial owner, directly or indirectly, of more than 5 % of
the voting power of the voting stock of the Company, other than pursuant to
agreements between the Company and the Principal in effect on the date of this
Indenture, in each case for such entity to constitute a Gaming Venture.
"Global Note" means a Security that contains the paragraph referred to in
footnote 1 and the additional schedule referred to in footnote 2 to the form
of the Note attached hereto as Exhibit A.
"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.
"Hedging Obligations" means, with respect to any Person, the obligations of
such Person under (a) interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements and (b) other agreements or
arrangements designed to protect such Person against fluctuations in interest
rates.
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"Holder" or "Securityholder" means a Person in whose name a Security is
registered.
"Indebtedness" means with respect to any Person, any indebtedness of such
Person, whether or not contingent, in respect of borrowed money or evidenced
by bonds, notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof or representing the balance
deferred and unpaid of the purchase price of any property (including Capital
Lease Obligations) or representing any Hedging Obligations, except any such
balance that constitutes an accrued expense or a trade payable, if and to the
extent any of the foregoing indebtedness (other than letters of credit and
Hedging Obligations) would appear as a liability upon a balance sheet of such
Person prepared in accordance with GAAP, and also includes, to the extent not
otherwise included, (a) the Guarantee of items that would be included within
this definition, and (b) liability for items that would arise by operation of
a Person's status as a general partner of a partnership.
"Indenture" means this Indenture as amended or supplemented from time to
time.
"Investments" means, with respect to any Person, all investments (whether of
cash or property) by such Person in other Persons (including Affiliates) in
the forms of loans (including Guarantees), advances or capital contributions
(excluding commission, travel and similar advances to officers and employees
made in the ordinary course of business), purchases or other acquisitions for
consideration of Indebtedness, Equity Interests or other securities and all
other items that are or would be classified as investments on a balance sheet
prepared in accordance with GAAP.
"Lien" means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind in respect of such asset, whether
or not filed, recorded or otherwise perfected under applicable law (including
any conditional sale or other title retention agreement, any lease in the
nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement
under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction).
"Net Income" means, with respect to any Person, the net income (loss) of
such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however, any gain (but not
loss), together with any related provision for taxes on such gain (but not
loss), realized in connection with any Asset Sale (including, without
limitation, dispositions pursuant to sale and leaseback transactions), and
excluding any extraordinary gain (but not loss), together with any related
provision for taxes on such extraordinary gain (but not loss).
"Net Proceeds" means the aggregate cash proceeds received by the Company or
any of its Subsidiaries in respect of any Asset Sale, net of the direct costs
relating to such Asset Sale (including, without limitation, legal, accounting
and investment banking fees, and sales commissions) and any relocation
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<PAGE> 48
expenses incurred as a result thereof, taxes paid or payable as a result
thereof (after taking into account any available tax credits or deductions and
any tax sharing arrangements), amounts required to be applied to the repayment
of Indebtedness secured by a Lien on the asset or assets the subject of such
Asset Sale and any reserve for adjustment in respect of the sale price of such
asset or assets.
"New Project" means a project to commence or conduct gaming by any Gaming
Venture.
"New Project Debt" means, with respect to any New Project, Indebtedness of a
Gaming Venture incurred to develop, construct, acquire, open or operate such
New Project and any refinancing thereof.
"New Project Guarantee" means a Guarantee of New Project Debt by the Company
or any Restricted Subsidiary provided that such New Project Guarantee is
contractually subordinated in right of payment to the Securities and the
Subsidiary Guarantees at least to the same extent as the Existing Subordinated
Notes are contractually subordinated to the Securities on the date hereof.
"Non-Recourse Debt" means Indebtedness or that portion of Indebtedness (a)
as to which neither the Company nor any of its Subsidiaries (other than a Non-
Recourse Subsidiary) (i) provide credit support (including any undertaking,
agreement or instrument that would constitute Indebtedness), (ii) is directly
or indirectly liable, or (iii) constitute the lender; and (b) no default with
respect to which (including any rights that the holders thereof may have to
take enforcement action against a Non-Recourse Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness of the
Company or any of its Subsidiaries (other than a Non-Recourse Subsidiary) to
declare a default on such other Indebtedness or cause the payment thereof to
be accelerated or payable prior to its stated maturity; except in each case of
(a) and (b) above, pursuant to a New Project Guarantee that is permitted to be
incurred pursuant to the terms of this Indenture.
"Non-Recourse Subsidiary" means a Person that (a) has not acquired any
assets (other than as specifically permitted by the terms of (i) the 1994
Indenture or (ii) this Indenture, including the covenant entitled "Restricted
Payments" and the definition of "Permitted Investments") from the Company or
any Subsidiary; (b) only owns properties acquired after August 26, 1994; and
(c) has no Indebtedness other than Non-Recourse Debt.
"Notes" means the Notes described above and issued under this Indenture.
"Obligations" means any principal, interest (including Post-Petition
Interest), penalties, fees, indemnifications, reimbursements, damages and
other liabilities payable under the documentation governing any Indebtedness.
"Officer" means the Chairman of the Board, the President, the Chief
Financial Officer, the Treasurer, any Assistant Treasurer, Controller,
Secretary or any Vice-President of the Company or any Subsidiary Guarantor, as
the case may be.
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"Officers' Certificate" means a certificate signed by two Officers, one of
whom must be the principal executive officer, principal operating officer,
principal financial offer or principal accounting officer of the Company.
"Opinion of Counsel" means an opinion in form and substance and from legal
counsel who is reasonably acceptable to the Trustee.
"Permitted Investments" means (a) any Investments in the Company or in a
Restricted Subsidiary; (b) any Investments in Cash Equivalents; (c)
Investments by the Company or any Restricted Subsidiary of the Company in a
Person, if as a result of such Investment (i) such Person becomes a Restricted
Subsidiary of the Company and a Subsidiary Guarantor or (ii) such Person is
merged, consolidated or amalgamated with or into, or transfers or conveys
substantially all of its assets to, or is liquidated into, the Company or a
Restricted Subsidiary of the Company that is a Subsidiary Guarantor; (d)
Investments by the Company or a Restricted Subsidiary in Gaming Ventures; and
(e) other Investments that do not exceed, in the aggregate, $5,000,000 at any
time outstanding; provided, however, the term "Permitted Investment" shall not
include any Investment in a Gaming Venture by the Company or a Restricted
Subsidiary of an Existing Productive Asset or the Net Proceeds from the sale
or other disposition of an Existing Productive Asset unless (x) on a pro forma
basis after giving effect to such Investment, sale or disposition (as well as
to the designation of any Subsidiary as a Restricted Subsidiary concurrently
therewith) the Company would have been permitted to incur at least $1.00 of
additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set
forth in Section 4.09 hereof (assuming for purposes of this definition that
the ratio set forth therein were 3 to 1 and (y) as soon as practicable but in
no event later than 90 days after the cessation of operations of an Existing
Productive Asset as part of the Company or a Restricted Subsidiary the Company
or Restricted Subsidiary replaces, or causes to be replaced, such Existing
Productive Asset with gaming facilities held directly by the Company or a
Restricted Subsidiary ("Replacement Gaming Facilities") that (1) in the case
of an Investment, sale or disposition of The President Riverboat Casino, have
an appraised value of at least $20.0 million, and (2), in the case of an
Investment, sale or disposition of President Casino Mississippi have an
appraised liquidation value as established by an appraisal firm of recognized
national stature in the gaming or maritime industry of at least 80% of the
appraised liquidation value of the Existing Productive Asset being replaced
and that, in either case in the good faith belief of the Board of Directors of
the Company as manifested by a resolution of the Board of Directors, are
reasonably expected to generate Consolidated Cash Flow over the next
succeeding four fiscal quarters equal to or greater than the Consolidated Cash
Flow generated by such Existing Productive Asset over the prior four fiscal
quarters; and further, provided, that the term "Permitted Investment" shall
not include an investment in a Gaming Venture by the Company or a Restricted
Subsidiary of The Admiral or the Net Proceeds from the sale or other
disposition of The Admiral until both (aa) The Admiral has been in operation
for a period of at least 3 years and (bb) the conditions set forth in clause
(x) and clause (y) (2) above (treating The Admiral for this purpose as an
Existing Productive Asset) are satisfied. Replacement Gaming Facilities shall
be treated for all purposes as Existing Productive Assets hereunder, except
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that after initial replacement of Existing Productive Assets, subsequent
Replacement Gaming Facilities must for purposes of clause (y) of the preceding
sentence have an appraised liquidation value equal to at least 100% of the
Existing Productive Assets being replaced.
"Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Post-Petition Interest" means interest accruing after the commencement of
any bankruptcy or insolvency case or proceeding with respect to the Company or
any receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, at the rate applicable to such
Indebtedness, whether or not such interest is an allowable claim in any such
proceeding.
"Principal" of a debt security means the principal of the security plus the
premium, if any, on the security.
"Principal" of the Company means John E. Connelly.
"Related Party" means, with respect to any Principal, (a) any controlling
stockholder, 80% (or more) owned Subsidiary, or spouse or immediate family
member (in the case of an individual) of such Principal or (b) or trust,
corporation, partnership or other entity, the beneficiaries, stockholders,
partners, owners or Persons beneficially holding an 80% (or more) controlling
interest of which consist of such Principal and/or such other Persons referred
to in the immediately preceding clause (a).
"Responsible Officer" when used with respect to the Trustee means any
officer in its Corporate Trust Department, or any other assistant officer of
the Trustee in its Corporate Trust Administration customarily performing
functions similar to those performed by the Persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred
because of his or her knowledge of and familiarity with the particular
subject.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Securities" means Securities that were acquired by the Holder
thereof other than pursuant to an effective registration statement under the
Securities Act of 1933, as amended, or Rule 144 (or any successor rule)
thereunder.
"Restricted Subsidiary" means each of the Subsidiaries that is a Subsidiary
Guarantor and that has not been designated an Unrestricted Subsidiary.
"SEC" means the Securities and Exchange Commission.
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"Securities" means, collectively, the Notes issued pursuant to this
Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Custodian" means the Trustee, as custodian with respect to the
Securities in global form, or any successor entity thereto.
"Significant Subsidiary" means any Subsidiary which would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act, as such Regulation is in effect on the date
hereof.
"Subsidiary" means any corporation, association or other business entity of
which more than 50% of the total voting power of shares of Capital Stock
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by any Person or one or more of the other
Subsidiaries of that Person or a combination thereof.
"Subsidiary Guarantee" means, individually and collectively, the Guarantees
now or hereafter given by the Subsidiary Guarantors pursuant to Article 11
hereof, including for such Subsidiary Guarantors as of the date hereof a
notation on the Securities substantially in the form attached hereto as
Exhibit B.
"Subsidiary Guarantors" means each of (a) President Riverboat Casino - Iowa,
Inc., President Riverboat Casino - Missouri, Inc., President Riverboat Casino
- - Mississippi, Inc., TCG/Blackhawk, Inc., P.R.C. - Louisiana, President
Riverboat Casino - New York, Inc., President Casino New Yorker, Inc., PRC
Holdings Corporation, PRC Management, Inc., PRCX Corporation, President
Riverboat Casino Philadelphia, Inc., Vegas Vegas, Inc., and The Connelly
Group, L.P., and (b) any other subsidiary that executes a Subsidiary Guarantee
in accordance with the provisions of this Indenture, and their respective
successors and assigns.
"TCG Intercompany Notes" means the intercompany promissory notes outstanding
from time to time issued by The Connelly Group, L.P. to PRC Holdings
Corporation.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-
77bbbb) as in effect on the date of this Indenture.
"Transfer Restricted Securities" means Securities that bear or are required
to bear the legend set forth in Section 2.06 hereof.
"Trustee" means the party named as such above until a successor replaces it
in accordance with the applicable provisions of this Indenture and thereafter
means the successor serving hereunder.
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"Unrestricted Subsidiary" means (a) any Subsidiary of the Company (i) that,
at the time of determination, shall be an Unrestricted Subsidiary (as
designated by the Board of Directors of the Company, as provided below), (ii)
that shall be engaged in the same businesses as may be conducted from time to
time by the Company and its Restricted Subsidiaries from time to time from the
date of this Indenture, and (iii) all of the Indebtedness of which shall be
non-recourse to the Company and its Subsidiaries other than its Unrestricted
Subsidiaries and (b) any Subsidiary of an Unrestricted Subsidiary; provided,
that notwithstanding clause (a)(iii) above, the Company or any Subsidiary of
the Company may guarantee, endorse, agree to provide funds for the payment or
maintenance of, or otherwise become directly or indirectly liable with respect
to, Indebtedness of an Unrestricted Subsidiary but only to the extent that the
Company or such Subsidiary could make an investment in such Unrestricted
Subsidiary pursuant to Section 4.07 hereof and any such guarantee, endorsement
or agreement shall be deemed an incurrence of Indebtedness by the Company for
purposes of Section 4.09 hereof. The Board of Directors may designate any
newly acquired or newly formed Subsidiary to be an Unrestricted Subsidiary
unless such Subsidiary owns any Capital Stock of, or owns or holds any Lien on
any property of, any other Subsidiary of the Company that is not an
Unrestricted Subsidiary (other than a subsidiary of the type referred to in
clause (b) above). Any such designation by the Board of Directors of the
Company shall be evidenced by filing with the Trustee a certified copy of the
resolution of the Board of Directors of the Company giving effect to such
designation and an Officers' Certificate certifying that such designation
complied with the foregoing conditions.
"U.S. Government Obligations" means direct obligations of the United States
of America, or any agency or instrumentality thereof for the payment of which
the full faith and credit of the United States of America is pledged.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing (a) the then outstanding
principal amount of such Indebtedness into (b) the sum of the products
obtained by multiplying (i) the amount of each then remaining installment,
sinking fund, serial maturity or other required payments of principal,
including payment at final maturity, in respect thereof, by (ii) the number of
years (calculated to the nearest one-twelfth) that will elapse between such
date and the making of such payment.
"1994 Indenture" means that Indenture between the Company, its then
subsidiaries who were guarantors and the United States Trust Company of New
York, as trustee and dated as of August 26, 1994.
Section 1.02. Other Definitions.
Defined in
Term Section
---- -------
"Affiliate Transaction" 4.11
"Asset Sale" 4.10(a)
"Asset Sale Offer" 3.09
"Bankruptcy Law" 6.01
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"Change of Control" 4.15
"Change of Control Date" 4.15
"Change of Control Payment Date" 4.15
"Collateral Documents" 10.01
"Creditor" 10.01
"Custodian" 6.01
"DTC" 2.03
"Event of Default" 6.01
"Excess Proceeds" 4.10
"Legal Holiday" 12.07
"Paying Agent" 2.03
"Refinancing Indebtedness" 4.09
"Registrar" 2.03
"Restricted Payments" 4.07
Section 1.03. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Securities and the Subsidiary Guarantees;
"indenture security holder" means a Securityholder;
"indenture trustee" or "institutional trustee" means the Trustee;
"obligor" on the Securities means the Company or any successor obligor or
any Subsidiary Guarantor upon the Securities.
All other terms used in this Indenture that are defined by the TIA, defined
by TIA reference to another statute or defined by SEC rule under the TIA have
the meanings so assigned to them.
Section 1.04. Rules of Construction.
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned to it
in accordance with GAAP;
(c) references to GAAP, as of any date, shall mean GAAP in effect in the
United States as of such date;
(d) "or" is not exclusive,
(e) words in the singular include the plural, and in the plural include the
singular; and
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(f) provisions apply to successive events and transactions.
ARTICLE 2
THE SECURITIES
Section 2.01. Form and Dating.
The Notes and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A hereto, the terms of which are
incorporated in and made a part of this Indenture. The Securities are limited
in aggregate principal amount to $25 million. The Subsidiary Guarantees shall
be substantially in the form of Exhibit B hereto, the terms of which are
incorporated in and made part of this Indenture. The Securities may have
notations, legends or endorsements required by law, stock exchange rule,
agreements to which the Company is subject or usage. Each Security shall be
dated the date of its authentication. The Securities shall be in
denominations of $1,000 and integral multiples thereof. After the Securities
have ceased to be Restricted Securities, the Company shall from time to time
prepare and deliver to the Trustee printed and engraved forms of note
certificates in quantities specified by the Trustee.
The terms and provisions contained in the Securities shall constitute, and
are hereby expressly made, a part of this Indenture and to the extent
applicable, the Company, and the Subsidiary Guarantors and the Trustee, by
their execution and delivery of this Indenture, and the Holders by accepting
the Securities, expressly agree to such terms and provisions and to be bound
thereby. In case of a conflict, the provisions of this Indenture shall
control.
Certain of the Notes may be issued in global form, substantially in the form
of Exhibit A attached hereto (including footnotes 1 and 2 thereto). The
remainder of the Notes will be issued in definitive form as Definitive
Securities, substantially in the form of Exhibit A attached hereto (not
including footnotes 1 and 2 thereto.) Each Global Note shall represent such of
the outstanding Securities as shall be specified therein and each shall
provide that it shall represent the aggregate amount of outstanding Securities
from time to time endorsed thereon and that the aggregate amount of
outstanding Securities represented thereby may from time to time be reduced or
increased, as appropriate, to reflect exchanges and redemptions. Any
endorsement of a Global Note to reflect the amount of any increase or decrease
in the amount of outstanding Securities represented thereby shall be made by
the Trustee or the Securities Custodian, at the direction of the Trustee, in
accordance with instructions given by the Holder thereof as required by
Section 2.06 hereof.
Section 2.02. Execution and Authentication.
Two Officers of the Company shall sign the Securities for the Company by
manual or facsimile signature. The Company's seal shall be reproduced on the
Securities.
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If an Officer whose signature is on a Security no longer holds that office
at the time the Security is authenticated by the Trustee, the Security shall
nevertheless be valid.
A Security shall not be valid until authenticated by the authorized manual
signature of the Trustee. The signature of the Trustee shall be conclusive
evidence that the Security has been authenticated under this Indenture.
The Trustee shall from time to time, upon a written order of the Company
signed by two Officers of the Company, authenticate Securities for original
issue up to an aggregate principal amount stated in paragraph 4 of the
Securities. The aggregate principal amount of Securities outstanding at any
time may not exceed the amount set forth herein (except as provided in Section
2.07 hereof). Such order shall specify the amount of the Notes to be
authenticated and the date upon which the original issue thereof is to be
authenticated.
The Trustee may appoint an authenticating agent acceptable to the Company to
authenticate Securities. Unless limited by the terms of such appointment, an
authenticating agent may authenticate Securities whenever the Trustee may do
so. Each reference in this Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent has the same rights as
an Agent to deal with the Company or an Affiliate of the Company.
Section 2.03. Registrar and Paying Agent.
The Company shall maintain (i) an office or agency where Securities may be
presented for registration of transfer or for exchange ("Registrar") and (ii)
an office or agency where Securities may be presented for payment ("Paying
Agent"). The Registrar shall keep a register of the Securities and of their
transfer and exchange. The Company may appoint one or more co-registrars and
one or more additional paying agents. The term "Registrar" includes any co-
registrar, and the term "Paying Agent" includes any additional paying agent.
The Company may change any Paying Agent or Registrar without notice to any
Securityholder. The Company shall notify the Trustee, and the Trustee shall
notify the Securityholders, of the name and address of any Agent not a party
to this Indenture. The Company or any of its Subsidiaries may act as Paying
Agent or Registrar. The Company shall enter into an appropriate agency
agreement with any Agent not a party to this Indenture. The agreement shall
implement the provisions of this Indenture that relate to such Agent. The
Company shall notify the Trustee of the name and address of any such Agent. If
the Company fails to maintain a Registrar or Paying Agent, or fails to give
the foregoing notice, the Trustee shall act as such, and shall be entitled to
appropriate compensation in accordance with Section 7.07 hereof.
