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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 13, 1996
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CASINO MAGIC CORP.
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(Exact name of registrant as specified in its charter)
MINNESOTA 0-20712 64-0817483
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
711 CASINO MAGIC DRIVE, BAY ST. LOUIS, MS 39520
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(Address of principal executive offices) (Zip Code)
(601) 467-9257
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(Registrant's telephone number, including area code)
NOT APPLICABLE
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(Former name, former address and former fiscal year,
if changed since last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
GENERAL
On May 13, 1996, a wholly-owned subsidiary of Casino Magic Corp. (the
"Company"), Jefferson Casino Corp., a Louisiana corporation ("Jefferson"),
acquired all of the outstanding capital stock of Crescent City Capital
Development Corporation, a Louisiana corporation. Immediately following the
acquisition, the name of Crescent City Capital Development Corporation was
changed to Casino Magic of Louisiana, Corp. For the purpose of the
discussion hereunder, Casino Magic of Louisiana, Corp. will be referred to
as "Crescent City".
Crescent City was a wholly-owned subsidiary of Capital Gaming
International., Inc. Crescent City obtained a gaming license from the State
of Louisiana and began gaming operations on a riverboat in mid-May 1995.
The riverboat was docked on the Mississippi River at New Orleans, Louisiana.
On July 26, 1995 Crescent City ceased gaming operations and sought
protection from its creditors by filing a petition under Chapter 11 of the
U.S. Bankruptcy Code in the United States Bankruptcy Court for the Eastern
District of Louisiana (Case No. 95-12735(TMB)). A plan of reorganization
(the "Plan") was developed, and was confirmed by the U.S. Bankruptcy Court
on April 29, 1996. The purchase of the outstanding capital stock of
Crescent City by Jefferson was effected as part of the Plan. In addition,
the purchase obligation was contingent upon the receipt of the approvals of
the Louisiana State Police and the Louisiana Gaming Commission of the change
of ownership of Crescent City to Jefferson, and the relocation of the gaming
license site from New Orleans to Bossier City, Louisiana. All such
approvals were obtained by April 30, 1996.
The original agreement to acquire Crescent City was entered into by
Jefferson and C-M of Louisiana, Inc., the latter being another wholly-owned
subsidiary of the Company. C-M of Louisiana, Inc. was the fee owner of
approximately 20 acres of land with 900 feet of shoreline on the Red River
in Bossier City, Louisiana (the "Bossier Property"). Another wholly-owned
subsidiary of the Company, Coastal Land of Florida, Inc., held a 99-year
lease on the Bossier Property. The Company had acquired C-M of Louisiana,
Inc. and Coastal Land of Florida, Inc. on October 26, 1995 in anticipation
of obtaining a gaming license and establish gaming operations at the Bossier
Property. Immediately prior to or as part of the acquisition of Crescent
City, the lease was canceled and C-M of Louisiana, Inc. was merged into
Jefferson. As a result, when the acquisition of Crescent City was
completed, Jefferson held all ownership interests in the Bossier Property,
and all of the capital stock of Crescent City.
When the acquisition of Crescent City was effected, Crescent City's assets
included the Crescent City Queen, a three deck self-powered riverboat upon
which Crescent City had conducted its gaming operations, Crescent City's
gaming license and the furniture, fixtures and gaming equipment located on
the Crescent City Queen. The Crescent City Queen is 450 feet long and 100
feet wide, and has 88,000 square feet of space, approximately 30,000 of
which is currently devoted to gaming activities. Gaming is conducted on the
first and second decks, which have approximately 18 foot interior ceilings.
The Crescent City Queen has a lobby area, restaurants, bars and
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS (CONTINUED).
entertainment facilities, a complete surveillance system, and other
ancillary and administrative facilities. The gaming equipment on the
Crescent City Queen consists of approximately 1150 slot machines and 60
table games. Crescent City had no employees at the time of the acquisition.
PURCHASE PRICE
In effecting the purchase of Crescent City, Jefferson paid $15,000,000 in
cash, and caused Crescent City to issue $35,000,000 in 11-1/2% Senior
Secured Notes (the "Notes"). The $15,000,000 was provided by the Company to
Jefferson from cash on hand. The cash and Notes were distributed in
accordance with the Plan to satisfy obligations to the creditors of Crescent
City. Upon the acquisition, aside from the issuance of the Notes, the only
liability of Crescent City was approximately $6,500,000 owed to two
creditors that supplied slot machines and other gaming equipment which is
located on the Crescent City Queen and in which the two creditors had a
security interest. As part of the Plan, Jefferson guaranteed the payment of
the $6,500,000 amount.
NOTES AND INDENTURE
The Notes were issued under an Indenture dated May 13, 1996 (the
"Indenture"), between Crescent City as the Issuer, Jefferson as the
Guarantor and First Trust National Association, St. Paul, Minnesota, as the
"Indenture Trustee." The Indenture Trustee also acts as the "Paying Agent"
and registrar for the Notes. The Notes accrue interest at the rate of 11-
1/2% per annum, compounded semi-annually, and are due three years following
the "Commencement Date" which is the earlier of November 9, 1996, or the
date that the Company's casino in Bossier City opens for gaming operations.
The Notes will also come due as a result of an adverse state action as
defined in the Indenture. Interest is payable quarterly on the 15th day
following each fiscal quarter of the Company.
The Notes are collateralized by a first security interest in the Crescent
City Queen which is evidenced by a ship's mortgage, a first security
interest in substantially all other assets of Crescent City, except for
furniture, fixtures and equipment on hand as of the date of the Indenture,
and cash arising from operations. The Notes are guaranteed by Jefferson,
and Jefferson's guarantee is secured by a first security interest in the
Bossier Property evidenced by a mortgage, the outstanding capital stock of
Crescent City and substantially all other assets of Jefferson, except for
cash received as equity contributions from the Company and as the proceeds
from specified indebtedness. So long as neither Crescent City nor Jefferson
is in default under the Indenture, Crescent City is permitted under the
Indenture to sell or lease the Crescent City Queen, and utilize the proceeds
thereof to acquire, lease or construct a substitute boat which can be used
in Bossier City. In addition, Crescent City may use any excess proceeds
received from such sale to make capital improvements to the substitute boat
or the Bossier Property. If a substitute boat is not acquired or leased by
Crescent City, or construction of a substitute boat is not commenced within
90 days after the Crescent City Queen is sold or leased, the proceeds from
such sale or lease will be deemed to be Excess Cash Flow (as described
below) distributable in partial redemption of the Notes.
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS (CONTINUED).
After the principal balance of the Notes equals or is less than $17,500,000,
all security interests in the property of Crescent City and Jefferson will
be released, except for a ship's mortgage on the Crescent City Queen or any
substitute boat used by Crescent City at the Bossier Property.
On a quarterly basis, along with each quarterly interest payment, Crescent
City must deliver to the Indenture Trustee the "Excess Cash Flow" of
Crescent City and Jefferson generated during the fiscal quarter which
precedes the fiscal quarter for which the interest payment is being made.
The requirement to deliver Excess Cash flow ends on the second quarterly
interest payment date which follows the date the aggregate principal amount
of the Notes has been reduced to $17,500,000. Excess Cash Flow is defined
under the Indenture, and in general, includes the positive cash flow of
Crescent City combined with a portion of the cash flow of Jefferson, less
certain permitted capital expenditures, scheduled principal payments on
identified debt (including the Notes), and an aggregate of $5,000,000
(subject to specified reductions). The Indenture Trustee is required to
distribute the Excess Cash Flow held by the Indenture Trustee on a pro rata
basis to each of the holders of the Notes upon presentment of each such Note
to the Indenture Trustee. Such distributions are to be made along with
regularly scheduled interest payments, so long as the aggregate Excess Cash
Flow to be paid on any interest payment date exceeds $100,000.
Upon notice to the holders of the Notes establishing a redemption date at
least 30 days, but not more than 45 days, after the providing of such
notice, Crescent City may fully or partially redeem all or a portion of the
Notes. If funds sufficient to effect such redemption are deposited with the
Paying agent as prescribed in the Indenture, Notes (or the portion thereof)
called for redemption will cease to bear interest. Any Note called for
redemption must be submitted to the Paying Agent in order for the holder
thereof to receive the redemption payment. Notes may also be called for
redemption as ordered by any agency or other authority of the United States,
any foreign country in which Crescent City is conducting business, any
tribal government, any state or other political subdivision, having
jurisdiction relating to a gaming license, or where, in the Judgment of the
Board of Directors of Crescent City, Crescent City's ability to obtain or
retain a gaming license would be impaired because the holder or holders of
the Notes fails to obtain a finding of suitability or other qualification
under applicable gaming laws, after having been required to do so by
applicable gaming authorities.
Notes redeemed within one year following the Commencement Date are
redeemable at face value. Notes redeemed during the second and third years
following the Commencement Date require the payment of a premium over the
face amount of the Notes. The premium increases linearly over that two year
period from 0% to 20%, prorated daily over the 730 day period.
Notwithstanding the foregoing, Notes redeemed as the result of the failure
of the holder thereof to obtain a finding of suitability, as discussed
above, will only be redeemed at face value without the payment of any
premium. Notes paid at maturity carry no premium.
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS (CONTINUED).
Crescent City and Jefferson are obligated to maintain adequate comprehensive
general liability insurance, and insurance covering any loss sustained as a
result of damage to or destruction of the Crescent City Queen or any boat
acquired in substitution thereof.
Crescent City is required annually to obtain an opinion of legal counsel
that all necessary actions have been taken to maintain the perfection of all
security interests in the collateral for the Notes, and a certificate of an
officer of Crescent City as to whether Crescent City and Jefferson have
observed and fulfilled their obligations under the Indenture. Crescent City
is also required to provide the holders of the Notes with consolidated
quarterly and annual financial statements of Crescent City and Jefferson.
Under the Indenture, neither Crescent City nor Jefferson will be permitted
to incur any indebtedness until after the aggregate principal amount under
the Note equals or is less than $17,500,000, except for certain specified
indebtedness, including non-recourse indebtedness incurred in the
acquisition of furniture, fixtures or equipment to be used in the operation
of the Bossier City casino, and indebtedness the proceeds of which are used
to acquire a substitute boat.
FUTURE PLANS AND EVENTS
The Company plans to cause Crescent City to open a gaming facility at the
Bossier Property under its transferred Louisiana gaming license using the
Casino Magic trade name. Under the license in Bossier City, gaming may be
conducted on a boat which remains dockside. The Bossier Property is
adjacent to an interchange which provides access from and to Interstate
Highway 20, and which is approximately 160 miles east of Dallas, Texas. The
Company believes that a substantial majority of its customers will come from
the Dallas/Fort Worth metropolitan area.
Because the Crescent City Queen is too wide to be used in Bossier City, the
Company will be required to obtain a smaller gaming boat. The Company plans
to sell or exchange the Crescent City Queen for a suitable boat, or to
obtain sufficient financing to acquire a new boat, and retain the Crescent
City Queen for use on the Ohio River in Crawford County, Indiana, where the
Company is attempting to obtain a gaming license. There is no assurance
that the additional financing will be available, or whether the Company will
obtain a license to engage in gaming operations in Crawford County, Indiana.
The Company anticipates that a determination as to whether it will receive a
gaming license for Crawford County, Indiana, will be made in July 1996.
In addition to the investments made in the Bossier Property and in the
acquisition of Crescent City, the Company estimates that it will cost
approximately $15,000,000 to develop and open a gaming casino at Bossier
City. This amount includes the construction of a land-based facility which
would serve as the entrance to the dockside gaming casino, contain
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS (CONTINUED).
entertainment facilities, storage facilities and administrative offices, and
provide both surface and ramp parking for 1,500 cars. The Company
anticipates that the Bossier City casino will have approximately 1,000 slot
machines and 60 table games. Future development plans include construction
of a 400-room hotel with approximately 60,000 square feet of entertainment
and convention space at a cost of $45,000,000. All development is
contingent upon obtaining adequate capital. A portion of such capital may
be supplied by a partner in the Bossier City gaming operation. There is no
assurance that such capital will be available, or that a suitable partner
will be found.
Referenda are scheduled to be held on November 11, 1996 in all Louisiana
parishes where gaming is being conducted, to determine if certain forms of
gaming should be allowed to continue in each of those parishes. There is no
assurance that a gaming referendum in the parish where the Company intends
to conduct its Bossier City operations will permit gaming to continue. If
the voters in the referendum determine to discontinue riverboat gaming in
Bossier City, the Crescent City gaming license would not be renewable, and
will terminate in approximately four years and 10 months after gaming
operations are commenced. Under that circumstance, the Company will not
engage in the planned construction of a hotel and convention center at the
Bossier Property.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of businesses acquired.
Based on Rule 11-01(d) of Regulation S-X and its guidance in
evaluating if a "business" has been acquired, the Company has determined
that this transaction has not resulted in the acquisition of a "business".
Thus, it is not required that financial statements for Crescent City or pro
forma financial information, as generally required pursuant to Article 11 of
Regulation S-X, be included in this Form 8-K.
(b) Pro forma financial information.
See Item 7.(a) above.
(c) Exhibits
2.1. Second Amended Chapter 11 Plan of Reorganization of
Crescent City Capital Development Corporation. In Re: Crescent City Capital
Development Corporation, Case No. 95-12735 (TMB) in the United States
Bankruptcy Court for the Eastern District of Louisiana filed on March 15,
1996.
2.2. Order Confirming Plan. In Re: Crescent City Capital
Development Corporation, Case No. 95-12735 (TMB) in the United States
Bankruptcy Court for the Eastern District of Louisiana docketed on April 29,
1996.
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4. Indenture dated as of May 13, 1996, $35,000,000 11-1/2%
Senior Secured Notes due 1999.
10.1.(1) Stock Purchase Agreement by and between Casino Magic
Corp., Jefferson Casino Corporation, C-M of Louisiana, Inc., Capital Gaming
International, Inc. and Crescent City Capital Development Corporation dated
February 21, 1996.
10.2. Mortgage, Assignment of Leases and Rents and Security
Agreement Securing Future Advances by C-M of Louisiana, Inc. dated May 11,
1996.
10.3. Amendment of Mortgage, Assignment of Leases and Rents and
Security Agreement Securing Future Advances by Jefferson Casino and First
National Association, as Indenture Trustee dated May 13, 1996.
10.4. Pledge and Security Agreement dated as of May 13, 1996
among Casino Magic of Louisiana, Corp. and Jefferson Casino Corporation, as
Grantors and First National Association, as Agent for the Benefit of the
Holders of 11-1/2% Senior Secured Notes due 1999.
10.5. First Preferred Ship Mortgage dated May 13, 1996 recorded
with the National Vessel Documentation Center in Book 96-25 Page/Inst 90.
Received by the USCG MS @ New Orleans 96 May 13 PM 3:52.
10.6. Assumption Agreement dated May 13, 1996 entered into among
Casino Magic Corp., Jefferson Casino Corp., Capital Gaming International,
Inc. and Crescent City Capital Development Corp.
10.7. Promissory Note for the sum of $1,975,000 dated May 13,
1996.
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(1) Incorporated by reference to the Registrant's Annual Report on
Form 10-K for the fiscal year ended December 31, 1995.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CASINO MAGIC CORP.
Registrant
Date: May 24, 1996 /s/ JAMES E. ERNST
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James E. Ernst, President
and Chief Executive Officer
Date: May 24, 1996 /s/ JAY S. OSMAN
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Jay S. Osman, Chief Financial Officer
and Treasurer (principal financial
and accounting officer)
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IN THE UNITED STATES BANKRUPTCY COURT
FOR THE EASTERN DISTRICT OF LOUISIANA
In re )
)
CRESCENT CITY CAPITAL ) Case No. 95-12735 (TMB)
DEVELOPMENT CORPORATION, )
) (Chapter 11)
Debtor. )
SECOND AMENDED CHAPTER 11 PLAN OF REORGANIZATION
OF CRESCENT CITY CAPITAL DEVELOPMENT CORPORATION
BRONFIN & HELLER, LLC
Jan M. Hayden (La. Bar #6672)
Robyn J. Spalter (La. Bar #21116)
650 Poydras Street, Suite 2500
New Orleans, Louisiana 70130-
6101
(504) 568-1888
Attorneys for Debtor
Dated: March 15, 1996
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE EASTERN DISTRICT OF LOUISIANA
In re )
)
CRESCENT CITY CAPITAL ) Case No. 95-12735 (TMB)
DEVELOPMENT CORPORATION, )
) (Chapter 11)
Debtor. )
SECOND AMENDED CHAPTER 11 PLAN OF REORGANIZATION
OF CRESCENT CITY CAPITAL DEVELOPMENT CORPORATION
The Debtor, Crescent City Capital Development Corporation ("Debtor" or
"Crescent City") proposes the following plan of reorganization pursuant to
chapter 11 of the Bankruptcy Code. This plan amends and supersedes all
prior plans proposed by the Debtor in this case.
ARTICLE I
DEFINITIONS
A. Defined Terms. As used herein, all terms shall have the meanings as
defined in the United States Bankruptcy Code except as specifically modified
herein or if such meaning shall be wholly inconsistent with the use of such
term in this plan. The following terms shall have the respective meanings
specified below (such meaning to be equally applicable to both the singular
and the plural, and masculine and feminine forms of the terms defined):
1.1. Administrative Reserve means the reserve to be established and
maintained by Liquidating Trust in a segregated interest-bearing account
with a major money center bank into which Liquidating Trust will, from time
to time, deposit Cash to, among other things, fund the operating expenses of
Liquidating Trust, as provided in Article VI(A) of the Plan.
1.2. Allowance Date means the date on which a Claim becomes an Allowed
Claim.
1.3. Amended By-Laws means the by-laws of Reorganized Crescent City, as
amended and restated as of the Effective Date, which shall be a Plan
Document.
1.4. Amended Certificate of Incorporation means the certificate of
incorporation of Reorganized Crescent City, as amended and restated as of
the Effective Date, which shall be a Plan Document.
1.5. Avoidance Action Recoveries means any recoveries by the Debtor or
Liquidating Trust of money, property, or other value of any kind whatsoever
(including reduction or disallowance of a claim amount), on account of
rights of recovery held by the Debtor under 11 U.S.C. Section 547 and
applies to rights of recovery of transfers made directly by any affiliates
of the debtor, including but not limited to River City Joint Venture.
1.6. Avoidance Action Rights means any rights of recovery by the Debtor or
Liquidating Trust of money, property, or other value of any kind whatsoever
(including reduction or disallowance of a claim amount), on account of
rights of recovery, held by Debtor, under 11 U.S.C. Section 547 and applies
to rights of recovery of preferential transfers made directly by the debtor
and by any affiliate of the debtor, including but not limited to River City
Joint Venture.
1.7. Bally & IGT Claims means all Claims of Bally Gaming, Inc. and
International Game Technology Corp. or their respective successors, assigns,
affiliates or agents arising in connection with the acquisition by the
Debtor of certain slot machines and other coin-operated gaming devices to be
operated on the Riverboat.
1.8. Bankruptcy Court means the United States Bankruptcy Court for the
Eastern District of Louisiana having jurisdiction over the Reorganization
Case and, to the extent of any reference made pursuant to 28 U.S.C. Sec.
157, the unit of such District Court pursuant to 28 U.S.C. Sec. 151.
1.9. Bankruptcy Case means that case entitled In re Crescent City Capital
Development Corporation currently pending in the Eastern District Court of
Louisiana and bearing case no. 95-12735(TMB).
1.10. Bondholder means the holder of a Secured Note or, in the alternative,
the duly authorized agent of such holder.
1.11. Bondholder Claim means the claim filed by the Indenture Trustee, on
behalf of all Bondholders, for all amounts due under the Debtor's guarantee
of amounts due under the Indenture, which Claim shall, upon the Effective
Date, be deemed an Allowed Claim for $142 million.
1.12. Business Day means any day other than Saturday, Sunday or "legal
holiday" as such term is defined in Bankruptcy Rule 9006(a).
1.13. Cash means lawful currency of the United States of America.
1.14. Cash Distribution Date means (a) the forty fifth (45th) day after the
Effective Date, and (b) the twentieth (20th) day after the end of the first
full fiscal quarter after the Effective Date and the twentieth (20th) day
after the end of each fiscal quarter thereafter, subject, however, to the
limitations set forth in Article VIII(A)(4) and any other provisions of the
Plan.
1.15. CGII means Capital Gaming International, Inc., a New Jersey
corporation and the Debtor's parent corporation.
1.16. CGII Claim means all Claims (other than DIP Financing Claims or other
Administrative Claims) against the Debtor held by CGII.
1.17. Closing means the closing of the transaction contemplated by the
Magic Agreement.
1.18. Commencement Date means July 26, 1995, the date on which an
involuntary Reorganization Case was commenced against the Debtor.
1.19. Confirmation Date means the date on which the Clerk of the Bankruptcy
Court enters the Confirmation Order on its docket.
1.20. Convenience Claim means any General Unsecured Claim against the
Debtor that is equal to or less than $5,000, or those Claims in excess of
$5,000 as to which the holder thereof elects, in writing on its ballot to
accept or reject the Plan or otherwise in writing on or before the Effective
Date, to reduce such Claim to $5,000 in accordance with Article III(E)(Class
3A)(4) concerning treatment of General Unsecured Claims. For purposes of
defining a Convenience Claim and qualifying for the treatment afforded
holders of Convenience Claims, all General Unsecured Claims of a single
holder shall be aggregated, deemed, and treated as a single Claim; provided,
however, those holders of General Unsecured Claims who acquired such General
Unsecured Claims from different entities shall have their General Unsecured
Claims aggregated only to the extent such Claims would have been aggregated
in the hands of the original holder.
1.21. Creditors' Committee means the Statutory Committee of Unsecured
Creditors appointed in the Bankruptcy Case pursuant to Section 1102(a) of
the Bankruptcy Code, as presently or hereafter constituted.
1.22. Debtor means Crescent City Capital Development Corp., a Louisiana
corporation.
1.23. DIP Financing Claims means all Administrative Claims arising in
connection with money borrowed or credit incurred by the Debtor under Sec.
364 of the Bankruptcy Code from CGII, Purchaser, Mirage or any other Person.
1.24. Disputed Claim means a Claim (or portion thereof) as to which: (a) a
proof of Claim has been filed, or deemed filed, under applicable law or
order of the Bankruptcy Court, with the Bankruptcy Court; (b) an objection
has been timely filed; and (c) such objection has not been: (i) withdrawn,
(ii) overruled or denied in whole by a Final Order, or (iii) granted in
whole or part by a Final Order: provided, however, the Bankruptcy Court may
estimate a Disputed Claim for purposes of allowance pursuant to Section
502(c) of the Bankruptcy Code; provided also however, that any claim
expressly allowed under this Plan cannot be a Disputed Claim or the subject
of an objection. For purposes of the Plan, a Claim shall be considered a
Disputed Claim to the extent it is disputed if: (x) before the time that an
objection has been or may be filed, the amount of the Claim specified in the
Proof of Claim exceeds the amount of any corresponding Claim scheduled by
the Debtor in the Schedules: (y) there is a dispute as to classification of
the Claim; or (z) the Claim is unliquidated.
1.25. Disputed Claims Reserve means the reserve established pursuant to
Article VI(B) in an amount equal to the sum of (i) the aggregate of all
Disputed Designated Administrative Claims, Disputed Priority Claims,
Disputed Priority Tax Claims, and Disputed Secured Claims, (ii) the amount
of Cash that would have been distributable, from time to time, under the
Plan on account of Disputed General Unsecured Claims and Convenience Claims
had such Claims been Allowed Claims, and (iii) any net earnings in respect
thereof.
1.26. Effective Date means the date that the Plan is consummated which
shall be simultaneous with the Closing.
1.27. Fee Request means any Administrative Claim for compensation or
reimbursement of expenses pursuant to Sections 327, 328, 329, 330, 331, or
503(b) of the Bankruptcy Code in connection with an application made to the
Bankruptcy Court in the Bankruptcy Case.
1.28. Final Order means an order or judgment of the Bankruptcy Court or
other court of competent jurisdiction which may hear appeals from the
Bankruptcy Court which having not been reversed, modified or amended, and
not being stayed, and the time to appeal from which or to seek review or
rehearing or petition for certiorari from which having expired without an
appeal or application for review or rehearing having been filed, has become
final and is in full force and effect.
1.29. General Unsecured Claim means any Allowed Claim against the Debtor,
other than a Bondholder Claim, Secured Claim, Administrative Claim, Priority
Claim, Priority Tax Claim, CGII Claim, Subordinated Unsecured Claim or
Convenience Claim.
1.30. Grand Palais means Grand Palais Riverboat, Inc., a Louisiana
corporation.
1.31. Indenture means the Indenture governing the Secured Notes, dated
February 17, 1994, as amended, between CGII, as issuer, the guarantors
thereunder, and the Indenture Trustee.
1.32. Indenture Trustee means First Trust National Association, as
indenture trustee under the Indenture, and any successor or assign thereof.
1.33. Institutional Note Holders' Steering Committee means that committee
consisting of Bondholders who hold a substantial principal amount of the
Secured Notes and have filed, in this case, a statement pursuant to
Bankruptcy Rule 2019(a).
1.34. Interest means, except as expressly otherwise specified in the Plan,
the interest or interest equivalent payable on any Claim calculated as
provided for in any agreement concerning such Claim which contains an
enforceable provision for the payment of interest, or, in the absence of any
such provision, at the Legal Rate.
1.35. Legal Rate means the rate of interest on outstanding judgments of the
courts of the State of Louisiana as prescribed by Louisiana Civil Code
article 2924.
1.36. License means the gaming license issued by the Louisiana State Gaming
Commission on or about April 4, 1994 in favor of the Debtor.
1.37. Liquidating Trustees means the Persons selected by the Creditors'
Committee and approved by the Bankruptcy Court who shall be the co-trustees
of Liquidating Trust.
1.38. Liquidating Trust means Crescent City Liquidating Trust, a New Jersey
trust or trust of such state as the Debtor and the Unsecured Creditors
Committee shall select, which shall be established as of the Effective Date,
for the single purpose of implementing and administering the Plan in
accordance with Section 1142(a) of the Bankruptcy Code.
1.39. Magic Agreement means the Agreement by and between CGII, the Debtor,
Casino Magic Corporation, Jefferson Casino Corporation and C-M of Louisiana,
Inc., dated February 21, 1996, pursuant to which Casino Magic Corporation,
through Jefferson Casino Corporation or another of its wholly owned
subsidiaries to which the Agreement is assigned, has agreed to purchase the
New Common Stock in conjunction with the consummation of the Plan, a copy of
which is attached hereto as Exhibit "1".
1.40. Magic Cash Consideration, is estimated to be $15,000,000.00, less the
Magic Deferred Cash.
1.41. Magic Closing Cash means Magic Cash Consideration less the balance of
principal and interest due Magic at closing on the Magic DIP Financing
Claim, estimated at $1,000,000.00, and to be retained by Magic from the
Magic Cash Consideration and applied to pay its DIP Financing Claim.
1.42. Magic Consideration means the Magic Cash Consideration, the Magic
Non-cash Consideration, and the Magic Deferred Cash.
1.43. Magic Deferred Cash means the Cash, in the amount of $500,000.00, to
be held in escrow, pursuant to the Magic Agreement, for a period of one (1)
year after Closing as security for the Debtor's and CGII's indemnities under
the Magic Agreement, and which, upon the expiration of the one (1) year
escrow period, the amount in the escrow, if any, will be disbursed to CGII
in accordance with Paragraph 3 of the Magic Agreement and this Plan.
1.44. Magic DIP Financing Claim shall mean that Claim of Purchaser arising
out of money borrowed or credit incurred by Debtor under Sec.364 of the
Bankruptcy Code.
1.45. Magic Non-Cash Consideration means all non-cash consideration to be
delivered to, or for the benefit of, the Debtor pursuant to the Magic
Agreement, including without limitation, Magic's obligation to assume or
otherwise satisfy the Bally and IGT Claims (up to an aggregate total not to
exceed $6,500,000.00) and the Magic Notes.
1.46. Magic Notes means the $35,000,000.00 of notes which shall be issued
by Reorganized Crescent City and guaranteed by Jefferson Casino Corporation
and C-M of Louisiana, Inc., each a wholly owned subsidiary of Casino Magic
Corporation, under the Mirage Indenture.
1.47. Mirage shall mean Mirage Resorts, Inc. or any of its affiliates,
subsidiaries, related entities, successors and assigns, and their respective
officers, directors and/or agents.
1.48. Mirage Agreement shall mean the Agreement among CGII, the Debtor and
Mirage pursuant to which Mirage was to purchase the New Common Stock, and
which Agreement formed the basis for Debtor's First Amended Plan of
Reorganization.
1.49. Mirage Claim means any and all claims which the Debtor or debtor in
possession may have, whether arising prior to or after the filing of the
petition for relief herein against Mirage, including but not limited to any
rights of setoff or defenses to the payments of any claims asserted by
Mirage against Debtor or its property.
1.50. Magic Indenture shall mean the Indenture governing the Magic Notes,
dated as of the Effective Date, between Reorganized Crescent City, as
issuer, and the guarantors, thereunder, in substantially the same form as
attached hereto as Exhibit "2".
1.51. Mirage Recovery shall mean any and all monies recovered, paid,
credited, set off or otherwise received by the Debtor , debtor-in-possession
or the Liquidating Trust on behalf of the Mirage Claim.
1.52. Net Cash Proceeds means only those Net Proceeds received in Cash.
1.53. Net Proceeds means all Cash and other property received upon the
sale, exchange or other disposition of any property, less all direct and
indirect costs incurred in connection with such disposition, including,
without limitation, fees, commissions, legal fees and expenses.
1.54. New Common Stock means all authorized common stock of Reorganized
Crescent City to be issued on the Effective Date to the Purchaser (which
shall constitute all the outstanding equity interests in Reorganized
Crescent City), pursuant to the Restated Certificate of Incorporation and
Article V(A) and XV of the Plan.
1.55. Plan means this plan under chapter 11 of the Bankruptcy Code, as the
same may be altered, amended, or modified from time to time.
1.56. Plan Document(s) means the document(s) that aid in effecting the Plan
and that are specifically identified herein as Plan Documents or which, in
the view of the Debtor, become necessary or appropriate to effectuate the
Plan, which documents, to the extent feasible, shall be filed on or prior to
the Confirmation Hearing.
1.57. Priority Claim means any Claim to the extent entitled to priority in
payment under Sections 507(a)(2)-(7) or 507(a)(9) of the Bankruptcy Code.
1.58. Priority Tax Claim means any Claim to the extent entitled to priority
in payment under Section 507(a)(8) of the Bankruptcy Code.
1.59. Pro Rata means a number (expressed as a percentage) equal to the
proportion that an Allowed Claim in a particular Class bears to the
aggregate amount of Allowed Claims in such Class as of the date of
determination. Solely for the purpose of calculating the amount to be
distributed to holders of Allowed General Unsecured Claims and reserved for
the holders of Disputed General Unsecured Claims on a Cash Distribution
Date, Liquidating Trust shall treat each Disputed General Unsecured Claim as
an Allowed Claim in the amount of such Disputed General Unsecured Claim
unless such of Disputed General Unsecured Claims have been estimated by the
Bankruptcy Court.
1.60. Purchaser means Casino Magic Corporation, through Jefferson Casino
Corporation or another of its wholly owned subsidiaries to which the Magic
Agreement is assigned.
1.61. Reallocation Date means the tenth (10) Business Day prior to any Cash
Distribution Date.
1.62. Reorganized Crescent City means the Debtor from and after the
Effective Date.
1.63. Residual Property means all of the property of the Debtor's estate
immediately prior to Closing, other than the Riverboat Assets. "Residual
Property" includes, without limitation, the Debtor's interest in the River
City JV or property previously owned or held by River City JV, all avoidance
actions specified in Article V(G) and other causes of action, claims of the
Debtor against Grand Palais and its affiliates, all contract rights of the
Debtor including its rights under the Magic Agreement, the Mirage Claim and
the Mirage Recovery, provided however, Residual Property does not include
the Magic Consideration, which shall be treated in accordance with the Plan.