The Company initially appoints The Depository Trust Company ("DTC") to act
as Depositary with respect to the Global Notes.
The Company initially appoints the Trustee to act as Securities Custodian
with respect to the Global Notes.
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The Company initially appoints Trustee as Registrar, Paying Agent and agent
for service of notices and demands in connection with the Securities. The
Trustee shall act as Registrar and Paying Agent until such time as the Company
gives the Trustee written notice to the contrary.
Section 2.04. Paying Agent to Hold Money in Trust.
Prior to each due date of the principal or interest on any Security, the
Company shall deposit with the Paying Agent sufficient funds to pay principal,
premium, if any, and interest then so becoming due. The Company shall require
each Paying Agent other than the Trustee to agree in writing that the Paying
Agent will hold in trust for the benefit of Securityholders or the Trustee all
money held by the Paying Agent for the payment of principal or interest on the
Securities, and will notify the Trustee of any default by the Company or any
Subsidiary Guarantor in making any such payment. While any such default
continues, the Trustee may require a Paying Agent to pay all money held by it
to the Trustee. The Company at any time may require a Paying Agent to pay all
money held by it to the Trustee. Upon payment over to the Trustee, the Paying
Agent (if other than the Company or a Subsidiary) shall have no further
liability for the money delivered to the Trustee. If the Company or any
Subsidiary acts as Paying Agent, it shall segregate and hold in a separate
trust and for the benefit of the Securityholders all money held by it as
Paying Agent. The Company shall notify the Trustee in writing at least 5 days
before the next due date of the name and address of the Paying Agent if a
person other than the Trustee is named Paying Agent at any time or from time
to time.
Section 2.05. Securityholder Lists.
The Trustee shall preserve in as current a form as is reasonably practicable
the most recent list available to it of the names and addresses of
Securityholders. If the Trustee is not the Registrar, the Company shall
furnish to the Trustee at least 7 Business Days before each interest payment
date, and at such other times as the Trustee may request in writing, a list in
such form and as of such date as the Trustee may reasonably require of the
names and addresses of Securityholders.
Section 2.06. Transfer and Exchange.
(a) Transfer and Exchange of Definitive Securities. When Definitive
Securities are presented to the Registrar with the request:
(x) to register the transfer of the Definitive Securities, or
(y) to exchange such Definitive Securities for an equal principal amount
of Definitive Securities of other authorized denominations,
the Registrar shall register the transfer or make the exchange as requested if
its requirements for such transactions are met; provided, however, that the
Definitive Securities presented or surrendered for register of transfer or
exchange:
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(i) shall be duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by the Holder
thereof or by his attorney, duly authorized in writing; and
(ii) in the case of Transfer Restricted Securities that are Definitive
Securities, shall be accompanied by the following additional information and
documents, as applicable:
(A) if such Transfer Restricted Security is being delivered to the
Registrar by a Holder for registration in the name of such Holder, without
transfer, a certification from such Holder to that effect (in substantially
the form of Exhibit C hereto); or
(B) if such Transfer Restricted Security is being transferred to a
"qualified institutional buyer" (as defined in Rule 144A under the Securities
Act) in accordance with Rule 144A under the Securities Act or pursuant to an
exemption from registration in accordance with Rule 144 or Regulation S under
the Securities Act or pursuant to an effective registration statement under
the Securities Act, a certification to that effect (in substantially the form
of Exhibit C hereto); or
(C) if such Transfer Restricted Security is being transferred in
reliance on another exemption from the registration requirements of the
Securities Act, a certification to that effect (in substantially the form of
Exhibit C hereto) and an Opinion of Counsel reasonably acceptable to the
Company and to the Registrar to the effect that such transfer is in compliance
with the Securities Act.
(b) Restrictions on Transfer of a Definitive Security for a Beneficial
Interest in a Global Note. A Definitive Security may not be exchanged for a
beneficial interest in a Global Note except upon satisfaction of the
requirements set forth below. Upon receipt by the Trustee of a Definitive
Security, duly endorsed or accompanied by appropriate instruments of transfer,
in form satisfactory to the Trustee, together with:
(i) if such Definitive Security is a Transfer Restricted Security,
certification, substantially in the form of Exhibit C hereto, that such
Definitive Security is being transferred to a "qualified institutional buyer"
(as defined in Rule 144A under the Securities Act) in accordance with Rule
144A under the Securities Act; and
(ii) whether or not such Definitive Security is a Transfer Restricted
Security, written instructions directing the Trustee to make, or to direct the
Securities Custodian to make, an endorsement on the Global Note to reflect an
increase in the aggregate principal amount of the Securities represented by
the Global Note, then the Trustee shall cancel such Definitive Security and
cause, or direct the Securities Custodian to cause, in accordance with the
standing instructions and procedures existing between the Depository and the
Securities Custodian, the aggregate principal amount of Securities represented
by the Global Note to be increased accordingly. If no Global Notes are then
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outstanding, the Company shall issue and the Trustee shall authenticate a new
Global Note in the appropriate principal amount.
(c) Transfer and Exchange of Global Notes. The transfer and exchange of
Global Notes or beneficial interests therein shall be effected through the
Depository, in accordance with this Indenture (including the restrictions on
transfer set forth herein) and the procedures of the Depository therefor.
(d) Transfer of a Beneficial Interest in a Global Note for a Definitive
Security.
(i) Any Person having a beneficial interest in a Global Note may upon
written request exchange such beneficial interest for a Definitive Security.
Upon receipt by the Trustee of written instructions or such other form of
instructions as is customary for the Depository from the Depository or its
nominee on behalf of any Person having a beneficial interest in a Global Note
and upon receipt by the Trustee of a written order or such other forms of
instructions as is customary for the Depository or the Person designated by
the Depository as having such a beneficial interest in a Transfer Restricted
Security only, the following additional information and documents (all of
which may be submitted by facsimile):
(A) if such beneficial interest is being transferred to the Person
designated by the Depository as being the beneficial owner, a certification
from such person to that effect (in substantially the form of Exhibit C
hereto); or
(B) if such beneficial interest is being transferred to a "qualified
institutional buyer" (as defined in Rule 144A under the Securities Act) in
accordance with Rule 144A under the Securities Act or pursuant to an exemption
from registration in accordance with Rule 144 or Regulation S under the
Securities Act or pursuant to an effective registration statement under the
Securities Act,. a certification to- that effect from the transferor (in
substantially the form of Exhibit C hereto); or
(C) if such beneficial interest is being transferred in reliance on
another exemption from the registration requirements of the Securities Act, a
certification to that effect from the transferee or transferor (in
substantially the form of Exhibit C hereto) and an Opinion of Counsel from the
transferee or transferor reasonably acceptable to the Company and to the
Registrar to the effect that such transfer is in compliance with the
Securities Act, then the Trustee or the Securities Custodian, at the direction
of the Trustee, will cause, in accordance with the standing instructions and
procedures existing between the Depository and the Securities Custodian, the
aggregate principal amount of the Global Note to be reduced and, following
such reduction, the Company will execute and, upon receipt of an
authentication order in the form of an Officers' Certificate, the Trustee will
authenticate and deliver to the transferee a Definitive Security.
(ii) Definitive Securities issued in exchange for a beneficial interest
in a Global Note pursuant to this Section 2.06(d) shall be registered in such
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names and in such authorized denominations as the Depository, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee in writing. The Trustee shall deliver such Definitive
Securities to the persons in whose names such Securities are so registered.
(e) Restrictions on Transfer and Exchange of Global Notes. Notwithstanding
any other provisions of this Indenture (other than the provisions set forth in
subsection (f) of this Section 2.06), a Global Note may not be transferred as
a whole except by the Depository to a nominee of the Depository or by a
nominee of the Depository to the Depository or another nominee of the
Depository or by the Depository or any such nominee to a successor Depository
or a nominee of such successor Depository.
(f) Authentication of Definitive Securities in Absence of Depository. If at
any time:
(i) the Depository for the Securities notifies the Company that the
Depository is unwilling or unable to continue as Depository for the Global
Notes and a successor Depository for the Global Notes is not appointed by the
Company within 90 days after delivery of such notice; or
(ii) the Company, at its sole discretion, notifies the Trustee in
writing that it elects to cause the issuance of Definitive Securities under
this Indenture, then the Company will execute, and the Trustee, upon receipt
of an Officers' Certificate requesting the authentication and delivery of
Definitive Securities, will authenticate and deliver Definitive Securities, in
an aggregate principal amount equal to the principal amount of the Global
Notes, in exchange for such Global Notes.
(g) Legends.
(i) Except as permitted by the following paragraph (ii), each Security
certificate evidencing the Global Notes and the Definitive Securities (and all
Securities issued in exchange therefor or substitution thereof) shall bear a
legend in substantially the following form:
THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACTS") OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL
OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
SUCH SECURITY) ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR
SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A
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PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR
FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN
THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) TO AN
"ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (A), (1), (2), (3) OR
(7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR
ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN "ACCREDITED INVESTOR," FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION
WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (E) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO THE COMPANY'S OR THE REGISTRAR'S (AS APPLICABLE)
RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D) OR (E)
TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION REASONABLY SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE
FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER
SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE
REGISTRAR. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER
THE RESALE RESTRICTION TERMINATION DATE.
(ii) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by a Global Note)
pursuant to Rule 144A under the Act or an effective registration statement
under the Act:
(A) in the case of any Transfer Restricted Security that is a
Definitive Security, the Registrar shall permit the Holder thereof to exchange
such Transfer Restricted Security for a Definitive Security that does not bear
the legend set forth above and rescind any restriction on the transfer of such
Transfer Restricted Security; and
(B) any such Transfer Restricted Security represented by a Global Note
shall not be subject to the provisions set forth in (i) above (such sales or
transfers being subject only to the provisions of Section 2.06(d) hereof);
provided, however, that with respect to any request for an exchange of a
Transfer Restricted Security that is represented by a Global Note for a
Definitive Security that does not bear a legend, which request is made in
reliance upon Rule 144A, the Holder thereof shall certify in writing to the
Registrar that such request is being made pursuant to Rule 144A (such
certification to be substantially in the form of Exhibit C hereto).
(h) Cancellation and/or Adjustment of Global Note. At such time as all
beneficial interests in a Global Note have either been exchanged for
Definitive Securities, redeemed, repurchased or cancelled, such Global Note
shall be returned to or retained and cancelled by the Trustee. At any time
prior to such cancellation, if any beneficial interest in a Global Note is
exchanged for Definitive Securities, redeemed, repurchased or cancelled, the
principal amount of Securities represented by such Global Note shall be
reduced and an endorsement shall be made on such Global Note, by the Trustee
or the Securities Custodian, at the direction of the Trustee, to reflect such
reduction.
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(i) Obligations with respect to Transfers and Exchanges of Definitive
Securities.
(i) To permit registrations of transfers and exchanges, the Company
shall execute and the Trustee shall authenticate Definitive Securities and
Global Notes at the Registrar's written request.
(ii) No service charge shall be made to a Holder for any registration
or transfer or exchange, but the Company may require payment of a sum
sufficient to cover any transfer tax or similar governmental charge payable in
connection therewith (other than any such transfer taxes or similar
governmental charge payable upon exchange or transfer pursuant to Sections
3.09, 4.10 or 9.05 hereof).
(iii) The Registrar shall not be required to register the transfer or
exchange of any Definitive Security selected for redemption in whole or in
part, except the unredeemed portion of any Definitive Security being redeemed
in part.
(iv) All Definitive Securities and Global Notes issued upon any
registration of transfer or exchange of Definitive Securities or Global Notes
shall be the valid obligations of the Company, evidencing the same debt, and
entitled to the same benefits under the Indenture, as the Definitive
Securities or Global Notes surrendered upon such registration of transfer or
exchange.
(v) The Company shall not be required
(A) to issue, register the transfer of or exchange Securities during
a period beginning at the opening of business 15 days before the day of any
selection of Securities for redemption under Section 3.02 and ending at the
close of business on the day of selection, or
(B) to register the transfer of any Security so selected for
redemption in whole or in part, except the unredeemed portion of any Security
being redeemed in part.
(vi) Prior to due presentment for registration of transfer of any
Security, the Trustee, any Agent and the Company may deem and treat the person
in whose name any Security is registered as the absolute owner of such
Security for the purpose of receiving payment of principal of and interest on
such Security and for all other purposes whatsoever, whether such Security is
overdue, and neither the Trustee, any Agent nor the Company shall be affected
by notice to the contrary.
Section 2.07. Replacement Securities.
If any mutilated Security is surrendered to the Trustee, or the Company and
the Trustee receive evidence to their satisfaction of the destruction, loss or
theft of any Security, the Company shall issue and the Trustee, upon the
written order of the Company signed by two Officers of the Company if required
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by the Trustee, shall authenticate a replacement Security if the Trustee's
requirements for replacements of Securities are met. If required by the
Trustee or the Company, an indemnity agreement must be supplied by the Holder
that is sufficient in the judgment of the Trustee and the Company to protect
the Company, the Trustee, any Agent or any authenticating agent from any loss
which any of them may suffer if a Security is replaced. The Company and the
Trustee may charge for their expenses in replacing a Security.
Every replacement Security is an additional obligation of the Company and
shall be entitled to all benefits of this Indenture equally and
proportionately with all other Securities duly issued hereunder.
Section 2.08. Outstanding Securities.
The Securities outstanding at any time are all the Securities authenticated
by the Trustee except for those cancelled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by
the Trustee hereunder, and those described in this Section as not outstanding.
If a Security is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a protected purchaser.
If the principal amount of any Security is considered paid under Section
4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.
Subject to Section 2.09 hereof, a Security does not cease to be outstanding
because the Company or an Affiliate of the Company holds the Security.
Section 2.09. Treasury Securities.
In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, waiver or consent, Securities
owned by the Company, any Subsidiary Guarantor, or any Affiliate of the
Company or any Subsidiary Guarantor shall be considered as though not
outstanding, except that for purposes of determining whether the Trustee shall
be protected in relying on any such direction, waiver or consent, only
Securities that a Responsible Officer of the Trustee actually knows to be so
owned shall be so disregarded.
Section 2.10. Temporary Securities.
Until Definitive Securities are ready for delivery, the Company may prepare
and the Trustee shall authenticate temporary Securities. Temporary Securities
shall be substantially in the form of Definitive Securities but may have
variations that the Company and the Trustee consider appropriate for temporary
Securities. Without unreasonable delay, the Company shall prepare and the
Trustee, upon receipt of the written order of the Company signed by two
Officers of the Company, shall authenticate Definitive Securities in exchange
for temporary Securities. Until such exchange, temporary Securities shall be
entitled to the same rights, benefits and privileges as Definitive Securities.
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Section 2.11. Cancellation.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Securities surrendered to them for registration of transfer, exchange or
payment. The Trustee shall cancel all Securities surrendered for registration
of transfer, exchange, payment, replacement or cancellation and shall destroy
cancelled Securities (subject to the record retention requirement of the
Exchange Act) unless the Company directs them to be returned to it. The
Company may not issue new Securities to replace Securities that it has
redeemed or paid or that have been delivered to the Trustee for cancellation.
All cancelled Securities held by the Trustee shall be destroyed and
certification of their destruction delivered to the Company unless by a
written order, signed by one Officer of the Company, the Company shall direct
that cancelled Securities be returned to it.
Section 2.12. Defaulted Interest.
If the Company defaults in a payment of interest on the Securities, it shall
pay the defaulted interest plus, to the extent lawful, any interest payable on
the defaulted interest, at the rate provided in the Securities and in Section
4.01 hereof to the Persons who are Securityholders on a subsequent special
record date, which date shall be at the earliest practicable date but in all
events at least 5 Business Days prior to the payment date. The Company shall,
with the consent of the Trustee, fix or cause to be fixed each such special
record date and payment date. At least 15 days before any such special record
date, the Company (or the Trustee, in the name of and at the expense of the
Company) shall mail to Securityholders a notice that states the special record
date, the related payment date and the amount of such interest to be paid.
ARTICLE 3
REDEMPTION
Section 3.01. Notices to Trustee.
If the Company elects to redeem Securities pursuant to the optional
redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee,
at least 45 days but not more than 60 days before a redemption date, an
Officers' Certificate setting forth the Section of this Indenture pursuant to
which the redemption shall occur, the redemption date, the principal amount of
Securities to be redeemed and the redemption price.
If the Company is required to make an offer to redeem Securities pursuant to
the provisions of Section 3.09 hereof, it shall notify the Trustee in writing
of the Section of this Indenture pursuant to which the redemption shall occur,
the redemption date, the principal amount of Securities to be redeemed and the
redemption price and shall furnish to the Trustee an Officers' Certificate to
the effect that (a) the Company or one of its Subsidiaries has effected an
Asset Sale (as hereinafter defined) and (b) the conditions set forth in
Section 4.10 have been satisfied.
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If the Registrar is not the Trustee, the Company shall, concurrently with
each notice of redemption, cause the Registrar to deliver to the Trustee a
certificate (upon which the Trustee may conclusively rely) setting forth the
principal amounts of and identifying Restricted Securities held by any Holder.
Section 3.02. Selection of Securities to Be Redeemed.
If less than all of the Securities are to be redeemed, the Trustee shall
select the Securities to be redeemed among the Holders of the Securities in
compliance with the requirements of the principal national securities
exchange, if any, on which the Securities are listed, or, if the Securities
are not so listed, on a pro rata basis, provided, that no Securities of $1,000
or less shall be redeemed in part. In the event of partial redemption by lot,
the particular Securities to be redeemed shall be selected, unless otherwise
provided herein, not less than 30 nor more than 60 days prior to the
redemption date by the Trustee from the outstanding Securities not previously
called for redemption.
The Trustee shall promptly notify the Company in writing of the Securities
selected for redemption and, in the case of any Security selected for partial
redemption, the principal amount thereof to be redeemed. Securities and
portions of them selected shall be in amounts of $1,000 or whole multiples of
$1,000; except that if all of the Securities of a Holder are to be redeemed,
the entire outstanding amount of Securities held by such Holder, even if not a
multiple of $1,000, shall be redeemed. Except as provided in the preceding
sentence, provisions of this Indenture that apply to Securities called for
redemption also apply to portions of Securities called for redemption.
In the event the Company is required to make an offer to redeem Securities
pursuant to Sections 3.09 and 4.10 hereof and the amount of the Net Proceeds
from the Asset Sale is not evenly divisible by $1,000, the Trustee shall
promptly refund to the Company any remaining Net Proceeds.
Section 3.03. Notice of Redemption.
Subject to the provisions of Section 3.09 hereof, at least 30 days but not
more than 60 days before a redemption date, the Company shall mail a notice of
redemption by first class mail to each Holder whose Securities are to be
redeemed and shall mail to the Trustee a copy of the form of such notice.
The notice shall identify the Securities to be redeemed (including the CUSIP
numbers thereof) and shall state:
(1) the redemption date;
(2) the redemption price;
(3) if any Security is being redeemed in part only, the portion of the
principal amount of such Security to be redeemed and that, after the
redemption date, upon surrender of such Security, a new Security or Securities
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in principal amount equal to the unredeemed portion will be issued in the name
of the Holder thereof upon cancellation of the original Security;
(4) the name and address of the Paying Agent;
(5) that Securities called for redemption must be surrendered to the Paying
Agent to collect the redemption price;
(6) that, unless the Company defaults in making such redemption payment,
interest on Securities called for redemption ceases to accrue on and after the
redemption date;
(7) the paragraph of the Securities and/or Section of this Indenture
pursuant to which the Securities called for redemption are being redeemed; and
(8) that no representation is made as to the correctness or accuracy of the
CUSIP number, if any, listed in such notice or printed on the Securities.
At the Company's request, the Trustee shall give the notice of redemption in
the Company's name and at its expense; provided, however, that the Company
shall deliver to the Trustee, at least 45 days prior to the redemption date,
an Officers' Certificate requesting that the Trustee give such notice and
setting forth the information to be stated in such notice as provided in the
preceding paragraph.
Section 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.03 herein,
Securities called for redemption become due and payable on the redemption date
at the redemption price set forth in the notice.
Section 3.05. Deposit of Redemption Price.
One Business Day prior to the redemption date, the Company shall deposit
with the Trustee or with the Paying Agent money sufficient to pay the
redemption price of and accrued interest on all Securities to be redeemed on
that date (other than Securities or portions of Securities that have been
surrendered by the Company to the Trustee for cancellation in accordance with
the terms of this Indenture). The Trustee or the Paying Agent shall return to
the Company any money deposited with the Trustee or the Paying Agent by the
Company in excess of the amounts necessary to pay the redemption price of, and
accrued interest on, all Securities to be redeemed.
Interest on the Securities to be redeemed will cease to accrue on the
applicable redemption date, whether or not such Securities are presented for
payment, if the Company makes the redemption deposit. If any Security called
for redemption shall not be so paid upon surrender for redemption because of
the failure of the Company to comply with the preceding paragraph, interest
will be paid at the rate provided in the Securities and in Section 4.01 hereof
on the unpaid principal, from the redemption date until such principal is
paid, and to the extent lawful on any interest not paid on such unpaid
principal.
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Section 3.06. Securities Redeemed in Part.
Upon surrender and cancellation of a Security that is redeemed in part, the
Company shall issue and the Trustee shall authenticate for the Holder at the
expense of the Company a new Security equal in principal amount to the
unredeemed portion of the Security surrendered.
Section 3.07. Optional Redemption.
The Company may redeem all or a portion of the Securities upon the terms and
subject to the conditions set forth in paragraph 5 of the Securities. Any
redemption pursuant to this Section 3.07 shall be made pursuant to the
provisions of Sections 3.01 through 3.06 hereof. The restrictions set forth
in paragraph 5 of the Securities shall not be deemed to limit the Company's
right to make open market purchases of the Securities from time to time.
Section 3.08. Mandatory Redemption.
The Company shall not have any obligations to mandatorily redeem any
Securities issued hereunder.
Section 3.09. Offer to Redeem by Application of Net Proceeds.
If applicable, within 30 days after the occurrence of any event requiring
the Company to offer to redeem Securities pursuant to the provisions of
Section 4.10 hereof, the Company shall deliver to the Trustee a notice of
redemption pursuant to Section 3.01 hereof (without regard to the number of
prior days notice required). Within 15 days thereafter, the Trustee shall
select the Securities to be offered to be redeemed in accordance with Section
3.02 hereof. Within 15 Business Days thereafter, the Company shall mail or
cause the Trustee to mail (in the Company's name and at its expense and
pursuant to an Officers' Certificate as required by Section 3.03 hereof) an
offer to redeem (the "Asset Sale Offer") to each Holder of Securities whose
Securities are to be offered to be redeemed. The Asset Sale Offer shall be
made in compliance with all applicable laws, including, without limitation,
all applicable federal and state securities laws. The Asset Sale Offer shall
identify the Securities to which it relates and shall contain the information
required by clauses (1) through (8) (other than clause (6)) of Section 3.03
hereof and shall provide for a redemption date no earlier than 65 days after
the giving of the Asset Sale Offer. The redemption price shall be 100% of the
principal amount of the Securities, plus accrued and unpaid interest to the
redemption date.
A Holder receiving an Asset Sale Offer may elect to have redeemed the
Securities to which the Asset Sale Offer relates by completing the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Security
and providing such form to the Trustee and the Company on or before 35 days
preceding the redemption date. A Holder may not elect to have redeemed less
than all of the Securities to which the Asset Sale Offer relates. If less than
all of the Holders receiving an Asset Sale Offer elect to have Securities
redeemed, the Company or the Trustee (in the Company's name and at its expense
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and pursuant to an Officers' Certificate as required by Section 3.03 hereof)
shall, no later than 25 days preceding the redemption date, mail an additional
Asset Sale Offer to the Holders of the Securities, if any, who have provided
written notice of election to redeem Securities and whose Securities have not
been completely redeemed. Such additional Asset Sale Offer shall be accepted
by the Holder by providing written notice of such acceptance to the Trustee
and to the Company on or before 15 days preceding the redemption date. The
Trustee shall thereafter mail a notice of redemption in accordance with
Section 3.03 hereof at least 10 days prior to the redemption date.
Other than as specifically provided in this Section 3.09, any redemption
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.
ARTICLE 4
COVENANTS
Section 4.01. Payment of Securities.
The Company shall duly pay the principal of and interest on the Securities
on the dates and in the manner provided in the Securities. Principal and
interest shall be considered paid on the date due if the Paying Agent, other
than the Company or a Subsidiary of the Company, holds at least one Business
Day before that date money deposited by the Company in immediately available
funds and designated for and sufficient to pay all principal and interest then
due. Such Paying Agent shall return to the Company, no later than 5 days
following the date of payment, any money (including accrued interest) that
exceeds such amount of principal and interest paid on the Securities in
accordance with this Section 4.01.
To the extent lawful, the Company shall pay interest (including Post-
Petition interest) on overdue principal at the rate borne by the Securities,
compounded semi-annually; it shall pay interest (including Post-Petition
Interest) on overdue installments of interest (without regard to any
applicable grace period) at the same rate, compounded semi-annually.
Section 4.02. Maintenance of Office or Agency.
The Company will maintain in the Borough of Manhattan, the City of New York,
an office or agency (which may be an office of the Trustee, Registrar or co-
registrar) where Securities may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Company in respect of
the Securities and this Indenture may be served. The Company will give prompt
written notice to the Trustee of the location, and any change in the location,
of such office or agency. If at any time the Company shall fail to maintain
any such required office or agency or shall fail to furnish the Trustee with
the address thereof, such presentations, surrenders, notices and demands may
be made or served at the Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other offices
or agencies where the Securities may be presented or surrendered for any or
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all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its respective obligations to maintain an office or
agency in the Borough of Manhattan, The City of New York for such purposes.
The Company will give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of any such other
office or agency.
The Company hereby designates the Corporate Trust Office of the Trustee as
one such office or agency of the Company in accordance with Section 2.03.
Section 4.03. SEC Reports.
(a) The Company and each Subsidiary Guarantor shall file with the
Trustee, within 15 days after filing with the SEC, copies of the annual
reports and of the information, documents, and other reports (or copies of
such portions of any of the foregoing as the SEC may by rules and regulations
prescribe) that the Company and each Subsidiary Guarantor is required to file
with the SEC pursuant to Section 13 or 15(d) of the Exchange Act. If the
Company is not subject to the requirements of such Section 13 or 15(d) of the
Exchange Act, the Company shall continue to file with the SEC and the Trustee
on the same timely basis such reports, information and other documents as it
would file if it were subject to the requirements of Section 13 or 15(d) of
the Exchange Act.
(b) So long as any of the Securities remain outstanding, the Company shall
cause an annual report to stockholders and each quarterly or other financial
report furnished by it generally to stockholders to be filed with the Trustee
and mailed to the Holders at their addresses appearing in the register of
Securities maintained by the Registrar, in each case, at the time of such
mailing or furnishing to stockholders. If the Company is not required to
furnish annual or quarterly reports to its stockholders pursuant to the
Exchange Act, the Company shall cause its financial statements, including any
notes thereto (and, with respect to annual reports, an auditors' report by the
Company's certified independent accountants) and a "Management's Discussion
and Analysis of Financial Condition and Results of Operations," comparable to
that which would have been required to appear in annual or quarterly reports
filed under Section 13 or 15(d) of the Exchange Act to be so filed with the
Trustee and mailed to the Holders within 120 days after the end of each of the
Company's fiscal years and within 60 days after the end of each of the first
three quarters of each such fiscal year.
(c) The Company shall provide the Trustee with a sufficient number of
copies of all reports and other documents and information that the Trustee may
be required to deliver to the Securityholders under this Section 4.03. In
addition, whether or not required by the rules and regulations of the SEC, the
Company shall file a copy of all such information with the SEC for public
availability and make such information available to investors who request it
in writing.
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Section 4.04. Compliance Certificate.
(a) The Company shall deliver to the Trustee, within 120 days after the end
of each fiscal year, an Officers' Certificate stating that a review of the
activities of the Company and its Subsidiaries (including the Company and the
Subsidiary Guarantors) during the preceding fiscal year has been made under
the supervision of the signing Officers with a view to determining whether
each has kept, observed, performed and fulfilled its obligations under this
Indenture, and further stating, as to each such Officer signing such
certificate, that to the best of his knowledge each has kept, observed,
performed and fulfilled each and every covenant contained in this Indenture
and is not in default in the performance or observance of any of the terms,
provisions and conditions hereof (or, if a Default or Event of Default shall
have occurred, describing all such Defaults or Events of Default of which he
may have knowledge and what action each is taking or proposes to take with
respect thereto) and that to the best of his knowledge no event has occurred
and remains in existence by reason of which payments on account of the
principal of or interest, if any, on the Securities or the Subsidiary
Guarantees are prohibited or if such event has occurred, a description of the
event and what action each is taking or proposes to take with respect thereto.
(b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the annual financial
statements delivered pursuant to Section 4.03 above shall be accompanied by a
written statement of the Company's independent public accountants (who shall
be a firm of established national reputation reasonably satisfactory to the
Trustee) that in making the examination necessary for certification of such
financial statements nothing has come to their attention which would lead them
to believe that the Company or the Subsidiary Guarantors has violated any
provisions of Sections 4.01, 4.05, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13,
or 4.15 hereof or of Article 5 or Article 11 of this Indenture or, if any such
violation has occurred, specifying the nature and period of existence thereof,
it being understood that such accountants shall not be liable directly or
indirectly to any Person for any failure to obtain knowledge of any such
violation.
(c) The Company and each of the Subsidiary Guarantors will, so long as any
of the Securities are outstanding, deliver to the Trustee, forthwith upon any
Officer becoming aware of (i) any Default or Event of Default or (ii) any
event of default under any other mortgage, indenture or instrument as such
terms are used in Section 6.01(5), an Officers' Certificate specifying such
Default, Event of Default or default and what action the Company is taking or
proposes to take with respect thereto.
Section 4.05. Taxes.
Each of the Company and the Subsidiary Guarantors shall, and shall cause
each of its respective subsidiaries to, pay prior to delinquency all material
taxes, assessments, and governmental levies except as contested in good faith
and by appropriate proceedings.
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Section 4.06. Stay, Extension and Usury Laws.
Each of the Company and the Subsidiary Guarantors covenants (to the extent
that each may lawfully do so) that it will not at any time insist upon, plead,
or in any manner whatsoever claim or take the benefit or advantage of, any
stay, extension or usury law wherever enacted, now or at any time hereafter in
force, which may affect the covenants or the performance of this Indenture;
and each of the Company and the Subsidiary Guarantors (to the extent that each
may lawfully do so) hereby expressly waives all benefit or advantage of any
such law, and covenants that it will not, by resort to any such law, hinder,
delay or impede the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as though no such law
has been enacted.
Section 4.07. Limitation on Restricted Payments.
The Company will not, and will not permit any of its Restricted Subsidiaries
to, directly or indirectly:
(a) declare or pay any dividend or make any distribution on account of the
Company's or any of its Restricted Subsidiaries' Equity Interests (other than
dividends or distributions payable in Equity Interests (other than
Disqualified Stock) of the Company or a Restricted Subsidiary or dividends or
distributions payable to the Company or a Restricted Subsidiary);
(b) purchase, redeem or otherwise acquire or retire for value any Equity
Interests of the Company or any Subsidiary or other Affiliate of the Company
(other than any such Equity Interests owned by the Company or a Restricted
Subsidiary);
(c) purchase, redeem or otherwise acquire or retire for value any
Indebtedness that is subordinated to the Securities; or
(d) make any Restricted Investment (all such payments and other actions set
forth in clauses (a) through (d) above being collectively referred to as
"Restricted Payments"), unless, at the time of such Restricted Payment:
(i) no Default or Event of Default shall have occurred and be continuing
or would occur as a consequence thereof; and
(ii) the Company would, at the time of such Restricted Payment and after
giving pro forma effect thereto as if such Restricted Payment had been made at
the beginning of the applicable four-quarter period, have been permitted to
incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge
Coverage Ratio test set forth in Section 4.09; and
(iii) such Restricted Payment, together with the aggregate of all other
Restricted Payments made by the Company and its Restricted Subsidiaries after
the date of the Indenture (including Restricted Payments permitted by clauses
(i), (ii), (iii), (iv) and (v) of the next succeeding paragraph), is less than
the sum of (x) 50% of the Consolidated Net Income of the Company for the
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period (taken as one accounting period) from the beginning of the first
quarter immediately after the date of original issuance of the Notes to the
end of the Company's most recently ended fiscal quarter for which internal
financial statements are available at the time of such Restricted Payment (or,
if such Consolidated Net Income for such period is a deficit, 100% of such
deficit), plus (y) 100% of the aggregate net cash proceeds received by the
Company from the issue or sale since the date of this Indenture of Equity
Interests of the Company or of debt securities of the Company that have been
converted into such Equity Interests (other than Equity Interests (or
convertible debt securities) sold to a Subsidiary of the Company and other
than Disqualified Stock or debt securities that have been converted into
Disqualified Stock).
The foregoing provisions will not prohibit (i) the payment of any dividend
within 60 days after the date of declaration thereof, if at said date of
declaration such payment would have complied with the provisions of this
Indenture; (ii) the redemption, repurchase, retirement or other acquisition of
any Equity Interests of the Company in exchange for, or out of the proceeds
of, the substantially concurrent sale (other than to a Subsidiary of the
Company) of other Equity Interests of the Company (other than any Disqualified
Stock); (iii) the repurchase, redemption or other acquisition or retirement
for value of any Equity Interests of the Company or any Subsidiary of the
Company held by any member of the Company's (or any of its Subsidiaries')
management pursuant to any management equity subscription agreement or stock
option agreement in effect as of August 26, 1994: provided, however, that the
aggregate price paid for all such repurchased, redeemed, acquired or retired
Equity Interests shall not exceed $3.0 million; (iv) the redemption or
repurchase of any Capital Stock or Indebtedness of the Company or a Subsidiary
(a) to the extent a holder or beneficial owner of Capital Stock or
Indebtedness is required to qualify under the Gaming Laws of any jurisdiction
to which the Company or any of its Subsidiaries is subject and does not so
qualify, or (b) to the extent necessary in the reasonable, good faith judgment
of the Board of Directors of the Company to prevent the loss or secure the
reinstatement of any license or franchise or any right or approval granted
pursuant thereto from any governmental agency held by the Company or any
Subsidiary of the Company to conduct any portion of the business of the
Company or any such Subsidiary, which if lost or not reinstated, as the case
may be, would have a material adverse effect on the business of the Company or
any such Subsidiary or would restrict the ability of the Company or any
Subsidiary to conduct business in any gaming jurisdiction; and (v) additional
Restricted Payments in an aggregate amount not to exceed $5.0 million since
the date of this Indenture.
Not later than the date of making any Restricted Payment, the Company shall
deliver to the Trustee an Officers' Certificate stating that such Restricted
Payment is permitted and setting forth the basis upon which the calculations
required by this Section 4.07 were computed, which calculations may be based
upon the Company's latest available financial statements.
Notwithstanding the foregoing and the definitions of "Permitted Investments"
and "Restricted Investments" above, the Company and its Subsidiaries shall not
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<PAGE> 72
directly or indirectly make any Investments in or incur any expenses related
to any new or prospective Gaming Venture or gaming location or facility
(whether or not a vessel or on dry land, but excluding facilities or vessels
currently owned or optioned by the Company or its Subsidiaries) exceeding, in
the aggregate, $3,000,000 in any one calendar year, without the express
written consent of the Trustee and at least a 60% majority-in-interest of the
Noteholders.
Section 4.08. Limitation on Dividend and Other Payment Restrictions Affecting
Restricted Subsidiaries.
The Company will not, and will not permit any of its Restricted Subsidiaries
to, directly or indirectly, create or otherwise cause or suffer to exist or
become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary to (i) (a) pay dividends or make any other distributions
to the Company or any of its Restricted Subsidiaries (x) on its Capital Stock
or (y) with respect to any other interest or participation in, or measured by,
its profits, or (b) pay any Indebtedness owed to the Company or any of its
Restricted Subsidiaries, (ii) make loans or advances to the Company or any of
its Restricted Subsidiaries or (iii) transfer any of its properties or assets
to the Company or any of its Restricted Subsidiaries, except for such
encumbrances or restrictions existing under or by reason of (A) Existing
Indebtedness as in effect on the date of this Indenture, and in each case any
amendments, modifications, restatements, renewals, increases, supplements.
refundings, replacements or refinancings thereof; provided that such
amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings are no more restrictive with respect
to such dividend and other payment restrictions than those contained in such
Existing Indebtedness as in effect on the date of this Indenture, as the case
may be, (B) the Indenture, the 1994 Indenture and the Notes, (C) applicable
law, (D) any instrument governing Indebtedness or Capital Stock of a person
acquired by the Company or any of its Restricted Subsidiaries as in effect at
the time of such acquisition (except to the extent such Indebtedness was
incurred in connection with such acquisition), which encumbrance or
restriction is not applicable to any Person, or the properties or assets of
any Person, other than the Person, or the property or assets of the Person, so
acquired; provided that the Consolidated Cash Flow of such Person is not taken
into account in determining whether such acquisition was permitted by the
terms of this Indenture, (E) by reason of customary non-assignment provisions
in leases entered into in the ordinary course of business and consistent with
past practices, (F) with respect to clause (iii) above, purchase money
obligations for property acquired in the ordinary course of business, or (G)
permitted Refinancing Indebtedness, provided that the restrictions contained
in the agreements governing such Refinancing Indebtedness are no more
restrictive than those contained in the agreements governing the Indebtedness
being refinanced.
Section 4.09. Limitation on Incurrence of Indebtedness and Issuance of
Disqualified Stock.
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(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume,
guarantee or otherwise become directly or indirectly liable with respect to
(collectively, "incur") any Indebtedness (including Acquired Debt), and the
Company will not, and will not permit any of its Restricted Subsidiaries to,
issue any Disqualified Stock; provided, however, that the Company and the
Restricted Subsidiaries may incur Indebtedness or issue Disqualified Stock if
(i) the Fixed Charge Coverage Ratio of the Company and the Restricted
Subsidiaries for the Company's most recently ended four full fiscal quarters
for which internal financial statements are available immediately preceding
the date on which such additional Indebtedness is incurred or such
Disqualified Stock is issued would have been at least 2.5 to 1, and (ii) the
Consolidated Fixed Charge Coverage Ratio for the same period would have been
at least 2.0 to 1, determined in each case on a pro forma basis (including a
pro forma application of the net proceeds from such Indebtedness or
Disqualified Stock), as if the additional Indebtedness had been incurred, or
the Disqualified Stock had been issued, as the case may be, at the beginning
of such four-quarter period.