1.64. Riverboat means the M/V Crescent City Queen, the riverboat owned by
the Debtor.
1.65. Riverboat Assets means, collectively, the Riverboat, the License,
certain slot machines and other coin-operated gaming devices acquired by the
Debtor from Bally Gaming, Inc. and International Game Technology Corp., and
such other items of personal property used in connection with the operation
of the Riverboat as may be agreed upon between the Debtor and the Purchaser,
and as evidenced on the inventory list attached to the Magic Agreement as
Exhibit "1", specifically excepting (i) any equipment licensing or other
agreements provided by Gaming Systems International and (ii) the Crescent
City Capital Escrow, as hereinafter defined, all monies therein and all
proceeds (in whatever form) thereof.
1.66. River City JV means the River City Joint Venture, a Louisiana general
partnership, comprised of the Debtor and Grand Palais, each as general
partner.
1.67. Schedules means the schedules of assets and liabilities filed by the
Debtor with the Bankruptcy Court in accordance with Section 521(1) of the
Bankruptcy Code, as amended from time to time.
1.68. Secured Notes means, collectively, the 111/2 Secured Notes due 2001,
issued by CGII pursuant to the Indenture.
1.69. Settlement Amount means the difference, in Cash, between the Magic
Closing Cash and $6,750,000.00 plus the difference, in Magic Notes, between
the Magic Notes and $28,000,000 of Magic Notes; the Settlement Amount is to
be paid by the Indenture Trustee from the Magic Consideration to the
Liquidating Trust.
1.70. Subordinated Unsecured Claim means: (a) an unsecured Claim against
the Debtor, proof of which is tardily filed under Section 501(a) of the
Bankruptcy Code; (b) any Claim against the Debtor whether a Secured Claim or
Unsecured Claim, for any fine, penalty or forfeiture, or for multiple
exemplary or punitive damages to the extent such fine, penalty, forfeiture,
or damages are not compensation for actual pecuniary loss suffered by the
holder of such Claim; (c) any Claim against the Debtor arising from
rescission of a purchase or sale of a security of the Debtor or of an
affiliate of the Debtor, for damages arising from the purchase or sale of
such security, or for reimbursement or contribution allowed under Section
502 of the Bankruptcy Code on account of such a Claim; and (d) any Claim
against the Debtor subordinated under Section 510 of the Bankruptcy Code or
under other applicable law to General Unsecured Claims by order of the
Bankruptcy Court.
1.71. Total [ ] Claims means, with respect to a particular Class of
Claims, the aggregate dollar amount of (a) all Allowed Claims, plus (b) the
Face Amount of all Disputed Claims, in such Class.
1.72. Voting Deadline means the date by which holders of impaired Claims
receiving distributions under the Plan must vote to accept or reject the
Plan.
B. Other Terms. The words "herein," "hereof," "hereto," "hereunder," and
others of similar inference refer to the Plan as a whole and not to any
particular section, subsection, or clause contained in the Plan unless
otherwise specified herein. A term used herein or elsewhere in the Plan
that is not defined herein shall have the meaning ascribed to that term, if
any, in the Bankruptcy Code or Bankruptcy Rules. The word "including" shall
mean including, without limitation. The headings in the Plan are only for
convenience of reference and shall not limit or otherwise affect the
provisions of the Plan.
C. Exhibits. All exhibits to the Plan are incorporated into and are a part
of the Plan as if set forth in full herein.
ARTICLE II
GENERAL DESCRIPTION OF THE PLAN
A. The Plan Generally. Under the Plan, the Debtor will sell the Riverboat
Assets (by reissuing its common stock) to the Purchaser for the Magic
Consideration. The Magic Closing Cash and the Magic Notes will be paid to
the Indenture Trustee, on behalf of the Bondholders, who claims a perfected
security interest in such proceeds. Upon receipt of the Magic Closing Cash
and the Magic Notes, the Indenture Trustee shall pay the Settlement Amount
to Liquidating Trust in accordance with Article II(B)(1) below, to be
distributed as provided herein. In addition, all of the Residual Property
will be transferred to Liquidating Trust and liquidated or otherwise
disposed of for the benefit of Debtor's Class 3A Creditors in accordance
with the terms of the Plan.
B. Payment of Settlement Amount.
1. Payment of Magic Closing Cash. Upon receipt of the Magic Closing Cash,
the Indenture Trustee, on behalf of the Bondholders, shall retain the sum of
$6,750,000.00 for distribution to Bondholders pursuant to the terms of the
Indenture and shall pay the remaining balance of the Magic Closing Cash
(estimated to be $6,750,000.00 less any amount by which the total balance of
principal and interest due to pay Magic's DIP Financing Claims and/or any
other DIP Financing Claims, excluding the DIP Financing Claim of Mirage, in
full, exceeds $1,000,000.00) to Liquidating Trust to be distributed and/or
reserved for Disputed Claims in accordance with the terms of this Plan.
2. Payment of Magic Notes. Upon receipt of the Magic Notes, the Indenture
Trustee, on behalf of the Bondholders, shall retain $28,000,000.00 of the
Magic Notes, for distribution to the Bondholders in accord with the
Indenture and shall assign the remaining $7,000,000.00 of Magic Notes to the
Liquidating Trust in accordance with the terms of this Plan.
ARTICLE III
CLASSIFICATION AND TREATMENT OF CLAIMS AND EQUITY INTERESTS
A. Summary. The categories of Claims and Equity Interests listed below
classify Claims and Equity Interests for all purposes, including voting,
confirmation, and distribution pursuant to the Plan.
CLASS STATUS
Class 1: Bondholder Claim Impaired - entitled to vote
Class 2: Secured Claims Impaired - entitled to vote
Class 3A: General Unsecured Claims Impaired - entitled to vote
Class 3B: Convenience Claims Impaired - entitled to vote
Class 3C: CGII Claims Impaired - entitled to vote
Class 4: Subordinated Unsecured Claims Impaired - deemed to reject
Class 5: Common Stock Impaired - deemed to reject
Class 6: Mirage Administrative/
Secured Claim Unimpaired - not entitled to vote
B. Administrative Claims. Subject to the applicable bar date provisions
contained in Article X(B), each holder of an Allowed Administrative Claim
shall be paid on account of such Claim in full, in Cash, from the
Liquidating Trust, on the later of: (a) the Effective Date (or as soon
thereafter as practicable), or (b) the first Cash Distribution Date
immediately following the date on which such Administrative Claim becomes an
Allowed Claim, except to the extent that the holder of an Allowed
Administrative Claim agrees to a different treatment; provided, however,
that Administrative Claims that are Allowed Claims representing obligations
incurred in the ordinary course of business by the Debtor will be paid by
Liquidating Trust when due in the ordinary course of business; and, provided
further, however, that Administrative Claims for payment of compensation or
reimbursement of expenses pursuant to Sections 330, 331 and 503(b) of the
Bankruptcy Code shall be paid within (3) Business Days of the entry of an
order by the Bankruptcy Court authorizing the payment of such fees and
expenses. Payments to the holders of the Administrative Claims shall be
made from the Net Cash Proceeds of one or more of the following sources, in
the following order of priority; the Settlement Amount and the Residual
Property.
C. Priority Claims. Each holder of an Allowed Priority Claim shall be paid
on account of such Claim in full, in Cash, from the Liquidating Trust, on
the later of (a) the Effective Date (or as soon thereafter as is
practicable), or (b) the first Cash Distribution Date immediately following
the date on which such Priority Claim becomes an Allowed Claim, or,
alternatively, upon such other terms as may be agreed upon by and between
the holder of such Claim and the Debtor or Liquidating Trust, as the case
may be. Payments to the holders of the Priority Claims shall be made from
the Net Cash Proceeds of one or more of the following sources, in the
following order of priority; the Settlement Amount and the Residual
Property.
D. Priority Tax Claims. Each holder of an Allowed Priority Tax Claim shall
be paid on account of such Claim in full, in Cash, from the Liquidating
Trust, on the later of (a) the Effective Date (or as soon thereafter as is
practicable), or (b) the first Cash Distribution Date immediately following
the date on which such Priority Tax Claim becomes an Allowed Claim, or,
alternatively, upon such other terms as may be agreed upon by and between
the holder of such Claim and the Debtor or Liquidating Trust, as the case
may be. Payments to the holders of the Priority Tax Claims shall be made
from the Net Cash Proceeds of one or more of the following sources, in the
following order of priority, the Settlement Amount and the Residual
Property.
E. Classification and Treatment. The Allowed Claims against, and Equity
Interests in, the Debtor, other than Administrative Claims, Priority Claims,
and Priority Tax Claims, shall be classified and receive the treatment
specified below.
Class 1:
1. Classification: Class 1 consists of the Bondholder Claim.
2. Allowance of Bondholder Claim: On the Effective Date, the Bondholder
Claim shall be deemed an Allowed Class 1 Claim in the amount of $142
million. The Bondholder Claim shall not, after the Effective Date, be
subject to, or the subject of, any objection, claim, counterclaim, set off,
defense, action or proceeding by the Debtor, Reorganized Crescent City, any
statutory committee, or any other party in interest, whether in law or
equity. To the extent any such objection, action or proceeding is pending
on or after the Effective Date, such action, objection or proceeding shall
be deemed withdrawn and the Bondholders may take such steps as they deem
appropriate to cause the Bankruptcy Court's records to reflect such
withdrawal (including, without limitation, seeking ex parte relief).
3. Treatment: As provided in Article II(B) of the Plan, upon receipt of
the Magic Closing Cash and the Magic Notes, the Indenture Trustee, on behalf
of the Bondholders, shall retain (i) Cash, in the amount of $6,750,000.00
and (ii) $28,000,000.00 of Magic Notes, all, and both, free and clear of any
and all liens, claims, privileges and encumbrances held or asserted by any
person other than the Indenture Trustee, for distribution to the Bondholders
pursuant to the terms of the Indenture, and the Indenture Trustee shall
immediately (i) pay the remaining balance of the Magic Closing Cash
(estimated to be $6,750,000.00, less any amount by which the total balance
of principal and interest due to pay Magic's DIP Financing Claims in full
exceeds $1,000,000.00) and (ii) assign the remaining Magic Notes, in the
amount of $7,000,000, to Liquidating Trust for distribution and/or
application in accordance with this Plan. The Indenture Trustee shall
retain the sum of $7,250,000.00 in Magic Closing Cash and $28,000,000.00 in
Magic Notes, to be paid to Class 1 Claimants in accordance with the terms of
the Indenture.
Additionally, any amounts to be paid to CGII from the Magic Deferred Cash,
as provided in this Plan, shall be subject to the security interest of the
Indenture Trustee. Any amounts to be paid to CGII from the Magic Deferred
Cash, shall be deposited by Purchaser in a segregated interest bearing
account designated by the Indenture Trustee at First Bank National
Association, subject in all respects to all of the first priority liens and
security interests of the Indenture Trustee, without any further action, and
shall not be disbursed absent the mutual consent of CGII and the Indenture
Trustee, or by an order of a court of competent jurisdiction.
Other than as set forth herein, the Class 1 claimants (including the
Indenture Trustee, the Bondholders, and anyone deriving or claiming rights
under the Secured Notes, the Indenture, or any security therefore), shall
not be entitled to participate as a Class 2, 3A or 3B Claimant under this
Plan on account of such claim.
4. Release of Defenses: As of the Effective Date, the Debtor, Debtor in
Possession, Liquidating Trust, all Creditors and equity security holders of
the Debtor shall release and waive: (i) all defenses to allowance of the
Bondholder Claim in the Bankruptcy Case, and (ii) all claims and causes of
action, if any, against the Bondholders or the Indenture Trustee based upon
or related to the Debtor's execution of its guarantee of CGII's obligations
under the Indenture, or based upon any payments made to the Indenture
Trustee by the Debtor.
Nothing herein shall constitute a waiver of any defenses to the allowance of
the claim of the Bondholders or the Indenture Trustee against CGII in any
other bankruptcy proceeding. Except with respect to the Debtor, nothing in
this Plan shall impair or otherwise affect any rights, liens, claims, or
interests of the Indenture Trustee or any Bondholder under the Notes, the
Indenture, or any related documents, including, but not limited to, any
rights, liens, claims or interests against CGII or any guarantor of CGII's
obligations.
5. Voting: Class 1 is Impaired by the Plan and the holder of Claims in
Class 1 are entitled to vote to accept or reject the Plan.
Class 2: Secured Claims
1. Classification: Class 2 consists of secured claims.
2. Determination of Allowed Secured Claim: Prior to the Effective Date,
the Debtor may seek and obtain a determination of the Allowed Secured Claim
of any Creditor asserting a Secured Claim pursuant to the Bankruptcy Code
and the Bankruptcy Rules.
3. Treatment: Except as provided in Article V(A) of the Plan, as to each
Allowed Secured Claim and in complete satisfaction of such Claim, at the
Debtor's option, either:
(i) (A) any default, other than of the kind specified in Section 365(b)(2)
of the Bankruptcy Code, shall be cured, provided that any accrued and unpaid
interest, if any, which the Debtor may be obligated to pay with respect to
such default shall be simple interest at the contract rate and not at any
default rate of interest;
(B) the maturity of such Claim shall be reinstated as the maturity existed
before any default;
(C) the holder of such Claim shall be compensated for any damage incurred
as a result of any reasonable reliance by the holder on any provision that
entitled the holder to accelerate maturity of such Claim; and
(D) the other legal, equitable, or contractual rights to which the Claim
entitles the holder shall not otherwise be altered; provided, however, that
as to any Allowed Secured Claim which is a nonrecourse claim and exceeds the
value of the collateral securing the Claim, the collateral may be sold at a
sale at which the holder of such Claim has an opportunity to bid;
(ii) on the Effective Date or such other date as may be agreed upon by the
Debtor or Liquidating Trust, as the case may be, and the holder of such
Allowed Secured Claim, the Debtor or Liquidating Trust, as the case may be,
shall abandon the collateral securing such Claim to the holder thereof in
full satisfaction and release of such Claim. The Claim held by Jones Casino
Supplies, Inc. ("Jones") shall be partially satisfied, based upon and in
consideration of the sale free and clear of all liens and other interests
pursuant to 11 U.S.C. 363(f), to Jones Casino Supplies, Inc., of the slot
machines and other gaming equipment manufactured by Sigma Games, Inc.
("Sigma"), and Advance Cart Technology, Inc. ("ACT") for a total credit of
$204,754.67 ($156, 387.20 for Sigma equipment and $48,367.47 for ACT
equipment), to be applied in reduction of the total Secured Claim of Jones
Casino Supplies, Inc. In the alternative, a partial credit shall be granted
following the abandonment of the slot machines and other equipment and
supplies manufactured by Sigma and ACT to Jones to allow it to foreclose its
security interest, and based upon the Court's determination as to the amount
of the secured portion of the Jones Claims, and the security interest and
liens held by Jones shall be preserved and retained by Jones pending the
Court's determination and the foreclosure; or
(iii) the holder of such Claim shall be paid, on account of such Allowed
Secured Claim: (a) in full, in cash, after the later of (i) the Effective
Date or (ii) the first Cash Distribution Date after the date such Secured
Claim becomes an Allowed Claim; or, if applicable, (b) upon such other terms
as may be agreed to between the Debtor or Liquidating Trust, as the case may
be, and the holder of such Allowed Secured Claim; provided, however, that as
to the Bally & IGT claims, upon such other terms as may be agreed to between
Reorganized Crescent City or the Purchaser, as the case may be, and the
respective holders of the Bally & IGT Claims. The security interest of
Bally and IGT shall survive confirmation until such claims are paid. The
security interests of any other secured claimant, shall be preserved and
retained, to survive confirmation, in either the specific collateral itself,
provided said collateral is not part of the Riverboat Assets, or preserved
and attaching to the proceeds that constitute the Settlement Amount and/or
the Residual Property, if the collateral is sold free and clear of liens and
interests, until paid.
(iv) Any Allowed Class 2 Claim found by Final Order to be secured by a lien
against any of the Riverboat Assets to be transferred to Purchaser and to be
senior to the lien securing the Class 1 Claims affecting the Riverboat
Property shall be paid in cash on the Effective Date or at such later date
as such determination is made by Final Order. Payments to the holders of
any such Class 2 Claims shall be made from the Net Cash Proceeds of one or
more of the following sources, in the following order of priority; the
Settlement Amount and the Residual Property. Any creditor determined by
final order to have an allowed Class 2 Secured Claim shall be paid to the
extent of the value of its collateral, with the creditor retaining its
security interest and lien, either as to the specific collateral, provided
said collateral is not part of the Riverboat Assets, or preserved and
attaching to the proceeds only that constitute the Settlement Amount and the
Residual Property, until the court's determination and payment, and shall
have an unsecured claim for any deficiency which shall then be recognized,
and the creditor paid its pro-rata distribution or share of the Settlement
Amount as set forth below, for the Class 3 Allowed General Unsecured Claims;
provided however, that notwithstanding anything contained in the Plan
(including specifically, without limitation, subsection 3(iii) and
subsection 3(iv) hereof), the rights, if any, of the Board of Commissioners
of the Port of New Orleans (the "Board") under that certain escrow agreement
between the Board and the Debtor and the lien or security interest, if any,
in favor of the Board, pursuant to the Escrow Agreement and/or Bert
Infrastructure Reimbursement Agreement (as amended) between the parties,
including without limitation, any valid, perfected and unavoidable lien or
security interest the Board has on or in that certain escrow account
numbered 785-1061190 at the First National Bank of Commerce, denominated as
"Crescent City Capital Escrow" and all monies therein and all proceeds (in
whatever form) thereof, shall survive confirmation.
4. Voting: Class 2 is impaired by the Plan and each holder of a Claim in
Class 2 shall be entitled to vote to accept or reject the Plan.
Class 3A: General Unsecured Claims
1. Classification: Class 3A consists of Allowed General Unsecured Claims.
2. Treatment: Each holder of an Allowed General Unsecured Claim shall
receive its Pro Rata share of the remainder of the Net Cash Proceeds of the
Settlement Amount, on account of their beneficial interests in the
Liquidating Trust, after payment or reserve for all (i) Administrative
Claims, (ii) Priority Claims, (iii) Priority Tax Claims (iv) Allowed Class
3B Claims, (v) Allowed Class 2 Claims found to be secured by a lien on any
of the Riverboat Assets and superior to the lien of the Class 1 Claimant,
and (vi) establishment of a reserve for payment of operating expenses of
Liquidating Trust (which initial reserve is not to exceed $1,000,000.00).
In addition to distributions from the Settlement Amount, Class 3A Claimants
shall receive Pro Rata distributions from all Net Cash Proceeds generated
from the Residual Property. However, there will be no distribution of the
Net Cash Proceeds generated from the Residual Property unless and until all
payments and/or reserves required under this paragraph have been made.
3. Voting: Class 3A is impaired and the holders of Claims in Class 3A are
entitled to vote to accept or reject the Plan.
4. Election To Be Treated As Holder Of Convenience Claim: On or before the
Voting Deadline, any holder of an Allowed General Unsecured Claim may elect
(by election on the ballot to be sent to all holders of Allowed General
Unsecured Claims, or thereafter until the Effective Date, by other written
election in form and substance satisfactory to the Debtor) to voluntarily
reduce its Claim to $5,000, and receive the same treatment as holders of
Claims in Class 3B.
5. Claims With Recourse to Insurance Coverage: To the extent the holder of
any General Unsecured Claim has recourse to any liability insurance policy
covering tort claims issued to or for the benefit of the Debtor, the holder
of such Claim must first, to the satisfaction of the Liquidating Trustees,
use its best efforts to collect its Allowed Claims from the insurance
carrier. Such collection will reduce the amount of such holder's Allowed
Claim by the amount of any payment received from such insurance carrier.
Any remaining unpaid portion of such Allowed General Unsecured Claim will be
treated under the other provisions applicable to Allowed General Unsecured
Claims. In the event the Liquidating Trustees determine that the holder of
any such Claim has not used its best efforts to collect the proceeds of such
insurance coverage, such Claim shall be treated as a Disputed Claim until
the Liquidating Trustees determine that such best efforts have been made.
Class 3B: Convenience Claims
1. Classification: Class 3B consists of Convenience Claims.
2. Treatment: Each holder of an Allowed Convenience Claim shall be paid
forty (40%) percent of the Allowed amount of such Claim, in Cash, on the
later of (a) the Effective Date (or as soon thereafter as is practicable),
or (b) the first Cash Distribution Date immediately following the date on
which such Convenience Claim becomes an Allowed Convenience Claim.
3. Voting: Class 3B is impaired and the holders of Claims in Class 3B are
entitled to vote to accept or reject the Plan.
Class 3C: CGII Claim
1. Classification: Class 3C consists of the CGII Claim.
2. Treatment: On the Effective Date, the Class 3C Claim shall be allowed in
the amount of $5,000,000 and the holder of the Class 3C Claim shall receive
on account of such Claim, the Magic Deferred Cash pursuant to the Magic
Agreement. The payment of the Magic Deferred Cash shall be subject to the
security interest of the Indenture Trustee. Any amounts of the Magic
Deferred Cash to be paid to CGII, pursuant to this Plan and the Magic
Agreement, shall be deposited by Purchaser in a segregated interest bearing
account at First Bank National Association, subject in all respects to all
of the first priority liens and interests of the Indenture Trustee, without
any further action, and shall not be disbursed absent the mutual consent of
CGII and the Indenture Trustee, or by an order of a court of competent
jurisdiction.
3. Voting: Class 3C is impaired and the Holder of Claims in Class 3C is
entitled to vote to accept or reject the Plan.
Class 4: Subordinated Unsecured Claims
1. Classification: Class 4 consists of Subordinated Unsecured Claims.
2. Treatment: Holders of Subordinated Unsecured Claims shall receive no
distribution under the Plan. There shall be a presumption that excusable
neglect does not exist in respect of those Claims.
3. Voting: Class 4 is impaired and is deemed to reject the Plan.
Class 5: Equity Interests
1. Classification: Class 5 consists of all Equity Interests.
2. Treatment: Holders of Equity Interests shall receive no distribution
under the Plan. All Equity Interests will be canceled and rendered void and
of no further force or effect on the Effective Date.
3. Voting: Class 5 is impaired and is deemed to reject the Plan.
Class 6: Mirage Administrative/Secured Claim
1. Classification: Class 6 consists of the Mirage Administrative/Secured
Claim.
2. Treatment: Pending resolution of Debtor's objection to Mirage's DIP
Financing Claim, the entire sum of $2,000,000.00, plus the estimated amount
of accrued and/or accruing interest for a period of one (1) year after
Closing shall be reserved by the Liquidating Trust for the benefit of
Mirage. Upon entry of a Final Order allowing the claim of Mirage, a sum
equal to the Allowed Claim shall be distributed to Mirage. The balance, if
any, shall then be available for distribution to members of other classes of
creditors, other than Class 1. Upon entry of a Final Order disallowing the
claim of Mirage the entire sum reserved shall be available for distribution
to members of other classes of creditors, other than Class 1.
3. Voting: Class 6 is unimpaired and is deemed to have accepted the Plan.
ARTICLE IV
ACCEPTANCE OR REJECTION OF THE PLAN
1. Voting Classes. Each holder of an Allowed Claim in Classes 1, 2, 3A, 3B
and 3C shall be entitled to vote to accept or reject the Plan, unless
otherwise ordered by the Court.
2. Deemed Rejection of the Plan. Classes 4 and 5 shall receive no
distribution under the Plan and, therefore, are deemed to reject the Plan.
The Debtor hereby requests that the Court confirm the Plan over such
rejections in accordance with subsection 1129(b) of the Bankruptcy Code.
3. Deemed Acceptance of Plan. Class 6 is unimpaired under the Plan, and,
therefore, is deemed to accept the Plan, and thus, will not receive a ballot
to vote on the Plan.
4. Confirmability of the Plan. The confirmation requirements of Section
1129 of the Bankruptcy Code must be satisfied with respect to the Debtor and
the Plan. If the Bankruptcy Court determines that any provisions of the
Plan are prohibited by the Bankruptcy Code, or render the Plan unconfirmable
under Section 1129 of the Bankruptcy Code, the Debtor reserves the right to
sever such provisions from the Plan, and to request that the Plan, as so
modified, be confirmed.
5. Nonconsensual Confirmation. In the event that any of Classes reject the
Plan, the Debtor reserves the right to request that the Court confirm the
Plan over such rejection in accordance with Section 1129(b) of the
Bankruptcy Code.
6. Controversy Concerning Impairment. In the event of a controversy as to
whether any Class of Claims or Equity Interests is Impaired under the Plan,
the Bankruptcy Court will, after notice and a hearing prior to the
Confirmation Date, determine such controversy.
ARTICLE V
MEANS OF IMPLEMENTATION OF THE PLAN
A. Closing of the Magic Agreement. On the Effective Date, Purchaser shall
pay the Magic Closing Cash and Magic Notes to the Indenture Trustee for the
benefit of the Bondholders, and Purchaser shall receive in exchange therefor
100% of the outstanding shares of New Common Stock of Reorganized Crescent
City, as of the Effective Date. Immediately upon receipt of the Magic
Closing Cash and Magic Notes, and after deducting the sum of $7,250,000.00
from the Magic Closing Cash and $28,000,000.00 from the Magic Notes, for
distribution to Bondholders in accordance with the terms of the Indenture,
the Indenture Trustee shall pay the Settlement Amount to the Liquidating
Trust. At Closing, Purchaser or Reorganized Crescent City shall assume or
shall otherwise satisfy the Bally & IGT Claims, without any cost or expense
to the Debtor or Liquidating Trust.
B. Cancellation of Equity Interests. On and as of the Effective Date, all
Equity Interests, including, without limitation, unexercised rights to
acquire shares of stock of the Debtor by way of option, warrant or other
legal or contractual rights, shall be automatically canceled and deemed to
be void.
C. Liquidation of the Assets. On the Effective Date, (a) all of the
Residual Property shall be transferred to Liquidating Trust, (b) each holder
of an Allowed Claim, to the extent such Claim is not satisfied on the
Effective Date, shall receive from Liquidating Trust (or such other party
specifically identified) the distributions provided in Article III of the
Plan, and (c) Liquidating Trust shall be managed by the Liquidating Trustees
in good faith so as to maximize the value of Liquidating Trust's property
through the orderly liquidation of such property in a commercially
reasonable manner under the continuing supervision of the Bankruptcy Court,
as provided by this Plan.
D. Corporate Governance and Management of Reorganized Crescent City;
Vesting of Assets and Discharge; Capitalization of Reorganized Crescent
City; Action Necessary for Riverboat Gaming Commission Approvals.
1. Corporate Governance of Reorganized Crescent City: On and after the
Effective Date, the Debtor shall continue in existence as Reorganized
Crescent City, a Louisiana corporation governed by the provisions of the
Amended Certificate of Incorporation, the Amended By-laws, and Louisiana
General Corporation Law.
2. Management of Reorganized Crescent City: On and after the Effective
Date, the operation of Reorganized Crescent City shall become the
responsibility of its board of directors and management.
3. Vesting of Assets and Discharge: On and after the Effective Date,
Reorganized Crescent City may operate its businesses and may use, acquire,
and dispose of its property without supervisions or approval by the
Bankruptcy Court and free of any restrictions of the Bankruptcy Code or
Bankruptcy Rules, other than as expressly provided herein. The Riverboat
Assets shall vest in Reorganized Crescent City free and clear of the claims,
liens, charges, encumbrances and interests, except as otherwise provided
herein. Except as otherwise provided herein, including the Magic Agreement
on and after the Effective Date, Reorganized Crescent City shall not be
liable for and shall be discharged from any and all Claims against the
Debtor, and all Equity Interests in the Debtor shall be canceled.
E. Establishment and Management of Liquidating Trust.
1. Upon confirmation hereof, and effective upon the Effective Date, the
three (3) persons identified by the Creditors' Committee prior to the
conclusion of the Confirmation Hearing, shall be appointed to act as Co-
Liquidating Trustees (the "Liquidating Trustees") of and to administer the
Liquidating Trust hereinafter created and to liquidate assets for the
benefit of the creditors of the Debtor's estate. The selections of the
persons to serve as Liquidating Trustees shall be subject to approval of the
Bankruptcy Court. Vacancies occurring after the original appointments shall
be governed by the Liquidating Trust documents. The Liquidating Trustees
shall be deemed to be the authorized representatives of the Estate for the
purpose of and consummation of the Plan pursuant to Sections 1103 and
1123(b)(3)(B) and other applicable sections of the Bankruptcy Code.
2. The Liquidating Trustees shall manage and govern the Liquidating Trust
by majority rule.
3. The Debtor hereby declares and establishes a Liquidating Trust, as
defined by Treas. Reg. Sec. 301.7701-4(d), (the "Liquidating Trust") for the
benefit of the creditors of the Debtor. The Liquidating Trust is organized
for the primary purpose of receiving, liquidating, and distributing the
cash, claims, and property transferred to the Liquidating Trust (the
"Liquidating Trust Property") in accordance with the provisions of this Plan
as promptly as is reasonably possible, with no objective to carry on or
conduct a for-profit trade or business. Upon transfer of the Liquidating
Trust Property to the Liquidating Trust, the Debtor shall retain no interest
in the Liquidating Trust Property.
4. The Liquidating Trust Property will be transferred to the Liquidating
Trust for the benefit of the creditors. The transfer shall be treated as a
transfer to creditors to the extent that the creditors are beneficiaries of
the Liquidating Trust. The transfer will be treated as a deemed transfer by
the beneficiary-creditors to the Liquidating Trust. The beneficiaries-
creditors of the Liquidating Trust will be treated as the grantors and
deemed owners of the Liquidating Trust.
5. The Liquidating Trust Property must be consistently valued by the
Liquidating Trustees and the beneficiary-creditors and said valuation must
be used for all federal income tax purposes.
6. The Liquidating Trustees must file returns for the Liquidating Trust as
a grantor trust pursuant to Sec. 1.671-4(a) of the Income Tax Regulations.
7. The Liquidating Trustees' powers shall be limited to recovering,
preserving and protecting the Liquidating Trust Property, liquidating the
Liquidating Trust Property as promptly as is reasonably possible and
distributing all income and proceeds from the liquidation of Liquidating
Trust Property in accordance with the terms of the Plan as promptly as is
reasonably possible. Except as otherwise inconsistent with the provisions of
this Plan, in the exercise of such powers, the Liquidating Trustees, on
behalf of the Liquidating Trust, shall be authorized to (i) avoid or recover
transfers (including fraudulent conveyances or preferential transfers) of
the Debtor's property as may be permitted by Sections 542 through 553 of the
Bankruptcy Code or applicable state law, (ii) pursue all claims and causes
of action arising from the prepetition activities of the Debtor, whether
arising by statute or common law and whether arising under the laws of the
United States of America, Louisiana, or any other state having jurisdiction
over any claim or controversy pertaining to the Debtor, and whether
maintainable against third parties, Affiliates or Insiders of the
Debtor,(iii) defend claims, causes of action and other litigation that may
adversely affect or impact the Liquidating Trust Property,(iv) contest
Claims, (v) file, litigate to final judgment, settle, or withdraw objections
to Claims, and (vi) exercise offsets against Claims. All activities of the
Liquidating Trustees shall be reasonably necessary to, and consistent with,
the accomplishment of the purpose of the Liquidating Trust as set forth in
this Plan. The Liquidating Trustees shall make continuing efforts to
liquidate and distribute proceeds from the liquidation of Liquidating Trust
Property, shall make timely distributions pursuant to the provisions hereof,
and shall not unduly prolong the duration of the Liquidating Trust.
8. The Liquidating Trustees shall have full and complete authority to do
and perform all acts, to execute all documents and to make all payments and
disbursements of funds necessary to carry out the purpose of the Liquidating
Trust as set forth in this Plan. The Liquidating Trustees shall make
distributions of proceeds from the liquidation of Liquidating Trust Property
and income from investments in accordance with this Plan.