(b) The foregoing limitations will not apply to (i) the incurrence by the
Company and its Restricted Subsidiaries of Indebtedness (in addition to any
Indebtedness permitted under clauses (ii)-(viii) of this paragraph (b)) of up
to $15.0 million in aggregate principal amount at any one time outstanding
under this clause (i); (ii) the incurrence by the Company and its Restricted
Subsidiaries of the Existing Indebtedness and the guarantees thereof; (iii)
the incurrence by the Company of Indebtedness represented by the Securities;
(iv) the incurrence by the Subsidiary Guarantors of the Subsidiary Guarantees;
or (v) the incurrence by the Company or its Restricted Subsidiaries of
Indebtedness issued in exchange for, or the proceeds of which are used to
extend, refinance, renew, replace, or refund Indebtedness referred to in
clauses (ii), (iii) and (iv) above (the "Refinancing Indebtedness"); provided,
however, that (a) the principal amount of such Refinancing Indebtedness shall
not exceed the then outstanding principal amount of Indebtedness so extended,
refinanced, renewed, replaced, substituted or refunded (plus the amount of
reasonable expenses incurred in connection therewith) and (b) the Refinancing
Indebtedness shall have a Weighted Average Life to Maturity equal to or
greater than the Weighted Average Life to Maturity of the Indebtedness being
extended, refinanced, renewed, replaced or refunded; (vi) intercompany
Indebtedness between or among the Company and any of its Restricted
Subsidiaries; (vii) Hedging Obligations that are incurred for the purpose of
fixing or hedging interest rate risk with respect to any floating rate
Indebtedness that is permitted by the terms of the Indenture to be
outstanding; and (viii) New Project Guarantees by the Company or any
Restricted Subsidiary of New Project Debt, provided that the Fixed Charge
Coverage Ratio of the Company and its Restricted Subsidiaries for the
Company's most recently ended four full fiscal quarters for which internal
financial statements are available immediately preceding the date on which
such New Project Debt is to be guaranteed (determined on a pro forma basis,
including a pro forma application of the maximum principal amount of such
Guarantee as if it were direct Indebtedness of the Company incurred at the
beginning of such four quarter period) would have been at least 1.75 to 1.
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Section 4.10. Sale of Assets.
(a) The Company will not, and will not permit any Restricted Subsidiary to,
directly or indirectly, sell, lease (other than through an operating lease),
convey, dispose of or otherwise transfer any assets (other than cash and other
than in the ordinary course of business) of the Company or any of its
Restricted Subsidiaries (including a sale and leaseback transaction or the
issuance, sale or transfer of Capital Stock of a Subsidiary) other than to the
Company or a Restricted Subsidiary, whether in a single transaction or in a
series of related transactions (each of the foregoing, an "Asset Sale"),
unless (i) the Company (or the Restricted Subsidiary, as the case may be)
receives consideration at the time of such Asset Sale at least equal to the
fair market value (affirmed by a resolution of the Board of Directors set
forth in an Officers' Certificate delivered to the Trustee) of the assets sold
or otherwise disposed of, and (ii) at least 85% of the consideration therefor
received by the Company or such Restricted Subsidiary is in the form of cash
or long-term tangible assets that are deployed within the time period set
forth in the next paragraph below with respect to application of Net Proceeds
in such gaming and related businesses as may be conducted from time to time by
the Company and the Subsidiaries from the date of this Indenture; provided,
however, that the amount of (x) any liabilities (as shown on the Company's or
such Restricted Subsidiary's most recent balance sheet or in the notes
thereto) of the Company or any Restricted Subsidiary (other than liabilities
that are by their terms subordinated to the Securities or any guarantee
thereof) that are assumed by the transferee of any such assets and (y) any
notes or other obligations received by the Company or any such Restricted
Subsidiary from such transferee that are immediately converted by the Company
or such Restricted Subsidiary into cash (to the extent of the cash received),
shall be deemed to be cash for purposes of this provision.
(b) Within 180 days after any Asset Sale, the Company or any Restricted
Subsidiary, as the case may be, may apply the Net Proceeds from such Asset
Sale to either (i) permanently reduce Indebtedness permitted to be incurred
under clause (i) of Section 4.09(b), or Existing Indebtedness (or any
Refinancing Indebtedness incurred with respect to the Existing Indebtedness)
or (ii) contract pursuant to a binding written agreement with an unaffiliated
third party to make an investment in another business, or to make capital
expenditures or to acquire other long-term, tangible assets, in each case, in
such gaming and related businesses as may be conducted from time to time by
the Company and the Subsidiaries from the date of this Indenture, or (iii) any
combination thereof; provided, however, that such investment of Net Proceeds
must be substantially complete within 270 days of receipt thereof. Pending the
final application of any such Net Proceeds, the Company or Restricted
Subsidiary may temporarily reduce Indebtedness or otherwise invest such Net
Proceeds in any manner that is not prohibited by this Indenture. Any Net
Proceeds from the Asset Sale that are not applied or invested as provided in
the first sentence of this paragraph will be deemed to constitute "Excess
Proceeds." When the aggregate amount of Excess Proceeds exceeds $5,000,000,
the Company shall make an offer to all Holders of Securities (an "Asset Sale
Offer") to purchase the maximum principal amount of Securities that may be
purchased out of the Excess Proceeds, at an offer price in cash in an amount
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equal to 100% of the principal amount thereof plus accrued and unpaid
interest, if any, to the date fixed for the closing of such offer, in
accordance with the procedures set forth in Section 3.09 hereof. To the extent
that the aggregate amount of Securities tendered pursuant to an Asset Sale
Offer is less than the Excess Proceeds, the Company may use such deficiency
for general corporate purposes. If the aggregate principal amount of
Securities surrendered by Holders thereof exceeds the amount of Excess
Proceeds, the Trustee shall select the Securities to be purchased on a pro
rata basis. Upon completion of such offer to purchase, the amount of Excess
Proceeds shall be reset at zero.
(c) An offer to redeem the Securities pursuant to this Section 4.10 shall
be made pursuant to the provisions of Section 3.09 hereof. Simultaneously with
the notification of such offer of redemption to the Trustee as required by
Sections 3.01, 3.03 and 3.09 hereof, the Company shall provide the Trustee
with an Officers' Certificate setting forth the information required to be
included therein by Section 3.01 hereof and, in addition, setting forth the
calculations used in determining the amount of Excess Proceeds to be applied
to the redemption of Securities.
(d) Notwithstanding the foregoing, (i) an Asset Sale also constituting a
Permitted Investment under this Indenture need not comply with the
requirements set forth in this Section 4.10, and (ii) the sale, lease,
conveyance or other disposition of all or substantially all of the assets of
the Company shall be governed by Section 5.01 of this Indenture.
(e) The Company is restricted in its ability to make Asset Sales by the
1994 Indenture. The provisions of this Section 4.10 shall be suspended if and
then only to the extent an Asset Sale is governed by the applicable provisions
of the 1994 Indenture (without regard to any waiver or amendment thereof under
the 1994 Indenture).
(f) If any such Assert Sale is governed by Section 4.10 of the 1994
Indenture, the $5,000,000 threshold amount set forth in this Section 4.10(b)
shall be reduced (but not below zero) by the amount of "Excess Proceeds" under
the 1994 Indenture actually used to purchase "Securities" pursuant to Section
4.10(b) of the 1994 Indenture.
Section 4.11. Limitation on Transactions With Affiliates.
The Company will not, and will not permit any of its Subsidiaries to, sell,
lease, transfer or otherwise dispose of any of its properties or assets to, or
purchase any property or assets from, or enter into any contract, agreement,
understanding, loan, advance or guarantee with, or for the benefit of, any
Affiliate (each of the foregoing, an "Affiliate Transaction"), unless (i) such
Affiliate Transaction is on terms that are no less favorable to the Company or
the relevant Subsidiary than those that would have been obtained in a
comparable transaction by the Company or such Subsidiary with an unrelated
person and (ii) the Company delivers to the Trustee (a) with respect to any
Affiliate Transaction involving aggregate payments in excess of $1.0 million,
a resolution of the Board of Directors set forth in an Officers' Certificate
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certifying that such Affiliate Transaction complies with clause (i) above and
such Affiliate Transaction is approved by a majority of the Board of Directors
and (b) with respect to any Affiliate Transaction involving aggregate payments
in excess of $5.0 million, an opinion as to the fairness to the Company or
such Subsidiary from a financial point of view issued by an investment banking
firm of nationally recognized standing (or, in the case of real estate
transactions, an opinion of similar effect issued by a real estate appraisal
firm of regional standing in the region in which such real property is
located), provided, however, that (w) any employment agreement entered into by
the Company or any of its Subsidiaries in the ordinary course of business and
consistent with the past practice of the Company or such Subsidiary, (x)
transactions between or among the Company, its Subsidiaries and any Gaming
Venture not affiliated with the Company or any Subsidiary other than by virtue
of the Company's or a Restricted Subsidiary's ownership interest in such
Gaming Venture, (y) transactions permitted by the provisions of this Indenture
described above under Section 4.07, and (z) transactions pursuant to
agreements between the Company or any Subsidiary and any Affiliate in effect
on the date of this Indenture, in each case shall not be deemed Affiliate
Transactions.
Section 4.12. Limitation on Liens.
(a) Neither the Company nor any Restricted Subsidiary shall incur any
Indebtedness that is secured, directly or indirectly, with a Lien on the
property, assets or any income or profits thereon of the Company or any
Restricted Subsidiary, except for (i) any such Indebtedness secured by Liens
on the Property or assets of any entity existing at the time such Property or
assets are acquired by the Company or any of its Restricted Subsidiaries,
whether by merger, consolidation, purchase of assets or otherwise, provided
that such Liens (x) are not created incurred or assumed in connection with, or
in contemplation of, such assets being acquired by the Company or any of its
Restricted Subsidiaries and (y) do not extend to any other Property or assets
of the Company or any of its Restricted Subsidiaries, or (ii) Existing
Indebtedness (or any refinancing thereof) to the extent it is secured by
assets purchased with the proceeds of such Indebtedness, (iii) Indebtedness
permitted under clause (i) of Section 4.09 (b), (iv) Indebtedness created by
the Securities and the Subsidiary Guarantees, (v) New Project Debt for which a
New Project Guarantee is permitted under clause (viii) of Section 4.09 (b)
which may be secured by the assets of the Gaming Venture developing or
operating such New Project or (vi) Liens securing Indebtedness of up to $17.5
million in aggregate principal at any one time outstanding (in addition to
Indebtedness secured by Liens under clauses (i)-(v) of this paragraph (a)).
(b) Neither the Company nor any Restricted Subsidiary shall create, incur,
assume or suffer to exist any Lien on any Existing Productive Asset or The
Admiral without making effective provision for securing the Securities (and,
if the Company or Restricted Subsidiary shall so determine, any other
Indebtedness of the Company or any Restricted Subsidiary which is not
subordinated in right of payment to the Securities) equally and ratably with
the Indebtedness on account of which the Lien was created, incurred, or
assumed for so long as such Indebtedness shall be so secured; provided,
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however, that if such Indebtedness is subordinated in right of payment to the
Securities, the Lien securing such Indebtedness shall be subordinate and
junior to the Lien securing the Securities with the same relative priority as
such Indebtedness shall have with respect to the Securities. The foregoing
restrictions will not apply to (i) any Lien in favor of the United States of
America or any state thereof, or any instrumentality of either, to secure
certain payments pursuant to any statute or regulation promulgated thereunder;
(ii) any Lien for taxes or assessments or other governmental charges or levies
not then due and payable (or which, if due and payable, are being contested in
good faith) and for which adequate reserves are being maintained to the extent
required by GAAP; (iii) any Lien to secure obligations under workmen's
compensation laws or similar legislation, including any Lien with respect to
judgments which are not currently dischargeable; (iv) any Lien with respect to
a judgment for which the Company or a Restricted Subsidiary has posted a bond
from a nationally recognized bonding company for payment of the full amount of
such judgment; (v) any legally required Lien to secure the performance of
statutory obligations, surety or appeal bonds, performance or return-of-money
bonds or other obligations of a like nature incurred in the ordinary course of
business; (vi) Liens securing Indebtedness of up to $17.5 million in aggregate
principal amount at any one time outstanding (in addition to Indebtedness
secured by Liens under clause (vii) of this paragraph (b)); and (vii) Liens
securing Indebtedness permitted under clause (i) of Section 4.09(b).
(c) Unless approved by the Holders of 60% in principal of the then
outstanding securities, neither the Company nor President Riverboat Casino -
New York, Inc., shall extend the period of the charter of the vessel New
Yorker under its existing charter effective on the day hereof other than (a)
as now permitted in such charter, or (b) if a preferred ship mortgage securing
repayment of the Notes has been filed with respect to the New Yorker and the
charter is notified in advance of such mortgage.
Section 4.13. Corporate Existence.
Subject to Sections 4.14 and 11.03 and Article 5 hereof, each of the Company
and the Subsidiary Guarantors will do or cause to be done all things necessary
to preserve and keep in full force and effect (a) their corporate existence,
and the corporate, partnership or other existence of each of their
Subsidiaries, in accordance with the respective organizational documents (as
the same may be amended from time to time) of each subsidiary and (b) their
(and their Subsidiaries) rights (charter and statutory), licenses and
franchises: provided, however, that the Company and the Subsidiary Guarantors
shall not be required to preserve any such right, license or franchise, or the
corporate, partnership or other existence of any Subsidiary, if the Board of
Directors of the Company or such Subsidiary Guarantor, as the case may be,
shall determine that the preservation thereof is no longer desirable in the
conduct of the business of the Company and its Subsidiaries taken as a whole
and that the loss thereof is not adverse in any material respect to the
Holders.
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Section 4.14. Liquidation.
The Board of Directors or the stockholders of the Company may not adopt a
plan of liquidation that provides for, contemplates or the effectuation of
which is preceded by (a) the sale, lease, conveyance or other disposition of
all or substantially all of the assets of the Company otherwise than
substantially as an entirety (Section 5.01 of this Indenture being the Section
hereof which governs any such sale, lease, conveyance or other disposition
substantially as an entirety) and (b) the distribution of all or substantially
all of the proceeds of such sale, lease, conveyance or other disposition and
of the remaining assets of the Company to the holders of capital stock of the
Company, unless the Company, prior to making any liquidating distribution
pursuant to such plan, makes provision for the satisfaction of the Company's
Obligations hereunder and under the Securities as to the payment of principal
and interest. The Company shall be deemed to make provision for such payments
only if (i) the Company delivers in trust to the Trustee or Paying Agent
(other than the Company or its subsidiaries) money or U.S. Government
Obligations maturing as to principal and interest in such amounts and at such
times as are sufficient without consideration of any reinvestment of such
interest to pay, when due, the principal of and interest on the Securities or
(ii) there is an express assumption and observance of all covenants and
conditions to be performed by the Company hereunder by the execution and
delivery of a supplemental indenture in form satisfactory to the Trustee by a
Person that acquires or will acquire (otherwise than pursuant to a lease) a
portion of the assets of the Company and which Person will have Consolidated
Net Worth (immediately after the acquisition) and Consolidated Net Income (for
such Person's four full fiscal quarters immediately preceding the acquisition)
equal to or greater than the Consolidated Net Worth of the Company immediately
preceding the acquisition and the Consolidated Net Income of the Company (for
its four full fiscal quarters immediately preceding such acquisition),
respectively, and which is organized and existing under the laws of the United
States, any State thereof or the District of Columbia; provided, however, that
the Company shall not make any liquidating distribution until after the
Company shall have certified to the Trustee with an Officers' Certificate at
least 5 days prior to the making of any liquidating distribution that it has
complied with the provisions of this Section 4.14 and that no Default or Event
of Default then exists or would occur as a result of any such liquidating
distribution.
Section 4.15. Change of Control.
If, at any time, (i) all or substantially all of the Company's assets are
sold, leased or transferred, in one or a series of related transactions, to
any person or group (as such term is used in Section 13(d)(3) of the Exchange
Act) (other than the Principal or his Related Parties), (ii) a plan relating
to the liquidation or dissolution of the Company is adopted, (iii) any person
or group (as such term is used in Section 13(d)(3) of the Exchange Act) (other
than the Principal and his Related Parties or any underwriter or group of
underwriters in connection with a bona fide public offering) acquires direct
or indirect majority in interest (more than 50%) of the voting power of the
voting stock of the Company by way of merger or consolidation or otherwise,
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(iv) the Principal or his Related Parties sell or otherwise transfer for value
to any person or group (as such term is used in Section 13(d)(3) of the
Exchange Act) (other than the Principal or his Related Parties or any
underwriter or group of underwriters in connection with a bona ride public
offering) more than 25 % of the voting power of the voting stock of the
Company, or (v) a majority of the members of the Board of Directors of the
Company cease being Continuing Directors (each a "Change of Control" and the
time of such Change of Control being referred to as the "Change of Control
Date"), then the Company shall notify each Holder in writing of such
occurrence and shall make an offer to purchase (as the same may be extended in
accordance with applicable law, the "Change of Control Offer") on a date that
shall be no earlier than 30 days nor later than 40 days from the date such
notice is mailed to the Holders (the "Change of Control Payment Date") all or
any part (equal to $1,000 or an integral multiple thereof) of the Securities
then outstanding at a purchase price equal to 101% of the principal amount
thereof, or 100% of the principal amount thereof for purchases occurring on or
after September 15, 2000, in each case plus accrued and unpaid interest, if
any, to the Change of Control Payment Date (the "Change of Control Payment").
The Change of Control Offer shall be made in compliance with all applicable
laws, including without limitation, all applicable federal and state
securities laws.
Notice of a Change of Control Offer shall be mailed by the Company not more
than 40 days following any Change of Control to the Holders at their last
registered addresses, and a copy shall also be mailed by the Company to the
Trustee and the Paying Agent. The Change of Control Offer shall remain open
from the time of mailing until the third Business Day preceding the Change of
Control Payment Date. The notice, which shall govern the terms of the Change
of Control Offer, shall state:
(1) that the Change of Control Offer is being made pursuant to this Section
4.15 and that all Securities tendered will be accepted for payment;
(2) the purchase price and the Change of Control Payment Date;
(3) that any Securities not tendered will continue to accrue interest;
(4) that, unless the Company defaults in the payment of the Change of
Control Payment, any Securities accepted for payment pursuant to the Change of
Control Offer shall cease to accrue interest after the Change of Control
Payment Date;
(5) that Holders electing to have Securities purchased pursuant to a Change
of Control Offer will be required to surrender their Securities, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Securities
completed, to the Paying Agent at the address specified in the notice prior to
the close of business on the third Business Day preceding the Change of
Control Payment Date;
(6) that Holders will be entitled to withdraw their election if the Paying
Agent receives, not later than the close of business on the second Business
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Day preceding the Change of Control Payment Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of Securities the Holder delivered for purchase, and a statement that
such Holder is withdrawing his election to have such Securities purchased;
(7) that Holders whose Securities are being purchased only in part will be
issued new Securities equal in principal amount to the unpurchased portion of
the Securities surrendered, which unpurchased portion must be equal to $1,000
in principal amount or an integral multiple thereof;
(8) the instructions that Holders must follow in order to tender their
Securities; and
(9) the circumstances and relevant facts regarding such Change of Control
(including but not limited to information with respect to pro forma historical
and projected financial information after giving effect to such Change of
Control, information regarding the Persons acquiring control and such Person's
business plans going forward).
On the Change of Control Payment Date, the Company, to the extent lawful,
shall (i) accept for payment Securities or portions thereof tendered pursuant
to the Change of Control Offer, (ii) deposit with the Paying Agent an amount
equal to the Change of Control Payment in respect of all Securities or
portions thereof so tendered and (iii) deliver or cause to be delivered to the
Trustee the Securities so accepted together with an Officers' Certificate
setting forth the Securities or portions thereof tendered to the Company. The
Paying Agent shall promptly mail to each Holder of Securities so accepted
payment in an amount equal to the purchase price for such Securities, and the
Trustee shall promptly authenticate and mail to each such Holder a new
Security equal in principal amount to any unpurchased portion of the
Securities surrendered; provided, that each such new Security shall be in a
principal amount of $1,000 or an integral multiple thereof.
Section 4.16. Notice By Company.
The Company shall promptly notify the Trustee when the Securities are listed
on any stock exchange.
ARTICLE 5
SUCCESSORS
Section 5.01. When the Company May Merge, etc.