9. Any party dealing with the Liquidating Trustees in relation to the
Liquidating Trust Property or any part thereof, including, but not limited
to, any party to whom Liquidating Trust Property or any part thereof shall
be conveyed or contracted to be sold by the Liquidating Trustees, shall not
be obligated in any way (i) to see to the application of any purchase money,
(ii) to see that the provisions of this Plan or the terms of the Liquidating
Trust have been complied with, or (iii) to inquire into any limitation or
restriction on the power or authority of the Liquidating Trustees. The
power of the Liquidating Trustees to act or otherwise deal with the
Liquidating Trust Property shall be absolute as to any party dealing with
the Liquidating Trustees in any manner whatsoever in relation to the
Liquidating Trust Property.
10. All costs, expenses, and obligations incurred by the Liquidating
Trustees in administering this Liquidating Trust or in any manner reasonably
connected, incidental or related thereto shall be a charge against the
Liquidating Trust Property. The Liquidating Trustees may approve and direct
the payment thereof or the retention by the Liquidating Trustees of adequate
reserves for such payment prior to making distributions to creditors
pursuant to this Plan.
11. The Liquidating Trustees shall keep or cause to be kept books
containing a description of all property constituting Liquidating Trust
Property and an accounting of receipts and disbursements, which shall be
open to inspection by creditor-beneficiaries at reasonable times upon
written request to the Liquidating Trustees or their counsel. The
Liquidating Trustees shall file with the Bankruptcy Court semi-annually (or
more often if deemed appropriate by the Liquidating Trustees) a statement of
receipts and disbursements for the Liquidating Trust. The Liquidating
Trustees shall establish and maintain separate accounts (including bank
accounts) for the receipt and expenditure of funds derived from the
Settlement Amount, the Administrative, Priority and Disputed Claims Reserve
and the Residual Property. The Liquidating Trustees, in their discretion,
may advance funds from the Settlement Amount Account for the purpose of
investigating, commencing litigation, or otherwise enhancing the value of
the claims and property to be deposited in the other accounts but such
advance(s) shall be considered loans and shall promptly be repaid from the
first available funds in such other accounts.
12. No recourse shall ever be had, directly or indirectly, against the
Liquidating Trustees or any Representatives of the Liquidating Trustees
(including without limitation, the employers of the Liquidating Trustees),
or against any employee of the Liquidating Trustees, whether by legal or
equitable proceedings, by virtue of any statute or otherwise, or by reason
of the creation of any indebtedness by the Liquidating Trustees under this
Liquidating Trust for any purpose authorized by this Liquidating Trust, it
being expressly understood and agreed that all liabilities, contracts and
agreements of the Liquidating Trustees, whether in writing or otherwise,
under this Liquidating Trust shall be enforceable only against and be
satisfied only out of the Liquidating Trust Property or shall be evidence
only of a right of payment out of the Liquidating Trust Property, as the
case may be. Nothing herein shall constitute a waiver of claims for
intentional torts, embezzlement or other fraudulent activity. Every
undertaking, contract, covenant or agreement entered into in writing by the
Liquidating Trustees, their Representatives, shall provide expressly against
the personal liability of the Liquidating Trustees, their Representatives
and employees.
13. The Liquidating Trustees shall receive no compensation for their
services but shall be entitled to reimbursement for all expenses incurred by
them in the performance of their duties as trustees, which expenses shall be
a charge against and paid out of the Liquidating Trust Property, in
accordance with the terms of this Plan. The reimbursement of expenses to the
Liquidating Trustees and reimbursement of expenses and compensation of
professionals employed by the Liquidating Trustees shall constitute a first
priority expense of the Liquidating Trust.
14. The Liquidating Trustees shall be relieved of any and all duties,
restrictions or liabilities imposed upon Liquidating Trustees by applicable
laws of the governing state, including the provisions of the trust laws of
the governing state as in effect, in the governing state, on the Effective
Date and as it may thereafter be amended, so that the Liquidating Trustees
shall be liable only for acts of self-dealing or bad faith, or intentionally
adverse acts or reckless indifference to the interests of the creditors of
the Debtor. The fact that any act or failure to act of the Liquidating
Trustees was advised by an attorney acting as attorney for the Liquidating
Trust or the Liquidating Trustees shall be conclusive evidence of the
Liquidating Trustees' good faith in performing or failing to perform such
act.
15. The Liquidating Trust shall be effective as of the Effective Date and
shall remain and continue in full force and effect until the Liquidating
Trust Property has been wholly converted to cash, all costs, expenses and
obligations incurred in administering this Liquidating Trust have been fully
paid and discharged and all remaining income, proceeds and assets of the
Liquidating Trust Property have been distributed as herein set forth.
Notwithstanding the above, the Liquidating Trust created herein shall
terminate within(3) years from the Effective Date or within such further
time as is reasonably necessary to accomplish full liquidation and
disbursement; provided, however, in no event shall this Liquidating Trust
extend beyond five (5) years from the Effective Date.
16. Subject to approval of the Bankruptcy Court, the Liquidating Trustees
may engage attorneys, accountants and agents to advise or assist the
Liquidating Trustees in the administration of the Liquidating Trust and to
represent the Liquidating Trustees in all matters relating to the
Liquidating Trust. The Liquidating Trustees shall pay the reasonable fees,
charges and expenses of such attorneys and accountants who provide services
after the Effective Date as a priority expense of the Liquidating Trust, in
accordance with the terms this Plan. Subject to the availability of
sufficient funds in the Administrative Reserve, the fees and expenses of
such professionals and agents shall be paid upon the monthly submission of
bills to Liquidating Trust. If no written objection to payment is received
within five (5) Business Days following delivery of any bill, the bill shall
be paid by Liquidating Trust. If there is a dispute as to the amount of any
bill, such dispute shall be submitted to the Bankruptcy Court for a
determination of the reasonableness of such bill. Subject to the
availability of sufficient funds in the Administrative Reserve, the
uncontested portion of each bill shall be paid within ten (10) Business Days
after its delivery. As provided infra, to the extent funds are or become
available, fees and expenses of professionals and others involved in
investigating, recovering, or liquidating Residual Property shall be paid
from such recoveries. To the extent that contingent fee litigation is
desirable or necessary, the Liquidating Trustees are authorized to hire
counsel to pursue such litigation at a reasonable contingent fee. The
Liquidating Trust, which shall succeed to the Debtor's interest in the
property transferred to it pursuant to this Plan, shall constitute a
successor in interest to the Debtor. Accordingly, upon the Effective Date,
the Liquidating Trustees, on behalf of the Liquidating Trust, shall become
the owner and holder, of all privileges (including the attorney-client
privilege) owned or held by the Debtor, whether owned or held by the Debtor
individually or jointly and whether concerning pre-petition Date or post-
petition Date matters.
17. This Liquidating Trust shall be administered and governed by the laws
of the State of New Jersey or such other state (the "governing state") as
the Debtor and the Creditors' Committee shall select, which shall be
established as of the Effective Date, and any questions arising hereunder
shall be resolved and determined in accordance with the laws of the
governing state, without regard to principles of conflicts of law.
18. On the Effective Date, (a) the filing by Liquidating Trust of its Trust
Articles which shall be a Plan Document shall be deemed authorized and
approved in all respects, and (b) the appointment of the Liquidating
Trustees by the Bankruptcy Court in the Confirmation Order, and the other
matters provided under the Plan concerning the structure of Liquidating
Trust or action by Liquidating Trust, shall be deemed to have occurred and
shall be in effect without any requirement of further action or order of the
Bankruptcy Court. On the Effective Date, (a) the filing by Reorganized
Crescent City of the Amended Certificate of Incorporation and the adoption
of the Amended By- laws shall be deemed authorized and approved in all
respects, and (b) to the extent identified by the Purchaser on such date,
the appointment of the directors and officers of Reorganized Crescent City,
and the other matters provided under the Plan concerning the corporate
structure of Reorganized Crescent City, or corporate action by Reorganized
Crescent City or corporate action by Reorganized Crescent City, shall be
deemed to have occurred and shall be in effect from and after the such time
without any requirement of further action or order of the Bankruptcy Court.
The Directors and officers of the Debtors will be deemed to have resigned as
of the Effective Date.
F. Commission Approvals.
1. Corporate Governance of Reorganized Crescent City: On and after the
Effective Date, the Debtor shall continue in existence as Reorganized
Crescent City, a Louisiana corporation governed by the provisions of the
Amended Certificate of Incorporation, the Amended By-laws, and Louisiana
General Corporation Law.
2. Management of Reorganized Crescent City: On and after the Effective
Date, the operation of Reorganized Crescent City shall become the
responsibility of its Board of Directors and management.
3. Vesting of Assets and Discharge: On and after the Effective Date,
Reorganized Crescent City may operate its businesses and may use, acquire,
and dispose of its property without supervisions or approval by the
Bankruptcy Court and free of any restrictions of the Bankruptcy Code or
Bankruptcy Rules, other than as expressly provided herein. The Riverboat
Assets shall vest in Reorganized Crescent City free and clear of the claims,
liens, charges, encumbrances and interests, except as otherwise provided
herein. Except as otherwise provided herein, on and after the Effective
Date, Reorganized Crescent City shall not be liable for and shall be
discharged from any and all Claims against the Debtor, and all Equity
Interests in the Debtor shall be canceled.
4. Action Necessary for Riverboat Gaming Commission Approvals: On and after
the Confirmation Date, Purchaser and the Debtor shall take all reasonable
steps necessary to obtain any and all authorizations, certifications and
operating authorities and any other like permits necessary for Reorganized
Crescent City to start operations on, or on the earliest date possible after
the Effective Date.
H. Assignment of Causes of Action. On the Effective Date, except as
otherwise provided herein, all rights, claims, and causes of action pursuant
to: (a) Sections 541, 542, 544, 545, 547, 548, 549, 550 and 553 of the
Bankruptcy Code; and (b) all other claims and causes of action of the Debtor
against any Person as of the Effective Date including but not limited to the
Mirage Claim and any right to the Mirage Recovery, shall be preserved and
become property of Liquidating Trust. On the Effective Date, Liquidating
Trust shall be deemed the representative of the Estate under Section 1123(b)
of the Bankruptcy Code and will be authorized and shall have the power to
commence and prosecute any and all causes of action which could have been
asserted by the Estate. Liquidating Trust may pursue such causes of action
in the Bankruptcy Court and may retain such counsel, accountants or other
Persons as Liquidating Trust deems necessary in connection therewith or in
connection with liquidation of the Residual Property or performance of the
responsibilities of Liquidating Trust and the Liquidating Agent. All
recoveries, if any, received from or in respect of the causes of action
(whether by settlement, judgment or otherwise) shall become the property of
Liquidating Trust to be distributed pursuant to the terms of the Plan. The
costs and expenses, including legal fees and disbursements, incurred in
connection with the prosecution of such causes of action, shall be paid by
Liquidating Trust without necessity of approval by the Bankruptcy Court.
From and after the Effective Date, Liquidating Trust shall litigate any
avoidance or recovery actions and any other causes of action or rights to
payments of claims that belong to the Debtor that may be pending on the
Effective Date or instituted by Liquidating Trust after the Effective Date.
I. Waiver of Subordination. The distributions under the Plan take into
account the relative priorities of the Claims in each Class in connection
with any contractual subordination provisions relating thereto.
ARTICLE VI
ESTABLISHMENT OF RESERVES
A. Administrative Reserve.
1. Creation of Administrative Reserve: On the Effective Date, Liquidating
Trust shall establish an interest bearing account with a major money center
bank in an amount necessary to create and maintain the Administrative
Reserve, as same shall be determined by the Debtor at the Confirmation
Hearing and approved by the Bankruptcy Court. The money in the
Administrative Reserve shall be used to fund (i) the continuing
administration of Liquidating Trust, including the administration of Claims,
and the filing and prosecutions of objections thereto, (ii) the payment of
taxes for which the Liquidating Trust is liable, (iii) the maintenance of
insurance policies, (iv) the enforcement and prosecution of claims of or
claims assigned to the Liquidating Trust in conjunction with the marshaling
of the Residual Property, (vi) the liquidation by conversion to Cash or
other methods of the remaining Residual Property, and (vii) the payment of
the actual fees and expenses incurred in connection with all of the above-
described activities. The Administrative Reserve shall not be used to fund
the operations or pay any expenses of Reorganized Crescent City.
2. Maintenance of the Administrative Reserve: Liquidating Trust shall
maintain sufficient Cash in the Administrative Reserve as it in good faith
deems necessary to ensure the continued funding of the activities described
in Subsection 1 of this Article VI(E) of the Plan.
3. Investment of the Administrative Reserve: Liquidating Trust shall be
permitted, from time to time, to invest all or a portion of the Cash in the
Administrative Reserve in United States Treasury Bills, interest-bearing
certificates of deposit, tax exempt securities, or investments permitted by
Section 345 of the Bankruptcy Code, using prudent efforts to enhance the
rates of interest without inordinate credit risks or interest rate risks.
All interest earned on such Cash shall be held by Liquidating Trust and (i)
kept in the Administrative Reserve and utilized to fund the operation of
Liquidating Trust, and, to the extent of any excess, (ii) transferred to an
available cash reserve for distribution in accordance with the Plan.
4. Distribution of the Administrative Reserve: After completion by
Liquidating Trust of all tasks remaining to liquidate fully its assets and
distribute the proceeds therefrom in accordance with the Plan, including the
payment of all charges and taxes related thereto, any amounts remaining in
the Administrative Reserve will be distributed to Class 3A Claimants.
B. The Disputed Claims Reserve.
1. Creation of the Disputed Claims Reserve: On or before the first (1st)
Cash Distribution Date, Liquidating Trust shall establish a segregated
interest-bearing account with a major money center bank. On the first (1st)
Cash Distribution Date and each subsequent Cash Distribution Date, from the
Settlement Amount or the Net Cash Proceeds attributable to the Residual
Property, as applicable, Liquidating Trust shall deposit into such account,
or otherwise reserve, an amount of Cash and/or Magic Notes sufficient to pay
all Disputed Administrative Claims, Disputed Priority Claims, Disputed
Priority Tax Claims, Disputed Secured Claims, Disputed Convenience Claims
and Disputed General Unsecured Claims that would have been distributable on
account of such Claims had such Claims been Allowed Claims on the relevant
date. The reserve shall be based upon the amount ordered by the Court in
accordance with the Court's authority to estimate contingent and/or
unliquidated claims under 11 U.S.C. Sec.502(c) or, if no estimate has been
made, the amount of the Claims, as filed.
2. Claims With Recourse to Insurance Coverage: All Allowed General
Unsecured Claims with recourse to insurance coverage policies of the Debtor
covering tort claims shall be deemed Disputed Claims in their Face Amount or
as otherwise ordered by the Court, and Cash and/or Magic Notes shall be set
aside in the Disputed Claims Reserve on the first (1st) Cash Distribution
Date to account for such Claims. Upon receipt of notice that any such Claim
has been satisfied in whole, or in part, by the Debtor's insurance policies,
Liquidating Trust will reduce the amount on deposit in the Disputed Claims
Reserve by an amount equal to the amount allocable to the Claim or portion
thereof so satisfied. Upon receipt of notice that a Claim entitled to
coverage under an insurance policy of the Debtor is not satisfied, in whole,
or in part, under such policy, within sixty (60) days of the Effective Date,
and such Claim is not disputed in whole or in part by Liquidating Trust,
Liquidating Trust shall distribute to the holder of such Claim, Cash set
aside in the Disputed Claims Reserve on account of that portion of such
Claim that has not been satisfied by coverage under an insurance policy.
3. Payment of Expenses of the Disputed Claims Reserve: Liquidating Trust
shall pay, or cause to be paid, out of the funds held in the Disputed Claims
Reserve, all expenses of the Disputed Claims Reserve, including any tax
imposed by any governmental unit on the income generated by the funds held
in the Disputed Claims Reserve. Liquidating Trust shall also file or cause
to be filed any tax or information returns related to the Disputed Claims
Reserve that are required by any governmental unit.
4. Investment of Disputed Claims Reserve: Liquidating Trust shall be
permitted, from time to time, to invest all or a portion of the Cash in the
Disputed Claims Reserve in United States Treasury Bills, interest-bearing
certificates of deposit, tax exempt securities, or investments permitted by
Section 345 of the Bankruptcy Code, using prudent efforts to enhance the
rates of interest without inordinate credit risks or interest rate risks.
All interest earned on such Cash shall be held by Liquidating Trust and,
after satisfaction of any expenses incurred in connection with the
maintenance of the Disputed Claims Reserve, distributed in accordance with
the Plan.
5. Excess Funds: If, on any Reallocation Date, Liquidating Trust
determines there are excess funds on deposit in the Disputed Claims Reserve,
such excess funds (including any interest earned thereon) will be released
from the Disputed Claims Reserve and deposited in the Available Cash Reserve
and distributed to Class 3A Claimants in accordance with this Plan.
ARTICLE VII
PROVISIONS FOR TREATMENT OF DISPUTED AND CONTINGENT CLAIMS
A. Objections to Claims. Unless another date is established by the
Bankruptcy Court, all objections to Claims that were filed prior to the
Effective Date shall be filed and served on the holders of such Claims by
the sixtieth (60th) after the Effective Date, or such date as extended by
the Court. If any objection has not been filed to a proof of Claim or a
scheduled Claim by the objection bar date, the Claim to which the proof of
claim or scheduled Claim relates shall be treated as an Allowed Claim if
such Claim has not been Allowed or Disallowed earlier. After the Effective
Date, except as to objections to claims filed by persons other than the
Debtor, only the Liquidating Trustees shall have the authority to prosecute,
settle, compromise, withdraw or litigate to judgment objections to Claims
and counterclaims, all of which shall be prosecuted in the Bankruptcy Court.
B. Payments and Distributions on Disputed Claims. Notwithstanding any
provision in the Plan to the contrary, no payments or distributions will be
made with respect to a Disputed Claim until the resolution of such dispute
by settlement or Final Order. On the first Cash Distribution Date that is
at least forty-five (45) days after a Disputed Claim becomes an Allowed
Claim, the holder of such Allowed Claim will receive all distributions,
including its share of the net earnings of the Disputed Claims Reserve, to
which such holder is then entitled under the Plan. Notwithstanding the
foregoing, any Person who holds both an Allowed Claim(s) and a Disputed
Claim(s) will receive the appropriate payment or distribution on the Allowed
Claim(s), although no payment or distribution will be made on the Disputed
Claim(s) until such dispute is resolved by settlement or Final Order.
C. Disputed General Unsecured Claims.
1. Estimation: For purposes of effectuating the reserve provisions of
Article VI of the Plan and the allocations and distributions to holders of
Allowed General Unsecured Claims, the Bankruptcy Court will, on or prior to
the Confirmation Date, pursuant to Section 502 of the Bankruptcy Code, fix
or liquidate the amount of any Contingent General Unsecured Claim not
otherwise treated in the Plan, in which event the amount so fixed or
liquidated will be deemed the Allowed amount of such Claim for purposes of
this Plan, or, in lieu thereof, the Bankruptcy Court will determine the
maximum contingent amount for such Claim, which amount will be the maximum
amount in which such Claim ultimately may be Allowed under this Plan, if
such Claim is Allowed in whole or in part. The right of a Creditor under
Section 502(j) of the Bankruptcy Code to obtain reconsideration of a Claim
that has been estimated can only be exercised within thirty (30) days after
the Effective Date. Thereafter, no Claims that have been estimated for the
purpose of allowance may be reconsidered.
2. Distributions Upon Allowance: To the extent a Disputed General
Unsecured Claim becomes an Allowed Claim, on the next succeeding Cash
Distribution Date that is at least forty-five (45) days after a Disputed
Claim becomes an Allowed Claim, there will be distributed to the holder of
such Allowed Claim out of the Disputed Claims Reserve, in accordance with
the applicable provisions of this Plan, the amount of Cash on deposit in the
Disputed Claims Reserve allocable to the Claim so Allowed, plus its share of
the net earnings of the Disputed Claims Reserve.
ARTICLE VIII
DISTRIBUTIONS UNDER THE PLAN
B. Distributions.
1. On the Effective Date, or as soon thereafter as is reasonably
practicable, distributions of Cash shall be made by Liquidating Trust in
accordance with the relevant provisions of Article III hereof, on account of
Allowed Administrative Claims, Allowed Priority Claims, Allowed Priority Tax
Claims, and Allowed Secured Claims that are entitled to a Cash payment under
the Plan.
2. On the first (1st) Cash Distribution Date, or as soon thereafter as is
reasonably practicable, distributions of Cash shall be made by Liquidating
Trust in accordance with the relevant provisions of Article II hereof, on
account of Allowed Convenience Claims and Allowed General Unsecured Claims;
and
3. Subsequent distributions of (a) Net Cash Proceeds of the Residual
Property, and (b) previously undistributed Cash to the holders of Allowed
General Unsecured Claims, may be made if, on any Cash Distribution Date
(excluding the first (1st) Cash Distribution Date), the Liquidating
Trustees, in their discretion, determine that Liquidating Trust has
accumulated sufficient funds to justify a distribution.
4. On each Reallocation Date, the Liquidating Trustees will determine the
amount of Cash to be distributed on account of previously Allowed Claims and
Disputed Claims that have become, in whole or in part, Allowed Claims. The
Liquidating Trustees shall, if appropriate, make distributions from the
Disputed Claims Reserve on each Cash Distribution Date.
5. Fractional cents will not be distributed and shall revert to Liquidating
Trust.
B. Method of Payment. Payments to be made by Liquidating Trust pursuant to
the Plan will be made by check drawn on a domestic bank or, if in excess of
$1,000,000, by wire transfer of next day available funds.
C. Amendment of Plan. The Plan may be amended by the Debtor before, and
the Liquidating Trustees after, the Effective Date as provided in Section
1127 of the Bankruptcy Code.
D. Implementation. The Debtor and Liquidating Trust, as the case may be,
will be authorized to take all necessary steps, and perform all necessary
acts, to consummate the terms and conditions of the Plan.
E. Method of Distributions Under the Plan. All distributions of Cash and
other property shall be made by the Liquidating Trustees pursuant to the
Plan on the Effective Date or applicable Cash Distribution Date, as the case
may be, or as soon thereafter as is practicable (a) at the addresses set
forth in the proofs of claim filed by such holders; (b) at the addresses set
forth in any written notices of address change delivered to the Debtor or
Liquidating Trust after the date on which any related proof of claim was
filed; or (c) at the address reflected in the Schedules if no proof of claim
has been filed and Liquidating Trust has not received a written notice of a
change of address.
F. Undeliverable Distributions.
2. Distributions Held by Liquidating Trust: If the distribution to any
holder of an Allowed Claim is returned as undeliverable, no further
distributions shall be made to such holder unless and until the Liquidating
Trustees is notified in writing by such holder of the holder's current
address at which time all previously missed distributions shall be mailed to
such holder. Undeliverable distributions shall belong to Liquidating Trust
and be held in the account from which such distribution was made (e.g., the
Settlement Amount account, the Residual Property account, etc.).
3. After Distributions Become Deliverable: On each Cash Distribution Date,
Liquidating Trust shall make all distributions that have become deliverable
since the immediately prior Cash Distribution Date. Distributions from the
Disputed Claims Reserve shall be made in all instances as soon as
practicable after the same become deliverable.
4. Failure to Claim Undeliverable Distributions: Any holder of an Allowed
Claim that does not assert a claim pursuant to the Plan for an undeliverable
distribution within two (2) years after the Distribution Date shall have its
Claim for such undeliverable distribution discharged and shall be forever
barred from asserting any such claim for an undeliverable distribution. In
such case, any Cash held for distribution on account of such Claims for
undeliverable distributions shall be redeposited into the Administrative
Reserve for distribution to holders of Allowed Class 3A Claims on the next
Cash Distribution Date after such distributions become undeliverable
pursuant to the terms hereof. Nothing contained in the Plan shall require
Liquidating Trust to attempt to locate any holder of an Allowed Claim.
Checks issued in respect of distributions to the holders of Allowed Claims
shall be null and void if not cashed within 90 days of the date of issuance
thereof. Requests for the reissuance of any check shall be made directly to
Liquidating Trust by the holder of the Allowed Claim with respect to which
such check was originally issued. Any Claim in respect of such a check
voided shall be made on or before the sixth (6th) month anniversary of the
issuance of such check. After such date, all Claims in respect of a check
voided pursuant to this Subsection shall be discharged and forever barred.
ARTICLE IX
EXECUTORY CONTRACTS AND UNEXPIRED LEASES
B. Rejection of Executory Contracts and Unexpired Leases. On the
Confirmation Date (but subject to the occurrence of the Effective Date), all
executory contracts or unexpired leases that exist between the Debtor and
any Person, that have not been assumed or rejected by order of the
Bankruptcy Court or which are not the subject of a motion to assume or
reject pending on the Confirmation Date, will be deemed rejected in
accordance with the provisions and requirements of Section 365 of the
Bankruptcy Code. Entry of the Confirmation Order by the Clerk of the Court
shall constitute an order approving such rejections pursuant to Section
365(a) of the Bankruptcy Code.
C. Claims Based on Rejection of Executory Contracts or Unexpired Leases.
All proofs of claim with respect to Claims arising from the rejection of
executory contracts or unexpired leases must be filed with the Bankruptcy
Court no later than twenty-five (25) days after the Confirmation Date. Any
Claims not filed within such time will be forever barred from assertion
against the Debtor, the Estate and its property, Liquidating Trust, or the
Disputed Claims Reserve. Unless otherwise ordered by the Bankruptcy Court,
all such Claims arising from the rejection of executory contracts or
unexpired leases will be, and will be treated as Class 3A, General Unsecured
Claims or Class 3B Convenience Claims or Class 4 Subordinated Claims as the
case may be.
ARTICLE X
ADMINISTRATIVE PROVISIONS
A. Retention of Jurisdiction. The Bankruptcy Court will retain and have
exclusive jurisdiction on and after the Confirmation Date for the following
purposes:
1. to hear and determine objections to Administrative Claims or Proofs of
Claims whenever filed both before and after the Confirmation Date, including
any objections to the classification of any Claim and to allow or disallow
any Disputed Claim, in whole or in part;
2. to hear and determine any and all motions to estimate Claims regardless
of whether the Claim is the subject of a pending objection, a pending appeal
or otherwise;
3. to hear and determine any and all pending applications for the
rejection or assumption of executory contracts or unexpired leases to which
a Debtor is a party or with respect to which a Debtor may be liable and to
hear and determine, and, if need be, to liquidate, any and all Claims
arising therefrom;
4. to enforce the provisions of the Plan and to enforce any proposed
amendments thereto;
5. to ensure that distributions, if any, to holders of Allowed Claims are
accomplished as provided herein;
6. to determine any and all applications, adversary proceedings and
contested or litigated matters that may be pending on the Effective Date or
commenced thereafter;
7. to consider any modifications of the Plan, to cure any defect or
omission, or reconcile any inconsistency in any order of the Bankruptcy
Court, including, without limitation, the Confirmation Order;
8. to hear and determine all controversies, suits and disputes that may
arise in connection with the interpretation, implementation or enforcement
of the Plan, the Estate's obligations, releases under the Plan, or any Claim
asserted against any representative of the Estate or its agents;
9. to hear and determine all controversies concerning the Magic Agreement.
10. to hear and determine all controversies concerning the Mirage
Agreement, the Mirage DIP Financing Claims and any other claims and/or
dispute asserted by or against Mirage;
11. to enter such orders in aid of execution of the Plan to the extent
authorized by Section 1142 of the Bankruptcy Code, including such orders
aiding or promoting the transfer of the economic or ownership interest of
the Debtor, but not to the extent that such orders are in regard to matters
within the sole jurisdiction of police or regulatory authorities;
12. to determine such other matters as may be set forth in the Confirmation
Order or as may arise in connection with the Plan (including, without
limitation, Article XIII thereof) or the Confirmation Order or their
implementation;
13. to hear and determine all controversies, suits and disputes that may
arise with respect to the Residual Property;
14. to enforce all orders, judgments, injunctions and rulings entered in
connection with the Reorganization Case;
15. to determine any and all applications for allowance of compensation and
reimbursement of expenses and any other fees and expenses authorized to be
paid or reimbursed under the Bankruptcy Code or the Plan;
16. to hear and determine all proceedings to recover all assets of the
Debtor and property of the estate, wherever located, including any causes of
action under Sections 544 through 551 and 553(b) of the Bankruptcy Code, and
any other causes of action or rights to payment of Claims, that belong to
the Debtor, that may be pending on the Confirmation Date or that may be
instituted at any time by Liquidating Trust thereafter;
17. to hear and determine any disputes between the Liquidating Trustees and
Liquidating Trust or with respect to either of them;
18. to hear and determine matters concerning state, local and federal taxes
in accordance with Sections 346, 505 and 1146 of the Bankruptcy Code;
19. to approve the retention of professionals by Liquidating Trust and to
approve all requests for payment of fees and expenses by such professionals;
20. to hear any other matter as to which jurisdiction is not inconsistent
with the Bankruptcy Code; and
21. to enter a final decree or decrees closing the Reorganization Case.
B. Bar Date For Filing Claims Pursuant to Section 503(b) of the Bankruptcy
Code.
2. Administrative Claims Generally: Subject to further order of the
Bankruptcy Court, all applications for payment of Administrative Claims
(other than Administrative Claims that constitute Fee Requests) pursuant to
Section 503(b) of the Bankruptcy Code shall be filed with the Bankruptcy
Court within five (5) Business Days after the Effective Date. Any requests
for payment of such Administrative Claims not so scheduled by the Debtor or
filed within such time period shall be discharged and forever barred except
as otherwise may be ordered by the Bankruptcy Court.
3. Fee Requests:
A. All Fee Requests must be filed with the Bankruptcy Court within forty-
five (45) days after the Effective Date. Objections to such Fee Requests
may be filed by any party in interest within the later of sixty (60) days
after the Effective Date and sixty (60) days after such Fee Request is filed
with the Bankruptcy Court.
B. On or prior to the Confirmation Date, each Person that has sought or
will seek to file a Fee Request shall deliver to the Debtor an estimate of
the aggregate fees and expenses through the Effective Date which shall be
requested by such Person (including, if applicable, any amount previously
requested and subject to holdback). Any such estimate shall be binding on
such Person and such Person shall not apply for fees and expenses accruing
during the Reorganization Case in excess of such estimate; provided,
however, that such estimate shall not be binding unless the Confirmation
Order is entered within ten (10) Business Days of the scheduled Confirmation
hearing.
ARTICLE XI
CONDITIONS TO CONFIRMATION
AND EFFECTIVE DATE OF THE PLAN
A. Conditions to Entry of Confirmation Order. The Plan shall not be
confirmed unless the following conditions have been satisfied or waived as
specified in Article XI(C):
1. The Magic Closing Cash is estimated to be sufficient to pay the
Liquidating Trust the Settlement Amount of no less than $6,000,000.00;
B. Conditions to Effective Date. The Effective Date of the Plan shall not
occur unless and until the following conditions shall have been satisfied:
1. Entry of Confirmation Order in a form and substance satisfactory to the
Debtor, Purchaser, the Institutional Note Holders' Steering Committee and
the Creditors' Committee;
2. At Closing, Purchaser has assumed or otherwise satisfied or arranged to
satisfy the Bally & IGT Claims as provided in V(A) of the Plan;
3. The Confirmation Order shall have been entered;
4. The Confirmation Order shall not be currently stayed; and
5 The Closing has occurred or will occur simultaneously.
C. Waiver of Conditions.
1. Article XI(A)(1) may be waived by unanimous consent of the Creditors'
Committee, without regard to abstentions.
3. Article XI(B)(2) may be waived by the Creditors' Committee.
ARTICLE XII
EFFECTS OF CONFIRMATION
A. Binding Effect/Injunction.
1. Except as otherwise expressly provided in the Plan, on and after the
Effective Date, the terms of the Plan shall bind all holders of Claims and
Equity Interests, whether or not they accept the Plan.
2. Except as otherwise expressly provided in Section 1141 of the Bankruptcy
Code or this Plan, the distributions made pursuant to the Plan will be in
full and final satisfaction, settlement, release and discharge as against
the Debtor or any of its assets or properties, of any debt that arose before
the Confirmation Date and any debt of a kind specified in Sections 502(g),
502(h) or 502(i) of the Bankruptcy Code and all Claims and interests of any
nature, including, without limitation, any interest accrued thereon from and
after the Petition Date, whether or not (i) a proof of Claim or interest
based on such debt, obligation or interest is filed or deemed filed under
Section 501 of the Bankruptcy Code, (ii) such Claim or interest is Allowed
under Section 502 of the Bankruptcy Code, or (iii) the holder of such Claim
or interest has accepted the Plan.
3. Except as set forth herein, on and after the Effective Date, every
holder of a Claim or Equity Interest shall be precluded and permanently
enjoined from asserting against the Debtor, Liquidating Trust (in connection
with is organization, and operations), and the Liquidating Trustees (in
their capacity as such), and Reorganized Crescent City, their respective
officers, directors, professionals and agents or their respective assets or
properties, any further claim based on any document, instrument, judgment,
award, order, act, omission, transaction or other activity of any kind or
nature that occurred prior to the Confirmation Date. Said injunction shall
not be construed to enjoin any action by a Creditor or Bondholder against
the Debtor, Liquidating Trust, the Liquidating Trustees, Reorganized
Crescent City, their respective officers, directors, professionals and
agents which is personal to such person or entity, and which is not
derivative of the rights of the Debtor. Nothing contained herein shall
prevent the Louisiana Department of Revenue and Taxation ("LDRT") from
pursuing any corporate officers/directors of the Debtor, pursuant to LSA-
R.S. 47:1561.1, but only with respect to claims filed in the Bankruptcy
Case.
B. Rights of Action. Any rights or causes of action accruing to the Debtor
shall become assets of Liquidating Trust. Liquidating Trust may pursue
those rights or causes of action as appropriate as set forth in Article V(G)
of the Plan, in accordance with what is in the best interests, and for the
benefit of, those Creditors that will receive distributions from the
Residual Property. It is expressly understood that the Liquidating Trustees
may, in their discretion and by majority vote, settle or resolve any
avoidance action claim by agreeing to permit the transferee to make an
appropriate reduction in its claim(s) so as to give credit for the amount
otherwise recoverable from future distributions pursuant to this Plan.
C. Committees. The Creditors' Committee shall continue in existence until
the Effective Date, to exercise those powers and perform those duties
specified in Section 1103 of the Bankruptcy Code, and shall perform such
other duties as it may have been assigned by the Bankruptcy Court. On the
Effective Date, the Creditors' Committee shall be dissolved and their
members shall be deemed released of all their duties, responsibilities and
obligations in connection with the Bankruptcy Case. Upon dissolution of the
Creditors' Committee, each member of the Creditors' Committee and its
counsel shall be deemed released from liability by the Debtor and any
creditor entitled to receive a distribution under this Plan, and shall be
indemnified by Liquidating Trust from any liability to any creditor, the
debtor, purchaser, equity security holder, the Reorganized Debtor or party
in interest for any act taken in furtherance of its duties as a member of
the Creditors' Committee or its counsel, as applicable.
D. Full and Final Satisfaction. The payments and distributions which are
required to be made by the Debtor or Liquidating Trust under this Plan shall
be in full and final satisfaction, settlement, release and discharge of all
Claims against and Interests in the Debtor. A holder of an Allowed Claim
may not receive a distribution on account of such Allowed Claim equal to an
amount greater than the full amount (including interest to the extent
provided in the Plan) of such Allowed Claim.
E. Post-Confirmation Effect of Evidences of Claims or Interests. Except as
otherwise provided in the Plan, effective upon the Effective Date, all
notes, certificates and other evidences of Claims or Interests shall
represent only the right to participate in distributions under the Plan.
F. Continuation of Injunctions and Stays. Unless otherwise provided, all
injunctions, liens or stays: (a) ordered in the Reorganization Case
pursuant to Sections 105 and 362 of the Bankruptcy Code or otherwise or in
existence on the Petition Date, and (b) extant immediately prior to the
Confirmation Date shall remain in full force and effect until the Effective
Date.
ARTICLE XIII
RELEASE AND EXCULPATION
A. Release. Except for the obligations created by the Plan, for good and
valuable consideration, including, without limitation, the benefits of the
Plan, the promises and obligations of the Debtor, Reorganized Crescent City,
the Bondholders, CGII and the Purchaser and the efforts and contributions of
the officers and directors of the Debtor in bringing about the confirmation
and consummation of the Plan, and to permit the effective and expeditious
reorganization of the Debtor, on the Effective Date, the Debtor, shall be
deemed to have unconditionally waived and released any and all rights,
Claims, liabilities and causes of action with respect to those matters
directly relating to Crescent City, against Reorganized Crescent City, the
Bondholders, the Indenture Trustee, CGII, the Institutional Note Holders'
Steering Committee, the Creditors' Committee, the Purchaser, and except with
respect to CGII, their respective members, officers, directors, agents and
attorneys, as well as the Debtor's officers, directors, agents and
attorneys who served in such capacities at any time during the Bankruptcy
Case (collectively the "Releasees"); provided however, that (a) Purchaser
shall not be released from its obligations under the Magic Agreement to pay
the Magic Deferred Cash, and (b) the releases granted in favor of the
Committees shall release Committee members only in their capacity as such
and not in their capacity as individual creditors. Any claim or cause of
action a Creditor or Bondholder has against any Releasee which is personal
to such Releasee, and which is not derivative of the rights of the Debtor,
shall not be affected by the releases granted hereunder.
Except with respect to the Debtor, nothing in this Plan shall impair or
otherwise affect any rights, liens, claims, or interests of the Indenture
Trustee or any Bondholder under the Notes, the Indenture, or any related
documents, including, but not limited to, any rights, liens, claims or
interests against CGII or any guarantor of CGII's obligations.
ARTICLE XIV
MISCELLANEOUS PROVISIONS
A. Payment Dates. Whenever any payment to be made or action to be taken
under the Plan is due to be made or taken on a day other than a Business
Day, such payment will instead be made (without Interest for such delay) or
action will instead be taken on the next Business Day.
B. [INTENTIONALLY LEFT OUT]
C. Governing Law. Unless a rule or procedure is supplied by federal law
(including the Bankruptcy Code and Bankruptcy Rules), the laws of the State
of Louisiana shall govern the construction and implementation of the Plan
and any agreements, documents and instruments executed in connection with
the Plan.
D. Binding Effect. The rights, duties and obligations of any person or
entity named or referred to in the Plan shall be binding upon and shall
inure to the benefit of, such person or entity and their respective
successors and assigns.
E. Filing or Execution of Additional Documents. Except as otherwise
provided in the Plan, on or before substantial consummation of the Plan, the
Debtor will file with the Bankruptcy Court or execute, as appropriate, such
agreements and other documents as may be necessary or appropriate to
effectuate and further evidence the terms and conditions of the Plan.
F. Payment of Statutory Fees. All fees payable pursuant to Section 1930 of
title 28, United States Codes, as determined by the Bankruptcy Court at the
hearing pursuant to Section 1128 of the Bankruptcy Code, shall be paid on or
before the Effective Date.
G. Revocation and Modification of Plan and Related Documents. The Debtor
reserves the right, in accordance with the Bankruptcy Code, to amend or
modify the Plan and related Plan Documents in any manner or revoke the Plan
in its entirety prior to the entry of the Confirmation Order. After entry
of the Confirmation Order, the Debtor may: (a) amend or modify the Plan and
related Plan Documents in accordance with, and to the extent permitted by,
Section 1127(b) of the Bankruptcy Code; or (b) remedy any defect or omission
or reconcile any inconsistency in the Plan in such manner as may be
necessary to carry out the purpose and intent of the Plan. In the event the
Plan is confirmed but cannot be consummated, the Confirmation Order shall be
revoked and upon such revocation, the terms of the Plan shall not be binding
on or enforceable by any Person.
H. Notices. Any notice required or permitted under the Plan shall be in
writing and served either by (i) certified mail, return receipt requested,
postage pre-paid, (ii) hand delivery, or (iii) reputable overnight delivery
service, freight prepaid, addressed to the following parties:
If to the Debtor:
Crescent City Capital Development Corp.
Bayport One, Suite 250
8025 Black Horse Pike
W. Atlantic City, New Jersey 08232
Attn: President
with a copy to:
Bronfin & Heller, LLC
650 Poydras Street, Suite 2500
New Orleans, Louisiana 70130
Attn: Jan. M. Hayden, Esq.
If to Liquidating Trust:
with a copy to:
I. Construction. The rules of construction set forth in Section 102 of the
Bankruptcy Code shall apply to the construction of the Plan.
J. Section Headings. The section headings contained in the Plan are for
convenience and reference purposes only and will not affect in any way the
meaning or interpretation of the Plan.
K. Offer of Compromise. The Compromise embodied in this Plan shall not be
deemed to be an admission of liability of the Debtor, the Debtor-in-
Possession or Liquidating Trust, and shall not be admissible in any
proceeding or action, other than one to enforce the provisions of this Plan,
against the Debtor, as a debtor and debtor-in-possession, or the Indenture
Trustee or Bondholders.
ARTICLE XV
TRANSACTION WITH PURCHASER
A. Notwithstanding any provision to the contrary contained in the Plan, the
provisions of this Article shall govern the performance and effect of the
consummation of the Magic Agreement in lieu of any other provision in the
Plan which may conflict with this Article.
B. Upon the payment to the Indenture Trustee of the Magic Closing Cash and
the Magic Notes as provided in Article II(A), Purchaser shall be discharged
from any further liability to the Debtor for the payment of said sum, not
including the Magic Deferred Cash. The breach by the Indenture Trustee of
any of its obligations under the Plan including but not limited to making
specified disbursements shall not affect Purchaser in any manner, and
Purchaser shall be entitled to full performance (including specific
performance) by the Debtor under the Plan and the Magic Agreement.
C. The obligations to assume or satisfy the claims of Bally, IGT or any
other vendor as provided in Paragraph 4 of the Magic Agreement shall not
exceed an aggregate amount of $6,500,000.00.
D. All conditions to Closing as defined in Paragraph 5 of the Magic
Agreement must either be satisfied or waived in writing by Purchaser prior
to the Closing occurring.
E. All obligations of Purchaser under the Magic Agreement and the Plan
shall be governed by applicable federal law and the law of the State of
Louisiana.
F. The Liquidating Trust shall be responsible for all claims, obligations,
liabilities, liens or taxes which arise or accrue prior to the Effective
Date. Neither Purchaser nor the Reorganized Crescent City shall be liable
or in any manner responsible for those claims, obligations, liabilities,
liens or taxes which arise or accrue prior to the Effective Date. All
parties pursuant to section 1141 will be enjoined from asserting any such
claims, obligations, liabilities, liens or taxes against the Reorganized
Crescent City or the Purchaser, and the Reorganized Crescent City shall be
discharged from all such claims, obligations, liabilities, liens or taxes.
Except as otherwise provided herein, all Riverboat Assets of the Reorganized
Crescent City shall be revested in the Reorganized Crescent City free and
clear of all liens and/or encumbrances of any manner whatsoever.
G. Taxes and Section 338(h)(10) Election. All of the tax benefits and tax
obligations of Debtor arising prior to the Effective Date shall be for the
account of the Debtor and shall be satisfied, discharged or otherwise
provided for by the Liquidating Trust. The Liquidating Trust or CGII will
be responsible for filing all federal, state and local tax returns through
all relevant time periods until the Effective Date. Purchaser will co-
operate with CGII and the Liquidating Trust to file Form 8023, to effectuate
the election by the Debtor and CGII under section 338(g) and 338(h)(10) of
the Internal Revenue Code.
1. With respect to the sale of the Shares, if so requested by the Debtor
upon notice to Purchaser prior to the Closing Date, Debtor and Purchaser
shall jointly make a Section 339(h)(10) Election (as hereinafter defined) in
accordance with applicable laws and under any comparable provision of state
or local law for which a separate election is permissible and as set forth
herein. The Purchaser shall take all necessary steps to properly make a
Section 338(g) Election (as hereinafter defined) in connection with the
Section 338(h)(10) Election in accordance with applicable laws and under any
comparable provision of state or local law for which a separate election is
permissible. The Purchaser and Debtor agree to cooperate in good faith with
each other in the preparation and timely filing of any tax returns required
to be filed in connection with the making of such an election, including the
exchange of information and the joint preparation and filing of Form 8023
and related schedules.
2. The Debtor shall be responsible for the preparation and filing of all
Section 388 Forms (as hereinafter defined) in accordance with applicable tax
laws and the terms of this Agreement and shall deliver such Section 338
Forms to Purchaser at least 30 days prior to the date such Section 338 Forms
are required to be filed. Purchaser shall execute and deliver to the Debtor
such documents or forms (including executed Section 338 Forms) as are
requested and are required by any laws in order to properly complete the
Section 338 Forms at least 20 days prior to the date such Section 338 Forms
are required to be filed.
3. The Purchase Price, liabilities of the Companies and other relevant
items shall be allocated in accordance with Section 338(b)(5) of the Code
and the Treasury Regulations thereunder.
4. "Section 338 Forms" means all returns, documents, statements, and other
forms that are required to be submitted to any federal, state or local
taxing authority in connection with a Section 338(g) Election or a Section
338(h)(10) Election. Section 338 Forms shall include, without limitation,
any "statement of section 338 election" and IRS Form 8023 (together with any
schedules or attachments thereto) that are required pursuant to Treas. Regs.
Section 1.338-1 or Treas. Regs. Section 1.338(h)(10)-1 or any successor
provisions.
5. "Section 338(g) Election" means an election described in Section 338(g)
of the Code in connection with an election under Section 338(h)(10) of the
Code with respect to the acquisition of Shares pursuant to this Agreement.
Section 338(g) Election shall include any corresponding election under any
other relevant tax laws (e.g., state laws) for which a separate election is
permissible with respect to the Purchaser's acquisition of Shares pursuant
to this Agreement.
6. "Section 338(h)(10) Election" means an election described in Section
338(h)(10) of the Code with respect to the Purchaser's acquisition of Shares
pursuant to this Agreement. Section 338(h)(10) Election shall include any
corresponding election under any other relevant tax laws (e.g., state laws
for which a separate election is permissible with respect to the Purchaser's
acquisition of Shares pursuant to this Agreement.
7. Purchaser acknowledges that, in the absence of an effective election
under Section 338(h)(10) of the Code, CGII will make any otherwise permitted
election under Treas. Reg. Sec. 1.1502-20(g) with respect to the Debtor.
Purchaser agrees to cooperate with CGII in meeting the requirements of such
election, including causing the Debtor to comply with Treas. Regs. Sec.
1.1502-20(g)(5).
Dated: New Orleans, Louisiana
March 15, 1996
CRESCENT CITY CAPITAL
DEVELOPMENT CORPORATION
By: /s/ EDWARD M. TRACY
-------------------------
Name: Edward M. Tracy
Title: President and CEO
BRONFIN & HELLER, LLC
Counsel to Debtor
By: /s/ ROBYN J. SPALTER
--------------------------
Jan M. Hayden (Law Bar #6672)
Robyn J. Spalter (Law Bar #21116)
650 Poydras Street, Suite 2500
New Orleans, Louisiana 70130-6101
(504) 568-1888
UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF LOUISIANA
IN RE: NO. 95-12735-TMB
CHAPTER 11
CRESCENT CITY CAPITAL
DEVELOPMENT CORPORATION
DEBTOR A REORGANIZATION CASE
UNDER CHAPTER 11 OF THE
BANKRUPTCY CODE
ORDER CONFIRMING PLAN
The Second Amended Plan of Reorganization under Chapter 11 of the Bankruptcy
Code filed by Crescent City Capital Development Corporation ("Debtor" or
"Crescent City") on March 15, 1996, having been transmitted to creditors and
equity security holders and the First Immaterial Modification to the Second
Amended Plan of Reorganization of Crescent City Capital Development
Corporation (the "First Immaterial Modification")] having been duly filed;
and
It having been determined that the First Immaterial Modification is
immaterial; and it having been determined after hearing on notice that the
requirements for confirmation set forth in 11 USC Sec. l 129(a) have been
satisfied and that Reorganized Crescent City, the issuer of the Magic Notes
pursuant to the Magic Indenture, and Jefferson Casino Corporation ("JCC")
and C-M of Louisiana, Inc. ("CMLI"), the guarantors of the Magic Notes, is
each deemed a debtor or successor to the Debtor within the meaning of 11
U.S.C. Sec. 1145(a);
(STAMP ON EXHIBIT)
I CERTIFY THAT THIS DOCUMENT
IS A TRUE COPY OF THE
ORIGINAL ON FILE IN THIS COURT
/S/ FRANCES STARTY MAY 13, 1996,
DEPUTY CLERK
UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF LOUISIANA
All terms which are not defined herein are as defined in the Second Amended
Plan of Reorganization under Chapter 11 of the Bankruptcy Code as modified
by the First Immaterial Modification;
ORDERED that the Second Amended Plan of Reorganization filed by Crescent
City on March 15, 1996 with First Immaterial Modification is confirmed. A
copy of the confirmed Plan and First Immaterial Modification is attached.
ORDERED that at the consummation of the Plan the Riverboat Assets, including
but not limited to the MN Crescent City Queen, Official Number 1028319,
shall be released free and clear of all existing mortgages, liens and/or
encumbrances and that each mortgage, lien and other encumbrance attaching to
the Riverboat Assets at the time of the consummation of the Plan shall be
released as follows:
ORDERED that on the Effective Date the Secretary of State of Louisiana shall
terminate and place of record such termination statement to fully terminate
and erase from its record such termination statement to fully terminate and
erase from its records the UCC Financing Statements as more specifically
listed hereinbelow:
1. That certain UCC Financing Statement filed on February 11, 1994 under
original file number 36-80863 in Orleans Parish, Louisiana, given by debtor,
Crescent City Capital Development Corporation in favor of original secured
party, First Trust National Association, as Trustee, covering" all of
debtor's right, title and interest in all equipment, inventory, accounts,
contract rights, general intangibles, deposit accounts, chattel paper,
documents and instruments and all proceeds of the foregoing, whether now ...
(see original)."
2. That certain UCC Financing Statement filed on February 11, 1994 under
original file number 36-80864 in Orleans Parish, Louisiana, given by debtor,
Crescent City Capital Development Corporation in favor of original secured
party, First Trust National Association, as Trustee, covering "Hull No.
3009, being one (1) Riverboat Gaming Vessel, or Paddlewheel Casino
Riverboat, having overall dimensions of 360'x99'xl4'. A description of the
additional collateral covered by this financing statement (see original)".
3. That certain UCC Financing Statement filed on February 16, 1995 under
original file number 36-91410 in Orleans Parish, Louisiana, given by debtor,
Crescent City Capital Development Corporation in favor of original secured
party, Gulf Gaming Equipment, Inc., subsequently assigned to Bally Gaming,
Inc., covering "see exhibit 'A'. (1) Bally electronic gaming devices; any
and all of borrowers present and future electronic gaming devices
manufactured or distributed by Bally Gaming, Inc. (see original)."
4. That certain UCC Financing Statement filed on March 6, 1995 under
original file number 36-91890 in Orleans Parish, Louisiana, given by debtor,
Crescent City Capital Development Corporation in favor of original secured
party, Jones Casino Supplies, Inc., covering "debtor's interest in all of
the following, whether presently existing or hereafter acquired or arising
in which debtor has or hereafter acquires any interest and wherever located
(see original)".
5. That certain UCC Financing Statement filed on May 25, 1995 under
original file number 09-928872 in Caddo Parish, Louisiana given by debtor,
Crescent City Capital Development Corporation in favor of original security
party, IGT, covering "debtors interest in the equipment shown on the
attached schedule A and the proceeds and proceeds of sale thereof, proceeds
of collateral are also covered".
ORDERED that on the Effective Date the United States Department of
Transportation, U.S. Coast Guard/U.S. National Vessel Documentation Center,
2039 Stonewall Jackson Drive, Failing Waters, West Virginia 25419, shall
cancel and erase and place of record such cancellation and erasure to fully
cancel and erase from its record the following Preferred Mortgage(s) and/or
Claims against that certain MN Crescent City Queen, Official Number 1028319,
as more specifically listed hereinbelow:
1. That certain Preferred Mortgage dated March 23, 1995 recorded with the
U.S. Coast Guard in Book 9503, page 252 given by Crescent City Capital
Development Corporation in favor of First Trust National Association, as
Trustee, in the amount of $135,000,000.00.
2. That certain Claim dated June 2, 1995 recorded with the U. S. Coast
Guard in Book 9506, page 33 by Grimaldi/C.R. Pittman, Grimaldi Construction,
Inc. and C.R. Pittman Construction Co., Inc. in the amount of
$11,404,802.00.
3. That certain Claim dated June 5, 1995 recorded with the U. S. Coast
Guard in Book 9506, page 65 by BROADMOOR in the amount of $183,321.00.
4. That certain Claim dated June 6, 1995 recorded with the U. S. Coast
Guard in Book 9506, page 74 by Arthur D. Darden, Inc. in the amount of
$72,235.88.
5. That certain Claim dated June 5, 1995 recorded with the U. S. Coast
Guard in Book 9506, page 81 by Imperial Trading Company, Inc. in the amount
of $24,058.49.
6. That certain Claim dated June 5, 1995 recorded with the U. S. Coast
Guard in Book 9506, page 82 by Delta Diversions, Inc. d/b/a Delta Gaming
Company in the amount of $153,041.14.
7. That certain Claim dated June 6, 1995, recorded with the U. S. Coast
Guard in Book 9506, page 84 by Midship Marine, Inc. in the amount of
$53,664.81.
8. That certain Claim dated June 6, 1995, recorded with the U. S. Coast
Guard in Book 9506, page 88 by C. Baxter, Jr. & Assocs. Int'l., Inc. in the
amount of $72,405.39.
9. That certain Claim dated June 2, 1995, recorded with the U. S. Coast
Guard in Book 9506, page 95 by Richard's Restaurant Supply, Inc. in the
amount of $72,850.31.
10. That certain Claim dated June 8, 1995 recorded with the U. S. Coast
Guard in Book 9506, page 133 by Crescent City Moving & Storage, Inc. in the
amount of $98,482.00.
11. That certain Claim dated June 9, 1995, recorded with the U. S. Coast
Guard in Book 9506, page 135 by River Marine Services, Inc. in the amount of
$249,721.00.
12. That certain Claim dated June 9, 1995, recorded with the U. S. Coast
Guard in Book 9506, page 140 by Limousine Livery, Ltd. in the amount of
$1,160,000.00.
13. That certain Claim dated June 9, 1995, recorded with the U. S. Coast
Guard in Book 9506, page 144 by Boland Marine & Manufacturing Company, Inc.
in the amount of $14,464.64.
14. That certain Claim dated June 9, 1995, recorded with the U. S. Coast
Guard in Book 9506, page 156 by Computer Technology Center, A Division of
Universal Telephone Company, Inc. in the amount of $36,182.44.
15. That certain Claim dated June 9, 1995, recorded with the U. S. Coast
Guard in Book 9506, page 157 by Communicore, Inc. d/b/a MULTICOM in the
amount of $345,135.07.
16. That certain Claim dated June 12, 1995, recorded with the U. S. Coast
Guard in Book 9506, page 165 by River Parish Disposal, Inc. in the amount of
$55,957.50.
17. That certain Claim dated June 12, 1995, recorded with the U. S. Coast
Guard in Book 9506, page 168 by Gulf South Systems, Inc. in the amount of
$23,639.40.
18. That certain Claim dated June 13, 1995, recorded with the U. S. Coast
Guard in Book 9506, page 178 by The Board of Commissioners of the Port of
New Orleans, LA in the amount of $110,194.00.
19. That certain Claim dated June 13, 1995, recorded with the U. S. Coast
Guard in Book 9506, page 194 by the City of New Orleans in the amount of
$437,203.00.
20. That certain Claim dated June 13, 1995, recorded with the U. S. Coast
Guard in Book 9506, page 195 by the City of New Orleans in the amount of
$126,128.88.
21. That certain Claim dated June 16, 1995, recorded with the U. S. Coast
Guard in Book 9506, page 242 by Bravo Special Events Management Company, A
Division of Pete Fountain Productions, Inc. in the amount of $164,031.53.
22. That certain Claim dated June 16, 1995, recorded with the U. S. Coast
Guard in Book 9506, page 243 by Jones Casino Supplies, Inc. in the amount of
$421,859.26.
23. That certain Claim dated June 17, 1995, recorded with the U. S. Coast
Guard in Book 9506, page 259 by Ammon & Associates, Inc. in the amount of
$16,236.70.
24. That certain Claim dated June 13, 1995, recorded with the U. S. Coast
Guard in Book 9506, page 265 by Hotard Coaches, Inc. in the amount of
$76,810.00.
25. That certain Claim dated June 15, 1995, recorded with the U. S. Coast
Guard in Book 9506, page 271 by Helm Paint & Supply, Inc. in the amount of
$2,301.00.
26. That certain Claim dated June 9, 1995, recorded with the U. S. Coast
Guard in Book 9506, page 302 by State of Louisiana, Department of Revenue
and Taxation in the amount of $4,389,125.00.
27. That certain Claim dated June 22, 1995, recorded with the U. S. Coast
Guard in Book 9506, page 313 by City of New Orleans, Bureau of Revenue in
the amount of $126,128.88.
28. That certain Claim dated June 28, 1995, recorded with the U. S. Coast
Guard in Book 9506, page 339 by International Electronic Protection, Ltd. in
the amount of $326,774.64.
29. That certain Claim dated June 14, 1995, recorded with the U. S. Coast
Guard in Book 9506, page 341 by Bayou Beouf Electric of Alabama, Inc. in the
amount of $92,990.20.
30. That certain Claim dated July 3, 1995, recorded with the U. S. Coast
Guard in Book 9507, page 6 by Directions In Design, Inc. in the amount of
$326,993.10.
31. That certain Claim dated July 6, 1995, recorded with the U. S. Coast
Guard in Book 9507, page 120 by Michael T. Roberts d/b/a MTR Design Service
in the amount of $1,295.40.
32. That certain Claim dated July 6, 1995, recorded with the U. S. Coast
Guard in Book 9507, page 121 by Consolidated Electrical Distributors, Inc.
d/b/a .-ED in the amount of $1,477.72.
33. That certain Claim dated July 12, 1995, recorded with the U. S. Coast
Guard in Book 9507, page 124 by City of New Orleans, Bureau of Revenue in
the amount of $1,125,979.24.
34. That certain Claim dated July 12, 1995, recorded with the U. S. Coast
Guard in Book 9507, page 125 by City of New Orleans, Bureau of Revenue in
the amount of $324,167.39.
35. That certain Claim dated July 13, 1995, recorded with the U. S. Coast
Guard in Book 9507, page 152 by TCS America, Inc. in the amount of
$22,190.00.
36. That certain Claim dated July 14 1995, recorded with the U. S. Coast
Guard in Book 9507, page 154 by H.J.M. Machine Shop, Inc. in the amount of
$61,471.18.
37. That certain Claim dated July 17, 1995, recorded with the U. S. Coast
Guard in Book 9507, page 193 by GDC, Inc. in the amount of $74,978.00.
38. That certain Claim dated July 18, 1995, recorded with the U. S. Coast
Guard in Book 9507, page 194 by Priority EMS, Inc. in the amount of
$36,864.1 0.
39. That certain Claim dated July 17, 1995, recorded with the U. S. Coast
Guard in Book 9507, page 196 by Bender Shipyard, Inc. in the amount of
$833,078.91.
40. That certain Claim dated July 17, 1995, recorded with the U. S. Coast
Guard in Book 9507, page 219 by Magnolia Marketing Company in the amount of
$17,247.60.
41. That certain Claim dated August 2, 1995, recorded with the U. S. Coast
Guard in Book 9508, page 41 by Radiofone, Inc. in the amount of $68,015.00.
42. That certain Claim dated August 2, 1995, recorded with the U. S. Coast
Guard in Book 9508, page 42 by Partysist, Inc. in the amount of $3,711.50.
43. That certain Claim dated August 8, 1995, recorded with the U. S. Coast
Guard in Book 9508, page 44 by Food Art, Inc. in the amount of $19,993.08.
44. That certain Claim dated September 19,1995, recorded with the U. S.
Coast Guard in Book 9509, page 74 by D & L Equipment, Inc. in the amount of
$1,324.36.
45. That certain Claim dated September 19, 1995, recorded with the U. S.
Coast Guard in Book 9509, page 75 by American Machinery Movers, Inc. in the
amount of $15,881.00.
46. That certain Claim dated September 20, 1995, recorded with the U. S.
Coast Guard in Book 9509, page 89 by New Orleans International Cruise Ship
Terminal, Inc. in the amount of $1,600.00.
47. That certain Claim dated November 15, 1995, recorded with the U. S.
Coast Guard in Book 95-5, page 734, by Bayou Boeuf Electric of Alabama, Inc.
in the amount of $92,990.20.
48. That certain Claim dated December 5, 1995, recorded with the U. S.
Coast Guard in Book 95-9, page 381 by American Machinery Movers, Inc. in the
amount of $15,881.00 (refers to Book 9509, page 75).
ORDERED that on the Effective Date, Sandra M. Hardin, the Clerk of Court and
Ex-Officio Recorder of Mortgages for Plaquemines Parish shall cancel from
the records of her office the liens, mortgages, security interests,
privileges and/or encumbrances more specifically listed hereinbelow:
1. Liens and/or encumbrances in favor of Grinnell Fire Protection Systems
Co., a division of Grinnell Corp.:
(a) MOB 244, folio 639 Statement of Claim.
(b) MOB 244, folio 670 in amount of $46,198.00.
(c) MOB 245, folio 11 19 Supplement to Affidavit of Lien.
(d) MOB 245, folio 1134 Supplemental in amount of $66,429.21.
2. MOB 247, folio 494 in favor of Bender Shipyard, Inc. in the amount of
$833,078.91.
ORDERED that on the Effective Date, Michael P. McCrossen, the Recorder of
Mortgages for the Parish of Orleans shall cancel from the records of his
office the liens, mortgages, security interests, privileges and/or
encumbrances more specifically listed hereinbelow:
1. Mortgage Office Instrument No. 309446 in favor of Insulation Sales &
Service, Inc. in the amount of $370,809.00.
2. Mortgage Office Instrument No. 309447 in favor of Insulation Sales &
Service, Inc. in the amount of $86,487.00.
3. Mortgage Office Instrument No. 310749 in favor of Grinnell Fire
Protection Systems Co., a division of Grinnell Corp. in the amount of
$66,429.21.
4. Mortgage Office Instrument No. 310750 in favor of Grinnell Fire
Protection Systems Co., a division of Grinnell Corp. in the amount of
$66,429.21.
5. Mortgage Office Instrument No. 312349 in favor of Broadmoor in the
amount of $810,349.00.
6. Mortgage Office Instrument No. 315001 in favor of Lucien T. Vivien &
Associates, Inc. in the amount of $9,400.00.
7. Mortgage Office Instrument No. 31501 0 in favor of Lucien (Luciet) T.
Vivien & Associates, Inc. in the amount of $24,676.59.
B. Mortgage Office Instrument No. 315011 in favor of Lucien T. Vivien &
Associates, Inc. in the amount of $5,985.00.
9. Mortgage Office Instrument No. 316714 in favor of The Ellis Company,
Inc. in the amount of $42,977.00.
10. Mortgage Office Instrument No. 316838 in favor of Hewitt-Washington &
Associates, Architects.
11. Mortgage Office Instrument No. 316873 in favor of Grimaldi/C.R.
Pittman, A Joint Venture in the amount of $11,404,802.00.
12. Mortgage Office Instrument No. 316943 in favor of George M. Raymond
Company in the amount of $58,353.45.
13. Mortgage Office Instrument No. 316944 in favor of George M. Raymond
Company in the amount of $1,000,871.50.
14. Mortgage Office Instrument No. 317015 in favor of Lyons & Hudson
Architects, Ltd. in the amount of $216,700.00.