The Company may not consolidate or merge with or into (whether or not the
Company is the surviving corporation), or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its properties or
assets in one or more related transactions constituting an Asset Sale
hereunder to another corporation, Person or entity unless (a) the Company is
the surviving corporation or the entity or the Person formed by or surviving
any such consolidation or merger (if other than the Company) or to which such
sale, assignment, transfer, lease, conveyance or other disposition shall have
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been made is a corporation organized or existing under the laws of the United
States, any state thereof or the District of Columbia; (b) the entity or
Person formed by or surviving any such consolidation or merger (if other than
the Company) or the entity or Person to which such sale, assignment, transfer,
lease, conveyance or other disposition will have been made assumes all the
obligations of the Company pursuant to a supplemental indenture in a form
reasonably satisfactory to the Trustee, under the Securities and this
Indenture; (c) immediately after such transaction no Default or Event of
Default exists; and (d) the Company or any entity or Person formed by or
surviving any such consolidation or merger, or to which such sale, assignment,
transfer, lease, conveyance or other disposition will have been made (i) will
have Consolidated Net Worth (immediately after the transaction but prior to
any purchase accounting adjustments resulting from the transaction) equal to
or greater than the Consolidated Net Worth of the Company immediately
preceding the transaction and (ii) will, at the time of such transaction and
after giving pro forma effect thereto as if such transaction had occurred at
the beginning of the applicable four-quarter period, be permitted to incur at
least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage
Ratio test set forth in Section 4.09 hereof.
The Company shall deliver to the Trustee prior to the consummation of the
proposed transaction an Officers' Certificate to the foregoing effect and an
Opinion of Counsel stating that the proposed transaction and such supplemental
indenture comply with this Indenture. The Trustee shall be entitled to
conclusively rely upon such Officers' Certificate and Opinion of Counsel.
Section 5.02. Successor Corporation Substituted.
Upon any consolidation or merger, or any sale, lease, conveyance or other
disposition of all or substantially all of the assets of the Company in
accordance with Section 5.01, the successor corporation formed by such
consolidation or into or with which the Company, is merged or to which such
sale, lease, conveyance or other disposition is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor Person has been named
as the Company herein; provided, however, that the Company shall not be
released or discharged from the obligation to pay the principal of or interest
on the Securities.
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default.
An "Event of Default" occurs if:
(1) the Company defaults in the payment of interest on a Security when the
same becomes due and payable and the Default continues for a period of 30
days;
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(2) the Company defaults in the payment of the principal of any Security
when the same becomes due and payable at maturity, upon redemption or
otherwise;
(3) the Company or any Restricted Subsidiary fails to observe or perform
any covenant, condition or agreement on the part of the Company or such
Restricted Subsidiary to be observed or performed pursuant to (i) Section
4.07, 4.09, 4.10, 4.13, 4.14, 4.15 or 5.01 hereof; or (ii) any of the
Collateral Documents (subject to any applicable grace period).
(4) the Company or any Restricted Subsidiary fails to comply with any of
its other agreements or covenants in, or provisions of, the Securities or this
Indenture and the Default continues for the period and after the notice
specified below;
(5) the Company or any Restricted Subsidiary defaults under any mortgage,
indenture or instrument under which there may be issued or by which there may
be secured or evidenced any Indebtedness for money borrowed by the Company or
any of its Subsidiaries other than a Non-Recourse Subsidiary (or the payment
of which is guaranteed by the Company or any of its Subsidiaries other than a
Non-Recourse Subsidiary) whether such Indebtedness or guarantee now exists, or
is created after the date of this Indenture, which default (a) is caused by a
failure to pay when due principal or interest on such Indebtedness within the
grace period provided in such Indebtedness (which failure continues beyond any
applicable grace period) (a "Payment Default") or (b) results in the
acceleration of such Indebtedness prior to its express maturity and, in each
case, the principal amount of any such Indebtedness, together with the
principal amount of any other such Indebtedness under which there has been a
Payment Default or the maturity of which has been so accelerated, aggregates
$5.0 million or more;
(6) a final non-appealable judgment or final non-appealable judgments for
the payment of money are entered by a court or courts of competent
jurisdiction against the Company or any of its Subsidiary Guarantors (other
than any judgment as to which a reputable insurance company has accepted full
liability) and such judgment or judgments remain undischarged for a period
(during which execution shall not be effectively stayed) of 60 days, provided
that the aggregate of all such undischarged judgments exceeds $5,000,000;
(7) except as permitted this Indenture, any Subsidiary Guarantee of a
Significant Subsidiary (or group of Subsidiaries that, taken together,
constitute a Significant Subsidiary) shall be held in any judicial proceeding
to be unenforceable or invalid or shall cease for any reason to be in full
force and effect or any Subsidiary Guarantor which is a Significant
Subsidiary, or group of Subsidiary Guarantors that, taken together, constitute
a Significant Subsidiary, or any person acting on behalf of any such
Subsidiary Guarantor or group of Subsidiary Guarantors, shall deny or
disaffirm its obligations under its (or their) Subsidiary Guarantee;
(8) the Company or any of its Subsidiary Guarantors pursuant to or within
the meaning of any Bankruptcy Law (a) commences a voluntary case; (b) consents
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to the entry of an order for relief against it in an involuntary case; (c)
consents to the appointment of a Custodian of it or for all or substantially
all of its property; (d) makes a general assignment for the benefit of its
creditors; or (e) admits in writing its inability to pay debts as the same
become due; or
(9) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that (a) is for relief against the Company or any of its
Subsidiary Guarantors in an involuntary case; (b) appoints a Custodian of the
Company or any of its Significant Subsidiaries or for all or substantially all
of their property; (c) orders the liquidation of the Company or any of its
Subsidiary Guarantors, and the order or decree remains unstayed and in effect
for 90 consecutive days; and
(10) any Gaming License of the Company, any of its Subsidiaries or any
Gaming Venture is revoked, terminated or suspended or otherwise ceases to be
effective resulting in the cessation or suspension of operation for a period
of more than 90 days of the gaming business owned, leased or operated directly
or indirectly by the Company, any of its Subsidiaries or any Gaming Venture
(other than any revocation, termination, suspension, cessation or voluntary
relinquishment of a Gaming License if such event is, in the reasonable, good
faith judgment of the Board of Directors of the Company, evidenced by a
resolution of such Board, both acceptable in the conduct of the business of
the Company and its Subsidiaries, taken as a whole, and not disadvantageous in
any material respect to the Holders).
(11) any event of default occurs under the 1994 Indenture; or
(12) the Company or any Restricted Subsidiary breaches any of the
representations, warranties or covenants contained in the Agreement to
Exchange Securities dated the date hereof which breaches are not cured within
thirty (30) days after written notice thereof; and
(13) President Riverboat Casino New York, Inc., fails to provide a first
preferred fleet mortgage against the vessel New Yorker as set forth in Section
10.01(b) hereof, on or prior to the first anniversary hereof; and
(14) The Future Advances Leasehold and Improvements Deed of Trust, Security
Agreement and Fixture Filing shall not have been executed and recorded prior
to December 31, 1998.
The term "Bankruptcy Law" means title 11, U.S. Code or any similar Federal
or state law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.
A Default under clause (4) of Section 6.01 is not an Event of Default until
the Trustee or the Holders of at least 25% in principal amount of the then
outstanding Securities notify the Company of the Default and the Company does
not cure the Default or such Default is not waived within 60 days after
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receipt of the notice. The notice must specify the Default, demand that it be
remedied and state that the notice is a "Notice of Default. "
In the case of any Event of Default pursuant to this Section 6.01 occurring
by reason of any willful action (or inaction) taken (or nor taken) by or on
behalf of the Company with the intention of avoiding payment of the premium
that the Company would have had to pay if the Company then had elected to
redeem the Securities pursuant to the optional redemption provisions of this
Indenture, an equivalent premium shall also become and be immediately due and
payable to the extent permitted by law. If an Event of Default occurs prior to
March 15, 1999 by reason of any willful action (or inaction) taken (or not
taken) by or on behalf of the Company with the intention of avoiding the
prohibition on redemption of the Securities prior to March 15, 1999, then the
premium specified in this Indenture shall also become immediately due and
payable to the extent permitted by law.
Section 6.02. Acceleration.
If an Event of Default (other than an Event of Default specified in clauses
(8) and (9) of Section 6.01) occurs and is continuing, the Trustee by notice
to the Company and the Subsidiary Guarantors, or the Holders of at least 60%
in principal amount of the then outstanding Securities by written notice to
the Company, the Subsidiary Guarantors and the Trustee may declare the unpaid
principal of and any accrued interest on all the Securities to be due and
payable. Upon such declaration the principal and interest shall be due and
payable immediately. In the event of an acceleration based upon an Event of
Default set forth in clause (5) of Section 6.01 hereof, such declaration of
acceleration shall be automatically annulled if the holders of the
Indebtedness which is the subject of such Event of Default have rescinded
their declaration of acceleration in respect of such Indebtedness within 15
Business Days thereof and no other Event of Default has occurred during such
period of 15 Business Days which has not been cured or waived. If an Event of
Default specified in clause (8) or (9) of Section 6.01 occurs, such an amount
shall ipso facto become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Holder. The Holders
of at least 60% majority in principal amount of the then outstanding
Securities by written notice to the Trustee may rescind an acceleration and
its consequences if the rescission would not conflict with any judgment or
decree and if all existing Events of Default (except nonpayment of principal
or interest that has become due solely because of the acceleration) have been
cured or waived.
Section 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy to collect the payment of principal or interest on the
Securities or to enforce the performance of any provision of the Securities or
this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of the
Securities or does not produce any of them in the proceeding. A delay or
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omission by the Trustee or any Securityholder in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. All
remedies are cumulative to the extent permitted by law.
Section 6.04. Waiver of Past Defaults.
Holders of at least 60% in principal amount of the then outstanding
Securities by notice to the Trustee may waive an existing Default or Event of
Default and its consequences except a continuing Default or Event of Default
in the payment of the principal of or interest on any Security held by a non-
consenting Holder. Upon actual receipt of any such notice of waiver by a
Responsible Officer of the Trustee, such Default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Default or impair any right consequent thereon.
Section 6.05. Control by Majority.
The Holders of at least 60% in principal amount of the then outstanding
Securities may direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust or power
conferred on it. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture, that the Trustee determines may be
unduly prejudicial to the rights of other Securityholders, or that may involve
the Trustee in personal liability.
Section 6.06. Limitation on Suits.
A Securityholder may pursue a remedy with respect to this Indenture or the
Securities only if:
(1) the Holder gives to the Trustee written notice of a continuing Event of
Default;
(2) the Holders of at least 25 % in principal amount of the then
outstanding Securities make a written request to the Trustee to pursue the
remedy;
(3) such Holder or Holders offer and, if requested, provide to the Trustee
indemnity satisfactory to the Trustee against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and
(5) during such 60-day period the Holders of at least 60% in principal
amount of the then outstanding Securities do not give the Trustee a direction
inconsistent with the request.
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A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over another
Securityholder.
Section 6.07. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Security to receive payment of principal and interest on the
Security, on or after the respective due dates expressed in the Security, or
to bring suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of the
Holder.
Section 6.08. Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(1) or (2) occurs and is
continuing, the Trustee is authorized to recover judgment in its own name and
as trustee of an express trust against the Company or any Subsidiary Guarantor
for the whole amount of principal and interest remaining unpaid on the
Securities and interest on overdue principal and, to the extent lawful,
interest and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
Section 6.09. Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, in any capacity, its agents and
counsel) and the Securityholders allowed in any judicial proceedings relative
to the Company (or any other obligor upon the Securities), its creditors or
its property and shall be entitled and empowered to collect, receive and
distribute any money or other property payable or deliverable on any such
claims and any custodian in any such judicial proceeding is hereby authorized
by each Securityholder to make such payments to the Trustee, and in the event
that the Trustee shall consent to the making of such payments directly to the
Securityholder to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, in any
capacity, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof. The payment of any such compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any
other amounts due the Trustee under Section 7.07 in any capacity hereof out of
the estate in any such proceeding shall be secured by a Lien on, and shall be
paid out of, any and all distributions, dividends, money, securities and other
properties which the Holders of the Securities may be entitled to receive in
such proceeding whether in liquidation or under any plan of reorganization or
arrangement or otherwise. Nothing herein contained shall be deemed to
authorize the Trustee to authorize or consent to or accept or adopt on behalf
of any Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof, or
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to authorize the Trustee to vote in respect of the claim of any Securityholder
in any such proceeding.
Section 6.10. Priorities.
If the Trustee collects any money pursuant to this Article, it shall pay out
the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due under
Section 7.07, acting in any capacity, including payment of all compensation,
expenses and liabilities incurred, and all advances made, if any, by the
Trustee and the costs and expenses of collection;
Second: to Securityholders for amounts due and unpaid on the Securities for
principal and interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Securities for principal and
interest, respectively; and
Third: to the Company or to such party as a court of competent jurisdiction
shall direct.
The Trustee may fix a record date and payment date for any payment to
Securityholders.
Section 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this Indenture
or in any suit against the Trustee for any action taken or omitted by it as a
Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the parry
litigant. This Section does not apply to a suit by the Trustee, a suit by a
Holder pursuant to Section 6.07, or a suit by Holders of more than 10% in
principal amount of the then outstanding Securities.
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee.
(1) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture,
and use the same degree of care and skill in their exercise, as a prudent man
would exercise or use under the circumstances in the conduct of his own
affairs.
(2) Except during the continuance of an Event of Default:
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(a) The duties of the Trustee shall be determined solely by the express
provisions of this Indenture and the Trustee need perform only those duties
that are specifically set forth in this Indenture and no others, and no
implied covenants or obligations shall be read into this Indenture against the
Trustee.
(b) In the absence of bad faith on its part, the Trustee may conclusively
rely, as to the truth of the statements and the correctness of the opinions
expressed therein, upon resolutions, statements, reports, documents, orders,
certificates, opinions or other instruments furnished to the Trustee and
conforming to the requirements of this Indenture. However, in the case of any
of the above that are specifically required to be furnished to the Trustee
pursuant to this Indenture, the Trustee shall examine them to determine
whether they substantially conform to the requirements of this Indenture.
(3) The Trustee may not be relieved from liabilities for its own negligent
action, its own negligent failure to act, or its own willful misconduct,
except that:
(a) This paragraph does not limit the effect of paragraph (2) of this
Section.
(b) This Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts.
(c) The Trustee shall not be liable with respect to any action it takes
or omits to take in good faith in accordance with a direction received by it
pursuant to Section 6.05.
(4) Whether or not therein expressly so provided, every provision of this
Indenture that in any way relates to the Trustee is subject to paragraphs (1),
(2) and (3) of this Section.
(5) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or incur any liability. The Trustee may refuse to perform
any duty or exercise any right or power unless it receives indemnity
satisfactory to it against any loss, liability or expense.
(6) The Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
Section 7.02. Rights of Trustee.
(1) The Trustee may conclusively rely upon any document believed by it to
be genuine and to have been signed or presented to it by the proper Person.
The Trustee need not investigate any fact or matter stated in the document.
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(2) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance
on such Officers' Certificate or Opinion of Counsel. The Trustee may consult
with counsel and the written advice of such counsel or any Opinion of Counsel
shall be full and complete authorization and protection from liability in
respect of any action taken, suffered or omitted by it hereunder in good faith
and in reliance thereon.
(3) The Trustee may act through agents, attorneys, custodians or nominees
and shall not be responsible for the misconduct or negligence or the
supervision of any agents, attorneys, custodians or nominees appointed by it
with due care.
(4) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
(5) Unless otherwise specifically provided in this Indenture, any demand,
request, direction or notice from the Company shall be sufficient if signed by
an Officer of the Company, and any demand, request, direction or notice from
any Subsidiary Guarantor shall be sufficient if signed by an Officer of such
Subsidiary Guarantor.
Section 7.03. Individual Rights of Trustee
The Trustee in its individual or any other capacity may become the owner or
pledgee of Securities and may otherwise deal with the Company or an Affiliate
of the Company with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights. However, the Trustee is subject to
Sections 7.10.
Section 7.04. Trustee's Disclaimer
The Trustee shall not be responsible for and makes no representation as to
the validity or adequacy of this Indenture or the Securities, it shall not be
accountable for the Company's use of the proceeds from the Securities or any
money paid to the Company or upon the Company's direction under any provision
hereof, it shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee and it shall not be
responsible for any statement or recital herein or any statement in the
Securities or any other document in connection with the sale of the Securities
or pursuant to this Indenture other than its certificate of authentication.
Section 7.05. Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if it is known
to a Responsible Officer of the Trustee, the Trustee shall mail to
Securityholders a notice of the Default or Event of Default within 30 days
after it occurs.
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Section 7.06. Notice By Trustee.
Within 60 days after each May 15 beginning with the May 15 following the
date of this Indenture, the Trustee shall mail to Securityholders a brief
report dated as of such reporting date that complies with TIA Section 313(a)
(but if no event described in TIA Section 313(a) has occurred within the 12
months preceding the reporting date, no report need be prepared or
transmitted). The Trustee also shall comply with TIA Section 313(b) as if it
were applicable to this Indenture. The Trustee shall also transmit by mail
all reports as required by TIA Section 313(c) as if it were applicable to
this Indenture.
Section 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and its performance of the
duties and services required hereunder in any capacity. The Trustee's
compensation shall not be limited by any law on compensation of a trustee of
an express trust. The Company shall reimburse the Trustee promptly upon
request for all reasonable disbursements, advances and expenses incurred or
made by it in any capacity in addition to the compensation for its services.
Such expenses shall include the reasonable compensation, disbursements and
expenses of the Trustee's agents and counsel.
The Company and each Subsidiary Guarantor, jointly and severally, shall
indemnify the Trustee against any and all losses, liabilities or expenses
incurred by it arising out of or in connection with the acceptance or
administration of its duties in any capacity under this Indenture, except as
set forth in the second next paragraph. The Trustee shall notify the Company
promptly of any claim for which it may seek indemnity. Failure by the Trustee
to so notify the Company shall not relieve the Company or the Subsidiary
Guarantors of their obligations hereunder, except to the extent the Company is
prejudiced thereby. The Company shall defend the claim and the Trustee shall
reasonably cooperate in such defense. The Trustee may have separate counsel
and the Company shall pay the reasonable fees and expenses of such one
counsel. The Company need not pay for any settlement made without its
consent, which consent shall not be unreasonably withheld.
The obligations of the Company and the Subsidiary Guarantors under this
Section 7.07 shall survive the satisfaction and discharge of this Indenture.
The Company need not reimburse any expense or indemnify against any loss or
liability incurred by the Trustee through its own negligence or willful
misconduct.
To secure the Company's and the Subsidiary Guarantors' payment obligations
in this Section, the Trustee shall have a Lien prior to the Securities on all
money or property held or collected by the Trustee, except that held in trust
to pay principal and interest on particular Securities. Such Lien shall
survive the satisfaction and discharge of this Indenture.
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When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(8) or (9) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
Section 7.08. Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a successor
Trustee become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 7.08.
The Trustee may resign at any time and be discharged from the trust hereby
created by so notifying the Company. The Holders of a majority in principal
amount of the then outstanding Securities may remove the Trustee by so
notifying the Trustee and the Company in writing. The Company may remove the
Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(3) a Custodian or public officer takes charge of the Trustee or its
property; or
(4) the Trustee becomes incapable of acting as Trustee under this
Indenture.
If the Trustee resigns or is removed or if a vacancy exists in the office of
Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of at least 60% in principal amount of the then outstanding Securities may
appoint a different successor Trustee to replace the successor Trustee
appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or
the Holders of at least 10% in principal amount of the then outstanding
Securities may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee after written request by any Securityholder who has been a
Securityholder for at least 6 months fails to comply with Section 7.10, such
Securityholder may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment to
the retiring Trustee and to the Company. Thereupon the resignation or removal
of the retiring Trustee shall become effective, and the successor Trustee
shall have all the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its succession to all
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Securityholders. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee, provided all sums owing to the
Trustee hereunder have been paid and subject to the Lien provided for in
Section 7.07. Notwithstanding replacement of the Trustee pursuant to this
Section 7.08, the Company's obligations under Section 7.07 hereof shall
continue for the benefit of the retiring Trustee.