15. Mortgage Office Instrument No. 317157 in favor of Delta Diversions,
Inc. d/b/a Delta Gaming Co. in the amount of $153,041.14.
16. Mortgage Office Instrument No. 317158 in favor of Imperial Trading
Co., Inc. in the amount of $24,058.49.
17. Mortgage Office Instrument No. 317161 in favor of Gandolfo Kuhn &
Associates in the amount of $25,726.00.
18. Mortgage Office Instrument No. 317162 in favor of Morphy Makofsky,
Inc. in the amount of $181,347.20.
19. Mortgage Office Instrument No. 317163 in favor of Design Consortium,
Ltd. in the amount of $165,494.00.
20. Mortgage Office Instrument No. 317165 in favor of Bender Shipyard,
Inc. in the amount of $833,078.91.
21. Mortgage Office Instrument No. 317232 in favor of William A. De La
Houssaye, Inc. in the amount of $42,902.57.
22. Mortgage Office Instrument No. 317234 in favor of Searcy Steel
Company, Inc./Russellville in the amount of $833,078.91.
23. Mortgage Office Instrument No. 317247 in favor of Technifex, Inc. in
the amount of $140,827.00.
24. Mortgage Office Instrument No. 317282 in favor of Burk-Kleinpeter,
Inc. in the amount of $102,399.81,
25. Mortgage Office Instrument No. 317287 in favor of the City of New
Orleans in the amount of $126,128.88.
26. Mortgage Office Instrument No. 317288 in favor of the City of New
Orleans in the amount of $126,128.88.
27. Mortgage Office Instrument No. 317305 in favor of the City of New
Orleans in the amount of $437,203.00.
28. Mortgage Office Instrument No. 317308 in favor of the City of New
Orleans in the amount of $437,203.00.
29. Mortgage Office Instrument No. 317309 in favor of the City of New
Orleans in the amount of $437,203.00.
30. Mortgage Office Instrument No. 31731 0 in favor of the City of New
Orleans in the amount of $437,203.00.
31. Mortgage Office Instrument No. 317318 in favor of Hercules Sheet
Metal, Inc. in the amount of $388,277.47.
32. Mortgage Office Instrument No. 317341 in favor of Eustis Engineering
Company, Inc. in the amount of $27,072.25.
33. Mortgage Office Instrument No. 317395 in favor of the City of New
Orleans in the amount of $437,203.00.
34. Mortgage Office Instrument No. 317398 in favor of Balar Associates,
Inc. in the amount of $241,077.90.
35. Mortgage Office Instrument No. 317399 in favor of Urban Systems, Inc.
in the amount of $20,914.64.
36. Mortgage Office Instrument No. 317414 in favor of Boh Bros.
Construction Co., L.L.C. in the amount of $170,627.50.
37. Mortgage Office Instrument No. 317469 in favor of HJM Machine Shop,
Inc. in the amount of $123,148.96.
38. Mortgage Office Instrument No. 317574 in favor of the Delta Testing
and Inspection, Inc. in the amount of $25,787.35.
39. Mortgage Office Instrument No. 317575 in favor of the Delta Testing
and Inspection, Inc. in the amount of $13,710.40.
40. Mortgage Office Instrument No. 317576 in favor of the Delta Testing
and Inspection, Inc. in the amount of $4,609.25.
41. Mortgage Office Instrument No. 317577 in favor of the Delta Testing
and Inspection, Inc. in the amount of $5,527.12.
42. Mortgage Office Instrument No. 317747 in favor of Reginald Sheffield
Smith, Jr. in the amount of $36,097.20.
43. Mortgage Office Instrument No. 317769 in favor of Southern Heater
Company, Inc. in the amount of $5,592.73.
44. Mortgage Office Instrument No. 317814 in favor of the State of
Louisiana in the amount of $6,422,813.00.
45. Mortgage Office Instrument No. 317815 in favor of the State of
Louisiana in the amount of $103,125.00.
46. Mortgage Office Instrument No. 317816 in favor of the State of
Louisiana in the amount of $1,524,847.00.
47. Mortgage Office Instrument No. 317818 in favor of the State of
Louisiana in the amount of $15,000.00.
48. Mortgage Office Instrument No. 317819 in favor of the State of
Louisiana in the amount of $3,180,000.00.00.
49. Mortgage Office Instrument No. 317820 in favor of the State of
Louisiana in the amount of $1,175,000.00.
50. Mortgage Office Instrument No. 317821 in favor of the State of
Louisiana in the amount of $19,125.00.
51. Mortgage Office Instrument No. 317848 in favor of the Frischertz
Electric Company, Inc. in the amount of $1,279,621.50.
52. Mortgage Office Instrument No. 318092 in favor of the City of New
Orleans in the amount of $126,128.88.
53. Mortgage Office Instrument No. 318348 in favor of LTH Construction,
Inc. in the amount of $733,190.00.
54. Mortgage Office Instrument No. 318445 in favor of Carlo Ditta, Inc. in
the amount of $79,375.43.
55. Mortgage Office Instrument No. 318525 in favor of Interior Systems
Enterprises, Inc. in the amount of $56,829.91.
56. Mortgage Office Instrument No. 318526 in favor of Interior Systems
Enterprises, Inc. in the amount of $56,829.91.
57. Mortgage Office Instrument No. 318759 in favor of Rust Scaffold Rental
& Erection, Inc. in the amount of $175,482.45.
58. Mortgage Office Instrument No. 319186 in favor of Interior Systems
Enterprises, Inc. in the amount of $111,636.14.
59. Mortgage Office Instrument No. 319196 in favor of Culinary Design and
Fixture, Inc. in the amount of $167,343.00.
60. Mortgage Office Instrument No. 319197 in favor of Ammon & Associates,
Inc. in the amount of $16,236.70.
61. Mortgage Office Instrument No. 319721 in favor of Grimaldi
Construction, Inc. And C. R. Pittman in the amount of $56,829.91.
62. Mortgage Office Instrument No. 319853 in favor of Air-Side Equipment,
Inc. in the amount of $8,921.65.
63. Mortgage Office Instrument No. 319884 in favor of Lerch Bates North
America, Inc. in the amount of $7,870.96.
64. Mortgage Office Instrument No. 320133 in favor of Midstate Painting &
Wallpapering Co., Inc. in the amount of $82,981.49.
65. Mortgage Office Instrument No. 320226 in favor of Rolf Jensen &
Associates, Inc. in the amount of $16,115.04.
66. Mortgage Office Instrument No. 320366 in favor of Prime Equipment in
the amount of $14,410.75.
67. Mortgage Office Instrument No. 321235 in favor of Primary Electric,
Inc. in the amount of $39,461.00.
68. Mortgage Office Instrument No. 321371 in favor of Smith, Nelson &
Oatis in the amount of $17,619.14
69. Mortgage Office Instrument No. 321846 in favor of the City of New
Orleans in the amount of $1,125,979.24.
70. Mortgage Office Instrument No. 321848 in favor of the City of New
Orleans in the amount of $1,125,979.24.
71. Mortgage Office Instrument No. 321850 in favor of the City of New
Orleans in the amount of $324,167.39.
72. Mortgage Office Instrument No. 321851 in favor of the City of New
Orleans in the amount of $1,125,797.24.
73. Mortgage Office Instrument No. 321852 in favor of the City of New
Orleans in the amount of $324,167.39.
74. Mortgage Office Instrument No. 321882 in favor of LTH Construction,
Inc. in the amount of $923,341.00.
75. Mortgage Office Instrument No. 321883 in favor of Grimaldi/C.R.
Pittman in the amount of $12,251,740.00.
76. Mortgage Office Instrument No. 323303 in favor of the City of New
Orleans.
77. Mortgage Office Instrument No. 328833 in favor of Rust Scaffold Rental
& Erection, Inc. in the amount of $182,304.23.
78. Mortgage Office Instrument No. 329463 in favor of Culinary Design and
Fixture, Inc.
79. Mortgage Office Instrument No. 330088 in favor of The Larson Company
in the amount of $326,372.00.
ORDERED that if on or before the Effective Date, Bally Gaming, Inc. Is not
satisfied or agreement is not reached between Reorganized Crescent City and
Bally Gaming, Inc. as to the treatment, payment and securitization of Bally
Gaming, Inc.'s Claim, the cancellation of the Bally Gaming, Inc. UCC
Financing Statement, referred to herein, shall be ineffective, and the
Secretary of State shall not cancel said UCC Financing Statement.
ORDERED that the Magic Notes to be issued pursuant to the Magic Indenture
are exempt from the registration requirements of the Securities Act of 1933,
as amended, and any state or local law requiring registration for the offer
or sale of a security or registration or licensing of an issuer of,
underwriter of, or broker or dealer in, a security provided in 11 U.S.C.
Sec. l 145, except with respect to an entity that is an underwriter as
defined in 11 U.S.C. Sec. l 145(b).
ORDERED that except as otherwise provided in the Plan, on the Effective Date
of the Plan, in accordance with sections 1141(b) and 1141(c) of the
Bankruptcy Code, all property of the Debtor's estate which is to be vested
in the Reorganized Crescent City is hereby vested in the Reorganized
Crescent City free and clear of all claims and interests of creditors and
equity security holders of the Debtor and all other property is conveyed in
accordance with the terms of the Plan.
ORDERED that except as otherwise provided in the Plan, and effective upon
the occurrence of the Effective Date of the Plan, in accordance with section
1141(d) of the Bankruptcy Code, Reorganized Crescent City be, and it hereby
is, discharged of and from any and all debts and Claims that arose against
it before the Effective Date including, without limitation, any debt or
Claim of a kind specified in section 502(g), 502(h) or 502(i) of the
Bankruptcy Code, whether or not (i) a proof of claim based on such a debt is
filed or deemed filed under section 501 of the Bankruptcy Code, (ii) such
Claim is allowed under section 502 of the Bankruptcy Code, or (iii) the
holder of such Claim has accepted the Plan.
ORDERED that the commencement or continuation of any action, the employment
of process, or any act to collect, recover or offset any debt discharged
hereunder as a personal liability of the Reorganized Crescent City, or from
property of the Reorganized Crescent City, be, and it hereby is, permanently
enjoined, stayed and restrained.
ORDERED that this Court's previous order confirming the Debtor's First
Amended Plan of Reorganization, entered on January 12, 1996 is hereby
revoked.
New Orleans, Louisiana, this 29th day of April, 1996.
/S/ T. M. BRAHNEY
----------------------------
JUDGE T. M. BRAHNEY
UNITED STATES BANKRUPTCY JUDGE
_________________________________________________________________
CASINO MAGIC OF LOUISIANA, CORP.
Issuer
and
THE GUARANTORS NAMED HEREIN
and
FIRST TRUST NATIONAL ASSOCIATION
Trustee
________________________
INDENTURE
Dated as of May 13, 1996
________________________
$35,000,000
11 1/2% Senior Secured Notes due 1999
_________________________________________________________________
<PAGE>
Reconciliation and Tie between Trust Indenture
Act of 1939 and Indenture dated as of May 13, 1996
TRUST INDENTURE ACT SECTION INDENTURE SECTION
S 310(a)(1)............................................................7.10
(a)(2)............................................................7.10
(a)(3)............................................................N.A.
(a)(4)............................................................N.A.
(a)(5)............................................................7.10
(b)....................................................7.8; 7.10; 13.2
(c)...............................................................N.A.
S 311(a)...............................................................7.11
(b)...............................................................7.11
(c)...............................................................N.A.
S 312(a)........................................................ .......2.5
(b)...............................................................13.3
(c)...............................................................13.3
S 313(a)................................................................7.6
(b)(1)............................................................N.A.
(b)(2).............................................................7.6
(c)..........................................................7.6; 13.2
(d)................................................................7.6
S 314(a)..........................................................5.8; 13.1
(b)................................................................4.2
(c)(1)..................................................2.2; 7.2; 13.4
(c)(2).......................................................7.2; 13.4
(c)(3).............................................................4.2
(d)................................................................4.2
(e)...............................................................13.5
(f)...............................................................N.A.
S 315(a)................................................................7.1
(b).....................................................7.5; 7.6; 13.2
(c).............................................................7.1(a)
(d).....................................................2.8; 6.12; 7.1
(e)...............................................................6.14
S 316(a)(last sentence).................................................2.9
(a)(1)(A).........................................................6.12
(a)(1)(B).........................................................6.13
(a)(2)............................................................N.A.
(b)..........................................................6.13; 6.8
(c)...............................................................Note
S 317(a)(1).............................................................6.3
(a)(2).............................................................6.4
(b)................................................................2.4
S 318(a)...............................................................13.1
_______________
This Reconciliation and Tie shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE>
TABLE OF CONTENTS
Page
Article I. DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1. Definitions.................................................1
Section 1.2. Incorporation by Reference of TIA..........................24
Section 1.3. Rules of Construction......................................24
Article II. THE NOTES
Section 2.1. Form and Dating............................................25
Section 2.2. Execution and Authentication...............................25
Section 2.3. Registrar and Paying Agent.................................26
Section 2.4. Paying Agent to Hold Assets in Trust.......................27
Section 2.5. Noteholder Lists...........................................27
Section 2.6. Transfer and Exchange......................................28
Section 2.7. Replacement Notes..........................................28
Section 2.8. Outstanding Notes..........................................29
Section 2.9. Treasury Notes.............................................29
Section 2.10. Temporary Notes...........................................29
Section 2.11. Cancellation..............................................30
Section 2.12. Defaulted Interest........................................30
Article III. MANDATORY REDUCTION; REDEMPTION
Section 3.1. Mandatory Principal Reduction with Excess Cash Flow........31
Section 3.2. Optional Redemption........................................32
Section 3.3. Election to Redeem; Notices to Trustee.....................32
Section 3.4. Selection by Trustee of Notes to be Redeemed...............32
Section 3.5. Notice of Redemption.......................................33
Section 3.6. Effect of Notice of Redemption.............................34
Section 3.7. Deposit of Redemption Price................................34
Section 3.8. Notes Redeemed in Part.....................................35
Section 3.9. Redemption Pursuant to Gaming Laws.........................35
Article IV. SECURITY
Section 4.1. Security Interest..........................................35
Section 4.2. Recording; Opinions of Counsel.............................36
Section 4.3. Disposition of Certain Collateral..........................37
Section 4.4. Substitution of Collateral.................................39
Section 4.5. Release Date; Releases of Collateral.......................41
Section 4.6. Certain Other Releases of Collateral.......................42
Section 4.7. Payment of Expenses........................................42
Section 4.8. Suits to Protect the Collateral............................42
Section 4.9. Trustee's Duties...........................................43
Article V. COVENANTS
Section 5.1. Payment of Notes...........................................44
Section 5.2. Maintenance of Office or Agency............................44
Section 5.3. Limitation on Restricted Payments..........................45
Section 5.4. Corporate Existence........................................45
Section 5.5. Payment of Taxes and Other Claims..........................45
Section 5.6. Maintenance of Insurance...................................46
Section 5.7. Compliance Certificate: Notice of Default..................46
Section 5.8. Reports....................................................47
Section 5.9. Waiver of Stay, Extension or Usury Laws....................47
Section 5.10. Limitation on Transactions with Affiliates................48
Section 5.11. Limitation on Incurrence of Additional Indebtedness and
Disqualified Capital Stock................................49
Section 5.12. Limitation on Dividends and Other Payment Restrictions
Affecting Subsidiaries....................................50
Section 5.13. Limitation on Liens.......................................51
Section 5.14. Limitation on Lines of Business...........................52
Section 5.15. Limitation on Status as Investment Company................52
Section 5.16. Restrictions on Sale and Issuance of Stock. Prior to the
Release Date:.............................................52
Section 5.17. Restrictions on Subsidiaries..............................52
Section 5.18. Restrictions on Investments...............................52
Section 5.19. Restrictions on Capital Expenditures......................52
Section 5.20. Limitation on Sales of Assets and Subsidiary Stock........53
Section 5.21. Limitation on Merger, Sale or Consolidation...............54
Section 5.22. Maintenance of Business...................................54
Article VI. EVENTS OF DEFAULT AND REMEDIES
Section 6.1. Events of Default..........................................55
Section 6.2. Rescission and Annulment...................................59
Section 6.3. Collection of Indebtedness and Suits for Enforcement by
Trustee....................................................60
Section 6.4. Trustee May File Proofs of Claim...........................60
Section 6.5. Trustee May Enforce Claims Without Possession of Notes.....61
Section 6.6. Priorities.................................................62
Section 6.7. Limitation on Suits........................................62
Section 6.8. Unconditional Right of Holders to Receive Principal,
Premium and Interest.......................................63
Section 6.9. Rights and Remedies Cumulative.............................64
Section 6.10. Delay or Omission Not Waiver..............................64
Section 6.11. Control by Holders........................................64
Section 6.12. Waiver of Past Default....................................65
Section 6.13. Undertaking for Costs.....................................65
Section 6.14. Restoration of Rights and Remedies........................66
Section 6.15. Cash Proceeds from Collateral.............................66
Article VII. TRUSTEE
Section 7.1. Duties of Trustee......................................... 66
Section 7.2. Rights of Trustee..........................................68
Section 7.3. Individual Rights of Trustee...............................69
Section 7.4. Trustee's Disclaimer.......................................69
Section 7.5. Notice of Default..........................................70
Section 7.6. Reports by Trustee to Holders..............................70
Section 7.7. Compensation and Indemnity.................................70
Section 7.8. Replacement of Trustee.....................................71
Section 7.9. Successor Trustee by Merger, Etc...........................73
Section 7.10. Eligibility; Disqualification.............................73
Section 7.11. Preferential Collection of Claims Against Company.........73
Article VIII. TERMINATION AND DISCHARGE
Section 8.1. Termination of Obligations Upon Cancellation of the Notes..73
Section 8.2. Survival of Certain Obligations............................74
Section 8.3. Acknowledgment of Discharge by Trustee.....................74
Section 8.4. Reinstatement..............................................75
Article IX. AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.1. Supplemental Indentures Without Consent of Holders.........75
Section 9.2. Amendments, Supplemental Indentures and Waivers with
Consent of Holders.........................................76
Section 9.3. Compliance with TIA........................................78
Section 9.4. Revocation and Effect of Consents..........................78
Section 9.5. Notation on or Exchange of Notes...........................79
Section 9.6. Trustee to Sign Amendments, Etc............................79
Article X. MEETINGS OF NOTEHOLDERS
Section 10.1. Purposes for Which Meetings May Be Called.................80
Section 10.2. Manner of Calling Meetings................................80
Section 10.3. Call of Meetings by Company or Holders....................81
Section 10.4. Who May Attend and Vote at Meetings.......................81
Section 10.5. Regulations May Be Made by Trustee; Conduct of the
Meeting; Voting Rights; Adjournment.......................82
Section 10.6. Voting at the Meeting and Record to Be Kept...............83
Section 10.7. Exercise of Rights of Trustee or Noteholders May Not Be
Hindered or Delayed by Call of Meeting....................83
Article XI. APPLICATION OF TRUST MONEYS
Section 11.1. "Trust Moneys" Defined....................................84
Section 11.2. Withdrawals of Net Awards.................................86
Section 11.3. Withdrawal of Boat Conveyance Proceeds For Purchase or
Qualified Lessee Lease of Substitute Boat.................90
Section 11.4. Withdrawal of Boat Conveyance Proceeds For Construction
of Qualified Substitute Boat or for Capital Expenditures
on such Qualified Substitute Boat.........................94
Section 11.5. Investment of Trust Moneys...............................101
Article XII. GUARANTY
Section 12.1. Guaranty.................................................101
Section 12.2. Certain Bankruptcy Events................................103
Article XIII. MISCELLANEOUS
Section 13.1. TIA Controls.............................................104
Section 13.2. Notices..................................................104
Section 13.3. Communications by Holders with Other Holders.............105
Section 13.4. Certificate and Opinion as to Conditions Precedent.......105
Section 13.5. Statements Required in Certificate or Opinion............106
Section 13.6. Rules by Trustee, Paying Agent, Registrar................106
Section 13.7. Legal Holidays...........................................106
Section 13.8. Governing Law............................................107
Section 13.9. No Adverse Interpretation of Other Agreements............107
Section 13.10. No Recourse against Others..............................107
Section 13.11. Successors..............................................108
Section 13.12. Duplicate Originals.....................................108
Section 13.13. Severability............................................108
Section 13.14. Table of Contents, Headings, Etc........................108
EXHIBITS
Exhibit A -- Form of Note
Exhibit B -- Form of Guaranty
Exhibit C -- Tax Sharing Treaty
Exhibit D -- JCC Real Property Description
Exhibit E -- JCC Indebtedness
INDENTURE, dated as of May 13, 1996, between Casino Magic of Louisiana,
Corp., a Louisiana corporation (the "Company"), the Guarantors referred to
below and First Trust National Association, as Trustee.
Each party hereto agrees as follows for the benefit of each other party
and for the equal and ratable benefit of the Holders of the Company's 11
1/2% Senior Secured Notes due 1999:
Article I.
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1. DEFINITIONS.
"ACCELERATION NOTICE" shall have the meaning specified in Section 6.1.
"ADJUSTED RENT OBLIGATIONS" means the obligations of the Company to the
lessor under a Qualified Lessee Lease which would be in the nature of "basic
rent" or "fixed rent" under a "triple net" lease of Property, which
obligations in any event shall not include any amount attributable to the
operating expenses of or payment of taxes or insurance on such Substitute
Boat subject to such lease.
"ADVERSE STATE ACTION" means any administrative, regulatory or judicial act
or action of a Governmental Authority of the State of Louisiana the effect
of which is to prohibit, or to upon effectiveness prohibit, or to restrict,
or to upon effectiveness restrict, the ability of the Company to conduct the
business of operating a riverboat casino in Bossier City, Louisiana.
"AFFILIATE" means (i) any person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company,
any or any of their respective Subsidiaries, (ii) any spouse, immediate
family member, or other relative who has the same principal residence of any
person described in clause (i) above, and (iii) any trust in which any
person described in clause (i) or (ii) above has a beneficial interest. For
purposes of this definition, the term "control" means (a) the power to
direct the management and policies of a person, directly or through one or
more intermediaries, whether through the ownership of voting securities, by
contract, or otherwise, or (b) the beneficial ownership of 10% or more of
any class of voting Capital Stock of a person (on a fully diluted basis) or
of warrants or other rights to acquire such class of Capital Stock (whether
or not presently exercisable).
"AFFILIATE CONVEYANCE" shall have the meaning specified in Section 5.10.
"AFFILIATE TRANSACTION" shall have the meaning specified in Section 5.10.
"AGENT" means any Registrar, Paying Agent or co-Registrar.
"AGGREGATE EXCESS CASH FLOW" has the meaning set forth in Section 3.1
hereof.
"ARCHITECT'S CERTIFICATE" means a certificate of an independent, reputable
architect or engineer, licensed in the state in which the applicable
Property is located and experienced in the design, construction and
operation of the type of the applicable Property.
"ASSET SALE" shall have the meaning specified in Section 5.20.
"AVERAGE LIFE" means, as of the date of determination, with respect to any
security or instrument, the quotient obtained by dividing (i) the sum of the
products of the number of years from the date of determination to the dates
of each successive scheduled principal (or redemption) payment of such
security or instrument multiplied by the amount of such principal (or
redemption) payment by (ii) the sum of all such principal (or redemption)
payments.
"BASIC SUB-ACCOUNT" shall have the meaning provided in Section 11.1.
"BANKRUPTCY LAW" means Title 11, U.S. Code or any similar Federal, state or
foreign law for the relief of debtors.
"BOARD OF DIRECTORS" means, with respect to any person, the Board of
Directors of such person or any committee of the Board of Directors of such
person authorized, with respect to any particular matter, to exercise the
power of the Board of Directors of such person.
"BOAT CONVEYANCE PROCEEDS" means Cash received by the Company (i) as
consideration for the sale by the Company of the Crescent City Queen Casino,
or (ii) as rents, profits, or any other proceeds of a Qualified Lessor
Lease.
"BOAT CONVEYANCE PROCEEDS SUB-ACCOUNT" shall have the meaning provided in
Section 11.1.
"BOARD RESOLUTION" means, with respect to any person, a duly adopted
resolution of the Board of Directors of such person.
"BUSINESS DAY" means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in New York, New York are
authorized or obligated by law or executive order to close.
"CAPITAL EXPENDITURES" means all expenditures, except interest capitalized
during construction, which, in accordance with GAAP, are required to be
included in Property, plant and equipment or similar fixed asset account.
"CAPITAL STOCK" means, with respect to any corporation, any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests (however designated) in stock issued by that
corporation.
"CAPITALIZED LEASE OBLIGATION" means obligations under a lease, entered into
on or after the Issue Date, that are required to be capitalized for
financial reporting purposes in accordance with GAAP, and the amount of
Indebtedness represented as such obligations shall be the capitalized amount
of such obligations, as determined in accordance with GAAP.
"CASH" means U.S. Legal Tender or U.S. Government Obligations.
"CASH EQUIVALENT" means (i) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that good full faith and credit of the
United States of America is pledged in support thereof), (ii) time deposits
and certificates of deposit of banks doing business in the States of
Louisiana and Minnesota which are not Affiliated with the Company, (iii)
time deposits and certificates of deposit of banks, and commercial paper
issued by the parent corporation of any domestic commercial bank, of
recognized standing having capital and surplus in excess of $500,000,000,
and commercial paper issued by others rated at least A-2 or the equivalent
thereof by Standard & Poor's Corporation or at least P-2 or the equivalent
thereof by Moody's Investors Service, Inc. and in each case maturing within
one year after the date of acquisition, (iv) investments in money market
funds substantially all of whose assets comprise securities of the types
described in clauses (i) and (iii) above, and (v) bank accounts maintained
by the Grantor or a Guarantor in the ordinary course of its business.
"CMLI MORTGAGE" means the Mortgage, Assignment of Leases and Rents, and
Security Agreement Securing Future Advances dated as of May 13, 1996 by C-M
of Louisiana, Inc., a Louisiana corporation (n/k/a JCC) to the Trustee, as
the same may be amended from time to time.
"CMLI REAL PROPERTY" means the real Property owned by CMLI in Bossier
Parish, Louisiana, described in EXHIBIT D hereto, and all improvements to
such real Property existing on or after May 13, 1996.
"COLLATERAL" means, subject to Section 4.5 hereof, the Property and assets
of the Company and the Property and assets of the Guarantors which are
subject to the Liens created by the Collateral Documents, including, but not
limited to, the Crescent City Queen Casino, any Qualified Substitute Boat or
Substitute Boat, in each case owned by the Company, each Qualified Lessor
Lease and Qualified Lessee Lease, the Boat Conveyance Proceeds, all other
Property of the Company owned as of the Issue Date or thereafter acquired
(other than (i) certain Cash of the Company arising from the gaming
operations (or operations incidental or ancillary thereto) of the Company
conducted in the ordinary course of business, including, without limitation,
the sale of inventory and provision of services in the ordinary course of
the Company's gaming business, (ii) Cash of JCC received from Parent Equity
Contributions or as proceeds of Indebtedness which JCC may incur under
clause (g) of Section 5.11 hereof, and (iii) furniture, fixtures and
equipment of the Company (except furniture, fixtures and equipment which the
Company acquires after May 13, 1996 (other than that acquired pursuant to
Permitted FF&E Financing)), the CMLI Real Property, all the issued Capital
Stock of the Company and all other real and personal Property of the
Guarantors owned as of May 13, 1996 or thereafter acquired.
"COLLATERAL ACCOUNT" shall have the meaning provided in Section 11.1.
"COLLATERAL DOCUMENTS" means, collectively, the Security Agreement, the
Mortgage, any Other Boat Mortgage, the JCC Mortgage, all agreements relating
to the Collateral Account, and all other security agreements, mortgages,
deeds of trust, assignments of leases and rents, pledges, collateral
assignments or any other instruments evidencing or creating any security
interest in favor of the Trustee for the benefit of the Holders in all or
any portion of the Property of the Company or any Guarantor, as the same may
be modified, amended or supplemented from time to time.
"COMMENCEMENT DATE" means the earlier of (i) the date that is 180 days after
May 13, 1996 and (ii) the date on which the Company opens a riverboat casino
for public gaming play in Bossier City, Louisiana.
"COMPANY" means the party named as such in this Indenture until a successor
replaces it pursuant to the Indenture and thereafter means such successor.
"COMPANY CASH FLOW" means, for any period, the Net Income of the Company for
such period adjusted to add thereto, without duplication, the sum of (i)
Depreciation and Amortization of the Company for such period, (ii) Fixed
Charges, which reduced Net Income, of the Company for such period, and (iii)
all cash Income Tax Credit of the Company for such period, and adjusted to
subtract therefrom, all cash Income Tax Expense of the Company for such
period.
"COMPANY COLLATERAL SUB-ACCOUNT" shall have the meaning provided in Section
11.1.
"COMPANY ORDER" means a written order or request signed in the name of the
Company by its President or a Vice President, and by its Treasurer, an
Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered
to the Trustee.
"COMPANY PAYMENT SUB-ACCOUNT" shall have the meaning provided in Section
11.1.
"CONSULTING PROFESSIONAL" means a construction manager or consultant
experienced in the gaming business, engaged by the Trustee unless otherwise
instructed by Holders holding a majority in principal amount of the Notes
outstanding at the time of selection.
"CRESCENT CITY QUEEN CASINO" means the New Orleans Riverboat Casino known as
the M/V Crescent City Queen with respect to which the Company has a
Louisiana Gaming Operator's License.
"CUSTODIAN" means any receiver, trustee, assignee, liquidator, sequestrator
or similar official under any Bankruptcy.
"DEFAULT" means any event which is, or after notice or passage of time or
both would be, an Event of Default.
"DEFINITIVE GAMING OPERATOR'S LICENSE" means a Louisiana Gaming Operator's
License issued to the Company and with respect to which no condition or
other requirement of any Gaming Law or Gaming Authority to the validity or
effectiveness of such license or to the ability of the Company to conduct
gaming operations on and operate the New Orleans Riverboat, remains
unfulfilled.
"DEPRECIATION AND AMORTIZATION" for any person means the total depreciation
and amortization for such person and its Subsidiaries, as determined in
accordance with GAAP.
"DISQUALIFIED CAPITAL STOCK" means, with respect to any person, any Capital
Stock other than any common stock with no special rights and no preference,
privilege or redemption or repayment provisions.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute.
"ESTIMATE" has the meaning assigned to such term in the Collateral
Documents.
"EVENT OF DEFAULT" shall have the meaning specified in Section 7.1.
"EVENT OF LOSS" means, with respect to any Property or asset, any (i) loss,
destruction or damage of such Property or asset, or (ii) any actual
condemnation, seizure or taking, by exercise of the power of eminent domain
or otherwise, of such Property or asset, or confiscation or requisition of
the use of such Property or asset.
"EXCESS CASH FLOW" means for any fiscal quarter or portion thereof, the
amount of the sum of (x) Company Cash Flow (if greater than zero) for such
period plus (but not reduced by) (y) Guarantor Cash Flow for such period
less the sum of (i) the Cash Fixed Charges, which reduced Net Income, of the
Company for such period (but only to the extent such Fixed Charges were not
funded by Collateral), (ii) regularly scheduled principal payments on the
Notes (but not payments of Excess Cash Flow) during such period, (iii)
scheduled principal payments on assumed Existing FF&E Indebtedness and (iv)
the cash interest expense of the Guarantors in respect of Indebtedness, all
of the proceeds of which have been used to make Permitted Capital
Expenditures in respect of the CMLI Real Property (but only to the extent
such expense was not funded by Collateral), for such period, that exceeds
the sum of (a) Permitted Capital Expenditures other than Capital
Expenditures funded with Collateral or with a Parent Equity Contribution
(but only to the extent of such Collateral or Parent Equity Contribution),
and (b) an amount which for any fiscal quarter shall be in the sole
discretion of the Company but which may not for all fiscal quarters of the
Company exceed $5 million (less the aggregate amount of any indemnity or
other liabilities arising out of a Qualified Sale or Qualified Lessor Lease
which have been claimed during or prior to such period under such Qualified
Sale or Qualified Lessor Lease, but only to the extent such indemnity or
liability has reduced Net Income) in the aggregate.
"EXCESS CASH REDEMPTION AMOUNT" for any Interest Payment Date means the
amount of the Aggregate Excess Cash Flow to be paid to the Holders on such
Interest Payment Date in reduction of the outstanding principal amount of
the Notes pursuant to Section 3.1 hereof TIMES a fraction, the numerator of
which is 100 and the denominator of which is the sum of (i) 100 plus (ii)
the Excess Cash Redemption Premium for such Interest Payment Date.
"EXCESS CASH REDEMPTION PREMIUM" means (i) on any Interest Payment Date
occurring on or before the first anniversary of the Commencement Date, zero,
(ii) on any Interest Payment Date occurring on or after the first
anniversary of the Commencement Date but on or before the second
anniversary of the Commencement Date, ten percent (10%) TIMES a fraction,
the numerator of which is the amount of calendar days having elapsed from
and including the day after the first anniversary of the Commencement Date
to and including such Interest Payment Date, and the denominator of which
is three hundred and sixty-five (365), and (iii) on any Interest Payment
Date occurring after the second anniversary of the Commencement Date but
before the third anniversary of the Commencement Date, twenty percent (20%)
TIMES a fraction, the numerator of which is the amount of calendar days
having elapsed from and including the day after the second anniversary of
the Commencement Date to and including such Interest Payment Date, and the
denominator of which is three hundred and sixty-four (364).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated by the SEC thereunder.
"EXISTING FF&E FINANCING" means all Indebtedness arising out of the
assumption of all claims of Bally Gaming, Inc. and International Game
Technology Corp. or their respective successors, assigns, affiliates or
agents pursuant to the Stock Purchase Agreement.
"FIXED CHARGES" of any person means, for any period, the aggregate amount
(without duplication) of (a) interest expensed or capitalized, paid,
accrued, or scheduled to be paid or accrued in accordance with GAAP
(including, in accordance with the following sentence, interest
attributable to Capitalized Lease Obligations) during such period in
respect of all Indebtedness of such person and its Subsidiaries, including
(i) original issue discount and non- cash interest payments or accruals on
any Indebtedness other than with respect to the Notes, (ii) the interest
portion of all deferred payment obligations, calculated in accordance with
GAAP, (iii) all commissions, discounts and other fees and charges owed with
respect to bankers' acceptance financings and currency and Interest Swap
Obligations, in each case to the extent attributable to such period and
determined on a consolidated basis in accordance with GAAP, and (b) the
rental expense for such period attributable to operating leases of such
person and its Subsidiaries. For purposes of this definition, (x) interest
on a Capitalized Lease Obligation shall be deemed to accrue at an interest
rate reasonably determined by the Company to be the rate of interest
implicit in such Capitalized Lease Obligation in accordance with GAAP and
(y) interest expense attributable to any Indebtedness represented by the
guaranty by such person or a Subsidiary of such person of an obligation of
another person shall be deemed to be the interest expense attributable to
the Indebtedness guaranteed.
"GAAP" means United States generally accepted accounting principles as in
effect on the Issue Date.
"GAMING AUTHORITY" means any Governmental Authority with the power to
regulate gaming in any Gaming Jurisdiction, and the corresponding
Governmental Authorities with responsibility to interpret and enforce the
laws and regulations application to gaming in any Gaming Jurisdiction.
"GAMING JURISDICTION" means any Federal, state, tribal or local jurisdiction
or sovereign nation in which any entity in which the Company has a direct or
indirect beneficial, legal or voting interest conducts or intends to conduct
casino gaming (including the rendering of management services in respect
thereof pursuant to a Native American Casino Management Contract or
otherwise).
"GAMING LAW" means any law, rule, regulation or ordinance governing gaming
activities, including the Louisiana Economic Development and Riverboat
Gaming Control Act and the Indian Gaming Regulatory Act, 25 U.S.C. Sec.
2701 et seq., any administrative rules or regulations promulgated
thereunder, and any of the corresponding statutes, rules and regulations in
each Gaming Jurisdiction.
"GAMING LICENSES" means every material license, material franchise or other
material authorization on the date of the Indenture or thereafter required
to own, lease, operate or otherwise conduct or manage riverboat, dockside or
land-based gaming in any Gaming Jurisdiction, and applicable liquor
licenses.
"GOVERNMENTAL AUTHORITY" means any agency, authority, board, bureau,
commission, department, office or instrumentality of any nature whatsoever
of the United States or a tribal or foreign government, any sovereign nation
where the Company or any Guarantor conducts business (including the
rendering of management services in respect thereof pursuant to a Native
American Casino Management Contract or otherwise), any state, province or
any city or other political subdivision or otherwise and whether now or
hereafter in existence, or any officer or official thereof, and any maritime
authority.
"GUARANTORS" means JCC and any other person who executes and delivers a
Guaranty on or after the date hereof.
"GUARANTOR CASH FLOW" means, for any period, sixty percent (60%) of the
amount of the Net Income for such period, or forty percent (40%) of the
amount of the Net Loss for such period, of the Guarantors from the JCC Real
Property adjusted to add to such Net Income, without duplication, the sum of
(i) Depreciation and Amortization expense of the Guarantors and (ii) Fixed
Charges of the Guarantors.
"GUARANTOR COLLATERAL SUB-ACCOUNT" shall have the meaning provided in
Section 11.1.
"GUARANTY" shall have the meaning provided in Section 12.1(a).
"HOLDER" or "NOTEHOLDER" means the person in whose name a Note is registered
on the Registrar's books.
"INCOME TAX CREDIT" of the Company means the total net income tax credits of
the Company as determined under the Tax Sharing Treaty.
"INCOME TAX EXPENSE" of the Company means the total net income tax expenses
of the Company as determined under the Tax Sharing Treaty.
"INCUR" shall have the meaning specified in Section 5.11.
"INDEBTEDNESS" of any person means, without duplication, (a) all liabilities
and obligations, contingent or otherwise, of such person, (i) in respect of
borrowed money (whether or not the recourse of the lender is to the whole of
the assets of such person or only to a portion thereof), (ii) evidenced by
bonds, notes, debentures or similar instruments, (iii) representing the
balance deferred and unpaid of the purchase price of any Property or
services, except such as would constitute trade payables to trade creditors
in the ordinary course of business; provided that such trade payables that
are more than thirty (30) days past their original due date shall
constitute Indebtedness if the aggregate amount thereof at any time exceeds
$100,000, (iv) evidenced by bankers' acceptances or similar instruments
issued or accepted by banks, (v) for the payment of money relating to a
Capitalized Lease Obligation, or (vi) evidenced by a letter of credit or a
reimbursement obligation of such person with respect to any letter of
credit; (b) all net obligations of such person under Interest Swap
Obligations and foreign currency hedges; (c) all liabilities of others of
the kind described in the preceding clause (a) or (b) that such person has
guaranteed or that is otherwise its legal liability and all obligations to
purchase, redeem or acquire any Capital Stock; (d) all obligations secured
by a Lien to which the Property or assets (including, without limitation,
leasehold interests and any other tangible or intangible Property rights)
of such person are subject, whether or not the obligation secured thereby
shall have been assumed by or shall otherwise be such person's legal
liability, PROVIDED, that the amount of such obligation shall be limited to
the lesser of the fair market value of the assets or Property to which such
Lien attaches and the amount of the obligation so secured; and (e) any and
all deferrals, renewals, extensions, refinancings and refundings (whether
direct or indirect) of, or amendments, modifications or supplements to, any
liability of the kind described in any of the preceding clauses (a), (b),
(c), or (d) or this clause (e), whether or not between or among the same
parties.
"INDENTURE" means this Indenture, as amended or supplemented from time to
time in accordance with the terms hereof.
"INDENTURE OBLIGATIONS" means the obligations of the Company and the
Guarantors pursuant to this Indenture and the Notes (and any other obligor
hereunder or under the Notes) now or hereafter existing, to pay principal of
and premium, if any, and interest on the Notes when due and payable, whether
on the Maturity Date or an Interest Payment Date, by acceleration, call for
redemption, or otherwise, and interest on the overdue principal and premium,
if any, of, and (to the extent lawful) interest, if any, on, the Notes and
all other amounts due or to become due in connection with this Indenture,
the Notes and the Security Agreement and the Mortgage, including any and
all extensions, renewals or other modifications thereof, in whole or in
part, and the performance of all other obligations of the Company (and any
other obligor hereunder or under the Notes) and the Guarantors, including
all costs and expenses incurred by the Trustee or the Holders in the
collection or enforcement of any such obligations or realization upon the
Collateral or the security of any Mortgage.
"INSURANCE PROCEEDS" means the Company's and the Guarantors' interest in and
to (a) all proceeds which now or hereafter may be paid under any insurance
policies now or hereafter obtained by or on behalf of the Company or any of
the Guarantors in connection with the conversion of the Property subject to
the Mortgage, the CMLI Mortgage or the Security Agreement into Cash or
liquidated claims, together with the interest payable thereon and the right
to collect and receive the same, including, but without limiting the
generality of the foregoing, proceeds of casualty insurance, title
insurance, business interruption insurance and any other insurance now or
hereafter maintained with respect to such Property and (b) all amounts
attributable to Events of Loss.
"INTEREST PAYMENT DATE" means any of the following dates: August 15, 1996,
November 15, 1996, February 15, 1997, May 15, 1997, August 15, 1997,
November 15, 1997, February 15, 1998, May 15, 1998, August 15, 1998,
November 15, 1998, February 15, 1999, May 15, 1999, August 15, 1999 (but
only if such date is on or before the third anniversary of the Commencement
Date), and November 13, 1999 (but only if such date is on or before the
third anniversary of the Commencement Date).
"INTEREST SWAP OBLIGATION" means, when used with reference to any person,
the obligations of such person pursuant to any arrangement with any other
person whereby, directly or indirectly, such person is entitled to receive
from time to time periodic payments calculated by applying either a floating
or a fixed rate of interest on a stated notional amount in exchange for
periodic payments made by such person calculated by applying a fixed or a
floating rate of interest on the same notional amount.
"INVESTMENT" by any person in any other person means (without duplication)
(a) the acquisition by such person (whether for cash, Property, services,
securities or otherwise) of capital stock, bonds, notes, debentures,
partnership or other ownership interests or other securities, including any
options or warrants, of such other person or any agreement to make any such
acquisition; (b) the making by such person of any deposit with, or advance,
loan or other extension of credit to, such other person (including the
purchase of Property from another person subject to an understanding or
agreement, contingent or otherwise, to resell such Property to such other
person) or any commitment to make any such advance, loan or extension (but
excluding accounts receivable arising in the ordinary course of business;
provided that such receivables that are more than thirty (30) days past
their original due date shall constitute Investments if the aggregate amount
thereof at any time exceeds $100,000), other than prepaid expenses and
deposits with governmental authorities in the ordinary course of business of
such person; (c) other than the Guaranties of the Notes, the entering into
by such person of any guarantee of, or other credit support or contingent
obligation with respect to, Indebtedness or other liability of such other
person; or (d) the making of any capital contribution by such person to such
other person.
"ISSUE DATE" means the date of first issuance of the Notes under the the
Second Amended Plan of Reoerganization of Crescent City Casin Development
Corporation, dated March 15, 1996.
"JCC" means Jefferson Casino Corporation, a Louisiana corporation.
"JCC INDEBTEDNESS" means the Indebtedness of JCC identified on Exhibit E
hereto.
"LEGAL HOLIDAY" shall have the meaning provided in Section 12.7.
"LICENSES" means the Certificate of Preliminary Approval, Certificate of
Final Approval and Conditional or, as applicable, Definitive Gaming
Operator's License.
"LIEN" means any mortgage, lien, pledge, charge, security interest, or other
encumbrance of any kind, whether or not filed, recorded or otherwise
perfected under applicable law (including any conditional sale or other
title retention agreement and any lease deemed to constitute a security
interest, and any option or other agreement to give any security interest).
"LOUISIANA GAMING OPERATOR'S LICENSE" means one of the Gaming Licenses to
conduct riverboat gaming activities (limited in number to fifteen as of the
Issue Date) permitted to be issued pursuant to the provisions of the
Louisiana Riverboat Economic Development and Gaming Control Act and Title
42, Part XIII, Chapters 17 and 21 of the Louisiana Administrative Code, and
any amendment thereto.
"MATURITY DATE," when used with respect to any Note, means the date on which
the principal of such Note becomes due and payable as therein or herein
provided, whether at Stated Maturity, a Redemption Date or by declaration of
acceleration, call for redemption or otherwise.
"MORTGAGE" means the First Preferred Ship Mortgage dated as of May 13, 1996
from the Company to the Trustee, as the same may be amended from time to
time.
"NET AWARD" has the meaning assigned to such term in the Collateral
Documents.
"NET AWARD SUB-ACCOUNT" has the meaning set forth in Section 11.1 hereof.
"NET INCOME" of any person or in respect of any asset, for any period, means
the total of all gain and loss for such person or in respect of such asset,
as determined in accordance with GAAP, excluding from the computation
thereof (a) all gain and loss arising from the sale, damage, destruction,
condemnation, exchange, or distribution of any or all assets (other than
current assets), (b) all revenue and expense from (i) all changes in
accounting principles, (ii) all discontinued operations or dispositions
thereof, (iii) extraordinary transactions, or (iv) all Qualified Lessor
Leases and Qualified Lessee Leases, and (c) expenses to the extent funded
from Cash that is Collateral (other than expenses funded by the disposition
of Collateral in accordance with Section 4.3(a)(i) hereof).
"NET LOSS" shall mean, for any period, Net Income to the extent Net Income
as computed for such period is less than zero.
"NON-RECOURSE INDEBTEDNESS" means Indebtedness of a person to the extent
that under the terms thereof or pursuant to applicable law (i) no personal
recourse shall be had against such person for the payment of the principal
of or interest or premium on such Indebtedness, and (ii) enforcement of
obligations on such Indebtedness is limited only to recourse against
interests in Property and assets purchased with the proceeds of the
incurrence of such Indebtedness and as to which neither the Company nor any
Guarantor provides any credit support or is liable.
"NOTEHOLDER" See "HOLDER."
"NOTES" means the 11 1/2% Senior Secured Notes due 1999, as amended and
supplemented from time to time in accordance with the terms hereof, that are
issued pursuant to this Indenture.
"OFFICER" means, with respect to the Company or any Guarantor, the Chairman
of the Board, the President, any Vice President, the Chief Financial
Officer, the Treasurer, the Controller, or the Secretary or Assistant
Secretary of the Company or such Guarantor.
"OFFICERS' CERTIFICATE" means, with respect to the Company or any Guarantor,
a certificate signed by two Officers of the Company or such Guarantor and
otherwise complying with the requirements of Sections 13.4 and 13.5.
"OPINION OF COUNSEL" means a written opinion from legal counsel to the
Company complying with the requirements of Sections 13.4 and 13.5. Unless
otherwise required by this Indenture, the counsel may be in-house counsel to
the Company.
"OTHER BOAT MORTGAGE" means collectively the mortgages, instruments and
agreements delivered by the Company pursuant to Section 4.4(a) and 11.3
sufficient to grant to the Trustee for the benefit of the Holders a valid
first priority Lien on any Substitute Boat.
"PARENT EQUITY CONTRIBUTION" means Cash payments from JCC to the Company, or
from Casino Magic Corp. to either Guarantor, for Capital Stock (other than
Disqualified Capital Stock).
"PAYING AGENT" shall have the meaning specified in Section 2.3.
"PERMITTED CAPITAL EXPENDITURES" means any of the following:(i) Capital
Expenditures of the Company or the Guarantor to the extent funded with the
proceeds of a Parent Equity Contribution (a) in an amount of up to 25% of
the purchase price of furniture, fixtures and equipment the remainder of the
purchase price of which is financed with Permitted FF&E Financing pursuant
to Section 5.11(b) hereof, or (b) in all other cases, only so long as the
Liens of the Trustee under the Collateral Documents attach to the Property
acquired or constructed with such Capital Expenditures with the same
validity, priority and perfection as the Liens of the Trustee in the
Collateral;
(ii) Capital Expenditures to the extent funded with Cash which is not
Collateral (a) in an amount of up to 25% of the purchase price of furniture,
fixtures and equipment the remainder of the purchase price of which is
financed with Permitted FF&E Financing incurred pursuant to Section 5.11(b)
hereof, or (b) in all other cases, only so long as the Liens of the Trustee
under the Collateral Documents attach to the Property acquired or
constructed with such Capital Expenditures with the same validity, priority
and perfection as the Liens of the Trustee in the Collateral;
(iii) Capital Expenditures (other than to purchase furniture, fixtures and
equipment the purchase price of which is financed in part with Permitted
FF&E Financing incurred pursuant to Section 5.11(b) hereof) to the extent
funded with Cash from the Company Collateral Sub-Account, but only in an
aggregate amount from the Issue Date which, when added to the aggregate
amount from the Issue Date of Capital Expenditures permitted under clause
(iv) below, does not exceed $1,000,000; PROVIDED, HOWEVER, that the Liens of
the Trustee attach to the Property acquired or constructed with such Capital
Expenditures with the same validity, priority and perfection as the Liens of
the Trustee in the Collateral used to fund such Capital Expenditures;
(iv) Capital Expenditures to the extent funded with Cash from the Company
Collateral Sub-Account, in each case in an amount of up to 25% of the
purchase price of furniture, fixtures and equipment the remainder of the
purchase price of which is financed with Permitted FF&E Financing incurred
pursuant to Section 5.11(b) hereof, but only in an aggregate amount from the
Issue Date which, when added to the aggregate amount from the Issue Date of
Capital Expenditures permitted under clause (iii) above, does not exceed
$1,000,000;
(v) Capital Expenditures to the extent funded with Boat Conveyance Proceeds;
PROVIDED, HOWEVER, that the Liens of the Trustee attach to such Capital
Expenditures with the same validity, priority and perfection as the Liens of
the Trustee in the Collateral used to fund such Capital Expenditures;
PROVIDED, FURTHER, the Company complies in all respects with the provisions
of Section 11.4 hereof in making any Capital Expenditures funded with Boat
Conveyance Proceeds; and
(vi) Capital Expenditures to the extent funded with Net Awards; PROVIDED,
HOWEVER, that the Liens of the Trustee attach to such Capital Expenditures
with the same validity, priority and perfection as the Liens of the Trustee
in the Collateral used to fund such Capital Expenditures; PROVIDED, FURTHER,
the Company complies in all respects with the provisions of Section 11.2
hereof in making any Capital Expenditures funded with Net Awards; and
(vii) after the Release Date, Capital Expenditures to the extent funded with
Cash which is not Collateral.
"PERMITTED FF&E FINANCING" means Indebtedness which is Non-recourse
Indebtedness to the Company or any of its properties (other than as provided
in this definition) that is incurred to finance the acquisition or lease
after May 13, 1996 of newly acquired or leased furniture, fixtures or
equipment ("FF&E") used directly in the operation of casinos and secured by
a first priority Lien on such FF&E which Lien, subject to (i) Liens
permitted under Section 5.13 hereof, and (ii) a Lien in favor of the Notes,
but only to the extent permitted by the secured lender with respect to such
FF&E financing, shall be the only Lien with respect to such FF&E and may be
an exclusive Lien or senior, PARI PASSU or junior to the rights of the
Trustee under the Collateral Documents.
"PERMITTED LIENS" means any of the following:
(a) Liens for taxes, assessments or other governmental charges not yet
due or which are being contested in good faith and by appropriate
proceedings by the Company or a Guarantor if adequate reserves with respect
thereto are maintained on the books of the Company or such Guarantor, as the
case may be, in accordance with GAAP;
(b) statutory Liens of carriers, laborors, warehousemen, mechanics,
landlords, materialmen, repairmen or other like Liens (including maritime
liens) arising by operation of the law in the ordinary course of business
and consistent with industry practices and Liens on deposits made to obtain
the release of such Liens if (i)the underlying obligations are not overdue
for a period of more than sixty (60) days or (ii) such Liens are being
contested in good faith and by appropriate proceedings by the Company or a
Guarantor and adequate reserves with respect thereto are maintained on the
books of the Company or such Guarantor, as the case may be, in accordance
with GAAP; and
(c) easements, rights-of-way, zoning and similar restrictions and
other similar encumbrances or title defects incurred or imposed, as
applicable, in the ordinary course of business and consistent with industry
practices which, in the aggregate, are not substantial in amount, and which
do not in any case materially detract from the value of the property subject
thereto (as such property is used by the Company or such Guarantor) or
interfere with the ordinary conduct of the business of the Company or such
Guarantor or any of their Subsidiaries; PROVIDED, that any such Liens are
not incurred in connection with any borrowing of money or any commitment to
loan any money or to extend any credit.
"PERSON" means any individual, limited liability company, corporation,
partnership, joint venture, association, joint-venture company, trust,
unincorporated organization or government or other agency or political
subdivision thereof.
"PLANS AND SPECIFICATIONS" means all drawings, plans and specifications
prepared by or on behalf of the Company or any of its Subsidiaries, as the
same may be amended or supplemented from time to time in good faith by the
Board of Directors of the Company or such Guarantor, and, if required by
applicable law, submitted to and approved by the building or other relevant
department, which describe and show the Crescent City Queen Casino, or, if
applicable, another casino and the labor and materials necessary for
construction thereof.
"PRINCIPAL" of any Indebtedness (including the Notes) means the principal of
such Indebtedness plus any applicable premium, if any, on such Indebtedness.
"PROPERTY" or "property" means any right or interest in or to property or
assets of any kind whatsoever, whether real, personal or mixed and whether
tangible, intangible, contingent, indirect or direct.
"QUALIFIED LESSEE LEASE" means a lease agreement (which in all respects
shall be subject to the provisions of Section 11.3 hereof) pursuant to which
the Company is the Lessee of a Substitute Boat or a Qualified Substitute
Boat; PROVIDED, HOWEVER, that such lease stipulates that the Company's use
and quiet enjoyment of such Substitute Boat or Qualified Substitute Boat
during the term of such lease shall not be disturbed so long as the Company
does not default under its payment obligations to or for the benefit of the
lessor and its successors and assigns under such lease.
"QUALIFIED LESSOR LEASE" means a lease by the Company of the Crescent City
Queen Casino or a Qualified Substitute Boat owned by the Company pursuant to
the terms of which the contract rights, agreements and instruments
evidencing the Company's rights and interests with respect to the lease
transaction are not subject to any negative pledge or other impairment as to
assignability.
"QUALIFIED SALE" means a sale, transfer or other conveyance of all of the
Company's right, title and interest in the Crescent City Casino Queen
pursuant to the terms of which (i) there is no post-closing escrow,
retainage or other hold-back of the consideration to be paid to the Company,
(ii) the contract rights, agreements and instruments evidencing the
Company's rights and interests with respect to the sale are not subject to
any negative pledge or other impairment as to assignability, and (iii) the
Company shall have no post-closing indemnification or other liabilities to
or for the benefit of the purchaser other than liabilities that are not
recourse to the Collateral.
"QUALIFIED SUBSTITUTE BOAT" means a vessel qualifying under the Louisiana
Riverboat Economic and Control Act as a riverboat substantially similar in
quality and size to any riverboat casinos used and competitive in Bossier
City or Shreveport, Louisiana.
"RECORD DATE" means a Record Date specified in the Notes whether or not such
Record Date is a Business Day.
"REDEMPTION DATE" when used with respect to any Note to be redeemed means
the date fixed for such redemption by or pursuant to this Indenture.
"REDEMPTION PREMIUM" means (i) on any Redemption Date occurring on or before
the first anniversary of the Commencement Date, zero, (ii) on any Redemption
Date occurring on or after the first anniversary of the Commencement Date
but on or before the second anniversary of the Commencement Date, ten
percent (10%) TIMES a fraction, the numerator of which is the amount of
calendar days having elapsed from and including the day after the first
anniversary of the Commencement Date to and including such Redemption Date,
and the denominator of which is three hundred and sixty-five (365), and
(iii) on any Redemption Date occurring after the second anniversary of the
Commencement Date but before the third anniversary of the Commencement Date,
twenty percent (20%) TIMES a fraction, the numerator of which is the amount
of calendar days having elapsed from and including the day after the second
anniversary of the Commencement Date to and including such Redemption Date,
and the denominator of which is three hundred and sixty-four (364).
"REDEMPTION PRICE" when used with respect to any Note to be redeemed, means
the principal face amount of such Note TIMES the sum of one plus the
Redemption Premium as of the Redemption Date for such Note.
"REFINANCING INDEBTEDNESS" means Indebtedness (a) issued in exchange for, or
the proceeds from the issuance and sale of which are used substantially
concurrently to repay, redeem, defease, refund, refinance, discharge or
otherwise retire for value, in whole or in part, or (b) constituting an
amendment, modification or supplement to, or a deferral or renewal of ((a)
and (b) above are, collectively, a "Refinancing"), any Indebtedness in a
principal amount not to exceed (after deduction of reasonable and customary
fees and expenses incurred in connection with the Refinancing) the lesser of
(i) the principal amount of the Indebtedness so Refinanced and (ii) if such
Indebtedness being Refinanced was issued with an original issue discount,
the accreted value thereof (as determined in accordance with GAAP) at the
time of such Refinancing; PROVIDED, that (A) Refinancing Indebtedness of any
Guarantor of the Company shall only be used to refinance outstanding
Indebtedness of such Guarantor, (b) Refinancing Indebtedness shall (x) not
have an Average Life shorter than the Indebtedness to be so Refinanced at
the time of such refinancing and (y) in all respects, be no less
subordinated, if applicable, to the rights of holders pursuant to the Notes
than was the Indebtedness to be refinanced and (C) such Refinancing
Indebtedness shall have no installment of principal (or redemption)
scheduled to come due earlier than the scheduled maturity of any installment
of principal of the Indebtedness to be so refinanced which was scheduled to
come due prior to the Stated Maturity.
"REGISTRAR" shall have the meaning specified in Section 2.3.
"RELATED BUSINESS" means the gaming business conducted (or proposed to be
conducted) by the Company and its Subsidiaries as of the Issue Date and any
and all materially related businesses in support of and ancillary to the
gaming business.
"RELEASE DATE" means the first date on which the aggregate principal amount
of Notes outstanding is equal to or less than $17,500,000.00.
"REQUIRED REGULATORY REDEMPTION" means a redemption by the Company of any of
a Note or Notes pursuant to, and in accordance with, any order of any
Governmental Authority with appropriate jurisdiction and authority relating
to a Gaming License, or to the extent necessary in the reasonable, good
faith judgment of the Board of Directors of the Company to prevent the loss,
failure to obtain or material impairment or to secure the reinstatement of,
any material Gaming License, wherein any such case such redemption or
acquisition is required because the Holder or beneficial owner of such Note
is required to be found suitable or to otherwise qualify under any Gaming
Laws and is not found suitable or so qualified within a reasonable period of
time.
"RESTRICTED INVESTMENT" means, in one or a series of related transactions,
any Investment other than in Cash Equivalents; PROVIDED, that the extension
of credit to customers of Company-owned or operated casinos or the
settlement of gambling debts consistent with industry practice and in the
ordinary course of business shall not be a Restricted Investment.
"RESTRICTED PAYMENT" means, with respect to any person, (a) the declaration
or payment of any dividend or other distribution in respect of Capital Stock
of such person, or (b) any payment on account of the purchase, redemption or
other acquisition or retirement for value of Capital Stock of such person or
any Affiliate of such person; PROVIDED, HOWEVER, that the term "Restricted
Payment" does not include any dividend, distribution or other payment (i) to
any of the Guarantors by any other Guarantor, (ii) under the Tax Sharing
Treaty, or (iii) in repayment of the amount of an escrow or holdback funded
solely by a Parent Equity Contribution in connection with a Qualified Sale;
PROVIDED, FURTHER that any payment from a Subsidiary of the Guarantor (other
than the Company) shall not be a Restricted Payment for purposes of clause
(a) or (b) above.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the rules
and regulations of the SEC promulgated thereunder.
"SECURITY AGREEMENT" means the Pledge and Security Agreement, dated the date
hereof, by and among the Company, the Guarantors, and the Trustee for the
benefit of the Holders, as the same may be amended from time to time in
accordance with the terms thereof.
"STATED MATURITY," when used with respect to any Note, means the third
anniversary of the Commencement Date.
"STOCK PURCHASE AGREEMENT" means that certain Stock Purchase Agreement,
dated February 21, 1996, among the Company, JCC, C-M of Louisiana, Inc., a
Louisiana corporation (n/k/a JCC), Casino Magic Corp., and Capital Gaming
International, Inc.
"SUBSIDIARY," with respect to any person, means (i) a corporation a majority
of whose Capital Stock with voting power, under ordinary circumstances, to
elect directors is at the time, directly or indirectly, owned by such
person, by such person and one or more Subsidiaries of such person or by one
or more Subsidiaries of such person or (ii) any other person (other than a
corporation) in which such person, one or more Subsidiaries of such person,
or such person and one or more Subsidiaries of such person, directly or
indirectly, at the date of determination thereof has at least majority
ownership interest.
"SUBSTITUTE BOAT" means a vessel qualifying under the Louisiana Riverboat
Economic and Control Act as a riverboat.
"TAX SHARING TREATY" means the Tax Allocation Agreement substantially in the
form of Exhibit C hereto.
"THIRD PARTY" means a person which is not an Affiliate of the Company or any
Guarantor.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code Sec 77aaa-7bbbb)
as in effect on the date of the execution of this Indenture.
"TRUST MONEYS" shall have the meaning specified in Section 11.1.
"TRUSTEE" means the party named as such in this Indenture until a successor
replaces it in accordance with the provisions of this Indenture and
thereafter means such successor.
"TRUST OFFICER" means any officer within the corporate trust department (or
any successor group) of the Trustee including any vice president, assistant
vice president, secretary, assistant secretary or any other officer or
assistant officer of the Trustee customarily performing functions similar to
those performed by the persons who at that time shall be such officers, and
also means, with respect to a particular corporate trust officer any other
officer of the corporate trust department (or any successor group) of the
Trustee to whom such trust matter is referred because of his knowledge of
and familiarity with the particular subject.
"U.S. GOVERNMENT OBLIGATIONS" means direct non-callable obligations of, or
non-callable obligations guaranteed by, the United States of America for the
payment of which obligations or guarantee the full faith and credit of the
United States of America is pledged.
"U.S. LEGAL TENDER" means such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts.
"WAITING PERIOD" means the initial 90 day period from and after the
consummation of the transactions contemplated by the transfer of the
Crescent City Queen Casino pursuant to Section 4.4 hereof.
"WHOLLY OWNED" with respect to a Subsidiary of any person means (i) with
respect to a Subsidiary that is a limited liability company or similar
entity, a Subsidiary whose capital stock is 99% or greater beneficially
owned by such person and (ii) with respect to a Subsidiary that is other
than a limited liability company or similar entity, a Subsidiary whose
capital stock or other equity interest is 100% beneficially owned by such
person.
Section 1.2. INCORPORATION BY REFERENCE OF TIA.
Whenever this Indenture refers to a provision of the TIA, such provision is
incorporated by reference in and made a part of this Indenture. The
following TIA terms used in this Indenture have the following meanings:
"COMMISSION" means the SEC.
"INDENTURE SECURITYHOLDER" means a Holder or a Noteholder.
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee.
"OBLIGOR" on the indenture securities means the Company and any other
obligor on the Notes.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein have the meanings assigned to them thereby.
Section 1.3. RULES OF CONSTRUCTION.
Unless the context otherwise requires:(i) a term has the meaning assigned to
it;
(ii) an accounting term not otherwise defined has the meaning assigned to it
in accordance with GAAP;
(iii) "or" is not exclusive;
(iv) words in the singular include the plural, and words in the plural
include
the singular;
(v) provisions apply to successive events and transactions;
(vi) "herein," "hereof" and other words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or other
subdivision; and
(vii) references to Sections or Articles means reference to such Section or
Article in this Indenture, unless stated otherwise.
<PAGE>
Article II.
THE NOTES
Section 2.1. FORM AND DATING.
The Notes and the Trustee's certificate of authentication, in respect
thereof, shall be substantially in the form of EXHIBIT A hereto, which is
part of this Indenture. The Notes may have notations, legends or
endorsements required by law, stock exchange rule or usage. The Company
shall approve the form of the Notes and any notation, legend or endorsement
on them. Any such notations, legends or endorsements not contained in the
form of Note attached as EXHIBIT A hereto shall be delivered in writing to
the Trustee. Each Note shall be dated the date of its authentication.
The terms and provisions contained in the form of Notes shall constitute,
and are hereby expressly made, a part of this Indenture and, to the extent
applicable, the Company and the Trustee, by their execution and delivery of
this Indenture, expressly agree to such terms and provisions and to be bound
thereby.
Section 2.2. EXECUTION AND AUTHENTICATION.
Two Officers shall sign, or one Officer shall sign and one Officer shall
attest to, the Notes for the Company by manual or facsimile signature. The
Company's seal shall be impressed, affixed, imprinted, or reproduced on the
Notes and may be in facsimile form.
If an Officer whose signature is on a Note was an Officer at the time of
such execution but no longer holds that office at the time the Trustee
authenticates the Note, the Note shall be valid nevertheless and the Company
shall nevertheless be bound by the terms of the Notes and this Indenture.
A Note shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Note, but such
signature shall be conclusive evidence that the Note has been authenticated
pursuant to the term of this Indenture.
The Trustee shall authenticate Notes for original issue in the aggregate
principal amount of up to $35,000,000 upon a written order of the Company in
the form of an Officers' Certificate. The Officers' Certificate shall
specify the amount of Notes to be authenticated and the date on which the
Notes are to be authenticated. The aggregate principal amount of Notes
outstanding at any time may not exceed $35,000,000, except as provided in
Section 2.7. Upon the written order of the Company in the form of an
Officers' Certificate, the Trustee shall authenticate Notes in substitution
of Notes originally issued to reflect any name change of the Company.
The Trustee may appoint an authenticating agent acceptable to the Company to
authenticate Notes. Unless otherwise provided in the appointment, an
authenticating agent may authenticate Notes whenever the Trustee may do so.
Each reference in this Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent has the same rights
as an Agent to deal with the Company, any Affiliate of the Company or any of
their respective Subsidiaries.
Notes shall be issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof.
Section 2.3. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency in the borough of Manhattan,
The City of New York, where Notes may be presented for registration of
transfer or for exchange ("Registrar") and an office or agency in the
Borough of Manhattan, The City of New York where Notes may be presented for
payment ("Paying Agent") and an office or agency where notices and demands
to or upon the Company in respect of the Notes may be served. The Company
may act as its own Registrar or Paying Agent, except that, for the purposes
of Articles III and VII, neither the Company nor any Affiliate of the
Company shall act as Paying Agent. The Registrar shall keep a register of
the Notes, their respective outstanding principal amounts, and their
transfer and exchange. The Company may have one or more co-Registrars and
one or more additional Paying Agents. The term "Paying Agent" includes any
additional Paying Agent. The Company hereby initially appoints the Trustee
as Registrar and Paying Agent, and the Trustee hereby initially agrees so to
act.
The Company shall enter into an appropriate written agency agreement with
any Agent not a party to this Indenture, which agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall
promptly notify the Trustee in writing of the name and address of any such
Agent. If the Company fails to maintain a Registrar or Paying Agent, the
Trustee shall act as such.
Section 2.4. PAYING AGENT TO HOLD ASSETS IN TRUST.
The Company shall require each Paying Agent other than the Trustee to agree
in writing that each Paying Agent shall hold in trust for the benefit of
Holders or the Trustee all assets held by the Paying Agent for the payment
of principal of, or interest on, the Notes (whether such assets have been
distributed to it by the Company or any other obligor on the Notes), and
shall notify the Trustee in writing of any Default by the Company (or any
other obligor on the Notes) in making any such payment. If the Company or a
Subsidiary of the Company acts as Paying Agent, it shall segregate such
assets and hold them as a separate trust fund for the benefit of the Holders
or the Trustee. The Company at any time may require a Paying Agent to
distribute all assets held by it to the Trustee and account for any assets
disbursed and the Trustee may at any time during the continuance of any
payment Default, upon written request to a Paying Agent, require such Paying
Agent to distribute all assets held by it to the Trustee and to account for
any assets that shall have been delivered by the Company to the Paying
Agent, and upon compliance by the Paying Agent with such directions, the
Paying Agent (if other than the Company) shall have no further liability for
such assets.
Section 2.5. NOTEHOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably practicable
the most recent list available to it of the names and addresses of Holders.
If the Trustee is not the Registrar, the Company shall furnish to the
Trustee on or before the third Business Day preceding each Interest Payment
Date and at such other times as the Trustee may request in writing a list in
such form and as of such date as the Trustee reasonably may require of the
names and addresses of Holders. The Trustee, the Registrar and the Company
shall provide a current securityholder list to any Gaming Authority upon
demand.
Section 2.6. TRANSFER AND EXCHANGE.
When Notes are presented to the Registrar or a co-Registrar with a request
to register the transfer of such Notes or to exchange such Notes for an
equal principal amount of Notes of other authorized denominations, the
Registrar or co-Registrar shall register the transfer or make the exchange
as met; PROVIDED, HOWEVER, that the Notes surrendered for transfer or
exchange shall be duly endorsed or accompanied by a written instrument of
transfer in form reasonably satisfactory to the Company and the Registrar or
Co-Registrar, duly executed by the Holder thereof or his attorney duly
authorized in writing. To permit registrations of transfers and exchanges,
the Company shall execute and the Trustee shall authenticate Notes at the
Registrar's or co-Registrar's request. No service charge shall be made for
any registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any transfer tax, assessments, or
similar governmental charge payable in connection therewith (other than any
such transfer taxes, assessments, or similar governmental charge payable
upon exchanges or transfers pursuant to Sections 2.2, 2.10, 3.6, or 9.5).
Except for a Required Regulatory Redemption pursuant to Section 3.2 of this
Indenture or an order of any Gaming Authority, the Registrar or co-Registrar
shall not be required to register the transfer of or exchange of (a) any
Note selected for redemption in whole or in part pursuant to being redeemed
in part, or (b) any Note for a period of 15 Business Days before the mailing
of a notice of an offer to redeem Notes pursuant to Article III hereof and
ending on the close of business of the day of such mailing.
Section 2.7. REPLACEMENT NOTES.
If a mutilated Note is surrendered to the Trustee or if the Holder of a Note
claims and submits an affidavit or other evidence, satisfactory to the
Trustee, to the Trustee to the effect that the Note has been lost, destroyed
or wrongfully taken, the Company shall issue and the Trustee shall
authenticate a replacement Note if the Trustee's requirements are met. If
required by the Trustee or the Company, such Holder must provide an
indemnity bond or other indemnity, sufficient in the judgment of both the
Company and the Trustee, to protect the Company, the Trustee or any Agent
from any loss which any of them may suffer if a Note is replaced. The
Company may charge such Holder for its reasonable, out-of-pocket expenses in
replacing a Note.
Every replacement Note is an additional obligation of the Company.
Section 2.8. OUTSTANDING NOTES.
Notes outstanding at any time are all the Notes that have been authenticated
by the Trustee except those canceled by it, those delivered to it for
cancellation and those described in this Section 2.8 as not outstanding. A
Note does not cease to be outstanding because the Company or an Affiliate of
the Company holds the Note, except as provided in Section 2.9.
If a Note is replaced pursuant to Section 2.7 (other than a mutilated Note
surrendered for replacement), it ceases to be outstanding unless the Trustee
receives proof satisfactory to it that the replaced Note is held by a BONA
FIDE purchaser. A mutilated Note ceases to be outstanding upon surrender of
such Note and replacement thereof pursuant to Section 2.7.
If on a Redemption Date or the Maturity Date the Paying Agent (other than
the Company or an Affiliate of the Company) holds U.S. Legal Tender or U.S.
Government Obligations sufficient to pay all of the principal and interest
due on the Notes payable on that date and payment of the securities called
for redemption is not otherwise prohibited, then on and after that date such
Notes cease to be outstanding and interest on them ceases to accrue.
Section 2.9. TREASURY NOTES.
In determining whether the Holders of the required principal amount of Notes
have concurred in any direction, amendment, supplement, waiver or consent,
Notes owned by the Company, any Guarantor and Affiliates of the Company or
of any Guarantor shall be disregarded, except that, for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, amendment, supplement, waiver or consent, only Notes that the
Trustee knows or has reason to know are so owned shall be disregarded.
Section 2.10. TEMPORARY NOTES.
Until definitive Notes are ready for delivery, the Company may prepare, the
Guarantor shall endorse and the Trustee shall authenticate temporary Notes.
Temporary Notes shall be substantially in the form of definitive Notes but
may have variations that the Company reasonably and in good faith considers
appropriate for temporary Notes. Without unreasonable delay, the Company
shall prepare, the Guarantor shall endorse and the Trustee shall
authenticate definitive Notes in exchange for temporary Notes. Until so
exchanged, the temporary Notes shall in all respects be entitled to the same
benefits under this Indenture as permanent Notes authenticated and delivered
hereunder.
Section 2.11. CANCELLATION.The Company at any time may deliver Notes to the
Trustee for cancellation. The Registrar and the Paying Agent shall forward
to the Trustee any Notes surrendered to them for transfer, exchange or
payment. The Trustee, or at the direction of the Trustee, the Registrar or
the Paying Agent (other than the Company or an Affiliate of the Company),
and no one else, shall cancel and, at the written direction of the Company,
shall dispose of all Notes surrendered for transfer, exchange, payment or
cancellation. Subject to Section 2.7, the Company may not issue new Notes
to replace Notes it has paid or delivered to the Trustee for cancellation.
No Notes shall be authenticated in lieu of or in exchange for any Notes
canceled as provided in this Section 2.11, except as expressly permitted in
the form of Notes and as permitted in this Indenture.
Section 2.12. DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Notes, it shall pay
the defaulted interest, plus (to the extent lawful) interest on the
defaulted interest, to the persons who are Holders on a Record Date (or at
its option a subsequent special record date) which date shall be the
fifteenth day next preceding the date fixed by the Company for the payment
of defaulted interest, whether or not such day is a Business Day, unless
the Trustee fixes another record date. At least 15 days before the
subsequent special record date, the Company shall mail to each Holder with
a copy to the Trustee a notice that states the subsequent special record
date, the payment date and the amount of defaulted interest, and interest
payable on such defaulted interest, if any, to be paid.
<PAGE>
Article III.
MANDATORY REDUCTION; REDEMPTION
Section 3.1. MANDATORY PRINCIPAL REDUCTION WITH EXCESS CASH FLOW.
On each Interest Payment Date commencing November 15, 1996, and ending with
the second Interest Payment Date after the occurrence of the Release Date,
the Company will unconditionally pay to the Trustee for the benefit of the
Holders the Excess Cash Flow for the fiscal quarter of the Company and the
Guarantors ending on the Interest Payment Date immediately preceding such
Interest Payment Date; PROVIDED, HOWEVER, that the Company will pay to the
Trustee for the benefit of the Holders the Excess Cash Flow for the last
fiscal quarter of a fiscal year of the Company and the Guarantors on the
SECOND Interest Payment Date following the last date of such last fiscal
quarter of the fiscal year. The Company will certify no later than 10 days
prior to the applicable Interest Payment Date the amount of Excess Cash
Flow to be paid by the Company and will deliver such Excess Cash Flow in
accordance with Section 5.1 hereof.
If on any Interest Payment Date the Excess Cash Flow otherwise payable shall
be $100,000 or less, no Excess Cash Flow payment shall be made to Holders,
but as to such Excess Cash Flow (the "Aggregate Excess Cash Flow"), the
Trustee shall hold all such Aggregate Excess Cash Flow in the Company
Payment Sub- Account in anticipation of distribution in accordance with this
Section 3.1;
PROVIDED, HOWEVER, that interest earned on Aggregate Excess Cash Flow while
in the Company Payment Sub-Account during any fiscal quarter shall be
remitted to the Company on the last day of such fiscal quarter.
On each Interest Payment Date commencing November 15, 1996, and ending with
the second Interest Payment Date after the occurrence of the Release Date on
which the Aggregate Excess Cash Flow then held by the Trustee exceeds
$100,000, the Trustee will distribute to each Holder upon presentment to the
Trustee of such Holder's Note such Holder's PRO RATA share of the Aggregate
Excess Cash Flow in reduction of the then outstanding principal amount of
the Note by an amount equal to such Holder's PRO RATA share of the Excess
Cash Redemption Amount, in addition to any regularly scheduled principal
payment due on such Interest Payment Date (if any).
After the Release Date or the date of an Adverse State Action, as the case
may be, Aggregate Excess Cash Flow distributions made on an Interest
Payment Date pursuant to this Section 3.1 will be applied to installments
of principal on the Notes in inverse order of maturity.
The obligations of the Company under this Section 3.1 shall continue
notwithstanding an Adverse State Action.
Section 3.2. OPTIONAL REDEMPTION.
The Notes may be redeemed at any time, in whole or in part, at the election
of the Company at the Redemption Price then applicable for the Redemption
Date for such redemption and subject to the conditions set forth herein and
in the form of Note set forth in EXHIBIT A hereto.
Any redemption pursuant to this Section 3.2 shall be made, to the extent
applicable, pursuant to the provisions of Section 3.3 through 3.8 hereof.
Section 3.3. ELECTION TO REDEEM; NOTICES TO TRUSTEE.
If the Company elects to redeem Notes pursuant to Section 3.2 hereof, at
least 30 days but not more than 60 days prior to the date of the notice of
redemption described in Section 3.5, the Company shall notify the Trustee in
writing of the Redemption Date and deliver to the Trustee an Officers'
Certificate stating that such redemption will comply with the conditions
contained in Sections 3.3 through 3.8 hereof, as appropriate.
If the Company elects, and is permitted by the terms hereof, to credit
against any such redemption Notes not previously delivered to the Trustee
for cancellation, it shall deliver such Notes with the notice.
Section 3.4. SELECTION BY TRUSTEE OF NOTES TO BE REDEEMED.
In the event that less than all of the Notes are to be redeemed, the Trustee
shall select the Notes to be redeemed, if the Notes are listed on a national
securities exchange, in accordance with the rules of such exchange or, if
the Notes are not so listed, on either a pro rata basis or by lot, or such
other method as it shall deem fair and equitable. The Trustee shall
promptly notify the Company of the Notes selected for redemption and, in
the case of any Notes selected for partial redemption, the principal amount
thereof to be redeemed. The Trustee may select for redemption portions of
the principal of the Notes that have denominations larger than $1,000.
Notes and portions of them the Trustee selects shall be in amounts of
$1,000 or whole multiples of $1,000. For all purposes of this Indenture
unless the context otherwise requires, provisions of this Indenture that
apply to Notes called for redemption also apply to portions of Notes called
for redemption.
Section 3.5. NOTICE OF REDEMPTION.
At least 30 days, and no more than 45 days, before the Redemption Date fixed
by the Company, the Company shall mail, or cause to be mailed, a notice of
redemption by first-class mail to each Holder of Notes to be redeemed at his
or her last address as the same appears on the registry books maintained by
the Registrar pursuant to Section 2.3 hereof.
The notice shall identify the notes to be redeemed (including the CUSIP
numbers thereof) and shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) if any Note is being redeemed in part, the portion of the principal
amount of such Note to be redeemed and that, after the Redemption Date and
upon surrender of such Note, a new Note or Notes in principal amount equal
to the unredeemed portion will be issued;
(4) the name and address of the Paying Agent;
(5) that Notes called for redemption must be surrendered to the Paying
Agent to collect the Reduction Price;
(6) that unless the Company defaults in making the redemption payment,
interest on Notes called for redemption ceases to accrue on and after the
Redemption Date;
(7) the paragraph of the Notes and/or Section of this Indenture pursuant
to which the Notes called for redemption are being redeemed; and
(8) the aggregate principal amount of Notes that are being redeemed.
At the Company's request, the Trustee shall give the notice of redemption in
the Company's name and at the Company's sole expense.
Section 3.6. EFFECT OF NOTICE OF REDEMPTION.
Once the notice of redemption described in Section 3.5 is mailed, Notes
called for redemption become due and payable on the Redemption Date and at
the Redemption Price, including any Redemption Premium, plus interest
accrued to the Redemption Date. Upon surrender to the Paying Agent, such
Notes shall be paid at the Redemption Price, including any Redemption
Premium, plus interest accrued to the Redemption Date, PROVIDED, HOWEVER,
that if the Redemption Date is after a regular interest payment record date
and on or prior to the interest payment date, the accrued interest shall be
payable to the Holder of the redeemed Notes registered on the relevant
record date, and PROVIDED, FURTHER, that if a Redemption Date is a Legal
Holiday, payment shall be made on the next succeeding Business Day and no
interest shall accrue for the period from such Redemption Date to such
succeeding Business Day.
Section 3.7. DEPOSIT OF REDEMPTION PRICE.
On or prior to 10:00 A.M., New York City time, on each Redemption Date, the
Company shall deposit with the Paying Agent in immediately available funds
moneys sufficient to pay the Redemption Price of and accrued interest on all
Notes to be redeemed on that date other than Notes or portions thereof
called for redemption on that date which have been delivered by the Company
to the Trustee for cancellation.
On and after any Redemption Date, if money sufficient to pay the Redemption
Price of and accrued interest on Notes called for redemption shall have been
made available in accordance with the preceding paragraph, the Notes called
for redemption will cease to bear interest and the only right of the Holders
of such Notes will be to receive payment of the Redemption Price of and,
subject to the proviso in Section 3.6, accrued and unpaid interest on such
Notes. If any Note called for redemption shall not be so paid, interest
will be paid, from the Redemption Date until such redemption payment is
made, on the unpaid principal of the Note and any interest not paid on such
unpaid principal, in each case, at the rate and in the manner provided in
the Notes.
Section 3.8. NOTES REDEEMED IN PART.
Upon surrender of a Note that is redeemed in part, the Trustee shall
authenticate for a Holder a new Note equal in principal amount to the
unredeemed portion of the Note surrendered.
Section 3.9. REDEMPTION PURSUANT TO GAMING LAWS.
Notwithstanding any other provision of this Indenture, the Notes shall also
be redeemable at any time pursuant to, and in accordance with, a Required
Regulatory Redemption. If the Company requires the redemption of any Note
pursuant to this Section 3.9, then the redemption price shall be the
principal amount thereof, plus accrued interest to the date of redemption.
The Company shall tender the redemption price (together with any accrued
and unpaid interest) to the Trustee no later than 30 and no more than 60
days after the Company gives the Holder or owner of a beneficial or voting
interest written notice of redemption or such earlier date as may be
ordered by any Gaming Authority. The Company shall notify the Trustee of
any disposition or redemption required under this Section 3.9, and upon
receipt of such notice, the Trustee shall not accord any rights or
privileges under this Indenture or any Note to any Holder or owner of a
beneficial or voting interest who is required to dispose of any Note or
tender it for redemption, except to pay the redemption price (together with
any accrued but unpaid interest) upon tender of such Note.
Article IV.
SECURITY
Section 4.1. SECURITY INTEREST.
(a) In order to secure the prompt and complete payment and performance in
full of Indenture Obligations, the Company, the Guarantors and the Trustee
have entered into this Indenture, the Security Agreement and the Mortgage.
Each Holder, by accepting a Note, agrees to all of the terms and provisions
of this Indenture and the Collateral Documents, and the Trustee agrees to
all of the terms and provisions of the Indenture and the Collateral
Documents as this Indenture or any of the Collateral Documents may be
amended from time to time pursuant to the provisions thereof and hereof.
(b) The Collateral as now or hereafter constituted shall be held for the
equal and ratable benefit of the Holders without preference, priority or
distinction of any thereof over any other by reason of difference in time
of issuance, sale or otherwise, as security for the Indenture Obligations.
(c) The provisions of TIA Section 314(d), and the provisions of TIA Section
314(c)(3) to the extent applicable by specific reference in this Article IV,
are hereby incorporated by reference herein as if set forth in their
entirety and to the same extent as if the Indenture were qualified under
the TIA.
Section 4.2. RECORDING; OPINIONS OF COUNSEL.
(a) Each of the Company and the Guarantors represents that it has caused to
be executed and delivered, filed and recorded and covenants that it will
promptly cause to be executed and delivered, filed and recorded, all
instruments and documents, and have done and will do or will cause to be
done all such acts and other things, at the Company's expense, as are
necessary to effect and maintain valid and perfected security interests in
the Collateral. Each of the Company and the Guarantors shall, as promptly
as practicable, cause to be executed and delivered, filed and recorded all
instruments and do all acts and other things as may be required by law to
perfect, maintain and protect the security interests under the Collateral
Documents and herein. The Company and the Guarantors shall promptly obtain
title insurance insuring the Trustee as an insured for the benefit of the
Holders in the aggregate amount equal to the estimated fair market value of
the Property that is subject to the CMLI Mortgage, with such endorsements
as are reasonably requested by the Trustee, subject only to those
exceptions which are reasonably acceptable to the Trustee.
(b) The Company shall furnish to the Trustee, promptly after the execution
and delivery of this Indenture, the Security Agreement and the Mortgage and
promptly after the execution and delivery of any amendment thereto or any
other instrument of further assurance and Opinion(s) of Counsel stating
that, in the opinion of such counsel, subject to customary exclusions and
exceptions reasonably acceptable to the Trustee, either (i) this Indenture,
the Security Agreement, the Mortgage, the CMLI Mortgage, any such amendment
and all other instruments of further assurance have been properly recorded,
registered and filed has been taken to the extent necessary to make
effective valid security interests and to perfect the security interests
intended to be created by the Indenture, the Security Agreement and the
Mortgage, and reciting the details of such action, or (ii) no such action
is necessary to maintain the validity and perfection of the security
interests under the Security Agreement, the Mortgage and hereunder.
(c) The Company shall furnish to the Trustee, within 60 days after May 15 in
each year commencing 1997, an Opinion(s) of Counsel, dated as of such date,
stating that, in the opinion of such counsel, subject to customary
exclusions and exceptions, either (A) all such action has been taken with
respect to the recording, registering, filing, rerecording and refiling of
the Indenture, all supplemental indentures, the Security Agreement, the
Mortgage, financing statements, continuation statements and all other
instruments of further assurance or other Collateral Documents as is
necessary to maintain the security interests under the Collateral Documents
and hereunder in full force and effect and reciting the details of such
action, and stating that all financing statements and continuation
statements have been executed and filed that are necessary fully to
preserve and protect the rights of the Holders and the Trustee hereunder
and under the Collateral Documents or (B) no such action is necessary to
maintain the security interests in full force and effect.
Section 4.3. DISPOSITION OF CERTAIN COLLATERAL.
(a) The Company and the Guarantors may, without consent of the Trustee, but
otherwise subject to the requirements of this Indenture:
(i) sell, assign, transfer, license or otherwise dispose of, free from
the security interests under the Collateral Documents and hereunder, any
machinery, equipment, or other personal Property constituting Collateral
that has become worn out, obsolete, or unserviceable or is being upgraded,
upon replacing the same with or substituting for the same, machinery,
equipment or other Property constituting Collateral not necessarily of the
same character but being of at least equal fair value and at least equal
utility to the Company as the Property so disposed of, which Property shall
without further action become Collateral subject to the security interests
under the Collateral Documents and hereunder;
(ii) (A) sell, assign, transfer, license or otherwise dispose of, free
from the security interests under the Collateral Documents and hereunder,
inventory held for resale that is at any time part of the Collateral in the
ordinary course of the Company's business, consistent with industry
practices, (B) collect, liquidate, sell, factor or otherwise dispose of,
free from the security interests under the Collateral Documents and
hereunder, accounts receivable or notes receivable that are part of the
Collateral in the ordinary course of the Company's business, consistent
with industry practices, or (C) make Cash payments out of the Guarantor
Collateral Sub-Account to fund operating expenses of the CMLI Real Property
or Capital Expenditures in respect of the CMLI Real Property, PROVIDED,
HOWEVER, that the Liens of the Trustee under the Collateral Documents
attach to the Property acquired or constructed with such Capital
Expenditures with the same validity, priority and perfection as the Liens
of the Trustee in the CMLI Real Property;
(iii) so long as no Default or Event of Default hereunder shall have
occurred and be continuing, sell, assign, transfer, license or otherwise
dispose of Collateral of the Company for the purpose of making Capital
Expenditures permitted to the Company under clauses (iii), (iv), (v), (vi)
and (vii) of the definition of Permitted Capital Expenditures; and
(iv) abandon, sell, assign, transfer, license or otherwise dispose of
any personal Property the use of which is no longer necessary or desirable
in the proper conduct of the business of the Company and the maintenance of
its earnings and is not material to the conduct of the business of the
Company.
(b) In the event that the Company or any Guarantor has sold, exchanged, or
otherwise disposed of or proposes to sell, exchange or otherwise dispose of
any portion of the Collateral which under the provisions of this Section 4.3
may be sold, exchanged or otherwise disposed of by the Company and the
Guarantors without consent of the Trustee, and the Company and the
Guarantors request the Trustee to furnish a written disclaimer, release or
quitclaim of any interest in such Property under the Collateral Documents,
the Trustee shall execute such an instrument upon delivery to the Trustee
of an Officers' Certificate by the Company and the Guarantors reciting the
sale, exchange or other disposition made or proposed to be made and
describing in reasonable detail the Property affected thereby, and stating
and demonstrating that such Property is Property which by the provisions of
this Section 4.3 may be sold, exchanged or otherwise disposed of or dealt
with by the Company and the Guarantors without any release or consent of
the Trustee.
(c) Any disposition of Collateral made in compliance with the provisions of
this Section 4.3 shall be deemed not to impair the security interests under
the Collateral Documents and hereunder in contravention of the provisions of
this Indenture.
Section 4.4. SUBSTITUTION OF COLLATERAL.
(a)(i) So long as no Default or Event of Default hereunder shall have
occurred and be continuing, the Company may, without the consent of the
Trustee, but otherwise subject to the requirements of this Indenture,
consummate a Qualified Sale to a Third Party, free and clear of the Liens of
the Mortgage and the Security Agreement, in exchange for Cash or for a
Qualified Substitute Boat or a combination thereof; PROVIDED, HOWEVER, that
any Qualified Sale constituting an Affiliate Conveyance shall meet the
requirements of Section 5.10 hereof in all respects. In such event, the
Company immediately shall file and record all instruments and documents, and
immediately will do or will cause to be done all such acts and other things,
at the Company's expense, as are necessary to effect and maintain exclusive,
valid and perfected security interests in the Boat Conveyance Proceeds and
the Qualified Substitute Boat, as the case may be, and all agreements and
contract rights arising under or evidencing such Qualified Sale, in favor
of the Trustee for the benefit of the Holders, including, but not limited
to, the deposit of Boat Conveyance Proceeds in the Boat Conveyance Proceeds
Sub- Account.
(ii) So long as no Default or Event of Default hereunder shall have
occurred and be continuing, the Company may, without the consent of the
Trustee, but otherwise subject to the requirements of this Indenture, enter
into a Qualified Lessor Lease, subject to the Liens of the Mortgage or the
Other Boat Mortgage, as the case may be, and the other Collateral Documents;
PROVIDED, HOWEVER, that any such Qualified Lessor Lease constituting an
Affiliate Conveyance shall meet the requirements of Section 5.10 hereof in
all respects. In such event, the Company immediately shall file and record
all instruments and documents, and immediately will do or will cause to be
done all such acts and other things, at the Company's expense, as are
necessary to effect and maintain exclusive, valid and perfected security
interests in the Boat Conveyance Proceeds arising under such Qualified
Lessor Lease, and in all of the Company's right, title and interest in such
Qualified Lessor Lease and all rents, profits and proceeds therefrom and
contract rights arising thereunder, in favor of the Trustee for the benefit
of the Holders, including, but not limited to, the deposit of Boat
Conveyance Proceeds in the Boat Conveyance Proceeds Sub-Account.
(b) Boat Conveyance Proceeds shall remain in the Boat Conveyance Proceeds
Sub-Account with the Trustee subject to the Liens of the Trustee and, so
long as no Default or Event of Default shall have occurred and be
continuing, shall be released from the Boat Conveyance Proceeds Sub-Account
by the Trustee only as follows:
(i) During the Waiting Period, Boat Conveyance Proceeds will be
released by the Trustee to the Company, first, (A) for the consummation by
the Company of the purchase of a Qualified Substitute Boat pursuant to the
provisions of Section 11.3 hereof or for the financing or the servicing of
the financing of such purchase from time to time, or (B) for the payment of
the Adjusted Rent Obligations of the Company under a Qualified Lessee Lease
under the provisions of Section 11.3 hereof, and thereafter until the end
of the Waiting Period for Capital Expenditures permitted pursuant to the
provisions of Section 5.19 hereof;
(ii) If during the Waiting Period the Company has entered into a
binding contract with a Third Party for the construction of a Qualified
Substitute Boat, then after delivery of all certificates, documents,
instruments, contracts and agreements precedent to the first release of
Boat Conveyance Proceeds under the provisions of Section 11.4 hereof, and
until the date that is fifteen (15) months after the last day of the
Waiting Period, the Trustee shall release Boat Conveyance Proceeds to the
Company solely (A) to fund obligations under such contract for the
construction of the Qualified Substitute Boat, PROVIDED, HOWEVER, that the
Trustee shall maintain at all times a valid and perfected first priority
Lien on and security interest in the Qualified Substitute Boat, whether
under the Other Boat Mortgage or otherwise, subject only to Liens permitted
pursuant to Section 5.13 hereof;
(B) for the financing or the servicing of the financing from time to time by
the Company of the purchase of a Qualified Substitute Boat pursuant to the
provisions of Section 11.3 hereof; or (C) for the payment of the Adjusted
Rent Obligations of the Company under a Qualified Lessee Lease under the
provisions of Section 11.3 hereof;
(iii) If on or before the last day of the Waiting Period the Company
has neither consummated the purchase of a Qualified Substitute Boat,
entered into a Qualified Lessee Lease of a Substitute Boat, nor delivered
all certificates, documents, instruments, contracts and agreements
precedent to the first release of Boat Conveyance Proceeds under the
provisions of Section 11.4 hereof for the construction of a Qualified
Substitute Boat, then all Boat Conveyance Proceeds remaining in the Boat
Conveyance Proceeds Sub-Account with the Trustee on the last day of the
Waiting Period shall be deemed to constitute Excess Cash Flow of the
Company for the fiscal quarter in which the Waiting Period expires and
shall be used to redeem Notes on the Interest Payment Date that is the last
day of the fiscal quarter of the Company immediately following the fiscal
quarter in which the Waiting Period expires pursuant to the provisions of
Article III hereof; and
(iv) Notwithstanding any other provisions of this clause (b), all Boat
Conveyance Proceeds in the Boat Conveyance Proceeds Sub-Account on the last
date of the fifteenth month after the date of the last day of the Waiting
Period or at any time thereafter shall be deemed to solely constitute
Collateral securing the Indenture Obligations, and the Company shall have no
right to request or demand, and the Trustee shall have no obligation to
release, Boat Conveyance Proceeds prior to the payment in full of the
Indenture Obligations.
The Trustee shall release Liens on Boat Conveyance Proceeds pursuant to this
Section 4.4 in accordance with the provisions of Article XI, the Collateral
Documents and the TIA.
Section 4.5. RELEASE DATE; RELEASES OF COLLATERAL.