Section 7.09. Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or transfers all or
substantially all of its corporate trust business to, another corporation, the
successor corporation without any further act shall be the successor Trustee.
Section 7.10. Eligibility; Disqualification.
There shall at all times be a Trustee hereunder which shall be a corporation
organized and doing business under the laws of the United States of America or
of any state thereof authorized under such laws to exercise corporate trustee
power, shall be subject to supervision or examination by Federal or state
authority and shall have a combined capital and surplus of at least
$50,000,000 as set forth in its most recent published annual report of
condition.
ARTICLE 8
DISCHARGE OF INDENTURE
Section 8.01. Termination of Company's and Subsidiary Guarantors'
Obligations.
This Indenture shall cease to be of further effect (except that the
Company's and the Subsidiary Guarantors' obligations under Section 7.07 and
8.04, the Subsidiary Guarantors' obligations under Article 11 with respect
thereto and the Company's, Trustee's and Paying Agent's obligations under
Section 8.03 shall survive) when all outstanding Securities theretofore
authenticated and issued have been delivered (other than destroyed, lost or
stolen Securities which have been replaced or paid) to the Trustee for
cancellation and the Company and the Subsidiary Guarantors have paid all sums
payable by the Company or the Subsidiary Guarantors hereunder and under the
Subsidiary Guarantees. In addition, the Company and the Subsidiary Guarantors
may terminate all of their obligations under this Indenture if:
(1) the Company irrevocably deposits in trust with the Trustee or at the
option of the Trustee, with a trustee reasonably satisfactory to the Trustee
and the Company under the terms of an irrevocable trust agreement in form and
substance satisfactory to the Trustee, money or U.S. Government Obligations
sufficient (as certified by an independent public accountant designated by the
Company) to pay principal and interest on the Securities to maturity or
redemption, as the case may be, and to pay all other sums payable by it
hereunder, provided that (i) the trustee of the irrevocable trust shall have
been irrevocably instructed to pay such money or the proceeds of such U.S.
Government Obligations to the Trustee and (ii) the Trustee shall have been
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irrevocably instructed to apply such money or the proceeds of such U.S.
Government Obligations to the payment of said principal and interest with
respect to the Securities;
(2) the Company delivers to the Trustee an Officers' Certificate stating
that all conditions precedent to satisfaction and discharge of this Indenture
have been complied with, and an Opinion of Counsel to the same effect; and
(3) no Event of Default or event (including such deposit) which, with
notice or lapse of time, or both, would become an Event of Default with
respect to the Securities shall have occurred and be continuing on the date of
such deposit.
Then, this Indenture shall cease to be of further effect (except as provided
in this paragraph), and the Trustee, on demand of the Company or any
Subsidiary Guarantor, shall execute proper instruments acknowledging
confirmation of and discharge under this Indenture and the Subsidiary
Guarantees. However, the Company's obligations in Sections 2.03, 2.04, 2.05,
2.06, 2.07, 4.01, 4.06, 7.07, 7.08, 8.03 and 8.04, the Subsidiary Guarantors'
obligations under Article 11 and the Trustee's and Paying Agent's obligations
in Section 8.03 shall survive until the Securities are no longer outstanding.
Thereafter, only the Company's obligations in Section 7.07 and 8.04, the
Subsidiary Guarantors' obligations under Section 11.01 and the Company's,
Trustee's and Paying Agent's obligations in Section 8.03 shall survive. All
collateral securing the Securities shall thereupon be released from the lien
created pursuant to this Indenture or any other security document required by
Article 10, other than the amounts deposited into trust pursuant to this
Article 8.
After such irrevocable deposit made pursuant to this Section 8.01 and
satisfaction of the other conditions set forth herein, the Trustee upon
written request shall acknowledge in writing the discharge of the Company's
and the Subsidiary Guarantors' obligations under this Indenture and the
Subsidiary Guarantees except for those surviving obligations specified above.
In order to have money available on a payment date to pay principal or
interest on the Securities, the U.S. Government Obligations shall be payable
as to principal or interest at least one Business Day before such payment date
in such amounts as will provide the necessary money. U.S. Government
Obligations shall not be callable at the issuer's option.
Section 8.02. Application of Trust Money.
The Trustee or a trustee satisfactory to the Trustee and the Company shall
hold in trust money or U.S. Government Obligations deposited with it pursuant
to Section 8.01. It shall apply the deposited money and the money from U.S.
Government Obligations through the Paying Agent and in accordance with this
Indenture to the payment of principal and interest on the Securities.
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Section 8.03. Repayment to Company.
The Trustee and the Paying Agent shall promptly pay to the Company upon
written request any excess money or securities held by them at any time.
The Trustee and the Paying Agent shall pay to the Company upon written
request any money held by them for the payment of principal or interest that
remains unclaimed for 2 years after the date upon which such payment shall
have become due; provided, however, that the Company shall have either caused
notice of such payment to be mailed to each Securityholder entitled thereto no
less than 30 days prior to such repayment or within such period shall have
published such notice in a financial newspaper of widespread circulation
published in the City of New York, including, without limitation, The Wall
Street Journal. After payment to the Company, Securityholders entitled to the
money must look to the Company for payment as general creditors unless an
applicable abandoned property law designates another Person, and all liability
of the Trustee and such Paying Agent with respect to such money shall cease.
Section 8.04. Reinstatement.
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with Section 8.02 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application,
the Company's obligations under this Indenture and the Securities shall be
revived and reinstated as though no deposit had occurred pursuant to Section
8.01 until such time as the Trustee or Paying Agent is permitted to apply all
such money or U.S. Government Obligations in accordance with Section 8.02;
provided, however, that if the Company has made any payment of interest on or
principal of any Securities because of the reinstatement of its obligations,
the Company shall be subrogated to the rights of the Holders of such
Securities to receive such payment, as long as no money is owed to the Trustee
by the Company, from the money or U.S. Government Obligations held by the
Trustee or Paying Agent.
ARTICLE 9
AMENDMENTS
Section 9.01. Without Consent of Holders.
The Company, the Subsidiary Guarantors and the Trustee may amend this
Indenture, any exhibit thereto, any security or collateral document entered
into pursuant to Article 10 or the Securities without the consent of any
Securityholder:
(1) to cure any ambiguity, defect or inconsistency;
(2) to comply with Section 5.01 or 11.03;
(3) to provide for uncertificated Securities in addition to certificated
Securities; or
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(4) to make any change that does not adversely affect the legal rights
hereunder of any Securityholder.
Section 9.02. With Consent of Holders.
The Company, the Subsidiary Guarantors and the Trustee may amend this
Indenture, any exhibit thereto, any security or collateral document entered
into pursuant to Article 10 or the Securities with the written consent of the
Holders of at least a majority in principal amount of the then outstanding
Securities (including consents obtained in connection with a tender offer or
exchange offer for Securities). The Holders of at least 60% in principal of
the then outstanding Securities may also waive any existing default or
compliance with any provision of this Indenture, any exhibit thereto, any
security or collateral document entered into pursuant to Article 10, or the
Securities. However, without the consent of each Securityholder affected, an
amendment or waiver under this Section may not (with respect to any Securities
held by non-consenting Holders):
(1) reduce the principal amount of Securities whose Holders must consent to
an amendment, supplement or waiver;
(2) reduce the rate of or change the time for payment of interest,
including default interest, on any Security;
(3) reduce the principal of or change the fixed maturity of any Security or
alter the redemption provisions or the price at which the Company shall offer
to purchase such Securities pursuant to Sections 3.09 and 4.15 hereof;
(4) make any Security payable in money other than that stated in the
Security;
(5) make any change in Section 6.04 or 6.07 hereof or in this sentence of
this Section 9.02;
(6) make any change in Article 11 that adversely affects the rights of any
Securityholders:
(7) waive a Default or Event of Default in the payment of principal of, or
premium, if any, or interest on, or redemption payment with respect to, any
Security (except a rescission of acceleration of the Securities by the Holders
of at least 60% in aggregate principal amount of the Securities and a waiver
of the payment default that resulted from such acceleration); or
(8) except as provided in sections 8.01 and 11.04 hereof, release any of
the Subsidiary Guarantors from their obligations under the Subsidiary
Guarantees or make any change in the Subsidiary Guarantees that would
adversely affect the Holders.
It shall not be necessary for the consent of the Holders under this Section
to approve the particular form of any proposed amendment or waiver, but it
shall be sufficient if such consent approves the substance thereof.
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After an amendment or waiver under this Section becomes effective, the
Company shall mail to the Holders of each Security affected thereby a notice
briefly describing the amendment or waiver. Any failure of the Company to mail
such notice, or any defect therein, shall not, however, in any way impair or
affect the validity of any such Supplemental Indenture or waiver. Subject to
Sections 6.04 and 6.07 hereof, the Holders of at least 60% in principal amount
of the Securities then outstanding may waive compliance in a particular
instance by the Company or any Subsidiary Guarantor with any provision of this
Indenture or the Securities.
Section 9.03. Compliance with Trust Indenture Act.
If at the time, this Indenture shall be qualified under the TIA, every
amendment to this Indenture or the Securities shall be set forth in a
Supplemental Indenture that complies with the TIA as then in effect.
Section 9.04. Revocation and Effect of Consents.
Until an amendment or waiver becomes effective, a consent to it by a Holder
of a Security is a continuing consent by the Holder and every subsequent
Holder of a Security or portion of a Security that evidences the same debt as
the consenting Holder's Security, even if notation of the consent is not made
on any Security. An amendment or waiver becomes effective in accordance with
its terms and thereafter binds every Securityholder.
The Company may fix a record date for determining which Holders must consent
to such amendment or waiver. If the Company fixes a record date, the record
date shall be fixed at (i) the later of 30 days prior to the first
solicitation of such consent or the date of the most recent list of Holders
furnished to the Trustee prior to such solicitation pursuant to Section 2.05,
or (ii) such other date as the Company shall designate.
Section 9.05. Notation on or Exchange of Securities.
The Trustee may place an appropriate notation about an amendment or waiver-
on any Security thereafter authenticated. The Company in exchange for all
Securities may issue and the Trustee shall authenticate new Securities that
reflect the amendment or waiver.
Failure to make the appropriate notation or issue a new Security shall not
affect the validity and effect of such amendment or waiver.
Section 9.06. Trustee to Sign Amendments, etc.
The Trustee shall sign any amendment or Supplemental Indenture or other
amendment authorized pursuant to this Article 9 if, in the Trustee's
reasonable discretion, the amendment does not adversely affect the rights,
duties, liabilities or immunities of the Trustee. If it does, the Trustee may,
but need not, sign it. In signing or refusing to sign such amendment or
Supplemental Indenture, the Trustee shall be entitled to receive, if
requested, an indemnity reasonably satisfactory to it and to receive and,
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subject to Section 7.01, shall be fully protected in relying upon, an
Officers' Certificate and an Opinion of Counsel (or written advice of counsel)
as conclusive evidence that such amendment or Supplemental Indenture is
authorized or permitted by this Indenture, that it is not inconsistent
herewith, and that it will be valid and binding upon the Company in accordance
with its terms. None of the Company or any Subsidiary Guarantor may sign an
amendment or Supplemental Indenture until its respective Board of Directors
approves it.
ARTICLE 10
COLLATERAL AND SECURITY
Section 10.01. Agreement to Secure Securities.
(a) The due and punctual payment of the principal of, premium, if any, and
interest on the Securities when and as the same shall be due and payable,
whether on an interest payment date, at maturity, by acceleration, repurchase,
redemption or otherwise, and interest on the overdue principal of, premium, if
any, and interest on the Securities and performance of all other obligations
of the Company and the Subsidiary Guarantors to the Holders of the Securities
or the Trustee under this Indenture, the Notes and the Subsidiary Guarantees,
according to the terms hereunder or thereunder, shall be secured by the
collateral described in paragraph (b) of this Section 10.01, as provided in
the First Preferred Fleet Mortgage(s) (the "Admiral Fleet Mortgage") which the
Company and the President Riverboat Casino-Missouri, Inc. have entered into
simultaneously with the execution of this Indenture for the benefit of the
Holders of the Securities with respect to the vessels "The Admiral" and the
"Admiral Barge One." Each Holder of the Securities, by its acceptance
thereof, consents and agrees to the terms of the Admiral Fleet Mortgage or any
other collateral document required by this Article to be entered into
(collectively, the "Collateral Documents") (including, without limitation, the
provisions providing for foreclosure and release of collateral) as the same
may be in effect or may be amended from time to time in accordance with its
terms and authorizes and directs the Trustee to enter into the Collateral
Documents and to perform its obligations and exercise its rights thereunder in
accordance therewith. The Company and the Subsidiary Guarantors shall deliver
to the Trustee copies of all documents executed pursuant to this Indenture and
the Collateral Documents and shall do or cause to be done all such acts and
things as may be necessary or proper, or as may be required by the provisions
of the Collateral Documents, to assure and confirm to the Trustee the security
interest in the collateral contemplated hereby, by the Collateral Documents or
any part thereof, as from time to time constituted, so as to render the same
available for the security and benefit of Subsidiary Guarantees secured
hereby, according to the intent and purposes herein expressed. Subject to the
terms of this Article 10, the Company shall take, or shall cause its
Subsidiary Guarantors to take, any and all actions reasonably required to
cause the Collateral Documents to create and maintain, as security for the
obligations of the Company hereunder, a valid and enforceable perfected first
priority Lien in and on all of the collateral, in favor of the Trustee for the
ratable benefit of the Holders, superior to and prior to the rights of all
third Persons and subject to no other Liens.
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(b) The collateral contemplated hereby and which shall be subject to such
Lien in favor of the Trustee shall be (i) a first preferred Fleet Mortgage
against the vessels The Admiral and The Admiral Barge One as well as a
Security Agreement and a Future Advances Leasehold and Improvements Deed of
Trust, Security Agreement and Fixture Filing against the foregoing vessels as
well as The Admiral Barge Two; and (ii) A first preferred Fleet Mortgage
against the vessel New Yorker to be granted and delivered as soon as
practicable when the charter pursuant to which the vessel is chartered permits
such a mortgage, but no later than the first anniversary hereof.
Section 10.02. Recording and Opinions.
The Company and the Subsidiary Guarantors will cause the applicable
Collateral Documents and any financing statements, all amendments,
continuations or supplements to each of the foregoing and any other similar
security documents as necessary, to be registered, recorded and filed and/or
re-recorded, re-filed and renewed in such manner and in such place or places,
if any, as may be required by law or reasonably requested by the Trustee in
order fully to preserve and protect the Lien securing the obligations under
the Securities and the Subsidiary Guarantees in accordance with the terms of
this Article 10. The Company and each obligor shall furnish to the Trustee
the certificates and opinions required by TIA Sections 314(b), (c) and (d) as
if it were applicable to this Indenture. Such certificates or opinions will
be subject to the terms of TIA Section 314(e).
Section 10.03. Release of Collateral.
(a) Collateral may be released from the Lien created by the Collateral
Documents at any time or from time to time upon the request of the Company
pursuant to an Officers' Certificate certifying that all conditions precedent
hereunder or under the Collateral Documents have been met and specifying which
provision of this Indenture has authorized such release. The Trustee shall
release (at the sole cost and expense of the Company) (i) collateral that is
the subject of an Asset Sale (other than an Asset Sale to the Company or a
Restricted Subsidiary), provided that the Net Proceeds thereof have been or
will be applied in accordance with Section 4.10 and no Default or Event of
Default exists and is continuing; (ii) collateral with the consent of the
Holders pursuant to Article 9 hereof; (iii) all collateral upon discharge or
defeasance pursuant to Article 8 hereof; (iv) all collateral upon the payment
in full of all obligations on the Notes or the Subsidiary Guarantees; (v) any
collateral upon which the existence of a Lien in favor of the Trustee would,
in the reasonable, good faith judgment of the Company jeopardize the
acquisition or retention of any material Gaming License, which reasonable,
good faith determination shall be certified in an Officer's Certificate
delivered to the Trustee;
ARTICLE 11
SUBSIDIARY GUARANTEE
Section 11.01. Subsidiary Guarantee.
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Each of the Subsidiary Guarantors hereby, jointly and severally,
unconditionally guarantees to each Holder of a Security authenticated and
delivered by the Trustee and to the Trustee and its successors and assigns,
irrespective of the validity and enforceability of this Indenture, the
Securities and the Obligations of the Company hereunder and thereunder, that:
(a) the principal of and interest on the Securities will be promptly paid in
full when due, whether at maturity, by acceleration, redemption or otherwise,
and interest on the overdue principal of and interest on the Securities, if
any, if lawful, and all other obligations of the Company to the Holders or the
Trustee hereunder or thereunder will be promptly paid in full or performed,
all in accordance with the terms hereof and thereof; and (b) in case of any
extension of time of payment or renewal of any Securities or any of such other
obligations, that same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise. Failing payment when due of any
amount so guaranteed or any performance so guaranteed for whatever reason, the
Subsidiary Guarantors will be jointly and severally obligated to pay the same
immediately. The Subsidiary Guarantors hereby agree that their obligations
hereunder shall be unconditional, irrespective of the validity, regularity or
enforceability of the Securities or this Indenture, the absence of any action
to enforce the same, any waiver or consent by any Holder of the Securities
with respect to any provisions hereof or thereof, the recovery of any judgment
against the Company, any action to enforce the same or any other circumstance
which might otherwise constitute a legal or equitable discharge or defense of
a guarantor. Each Subsidiary Guarantor hereby waives diligence, presentment,
demand of payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first against the
Company, protest, notice and all demands whatsoever and covenant that this
Subsidiary Guarantee will not be discharged except by complete performance of
the obligations contained in the Securities and this Indenture. If any
Securityholder or the Trustee is required by any court or otherwise to return
to the Company or Subsidiary Guarantors, or any Custodian, Trustee, liquidator
or other similar official acting in relation to either the Company or
Subsidiary Guarantors, any amount paid by either to the Trustee or such
Securityholder, the Subsidiary Guarantees, to the extent theretofore
discharged, shall be reinstated in full force and effect. Each Subsidiary
Guarantor agrees that it shall not be entitled to any right of subrogation in
relation to the Securityholders in respect of any obligations guaranteed
hereby until payment in full of all obligations guaranteed hereby. Each
Subsidiary Guarantor further agrees that, as between the Subsidiary
Guarantors, on the one hand, and the Holders and the Trustee, on the other
hand, (x) the maturity of the obligations guaranteed hereby may be accelerated
as provided in Article 6 for the purposes of this Subsidiary Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby, and (y) in the
event of any declaration of acceleration of such obligations as provided in
Article 6, such obligations (whether or not due and payable) shall forthwith
become due and payable by the Subsidiary Guarantors for the purpose of this
Subsidiary Guarantee. The Subsidiary Guarantors shall have the right to seek
contribution from any non-paying Subsidiary Guarantor so long as the exercise
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of such right does not impair the rights of the Securityholders under the
Subsidiary Guarantee.
Notwithstanding anything to the contrary contained herein, (i) the amount
guaranteed by The Connelly Group, L.P. ("TCG") shall not exceed the sum of the
amount owed from time to time by The Connelly Group, L.P. pursuant to the TCG
Intercompany Notes given by the Connelly Group, L.P. to PRC Holdings
Corporation, and any amounts transferred by the Company and any Subsidiary
Guarantors to TCG and (ii) the amounts guaranteed by any Subsidiary Guarantor
shall be subject to certain limitations as provided in such Subsidiary
Guarantee.
Section 11.02. Additional Subsidiary Guarantees.
If the Company or any Restricted Subsidiary transfers or causes to be
transferred, in one or a series of related transactions, property or assets
(including, without limitation, businesses, divisions, real property, assets
or equipment) having a fair market value exceeding $2.0 million at any one
time outstanding to any Unrestricted Subsidiary of the Company, or if any
Unrestricted Subsidiary ceases to be an Unrestricted Subsidiary and becomes a
Restricted Subsidiary, the Company shall cause such transferee Unrestricted
Subsidiary or such Restricted Subsidiary to (i) execute and deliver to the
Trustee a supplemental indenture in form and substance reasonably satisfactory
to the Trustee pursuant to which such transferee Unrestricted Subsidiary or
Restricted Subsidiary, as the case may be, shall unconditionally Guarantee all
of the Company's Obligations under the Notes on the terms set forth in the
Indenture and (ii) deliver to the Trustee an Opinion of Counsel reasonably
satisfactory to the Trustee that such supplemental indenture has been duly
executed and delivered by such transferee Unrestricted Subsidiary or a
Restricted Subsidiary, as the case may be. However, the foregoing provisions
will not apply to (a) transfers of property or assets (other than cash) by the
Company or a Restricted Subsidiary to Unrestricted Subsidiaries in exchange
for (x) cash in an amount equal to the fair market value of such property or
assets, as determined in good faith by the Board of Directors of the Company
and evidenced by a resolution set forth in an Officers' Certificate, or (y)
long-term, tangible assets that are immediately usable in such gaming and
related businesses as may be conducted from time to time by the Company and
the Restricted Subsidiaries from the date of the Indenture and that have a
fair market value at least equal to the fair market value of such property or
assets, as determined by the Board of Directors of the Company and evidenced
by a resolution set forth in an Officers' Certificate, or (z) any combination
thereof, (b) Restricted Payments permitted by the Indenture, (c) Permitted
Investments specified in clause (d) of the definition of Permitted
Investments, (d) bona fide operating leases entered into between the Company
or a Restricted Subsidiary, as lessor, and a third party which is not an
Affiliate as lessee, or (e) bona fide operating leases entered into between
the Company or a Restricted Subsidiary, as lessor, and a Gaming Venture which
is not an Affiliate (other than by virtue of the Company's or a Restricted
Subsidiary's ownership interest in such Gaming Venture) as lessee.
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Section 11.03. Execution and Delivery of Subsidiary Guarantee.
To evidence its Subsidiary Guarantee set forth in Section 11.01, each
Subsidiary Guarantor hereby agrees that a notation of such Subsidiary
Guarantee substantially in the form of Exhibit B shall be endorsed by an
officer of such Subsidiary Guarantor on each Security authenticated and
delivered by the Trustee and that this Indenture shall be executed on behalf
of such Subsidiary Guarantor by its President or one of its Vice Presidents
and attested to by an Officer.
Each Subsidiary Guarantor hereby agrees that its Subsidiary Guarantee set
forth in Section 11.01 shall remain in full force and effect notwithstanding
any failure to endorse on each Security a notation of such Subsidiary
Guarantee.
If an officer or Officer whose signature is on this Indenture or on the
Subsidiary Guarantee no longer holds that office at the time the Trustee
authenticates the Security on which a Subsidiary Guarantee is endorsed, the
Subsidiary Guarantee shall be valid nevertheless.
The delivery of any Security by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Subsidiary Guarantee
set forth in this Indenture on behalf of the Subsidiary Guarantors.
Section 11.04. Subsidiary Guarantors May Consolidate, etc., on Certain Terms.
(a) Except as set forth in Articles 4 and 5, nothing contained in this
Indenture or in any of the Securities shall prevent any consolidation or
merger of a Subsidiary Guarantor with or into either of the Company or a
Subsidiary Guarantor or shall prevent any sale or conveyance of the property
of a Subsidiary Guarantor as an entirety or substantially as an entirety, to
the Company or to another Subsidiary Guarantor.
(b) Except as set forth in Article 4, nothing contained in this Indenture
or in any of the Securities shall prevent any consolidation or merger of a
Subsidiary Guarantor with or into a corporation or corporations other than the
Company (whether or not affiliated with the Subsidiary Guarantor), or
successive consolidations or mergers in which a Subsidiary Guarantor or its
successor or successors shall be a party or parties, or shall prevent any sale
or conveyance of the property of a Subsidiary Guarantor as an entirety or
substantially as an entirety, to a corporation other than the Company (whether
or not affiliated with the Subsidiary Guarantor) authorized to acquire and
operate the same; provided, however, that each Subsidiary Guarantor hereby
covenants and agrees that, upon any such consolidation, merger, sale or
conveyance, (i) the Person formed by or surviving any such consolidation or
merger (if other than such Subsidiary Guarantor) assumes all the obligations
of such Subsidiary Guarantor pursuant to a supplemental indenture in form
reasonably satisfactory to the Trustee, under the Securities. Guarantees and
the Indenture, (ii) immediately after giving effect to such transaction, no
Default or Event of Default exists, and (iii) such Subsidiary Guarantor, or
any Person formed by or surviving any such consolidation or merger, (a) will
61
<PAGE> 102
have Consolidated Net Worth (immediately after giving effect to such
transaction), equal to or greater than the Consolidated Net Worth of such
Subsidiary Guarantor immediately preceding the transaction and (b) will be
permitted by virtue of the Company's pro forma Fixed Charge Coverage Ratio to
incur, immediately after giving effect to such transaction, at least $1.00 of
additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set
forth in Section 4.09. In case of any such consolidation, merger, sale or
conveyance and upon the assumption by the successor corporation, by
supplemental indenture, executed and delivered to the Trustee and satisfactory
in form to the Trustee, of the Subsidiary Guarantee endorsed upon the
Securities and the due and punctual performance of all of the covenants and
conditions of this Indenture to be performed by the Subsidiary Guarantor, such
successor corporation shall succeed to and be substituted for the Subsidiary
Guarantor with the same effect as if it had been named herein as a Subsidiary
Guarantor. Such successor corporation thereupon may cause to be signed any or
all of the Guarantees to be endorsed upon all of the Securities issuable
hereunder which theretofore shall not have been signed by the Company and
delivered to the Trustee. All the Guarantees so issued shall in all respects
have the same legal rank and benefit under this Indenture as the Guarantees
theretofore and thereafter issued in accordance with the terms of this
Indenture as though all of such Guarantees had been issued at the date of the
execution hereof.
Section 11.05. Releases Following Sale of Assets.
Concurrently with any permitted sale of assets (including, if applicable,
all of the capital stock of any Subsidiary Guarantor), any Liens in favor of
the Trustee in the assets sold thereby shall be released; provided that in the
event of an Asset Sale, the Net Proceeds from such sale or other disposition
are treated in accordance with the provisions of Section 4.10 hereof. If the
assets sold in such sale or other disposition include all or substantially all
of the assets of any Subsidiary Guarantor or all of the capital stock of any
Subsidiary Guarantor in each case, in compliance with the terms hereof, then
such Subsidiary Guarantor (in the event of a sale or other disposition of all
of the capital stock of such Subsidiary Guarantor) or the corporation
acquiring the property (in the event of a sale or other disposition of all or
substantially all of the assets of a Subsidiary Guarantor) shall be released
from and relieved of its obligations under its Subsidiary Guarantee or Section
11.03 hereof, as the case may be; provided that in the event of an Asset Sale,
the Net Proceeds from such sale or other disposition are treated in accordance
with the provisions of Section 4.10 hereof. Upon delivery by the Company to
the Trustee of an Officers Certificate to the effect that such sale or other
disposition was made by the Company in accordance with the provisions of this
Indenture, including without limitation Section 4.10 hereof, the Trustee shall
execute any documents reasonably required in order to evidence the release of
any Subsidiary Guarantor from its obligations under its Subsidiary Guarantee.
Any Subsidiary Guarantor not released from its obligations under its
Subsidiary Guarantee shall remain liable for the full amount of principal of
and interest on the Securities and for the other obligations of any Subsidiary
Guarantor under this Indenture as provided in this Article 11.
62
<PAGE> 103
Section 11.06. "Trustee" to Include Paying Agent.
In case at any time any Paying Agent other than the Trustee shall have been
appointed by the Company and be then acting hereunder, the term "Trustee" as
used in this Article 11 shall in such case (unless the context shall otherwise
require) be construed as extending to and including such Paying Agent within
its meaning as fully and for all intents and purposes as if such Paying Agent
were named in this Article 11 in place of the Trustee.
ARTICLE 12
MISCELLANEOUS
Section 12.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by TIA Section 318(c), the imposed duties shall control.
Section 12.02. Notices.
Any notice, instruction, direction, request or other communication by the
Company, the Subsidiary Guarantors or the Trustee is duly given if in writing
and delivered in person or mailed by first-class mail (registered or
certified, return receipt requested), telex, telecopier or overnight air
courier guaranteeing next day delivery, to the other's address:
If to the Company or any Subsidiary Guarantor:
President Casinos, Inc.
802 North First Street
St. Louis, Missouri 63102
Attention: Executive Vice President and Chief Financial Officer
Telecopier No.: (314) 622-3049
With a copy to:
Thompson Coburn
One Mercantile Center
St. Louis, Missouri 63101
Attention: Gerard K. Sandweg, Jr.
Telecopier No.: (314) 552-7104
If to the Trustee:
U.S. Trust Company of Texas, N.A.
c/o United States Trust Company of New York
114 West 47th Street
New York, New York 10036-1352
Attention: Corporate Trust Office
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<PAGE> 104
The Company, the Subsidiary Guarantors or the Trustee by notice to the
others may designate additional or different addresses for subsequent notices
or communications.
All notices and communications (other than those sent to Securityholders)
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; 5 Business Days after being deposited in the mail,
postage prepaid, if mailed; when answered back, if telexed; when receipt
acknowledged, if telecopied; and the next Business Day after timely delivery
to the courier, if sent by overnight air courier guaranteeing next day
delivery.
Any notice or communication to a Securityholder shall be mailed by first-
class mail, certified or registered, return receipt requested, to his address
shown on the register kept by the Registrar. Failure to mail a notice or
communication to a Securityholder or any defect in it shall not affect its
sufficiency with respect to other Securityholders .
If a notice or communication is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives
it.
If the Company mails a notice or communication to Securityholders, it shall
mail a copy to the Trustee and each Agent at the same time.
Section 12.03. Communication by Holders with Other Holders.
Securityholders may, in accordance with the procedures established under
Section 312 of the TIA, communicate with other Securityholders with respect to
their rights under this Indenture or the Securities.
Section 12.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company and/or any Subsidiary
Guarantor to the Trustee to take any action under this Indenture, the Company
or such Subsidiary Guarantor, as the case may be, shall furnish to the
Trustee:
(1) an Officers' Certificate in form and substance reasonably satisfactory
to the Trustee (which shall include the statements set forth in Section 12.05)
stating that, in the opinion of the signers, all conditions precedent and
covenants, if any, provided for in this Indenture relating to the proposed
action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably satisfactory to
the Trustee (which shall include the statements set forth in Section 12.05)
stating that, in the opinion of such counsel, all such conditions precedent
and covenants have been complied with.
64
<PAGE> 105
Section 12.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(1) a statement that the Person making such certificate or opinion has read
such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion whether such covenant or condition has been complied with;
and
(4) a statement whether, in the opinion of such Person, such condition or
covenant has been complied with.
Section 12.06. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting of
Securityholders. The Registrar or Paying Agent may make reasonable rules and
set reasonable requirements for its functions.
Section 12.07. Legal Holidays.
A "Legal Holiday" is a Saturday, a Sunday or a day on which banking
institutions in The City of New York or at a place of payment are authorized
or obligated by law, regulation or executive order to remain closed. If a
payment date is a Legal Holiday at a place of payment, payment may be made at
that place on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue for the intervening period.
Section 12.08. No Recourse Against Others.
No director, officer, employee, agent, manager or stockholder of the Company
or any Subsidiary Guarantor, as such, shall have any liability for any
obligations
Section 12.09. Duplicate Originals.
The parties may sign any number of copies of this Indenture. One signed
copy is enough to prove this Indenture.
Section 12.10. Governing Law.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN THIS INDENTURE AND
THE SECURITIES, WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS THEREOF.
65
<PAGE> 106
Section 12.11. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company or its subsidiaries. Any such indenture, loan or
debt agreement may not be used to interpret this Indenture.
Section 12.12. Successors.
All agreements of the Company in this Indenture and the Securities shall
bind its successors. All agreements of the Trustee in this Indenture shall
bind its successor.
Section 12.13. Severability.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
Section 12.14. Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together represent the same
agreement.
Section 12.15. Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table and Headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part hereof and shall in no way modify or
restrict any of the terms or provisions hereof.
SIGNATURES
Dated as of December 3, 1998 PRESIDENT CASINOS, INC.
By: /s/ John S. Aylsworth
-------------------------------------
Name:
Title:
Attest:
/s/ Ralph J. Vaclavik
- ---------------------------- (SEAL)
Dated as of December 3, 1998 PRESIDENT RIVERBOAT CASINO-IOWA, INC.,
as Subsidiary Guarantor
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<PAGE> 107
By: /s/ John S. Aylsworth
------------------------------------
Name:
Title:
Attest:
/s/ Ralph J. Vaclavik
- ---------------------------- (SEAL)
Dated as of December 3, 1998 PRESIDENT RIVERBOAT CASINO-MISSOURI,
INC.,as Subsidiary Guarantor
By: /s/ John S. Aylsworth
------------------------------------
Name:
Title:
Attest:
/s/ Ralph J. Vaclavik
- ---------------------------- (SEAL)
Dated as of December 3, 1998 PRESIDENT RIVERBOAT CASINO-MISSISSIPPI,
INC., as Subsidiary Guarantor
By: /s/ John S. Aylsworth
------------------------------------
Name:
Title:
Attest:
/s/ Ralph J. Vaclavik
- ---------------------------- (SEAL)
Dated as of December 3, 1998 TCG/BLACKHAWK, INC.,
as Subsidiary Guarantor
By: /s/ John S. Aylsworth
------------------------------------
Name:
Title:
Attest:
/s/ Ralph J. Vaclavik
- ---------------------------- (SEAL)
Dated as of December 3, 1998 PRESIDENT RIVERBOAT CASINO-NEW YORK,
INC., as Subsidiary Guarantor
67
<PAGE> 108
By: /s/ John S. Aylsworth
------------------------------------
Name:
Title:
Attest:
/s/ Ralph J. Vaclavik
- ---------------------------- (SEAL)
Dated as of December 3, 1998 PRESIDENT CASINO-NEW YORKER, INC.,
as Subsidiary Guarantor
By: /s/ John S. Aylsworth
------------------------------------
Name:
Title:
Attest:
/s/ Ralph J. Vaclavik
- ---------------------------- (SEAL)
Dated as of December 3, 1998 PRC HOLDINGS CORPORATION,
as Subsidiary Guarantor
By: /s/ John S. Aylsworth
------------------------------------
Name:
Title:
Attest:
/s/ Ralph J. Vaclavik
- ---------------------------- (SEAL)
Dated as of December 3, 1998 PRC MANAGEMENT INC.,
as Subsidiary Guarantor
By: /s/ John S. Aylsworth
------------------------------------
Name:
Title:
Attest:
/s/ Ralph J. Vaclavik
- ---------------------------- (SEAL)
Dated as of December 3, 1998 PRCX CORPORATION, as Subsidiary
Guarantor
68
<PAGE> 109
By: /s/ John S. Aylsworth
------------------------------------
Name:
Title:
Attest:
/s/ Ralph J. Vaclavik
- ---------------------------- (SEAL)
Dated as of December 3, 1998 PRESIDENT RIVERBOAT CASINO-
PHILADELPHIA, INC., as Subsidiary
Guarantor
By: /s/ John S. Aylsworth
------------------------------------
Name:
Title:
Attest:
/s/ Ralph J. Vaclavik
- ---------------------------- (SEAL)
Dated as of December 3, 1998 VEGAS VEGAS, INC.,
as Subsidiary Guarantor
By: /s/ John S. Aylsworth
------------------------------------
Name:
Title:
Attest:
/s/ Ralph J. Vaclavik
- ---------------------------- (SEAL)
Dated as of December 3, 1998 THE CONNELLY GROUP, L.P.,
as Subsidiary Guarantor
By: /s/ John S. Aylsworth
------------------------------------
Name:
Title:
Attest:
/s/ Ralph J. Vaclavik
- ---------------------------- (SEAL)
Dated as of December 3, 1998 P.R.C.-LOUISIANA, INC.,
as Subsidiary Guarantor
69
<PAGE> 110
By: /s/ James A. Zweifel
------------------------------------
Name: James A. Zweifel
Title: Exec. V.P.
Attest:
/s/ Ralph J. Vaclavik
- ---------------------------- (SEAL)
Dated as of December 3, 1998 U.S. TRUST COMPANY OF TEXAS, N.A.,
as Trustee
By: /s/ John C. Stohlmann
------------------------------------
Name: John C. Stohlmann
Title: Vice President
Attest:
/s/ Bill Barber
- ---------------------------- (SEAL)
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<PAGE> 111
EXHIBIT A
(Face of Security)
12% NOTE
DUE SEPTEMBER 15, 2001
No. $
-----------
PRESIDENT CASINOS, INC.
promises to pay to
or registered assigns,
the principal sum of Dollars on September 15, 2001.
---------------------
Interest Payment Dates: March 15 and September 15;
commencing March 15, 1999
Record Dates: March 1 and September 1
Authenticated: Dated: December 3, 1998
PRESIDENT CASINOS, INC.
as Trustee
By: By:
----------------------------- ---------------------------------
Authorized Officer Officer of the Company
Attest:
-----------------------------
Officer of the Company
(SEAL)
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<PAGE> 112
(Back of Security)
12% Senior Note due September 15, 2001
[Unless and until it is exchanged in whole or in part for Securities in
definitive form, this Security may not be transferred except as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or by the Depositary or
any such nominee to a successor Depositary or a nominee of such successor
Depositary. Unless this certificate is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) ("DTC"), to the issuer or its agent for registration of transfer,
exchange or payment, and any certificate issued is registered in the name of
Cede & Co. or such other name as requested by an authorized representative of
DTC (and any payment is made to Cede & Co. or such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.]<F1>
THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACTS") OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL
OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
SUCH SECURITY) ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR
SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A
PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR
FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN
THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) TO AN
"ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (A), (1), (2), (3) OR
(7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR
ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN "ACCREDITED INVESTOR," FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION
WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (E) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO THE COMPANY'S, THE REGISTRAR'S (AS APPLICABLE)
RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D) OR (E)
- --------------
[FN]
<F1> This paragraph is to be included only if the Security is in global form.
72
<PAGE> 113
TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES,
A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS
SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE REGISTRAR. THIS
LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE
RESTRICTION TERMINATION DATE.
Capitalized terms used herein shall have the meanings ascribed to them in
the Indenture unless otherwise indicated.
1. Interest. President Casinos, Inc., a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this 12% Note
(the "Note") at 12% per annum from the date of issuance until maturity. The
Company will pay interest semiannually on March 15 and September 15 of each
year, or if any such day is not a Business Day, on the next succeeding
Business Day (each an "Interest Payment Dated.")
Interest on the Notes will accrue from the most recent date on which
interest has been paid or, if no interest has been paid, from the date of
issuance; provided that if there is no existing Default in the payment of
interest, and if this Note is authenticated between a record date referred to
on the face hereof and the next succeeding Interest Payment Date, interest
shall accrue from such next succeeding Interest Payment Date; provided,
further, that the first Interest Payment Date shall be March 15, 1999. The
Company shall pay interest (including Post-Petition Interest) on overdue
principal and premium, if any, from time to time on demand at the same rate
per annum on the Notes then in effect; it shall pay interest (including Post-
Petition Interest in any proceeding under Bankruptcy Law) on overdue
installments of interest (without regard to any applicable grace periods) from
time to time on demand at the same rate to the extent lawful. Interest will be
computed on the basis of a 360-day year of twelve 30 day months.