So long as no Default or Event of Default shall have occurred and be
continuing, then provided the Trustee shall have received notice from the
Company fifteen (15) days before the Release Date of the Release Date, the
Trustee shall on the Release Date (or, in the case of failure of the Company
to timely notify the Trustee in accordance with this Section 4.5, fifteen
(15) days from the date of actual receipt by the Trustee of such notice of
the Release Date) release or cause to be released all Liens securing
Indenture Obligations other than (i) those Liens granted to the Trustee
under the Mortgage or the Other Boat Mortgage, as the case may be, (ii)
those Liens granted to the Trustee in respect of a lease by the Company of
the Crescent City Queen Casino pursuant to Section 4.4(b) hereof, and (iii)
those Liens securing proceeds from the foregoing. The Trustee shall
release such Liens pursuant to this Section 4.5 in accordance with the
provisions of Article XI, the Collateral Documents and the TIA.
Section 4.6 CERTAIN OTHER RELEASES OF COLLATERAL.
Subject to applicable law, the release of any Collateral from Liens created
by the Security Agreement or the Mortgage or the release of, in whole or in
part, the Liens created by the Security Agreement or the Mortgage, will not
be deemed to impair the Security Agreement or the Mortgage, as the case may
be, in contravention of the provisions of this Indenture if and to the
extent the Collateral or Liens are released pursuant to, and in accordance
with, the terms hereof. To the extent applicable, without limitation, the
Company and each obligor on the Notes shall cause TIA Section 314(d)
relating to the release of Property or securities from the Liens of the
Security Agreement or the Mortgage to be complied with. Any certificate or
opinion required by TIA Section 314(d) may be made by one Officer prior to
the qualification of the Indenture under the TIA and by two Officers after
such qualification, except in cases which TIA Section 314(d) requires that
such certificate or opinion be made by an independent person.
Section 4.7 PAYMENT OF EXPENSES.
On demand of the Trustee, the Company forthwith shall pay or satisfactorily
provide for all reasonable expenditures incurred by the Trustee under this
Article IV, including the reasonable fees and expenses of counsel and all
such sums shall be a Lien upon the Collateral and shall be secured thereby.
Section 4.8 SUITS TO PROTECT THE COLLATERAL.
Subject to Section 4.1 of this Indenture and to the provisions of the
Security Agreement and the Mortgage, the Trustee shall have power to
institute and to maintain such suits and proceedings as it may deem
expedient to prevent any impairment of the Collateral by any acts which may
be unlawful or in violation of the Security Agreement, the Mortgage or this
Indenture, including the power to institute and maintain suits or
proceedings to restrain the enforcement of or compliance with any
legislative or other governmental enactment, rule or order that may be
unconstitutional or otherwise invalid or if the enforcement of, or
compliance with, such enactment, rule or order would impair the security
interests in contravention of this Indenture or be prejudicial to the
interests of the Holders or of the Trustee. The Trustee shall give notice
to the Company promptly following the institution of any such suit or
proceeding.
Section 4.9 TRUSTEE'S DUTIES.
The powers and duties conferred upon the Trustee by this Article IV are
solely to protect the security interests created hereby and shall not
impose any duty upon the Trustee to exercise any such powers and duties,
except as expressly provided in this Indenture. The Trustee shall be under
no duty to the Company or any Guarantor whatsoever to make or give any
presentment, demand for performance, notice of nonperformance, protest,
notice of protest, notice of dishonor, or other notice or demand in
connection with any Collateral, or to take any steps necessary to preserve
any rights against prior parties except as expressly provided in this
Indenture. The Trustee shall not be liable to the Company or the
Guarantors for failure to collect or realize upon any or all of the
Collateral, or for any delay in so doing, nor shall the Trustee be under
any duty to the Company or the Guarantors to take any action whatsoever
with regard thereto. The Trustee shall have no duty to the Company or the
Guarantors to comply with any recording, filing, or other legal requirements
necessary to establish or maintain the validity, priority or enforceability
of the security interests in, or the Trustee's rights in or to, any of the
Collateral.
Article V
COVENANTS
Section 5.1. PAYMENT OF NOTES
The Company shall pay the principal of (including Excess Cash Flow to be
paid by the Company on an Interest Payment Date pursuant to the provisions
of Section 3.1 hereof) and interest on the Notes on the dates and in the
manner provided in the Notes and this Indenture. An installment of
principal of (including Excess Cash Flow to be paid by the Company on an
Interest Payment Date pursuant to the provisions of Section 3.1 hereof) or
interest on the Notes shall be considered paid on the date it is due if the
Trustee or Paying Agent (other than the Company or an Affiliate of the
Company) holds for the benefit of the Holders, on or before 10:00 a.m. New
York City time on that date, U.S. Legal Tender deposited and designated for
and sufficient to pay the installment. Together with any installments of
principal the Company will deliver to the Trustee a sufficient number of
stickers, in form satisfactory to the Trustee, setting forth the
outstanding principal amount of each Note after having given effect to such
current principal payments, for delivery by the Trustee to the Holders for
the purpose of affixing such stickers to their respective Notes.
The Company shall pay interest on overdue principal and on overdue
installments of interest at the rate specified in the Notes compounded semi-
annually, to the extent lawful.
Section 5.2. MAINTENANCE OF OFFICE OR AGENCY.
The Company and the Guarantors shall maintain in the Borough of Manhattan,
The City of New York, an office or agency where Notes may be presented or
surrendered for payment, where Notes may be surrendered for registration of
transfer and exchange and where notices and demands to or upon the Company
and the Guarantors in respect of the Notes and this Indenture may be served.
The Company and the Guarantors shall give prompt written notice to the
Trustee of the location, and any change in the location, of such office or
agency. If at any time the Company and the Guarantors shall fail to
maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices
and demands may be made or served at the address of the Trustee set forth in
Section 13.2
The Company and the Guarantors may also from time to time designate one or
more other offices or agencies where the Notes may be presented or
surrendered for any or all such purposes and may from time to time rescind
such designations; PROVIDED, HOWEVER, that no such designation or
rescission shall in any manner relieve the Company and the Guarantors of
their obligation to maintain an office or agency in the Borough of
Manhattan, The City of New York, for such purposes. The Company and the
Guarantors shall give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of any such
other office or agency. The Company and the Guarantors hereby initially
designate the corporate trust office of the Trustee as such office.
Section 5.3. LIMITATION ON RESTRICTED PAYMENTS.
The Company and the Guarantors will not, and none will permit any of its
Subsidiaries to, directly or indirectly, make any Restricted Payment.
Section 5.4. CORPORATE EXISTENCE.
The Company and the Guarantors shall do or cause to be done all things
necessary to preserve and keep in full force and effect their corporate
existence and the corporate or other existence of each of their Subsidiaries
in accordance with the respective organizational documents of each of them
and the rights (charter and statutory) and corporate franchises of the
Company and the Guarantors and each of their Subsidiaries; PROVIDED,
HOWEVER, that neither the Company nor any of the Guarantors shall be
required to preserve, with respect to itself, any right or franchise if (a)
the Board of Directors of the Company shall determine reasonably and in
good faith that the preservation thereof is no longer desirable in the
conduct of the business of the Company and (b) the loss thereof is not
disadvantageous in any material respect to the Holders.
Section 5.5. PAYMENT OF TAXES AND OTHER CLAIMS.
The Company and the Guarantors shall, and shall cause each of their
Subsidiaries to, pay or discharge or cause to be paid or discharged, before
the same shall become delinquent, (i) all taxes, assessments and
governmental charges (including withholding taxes and any penalties,
interest and additions to taxes) levied or imposed upon the Company, any
Guarantor or any of their Subsidiaries or properties and assets of the
Company, any Guarantor, or any of their Subsidiaries and (ii) all lawful
claims, whether for labor, materials, supplies, services or anything else,
which have become due and payable and which by law have or may become a
Lien upon the Property and assets of the Company, any Guarantor or any of
their Subsidiaries; PROVIDED HOWEVER, that neither the Company nor any
Guarantor shall be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim the amount,
applicability or validity of which is being contested in good faith by
appropriate proceedings and for which disputed amounts adequate reserves
have been established in accordance with GAAP.
Section 5.6. MAINTENANCE OF INSURANCE.
From and at all times after May 13, 1996, the Company and each of the
Guarantors and each of their respective Subsidiaries shall have in effect
customary comprehensive general liability insurance and (as applicable)
brownwater coverage, shall use their best efforts to have completion,
performance or similar bonds in place for any Substitute Boat not yet
completed, and shall cause the builder of any Substitute Boat to maintain
builder's risk coverage insurance, in each case on terms and in an amount
reasonably sufficient (taking into account, among other factors, the
creditworthiness of the insurer) to avoid a material adverse change in the
financial condition or results of operation of the Company and the
Guarantors taken as a whole.
Section 5.7. COMPLIANCE CERTIFICATE: NOTICE OF DEFAULT.
The Company shall deliver to the Trustee within 90 days after the end of its
fiscal year an Officers' Certificate complying (whether or not required)
with Section 314(a)(4) of the TIA and stating that a review of its
activities during the preceding fiscal year has been made under the
supervision of the signing Officers with a view to determining whether the
Company has kept, observed, performed and fulfilled its obligations under
this Indenture and further stating, as to each such Officer signing such
certificate, whether or not the signer knows of any failure of the Company,
any Guarantor or any Subsidiary of the Company or any Guarantor to comply
with any conditions or covenants in this Indenture and, if such signer does
know of such a failure to comply, the certificate shall describe such
failure with particularity. The Officers' Certificate shall also notify
the Trustee should the relevant fiscal year end on any date other than the
current fiscal year end date.
The Company shall, so long as any of the Notes are outstanding, deliver to
the Trustee, immediately upon becoming aware of any Default or Event of
Default under this Indenture, an Officers' Certificate specifying such
Default or Event of Default and what action the Company is taking or
proposing to take with respect thereto. The Trustee shall not be deemed to
have knowledge of a Default or an Event of Default unless one of its trust
officers receives notice of the Default giving rise thereto from the
Company or any of the Holders.
Section 5.8. REPORTS.
Whether or not the Company or any Guarantor is subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, the Company and
each Guarantor shall deliver to the Trustee and to each Holder, within 15
days after it is or would have been required to file such with the SEC,
annual and quarterly consolidating financial statements substantially
equivalent to financial statements that would have been included in reports
filed with the SEC if the Company were subject to the requirements of
Section 13 or 15(d) of the Exchange Act including, with respect to annual
information only, a report thereon by the Company's independent public
accountants as such would be so required, together with a management's
discussion and analysis of financial condition and results of operations
which would be so required.
Section 5.9. WAIVER OF STAY, EXTENSION OR USURY LAWS.
The Company and each Guarantor covenants (to the extent that it may lawfully
do so) that it will not at any time insist upon, plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension
law or any usury law or other law wherever enacted which would prohibit or
forgive the Company or any Guarantor from paying all or any portion of the
principal of or interest on the Notes as contemplated herein, wherever
enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Indenture; and (to the extent that they
may lawfully do so) the Company and each Guarantor hereby expressly waives
all benefit or advantage of any such law insofar as such law applies to the
Notes, and covenants that it shall not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and
permit the execution of every such power as though no such law had been
enacted.
Section 5.10. LIMITATION ON TRANSACTIONS WITH AFFILIATES.
None of the Company, any Guarantor, or any of their Subsidiaries shall enter
into any transaction, including any contract, agreement, understanding,
loan, advance or guarantee and including any series of related
transactions, with or for the benefit of any Affiliate (an "Affiliate
Transaction") except for (i) employment arrangements in the ordinary course
with officers and employees of the Company who are not also officers,
directors, or employees of any Affiliate of the Company, (ii) the Tax
Sharing Treaty, (iii) Parent Equity Contributions, (iv) Indebtedness of JCC
which JCC may incur under clause (g) of Section 5.11 hereof, and (v) the
conveyance, sale, lease, transfer, assignment or other disposition of the
Crescent City Queen Casino or a Qualified Substitute Boat by the Company to
an Affiliate (an "Affiliate Conveyance"); PROVIDED, HOWEVER, that with
respect to any such Affiliate Conveyance described in clause (v) of this
Section 5.10, the Company shall obtain, prior to the consummation of such
Affiliate Transaction, a written opinion addressed to the Trustee from an
independent investment banking firm of national reputation with experience
in the gaming business conducted by the Company that such Affiliate
Conveyance is as favorable to the Company from a financial point of view as
if made on an arm's length basis with a Third Party. Such investment
banking firm shall be promptly selected by the Company and agreed to by the
Holders of a majority in aggregate principal amount of then outstanding
Notes; PROVIDED, HOWEVER, that if the Holders of a majority in aggregate
principal amount of then outstanding Notes do not agree to such investment
banking firm, each of the Company and the Holders of a majority in
aggregate principal amount of then outstanding Notes shall then promptly
select one such investment banking firm, and the two firms so chosen shall
select a third investment banking firm to provide such opinion.
Section 5.11. LIMITATION ON INCURRENCE OF ADDITIONAL INDEBTEDNESS AND
DISQUALIFIED CAPITAL STOCK.
Except as set forth below, from and after May 13, 1996 the Company and the
Guarantors will not, and none will permit any of its Subsidiaries to,
directly or indirectly, issue, assume, guaranty, incur, become directly or
indirectly liable with respect to (including as a result of an acquisition,
merger or consolidation), extend the maturity of, or otherwise become
responsible for, contingently or otherwise (individually and collectively,
to "incur," or, as appropriate, an "incurrence"), any Indebtedness or any
Disqualified Capital Stock. Notwithstanding the foregoing:
(a) the Company and the Guarantors may incur Indebtedness evidenced by the
Notes and other obligations pursuant to the Indenture up to the amounts
specified herein as of the Issue Date;
(b) so long as no Default or Event of Default shall have occurred and be
continuing at the time, the Company or any Guarantor may incur Permitted
FF&E Financing; provided, that (I) prior to the Release Date, the aggregate
amount of Indebtedness incurred pursuant to this paragraph (b) (including
any Indebtedness issued to refinance, replace or refund such Indebtedness)
shall not constitute more than 100% of the cost (reportable on the balance
sheet (including all appropriate notes thereto) of such entity in
accordance with GAAP) to the Company and the Guarantors of the FF&E so
purchased or leased and (ii) prior to the Release Date, the aggregate
principal amount of such Permitted FF&E Financing in respect of FF&E funded
with all or any portion of Cash of the Company (other than Cash from a
Parent Equity Contribution) does not exceed the sum of (x) the excess (the
"FF&E Basket") of $6.5 million over the principal amount of all Existing
FF&E Indebtedness on the Issue Date, less all payments of principal after
the Issue Date in respect of such Existing FF&E Indebtedness and (y) $1
million, at any time, and (iii) in all other cases prior to the Release
Date, Permitted FF&E Financing does not at any time exceed $10 million plus
the FF&E Basket, less the amount of any such financing described in clause
(ii) above then outstanding, at any time;
(c) the Company and any of the Guarantors may incur Indebtedness
constituting a bond or surety obligation (or an indemnity or similar
obligation) (i) in order to prevent the impairment or loss of or to obtain
a Gaming License, or (ii) as required under any insurance required under
Section 5.6 hereof, but only to the extent required by applicable law and
consistent in character and amount with customary industry practice;
(d) the Company may incur Indebtedness the proceeds of which are used to pay
all or a part of the purchase price of a Qualified Substitute Boat;
provided, however, that such Indebtedness and the Liens securing such
Indebtedness shall be subordinate and junior, in all respects, to the
Indenture Obligations and the Liens of the Trustee securing the Indenture
Obligations;
(e) the Company may suffer to exist Existing FF&E Financing;
(f) the Company and any of the Guarantors may incur Refinancing Indebtedness
with respect to any Indebtedness described in clauses (a),(b), (c) and (d)
of this covenant so long as, in the case of Indebtedness used to refinance,
refund, or replace Indebtedness in clauses (b) and (d), such Refinancing
Indebtedness satisfies the applicable requirements of such clauses;
(g) JCC may incur (i) the JCC Indebtedness, and (ii) any Indebtedness to an
Affiliate other than the Company as to which Indebtedness the Company
provides no credit support nor is liable and the proceeds of which
Indebtedness are used solely to pay the JCC Indebtedness; and
(h) after the Release Date, the Company may incur any Indebtedness, so long
as no Default or Event of Default shall have occurred and be continuing at
the time.
Section 5.12. LIMITATION ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS
AFFECTING SUBSIDIARIES.
None of the Guarantors will, and none will permit any of its Subsidiaries
other than the Company to, directly or indirectly, create, assume or suffer
to exist any consensual encumbrance or restriction on the ability of any
such Subsidiary to pay dividends or make other distributions to, or to pay
any obligation to, or to otherwise transfer assets or make or pay loans or
advances to, any of the Guarantors, except (a) restrictions imposed by the
Notes or the Indenture and (b) restrictions imposed by applicable law.
Section 5.13. LIMITATION ON LIENS.
Neither the Company nor any of the Guarantors will, and none will permit any
of its Subsidiaries to, directly or indirectly, create, incur, assume or
suffer to exist any Lien in or on any right, title or interest to any of
their respective Cash other than the Liens of the Trustee for the benefit
of the Holders. Neither the Company nor any of the Guarantors will, and
none will permit any of its Subsidiaries to, directly or indirectly,
create, incur, assume or suffer to exist any Lien in or on any right, title
or interest to any of their respective properties or assets, other than
Cash, owned by the Company or the Guarantors, as the case may be, on May
13, 1996 except (a) the Liens of the Trustee for the benefit of the
Holders, and (b) Liens existing on the Issue Date and identified on a
Schedule to be delivered to the Trustee no later than ten (10) days prior
to the Issue Date. Neither the Company nor any of the Guarantors will, and
none will permit any of its Subsidiaries to, directly or indirectly,
create, incur, assume or suffer to exist any Lien in or on any right, title
or interest to any of their respective properties or assets, other than
Cash, acquired after except (u) Permitted Liens, (v) the Liens of the
Trustee for the benefit of the Holders, (w) Liens incurred pursuant to
Permitted FF&E Financing incurred in accordance with the provisions of
paragraph (b) of Section 5.11, which Liens may be exclusive Liens on such
Permitted FF&E, (x) Liens in respect of Existing FF&E Financing, (y) Liens
incurred in connection with the incurrence of Refinancing Indebtedness in
accordance with the provisions of paragraph (f) of Section 5.11, PROVIDED,
HOWEVER, that such Liens are not more adverse to the interests of the
Holders of the Notes than the Liens replaced or extended thereby, PROVIDED,
FURTHER, that such Liens replaced or extended are permitted hereby, and (z)
only with respect to real Property acquired by the Guarantors after May 13,
1996, minor title defects and survey exceptions which do not materially
detract from the value of the real Property subject thereto (as such
Property is used by such Guarantor). Anything in this Section 5.13 to the
contrary notwithstanding, after the Release Date, the Company and the
Guarantors may incur Liens on any and all their respective Property or
assets other than the Collateral, so long as no Default or Event of
Default shall have occurred and be continuing at the time.
Section 5.14. LIMITATION ON LINES OF BUSINESS.
None of the Company, any Guarantor and any of their respective Subsidiaries
will directly or indirectly engage in any line or lines of business activity
other than in a Related Business.
Section 5.15. LIMITATION ON STATUS AS INVESTMENT COMPANY.
None of the Company, any Guarantor, or any of their respective Subsidiaries
shall become "investment companies" (as that term is defined in the
Investment Company Act of 1940, as amended), or otherwise become subject to
regulation under the Investment Company Act.
Section 5.16. RESTRICTIONS ON SALE AND ISSUANCE OF STOCK. Prior to the
Release Date:
(a) The Company and each Guarantor shall not issue or sell, and shall not
permit any of their respective Subsidiaries to issue or sell, any Capital
Stock of any Subsidiary to any person other than the Company or a Guarantor
of the Company.
(b) The Company shall not sell or issue Capital Stock (other than
Disqualified Capital Stock) unless the same becomes subject to the Lien of
this Indenture.
Section 5.17. RESTRICTIONS ON SUBSIDIARIES.
Prior to the Release Date, neither the Company nor any Guarantor shall
create, acquire or suffer to exist any Subsidiary which was not a direct or
indirect subsidiary of the Company or such Guarantor, as the case may be,
on May 13, 1996.
Section 5.18. RESTRICTIONS ON INVESTMENTS.
The Company and each Guarantor shall not make any Restricted Investments
except, in the case of JCC, its equity interests in the Company.
Section 5.19. RESTRICTIONS ON CAPITAL EXPENDITURES.
The Company and each Guarantor shall not incur any Capital Expenditures
except for Permitted Capital Expenditures.
Section 5.20. LIMITATION ON SALES OF ASSETS AND SUBSIDIARY STOCK.
Neither the Company nor any of the Guarantors will, and none will permit any
of its Subsidiaries to, in one or a series of related transactions, convey,
sell, lease, transfer, assign or otherwise dispose of, directly or
indirectly, any of its Property, business or assets, including without
limitation upon any sale or other transfer or issuance of any Capital Stock
of any Subsidiary or through the issuance, sale or transfer of Capital
Stock of a Subsidiary (an "Asset Sale"). Notwithstanding the foregoing:
(a) so long as no Default or Event of Default shall have occurred and be
continuing at the time of, or would occur after giving effect, on a PRO
FORMA basis, to, such Asset Sale, the Company may sell, lease, transfer,
assign or otherwise dispose of the Crescent City Queen Casino or any
Qualified Substitute Boat or other Substitute Boat in accordance with the
provisions of Section 4.4 or Section 5.10 hereof, and further subject to
the applicable provisions of Article XI hereof;
(b) the Company and the Guarantors may sell, lease, transfer, assign or
otherwise dispose of any machinery, equipment, or other personal Property
that has become worn out, obsolete, or unserviceable or is being upgraded
upon replacing the same with or substituting for the same, machinery,
equipment or other personal Property not necessarily of the same character
but being of at least equal fair value and at least equal utility to the
Company as the Property so disposed of;
(c) the Company and the Guarantors may (A) sell, assign, transfer, license
or otherwise dispose of inventory held for resale in the ordinary course of
the Company's business, consistent with industry practices and (B) collect,
liquidate, sell, factor or otherwise dispose of accounts receivable or notes
receivable in the ordinary course of the Company's business, consistent with
industry practices; and
(d) the Company and the Guarantors may abandon, sell, assign, transfer,
license or otherwise dispose of any personal Property the use of which is no
longer necessary or desirable in the proper conduct of the business of the
Company and the maintenance of its earnings and is not material to the
conduct of the business of the Company; and
(e) so long as no Default or Event of Default shall have occurred and be
continuing, the Company and the Guarantors may convey, sell, lease,
transfer, assign or otherwise dispose of their respective Property or
assets other than Collateral.
Section 5.21. LIMITATION ON MERGER, SALE OR CONSOLIDATION.
Neither the Company nor any of the Guarantors will consolidate with or merge
with or into another person.
Section 5.22. MAINTENANCE OF BUSINESS.
At all times from and after the Commencement Date, the Company will operate
a riverboat casino in Bossier City, Louisiana.
Section 5.23. COMMENCEMENT DATE; RELEASE DATE; ADVERSE STATE ACTION.
(a) The Company shall give the Trustee notice, at the addresses and in the
manner set forth in Section 13.2 hereof, of:
(i) the Commencement Date, as soon as the occurrence of such date is
ascertained by the Company but in no event later than five (5) days after
the occurrence thereof;
(ii) the Release Date, as soon as the occurrence of such date is
ascertained by the Company but in no event later than five (5) days after
the occurrence thereof;
(iii) the occurrence of an Adverse State Action, in no event later
than one (1) day after the Company receives actual notice of the occurrence
thereof; and
(iv) the date an Adverse State Action is to take effect, immediately
upon receipt by the Company of notice of such date.
(b) No later than ten (10) days after the Release Date, the Company will
deliver to the Trustee an amortization schedule setting forth the
amortization of the remaining outstanding principal amount of the Notes in
eight (8) equal installments payable on each of the eight (8) Interest
Payment Dates immediately following the Release Date (or, if there shall be
fewer than eight Interest Payment Dates remaining after the Release Date
but before or including the third anniversary of the Commencement Date, in
equal installments numbering the amount of remaining Interest Payment
Date).
(c) No later than ten (10) days after the date of the occurrence of an
Adverse State Action, the Company will deliver to the Trustee an
amortization schedule setting forth the amortization of the remaining
outstanding principal amount of the Notes in equal installments payable on
each of the Interest Payment Dates immediately following the date of the
occurrence of the Adverse State Action to and including the date on which
the Adverse State Action is to take effect against the Company.
Article VI.
EVENTS OF DEFAULT AND REMEDIES
Section 6.1. EVENTS OF DEFAULT.
"Event of Default," wherever used herein, means any one of the following
events (whatever the reason for such Event of Default and whether it shall
be caused voluntarily or involuntarily or effected, without limitation, by
operation of law or pursuant to any judgment, decree or order of any court
or any order, rule or regulation of any administrative or governmental
body):
(1) the failure by the Company to pay any installment of interest on the
Notes as and when due and payable and the continuance of any such failure
for 10 days;
(2) the failure by the Company to pay all or any part of the principal, or
premium, if any, on the Notes when and as the same become due and payable at
maturity, redemption, by acceleration or otherwise; PROVIDED that, in
respect of a payment of Excess Cash Flow, if the amount thereof, in respect
of any period, is greater than the amount originally determined by the
Company for purposes of making such payment (but by no more than 5% of such
originally determined amount), such greater amount, less the payment
already made, shall be deemed to be due and payable to the Trustee 5 days
after such greater amount is finally determined;
(3) except as provided in clauses (1) or (2) of this Section 6.1, failure
of the Company or any Guarantor to comply with any provision of Section
5.10, 5.14, 5.21, 5.22, 11.3 or 11.4 which failure continues for 30 days;
(4) failure of the Company or any Guarantor to comply with any provision of
Section 4.4 hereof;
(5) except as otherwise provided herein, the failure by the Company or any
Guarantor to observe or perform any other covenant or agreement contained in
the Notes or the Indenture and the continuance of such failure for a period
of 30 days after written notice is given to the Company by the Trustee or
to the Company and Trustee by the Holders of at least 25% in aggregate
principal amount of the Notes outstanding;
(6) a decree, judgment, or order by a court of competent jurisdiction shall
have been entered adjudging the Company or any Guarantor as bankrupt or
insolvent, or approving as properly filed a petition seeking reorganization
of the Company or such Guarantor under any bankruptcy or similar law, and
such decree or order shall have continued undischarged and unstayed for a
period of 60 days; or a decree or order of a court of competent
jurisdiction over the appointment of a receiver, liquidator, trustee, or
assignee in bankruptcy or insolvency of the Company or such Guarantor, or
of the Property of any such person, or for the winding up or liquidation of
the affairs of any such person, shall have been entered, and such decree,
judgment, or order shall have remained in force undischarged and unstayed
for a period of 60 days;
(7) the Company or any Guarantor shall institute proceedings to be
adjudicated a voluntary bankrupt, or shall consent to the filing of a
bankruptcy proceeding against it, or shall file a petition or answer or
consent seeking reorganization under any bankruptcy or similar law or
similar statute, or shall consent to the filing of any such petition, or
shall consent to the appointment of a Custodian, receiver, liquidator,
trustee, or assignee in bankruptcy or insolvency of it or any of its assets
or Property, or shall make a general assignment for the benefit of
creditors, or shall admit in writing its inability to pay its debts
generally as they become due, or shall, within the meaning of any
Bankruptcy Law, become insolvent, fail generally to pay their debts as they
become due, or take any corporate action in furtherance of or to
facilitate, conditionally or otherwise, any of the foregoing;
(8) a default in the payment of principal, premium or interest when due
which extends beyond any stated period of grace applicable thereto or an
acceleration for any other reason of maturity of any Indebtedness of the
Company, any Guarantor or any of their respective Subsidiaries with an
aggregate principal amount in excess of $500,000;
(9) final unsatisfied judgments not covered by insurance aggregating in
excess of $500,000, at any one time rendered against the Company, any
Guarantor or any of their respective Subsidiaries and not stayed, bonded or
discharged within 60 days;
(10) the closing after the Commencement Date (other than for repair or
maintenance) of a substantial portion of the Crescent City Queen Casino or,
if applicable, the casino on a Qualified Substitute Boat for more than 45
consecutive days;
(11) the loss of the legal right to operate the Crescent City Queen Casino
or, if applicable, the casino on a Qualified Substitute Boat and such loss
is continuing for more than 90 consecutive days;
(12) an event of default specified in any of the Collateral Documents; or
(13) any of the Collateral Documents fails to become or ceases to be in
full force and effect in accordance with the terms of this Indenture, or
ceases (once effective) to create in favor of the Trustee, with respect to
any material amount of Collateral, a valid and perfected first priority
Lien on the Collateral to be covered thereby (unless a prior or exclusive
Lien is specifically permitted by this Indenture).
If a Default occurs and is continuing, the Trustee must, within 90 days
after the occurrence of such default, give to the Holders notice of such
default in accordance with Section 7.5 hereof; PROVIDED, HOWEVER, that,
except in the case of a Default or an Event of Default in payment of
principal (or premium, if any) of, or interest on, any Note (including the
payment of the Redemption Price on the Redemption Date), the Trustee may
withhold the notice if and so long as a Trust Officer in good faith
determines that withholding the notice is in the interest of the Holders.
If an Event of Default occurs and is continuing (other than an Event of
Default specified in clauses (6) or (7), above, relating to the Company or
any Guarantor), then in every such case, unless the principal of all of the
Notes shall have already become due and payable, either the Trustee or the
Holders of 25% in aggregate principal amount of the Notes then outstanding,
by notice in writing to the Company, and to the Trustee if given by Holders
(an "Acceleration Notice"), may declare all principal and accrued interest
thereon to be due and payable immediately. If an Event of Default
specified in clauses (6) or (7), above, relating to the Company or any
Guarantor occurs, all principal and accrued interest thereon and any then
applicable Redemption Premium will be immediately due and payable on all
outstanding Notes without any declaration or other act on the part of
Trustee or the Holders. The Holders of no less than a majority in
aggregate principal amount of Notes generally are authorized to rescind
such acceleration if all existing Events of Default, other than the non-
payment of the principal of, premium, if any, and interest on the Notes
which have become due solely by such acceleration, have been cured or
waived.
Prior to the declaration of acceleration of the maturity of the Notes, the
Holders of a majority in aggregate principal amount of the Notes at the time
outstanding may waive on behalf of all the Holders any default, except a
default in the payment of principal of or interest on any Note not yet
cured, or a default with respect to any covenant or provision which cannot
be modified or amended without the consent of the Holder of each
outstanding Note affected. Subject to the provisions of the Indenture
relating to the duties of the Trustee, the Trustee will be under no
obligation to exercise any of its rights or powers under the Indenture at
the request, order or direction of any of the Holders, unless such Holders
have offered to the Trustee reasonable security or indemnity. Subject to
all provisions of the Indenture and applicable law, the Holders of a
majority in aggregate principal amount of the Notes at the time outstanding
will have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust
or power conferred on the Trustee.
Section 6.2. RESCISSION AND ANNULMENT.
Prior to any judgment or decree for payment of any money due being obtained
by the Trustee as hereinafter provided in this Article VI, the Holders of a
majority in aggregate principal amount of then outstanding Notes, by written
notice to the Company and the Trustee, may waive, on behalf of all Holders,
an Event of Default or Default if:
(1) the Company has paid or deposited with the Trustee a sum sufficient to
pay
(A) all overdue interest on all Notes,
(B) the principal of (and premium, if any, applicable to) any Notes which
would become due otherwise than by such declaration of acceleration, and
interest thereon at the rate borne by the Notes,
(C) to the extent that payment of such interest is lawful, interest upon
overdue interest at the rate borne by the Notes,
(D) all sums paid or advanced by the Trustee hereunder and the
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel, and
(2) all Events of Default, other than the non-payment of amounts which have
become due solely by such declaration of acceleration, have been cured or
waived as provided in Section 6.13.
Notwithstanding the previous sentence of this Section 6.2, no waiver shall
be effective for any Event of Default or Default with respect to any
covenant or provision which cannot be modified or amended without the
consent of the Holder of each outstanding Note, unless all such affected
Holders agree, in writing, to waive such Event of Default or Default. No
such waiver shall cure or waive any subsequent default or impair any right
consequent thereon.
Section 6.3. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE.
The Company covenants that if an