2. Method of Payment. The Company will pay interest on the Notes (except
defaulted interest) by check to the Persons who are registered Holders of
Notes at the close of business on the record date next preceding the Interest
Payment Date, even if such Notes are cancelled after such record date and on
or before such Interest Payment Date. The Notes will be payable both as to
principal and interest at the office of the Paying Agent maintained for such
purpose within the City and State of New York. Notwithstanding anything to the
contrary in this paragraph, the Company will pay or cause to be paid all
amounts payable with respect to any Transfer Restricted Security (without any
presentment of such Security and without any notation of such payment being
made thereon) by crediting by federal funds bank wire transfer to the Holder's
account in any bank in the United States as may be designated and specified in
writing by such Holder.
3. Paying Agent and Registrar. Initially, the Trustee under the Indenture,
will act as Paying Agent and Registrar. The Company may change any Paying
Agent or Registrar without notice to any Holder. The Company or any of its
subsidiaries may act in any such capacity.
73
<PAGE> 114
4. Indenture. The Company issued the Notes under an Indenture dated as of
December 1, 1999 ("Indenture") among the Company, the Subsidiary Guarantors
and the Trustee. The terms of the Notes include those stated in the Indenture.
The Notes are subject to all such terms, and Holders are referred to the
Indenture and such Act for a statement of such terms. The Securities are
limited to $25.0 million in aggregate principal amount.
5. Optional Redemption. The Company may redeem all or any of the
Securities, in whole or in part, upon no less than 30 nor more than 60 days'
notice, at the redemption prices expressed after March 15, 1999 as a
percentage of principal amount) set forth below, plus accrued and unpaid
interest thereon to the applicable redemption date:
After March 15, 1999 through September 14, 2000 102%
September 15, 2000 and thereafter 100%
6. Mandatory Offers to Repurchase.
(a) Following the occurrence of any Change of Control (as defined in the
Indenture), the Company will be required to offer (a "Change of Control
Offer") to purchase all outstanding Securities at a purchase price equal to
101 % of the aggregate principal amount of such Securities, or 100% of the
principal amount thereof for purchases occurring on or after September 15,
2000, in each case plus accrued and unpaid interest, if any, to the date of
purchase (the "Change of Control Payment"), and in each case in accordance
with and to the extent provided in the Indenture. The Change of Control Offer
shall remain open from the date of mailing of the notice of a Change of
Control Offer until the third Business Day preceding the Change of Control
Payment Date (as hereinafter defined) unless a longer offering period is
required by law. No earlier than 30 days nor later than 40 days after the
notice of the Change of Control Offer has been mailed (the "Change of Control
Payment Date"), the Company shall deposit, to the extent lawful, with the
Paying Agent an amount equal to the Change of Control Payment in respect of
all Securities or portions thereof tendered by Holders. The Paying Agent shall
promptly mail or deliver payment for all Securities tendered in the Change of
Control Offer.
A Holder of Notes may tender or refrain from tendering all or any portion
of his Notes at his discretion by completing the form entitled "OPTION OF
HOLDER TO ELECT PURCHASE" appearing on the reverse side of this Note. Any
portion of Notes tendered must be in integral multiples of $1,000.
(b) If the Company consummates any Asset Sale (as such term is defined in
the Indenture) and as governed by Section 4.10(e) , the Company may be
required to utilize a certain portion of the Net Proceeds received from such
Asset Sale to offer to redeem Securities at par, plus accrued and unpaid
interest, if any. Holders of Notes that are the subject of an offer to redeem
will receive an offer to redeem from the Company prior to any related
redemption date, and may elect to have such Notes redeemed by completing the
form entitled "OPTION OF HOLDER TO ELECT PURCHASE" appearing on the reverse
side of this Note.
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<PAGE> 115
A Holder of Notes may tender or refrain from tendering all or any portion
of his Notes at his discretion by completing the form entitled "OPTION OF
HOLDER TO ELECT PURCHASE" appearing on the reverse side of this Note.
7. Notice of Redemption. Subject to Sections 3.09, and 4.15 of the
Indenture, relating to repurchases in connection with Asset Sales and Change
of Control, notice of redemption will be mailed at least 30 days but not more
than 60 days before the redemption date to each Holder whose Notes are to be
redeemed at such Holder's registered address. Notes in denominations larger
than $1,000 may be redeemed in part but only in whole multiples of $1,000,
unless all of the Notes held by a Holder are to be redeemed. On and after the
redemption date interest ceases to accrue on Notes or portions thereof called
for redemption.
8. Denominations, Transfer, Exchange. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000.
The transfer of Notes may be registered and Notes may be exchanged as provided
in the Indenture. The Registrar and the Trustee may require a Holder, among
other things, to furnish appropriate endorsements, transfer documents and
opinions and the Company may require a Holder to pay any taxes and fees
required by law or permitted by the Indenture. The Company need not exchange
or register the transfer of any Note or portion of a Note selected for
redemption, except for the unredeemed portion of any Note being redeemed in
part. Also, it need not exchange or register the transfer of any Notes for a
period of 15 days before a selection of Notes to be redeemed or during the
period between a record date and the corresponding Interest Payment Date.
9. Persons Deemed Owners. The registered Holder of a Note may be treated
as its owner for all purposes.
10. Amendments and Waivers. Subject to certain exceptions, the Indenture
or the Notes may be amended or supplemented and any existing Default under, or
compliance with any provision of, the Indenture may be waived with the written
consent of the Holders of at least 60% in principal amount of the Securities
then outstanding (including consents obtained in connection with a tender
offer or exchange offer for Securities). Without the consent any Holder, the
Company and the Trustee may amend or supplement the Indenture or the
Securities to cure any ambiguity, defect or inconsistency; to provide for
uncertificated Securities in addition to or in place of certificated
Securities; to comply with Section 5.01 or 11.03 of the Indenture; or to make
any change that would provide any additional rights or benefits to the Holders
or that does not adversely affect the rights under the Indenture of any
Holder.
11. Defaults and Remedies. An Event of Default is: default for 30 days in
payment of interest on the Securities; default in payment of principal on the
Securities; failure by the Company for 60 days after notice to it to comply
with any of its other agreements in the Indenture, or the Securities or, in
the case of failure of the Company to maintain its corporate existence, or to
comply with the restrictions on restricted payments, incurrence of
indebtedness, asset sales, changes of control or on consolidation, merger or
75
<PAGE> 116
transfer or sale of substantially all its assets, without such notice or
passage of time; certain defaults under and acceleration prior to maturity of
other indebtedness; certain final judgments which remain undischarged; and
certain events of bankruptcy or insolvency. If an Event of Default occurs and
is continuing, the Trustee or the holders of at least 60% in principal amount
of the then outstanding Securities may declare all the Securities to be due
and payable immediately, except that in the case of an Event of Default
arising from certain events of bankruptcy or insolvency, all outstanding
Securities become due and payable immediately without further action or
notice. Holders of Securities may not enforce the Indenture or the Securities
except as provided in the Indenture. The Trustee may require indemnity
satisfactory to it before it enforces the Indenture or the Securities. Subject
to certain limitations, holders of a majority in principal amount of the then
outstanding Securities may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Securityholders notice of any continuing
default (except a default in payment of principal or interest) if it
determines that withholding notice would have no material adverse effect on
the Securityholders. The Company must furnish an annual compliance certificate
to the Trustee.
12. Trustee Dealings with Company. The Trustee, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services
for the Company or its Affiliates, and may otherwise deal with the Company or
its Affiliates, as if it were not Trustee.
13. No Recourse Against Others. A director, officer, employee, incorporator
or stockholder, of the Company, as such, shall not have any liability for any
obligations of the Company under the Notes or the Indenture or for any claim
based on, in respect of, or by reason of, such obligations or their creation.
Each Holder by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for the issuance of the
Notes.
14. Guarantees and Pledges. Payment of principal, premium (if any) and
interest (including interest on overdue principal and overdue interest, if
lawful) is unconditionally guaranteed by certain subsidiaries of the Company
and is secured by liens on certain vessels.
15. Authentication. This Note shall not be valid until authenticated by the
manual signature of the Trustee or an authenticating agent.
16. Abbreviations. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform
Gifts to Minors Act).
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to:
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<PAGE> 117
PRESIDENT CASINOS, INC.
802 North First Street
St. Louis, Missouri 63102
Attn: President
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and transfer
this Note to
- ------------------------------------------------------------------------------
(Insert assignee's Soc. Sec. Or Tax I.D. No.)
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
------------------------------------------------------
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
- ------------------------------------------------------------------------------
Date:
----------------
Your Signature:
------------------------------
(Sign exactly as your name
appears on the face of this
Note)
Signature Guarantee.
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<PAGE> 118
OPTION OF HOLDER TO ELECT PURCHASE
If you receive notice of an offer to repurchase pursuant to the terms of the
Indenture and if you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 or 4.15 of the Indenture, check the appropriate box
below:
Section 4.10 (Asset Sales) yes no
--- ---
Section 4.15 (Change of Control) yes no
--- ---
If you want to elect to have only part of the Note purchased by the Company
pursuant to Section 4.10 or 4.15 of the Indenture, state the amount you elect
to have purchased:
$
----------
Date:
----------------
Your Signature:
------------------------------
(Sign exactly as your name
appears on the face of this
Note)
Tax Identification No.:
----------------------
Signature Guarantee.
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<PAGE> 119
SCHEDULE OF EXCHANGES OF DEFINITIVE SECURITIES<F2>
The following exchanges of a part of this Global Note for Definitive
Securities have been made:
Date of Amount of Amount of Principal Signature of
Exchange decrease in increase in Amount of this authorized
Principal Principal Global Note officer of
Amount of this Amount of this following such Trustee or
Global Note Global Note decrease (or Securities
increase) Custodian
- ------------------------------------------------------------------------------
- -------------
[FN]
<F2> This should be included only if the Security is issued in global form.
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<PAGE> 120
EXHIBIT B
FORM OF NOTATION ON NOTE
RELATING TO SUBSIDIARY GUARANTEE
SUBSIDIARY GUARANTEE
Each of the undersigned (hereinafter referred to as the "Subsidiary
Guarantors," which term includes any successor or additional Subsidiary
Guarantor under the Indenture (the "Indenture") referred to in the Security
upon which this notation is endorsed), (i) has unconditionally guaranteed (a)
the due and punctual payment of the principal of, premium (if any) with
respect to and interest on the Securities, whether at maturity or an interest
payment date, by acceleration, call for redemption or otherwise, (b) the due
and punctual payment of interest on the overdue principal of and (if lawful)
interest on the Securities, (c) the due and punctual performance of all other
obligations of the Company to the holders or the Trustee, all in accordance
with the terms set forth in the Indenture, and (d) in case of any extension of
time of payment or renewal of any Securities or any of such other obligations,
the same will be promptly paid in full when due or performed in accordance
with the terms of the extension or renewal, whether at stated maturity, by
acceleration or otherwise and (ii) has agreed to pay any and all costs and
expenses (including reasonable attorneys' fees) incurred by the Trustee or any
holder in enforcing any rights under this Subsidiary Guarantee; provided,
however, that the maximum liability of a Subsidiary Guarantor pursuant to this
Subsidiary Guarantee shall be limited as provided in the next two paragraphs.
Capitalized terms used herein have the meanings assigned to them in the
Indenture unless otherwise indicated.
Subject to the next paragraph, each Subsidiary Guarantor's maximum liability
pursuant to this Subsidiary Guarantee will be that amount from time to time
equal to the aggregate liability of such Subsidiary Guarantor hereunder, but
shall be limited to the least of (i) the aggregate amount of the obligations
of the Company under the Securities and the Indenture or (ii) the amount, if
any, which would not have (A) rendered such Subsidiary Guarantor "insolvent"
(as such term is defined in the Federal Bankruptcy Code and in the Debtor and
Creditor Law of the State of New York) or (B) left it with unreasonably small
capital at the time its Subsidiary Guarantee of the Securities was entered
into, after giving effect to the incurrence of existing Indebtedness
immediately prior to such time; provided that, it shall be a presumption in
any lawsuit or other proceeding in which such Subsidiary Guarantor is a party
that the amount guaranteed pursuant to its Subsidiary Guarantee is the amount
set forth in clause (i) above unless any creditor, or representative of
creditors of such Subsidiary Guarantor, otherwise proves in such a lawsuit
that the aggregate liability of such Subsidiary Guarantor is limited to the
amount set forth in clause (ii). In making any determination as to the
solvency or sufficiency of capital of a Subsidiary Guarantor in accordance
with previous sentence, the right of such Subsidiary Guarantor to contribution
from other Subsidiary Guarantors and any other rights such Subsidiary
Guarantor many have, contractual or otherwise, shall be taken into account.
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<PAGE> 121
Notwithstanding anything herein to the contrary, the liability of The
Connelly Group, L.P. under this Subsidiary Guarantee shall not exceed the
amount owed from time to time by The Connelly Group, L.P. pursuant to the TCG
Intercompany Notes given by The Connelly Group, L.P. to PRC Holdings
Corporation.
No stockholder, officer, director or incorporator, as such, past, present or
future, of the Subsidiary Guarantors shall have any personal liability under
this Subsidiary Guarantee by reason of his or its status as such stockholder,
officer, director or incorporator.
This Subsidiary Guarantee shall be binding upon the Subsidiary Guarantors
and their successors and assigns and shall inure to the benefit of the
successors and assigns of the Trustee and the Holders and, in the event of any
transfer or assignment of rights by any Holder or the Trustee, the rights and
privileges herein conferred upon that party shall automatically extend to and
be vested in such transferee or assignee, all subject to the terms and
conditions hereof.
This Subsidiary Guarantee shall not be valid or obligatory for any purpose
until the certificate of authentication on the Security upon which this
Subsidiary Guarantee is noted shall have been executed by the Trustee under
the Indenture by the manual signature of one of its authorized officers.
This Subsidiary Guarantee is effective as of December 3, 1998.
COMPANY: PRESIDENT CASINOS, INC.
By: /s/John S. Aylsworth
---------------------------------------
Name:
Title:
SUBSIDIARY PRESIDENT RIVERBOAT CASINO-IOWA, INC.
GUARANTORS:
By: /s/ John S. Aylsworth
---------------------------------------
Name:
Title:
PRESIDENT RIVERBOAT CASINO-MISSOURI, INC.
By: /s/ John S. Aylsworth
---------------------------------------
Name:
Title:
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<PAGE> 122
THE PRESIDENT RIVERBOAT CASINO-
MISSISSIPPI, INC.
By: /s/ John S. Aylsworth
---------------------------------------
Name:
Title:
TCG/BLACKHAWK, INC.
By: /s/ John S. Aylsworth
---------------------------------------
Name:
Title:
P.R.C.-LOUISIANA, INC.
By: /s/ John S. Aylsworth
---------------------------------------
Name:
Title:
PRESIDENT RIVERBOAT CASINO-NEW YORK, INC.
By: /s/ John S. Aylsworth
---------------------------------------
Name:
Title:
PRESIDENT CASINO NEW YORKER, INC.
By: /s/ John S. Aylsworth
---------------------------------------
Name:
Title:
PRC HOLDINGS CORPORATION
By: /s/ John S. Aylsworth
---------------------------------------
Name:
Title:
PRC MANAGEMENT, INC.
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<PAGE> 123
By: /s/ John S. Aylsworth
---------------------------------------
Name:
Title:
PRCX CORPORATION
By: /s/ John S. Aylsworth
------------------------------------
Name:
Title:
PRESIDENT RIVERBOAT CASINO-
PHILADELPHIA, INC.
By: /s/ John S. Aylsworth
---------------------------------------
Name:
Title:
VEGAS VEGAS, INC.
By: /s/ John S. Aylsworth
---------------------------------------
Name:
Title:
THE CONNELLY GROUP, L.P.
By: /s/ John S. Aylsworth
---------------------------------------
Name:
Title:
83
<PAGE> 124
EXHIBIT C
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF TRANSFER OF
SECURITIES
Re: 12% SENIOR NOTES DUE 2001
OF PRESIDENT CASINOS, INC.
This Certificate relates to $ principal amount of Securities held
----------
in book-entry or definitive form by
------------- -------------
---------------- (the "Transferor").
The Transferor:
--- has requested the Trustee by written order to deliver in exchange for
its beneficial interest in the Global Security held by the Depository a
Security or Securities in definitive, registered form of authorized
denominations in an aggregate principal amount equal to its beneficial
interest in such Global Security (or the portion thereof indicated above); or
--- has requested the Trustee by written order to exchange or register the
transfer of a Security or Securities.
In connection with such request and in respect of each such Security, the
Transferor does hereby certify that Transferor is familiar with the Indenture
relating to the above-captioned Securities and as provided in Section 2.06 of
such Indenture, the transfer of this Security does not require registration
under the Securities Act (as defined below) because:
--- Such Security is being acquired for the Transferor's own account (or
the account of the Party for whom the Transferor acts as nominee), without
transfer (in satisfaction of Section 2.06(a)(ii)(A) or Section 2.06(d)(i)(A)
of the Indenture).
--- Such Security is being transferred to a "qualified institutional buyer"
(as defined in Rule 144A under the Securities Act of 1933, as amended (the
"Securities Act")) in reliance on Rule 144A (in satisfaction of Section
2.06(a)(ii)(B), Section 2.06(b)(i) or Section 2.06(d)(i)(B) of the Indenture)
or pursuant to an exemption from registration in accordance with Regulation S
under the Securities Act (in satisfaction of Section 2.06(a)(ii)(B) or Section
2.06(d)(i)(B) of the Indenture).
--- Such Security is being transferred in accordance with Rule 144 under
the Securities Act, or pursuant to an effective registration statement under
the Securities Act (in satisfaction of Section 2.06(a)(ii)(B) or Section
2.06(d)(i)(B) of the Indenture.).
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<PAGE> 125
--- Such Security is being transferred in reliance on and in compliance
with an exemption from the registration requirements of the Securities Act,
other than Rule 144A, 144 or Regulation S under the Securities Act. An
opinion of counsel to the effect that such transfer does not require
registration under the Securities Act accompanies this Certificate (in
satisfaction of Section 2.06(a)(ii)(C) or Section 2.06(d)(i)(C) of the
Indenture).
-------------------------------------
[INSERT NAME OF TRANSFEROR]
By:
---------------------------------------
Date:
-------------------------------
EXHIBIT 99
CONTACT: James A. Zweifel
President Casinos, Inc.
St. Louis, Missouri 63102
314-622-3018
PRESIDENT CASINOS, INC.
REPURCHASES $25.0 MILLION OF SENIOR NOTES;
ISSUES $25.0 MILLION OF NEW SENIOR SECURED NOTES
TO FINANCE REPURCHASE
ST. LOUIS, MISSOURI, December 4, 1998 -- President Casinos, Inc. (OTC:PREZ)
announced today that it has repurchased $25 million of its 13% senior notes.
The repurchased notes will be used to satisfy the $25 million dollar principal
payment due September 15, 1999 on President's originally outstanding $100
million 13% senior notes. The repurchase was funded by the issuance of $25
million of new 12% notes. The new 12% notes have no mandatory redemption
obligation, mature on September 15, 2001, and are to be secured by mortgages
on two of the company's vessels, the "Admiral" and the "New Yorker", as well as
subsidiary guarantees.
James A. Zweifel, Executive Vice President and Chief Financial Officer stated,
"This strategic financial move is a real win for the company, as it satisfies
the September 1999 $25.0 million cash redemption requirement."
Libra Investments, Inc. acted as advisor to the Company on this transaction.
President Casinos, Inc. owns and operates riverboat and dockside gaming
facilities in Davenport, Iowa, Biloxi, Mississippi and downtown St. Louis,
Missouri near the base of the Gateway Arch.
# # #
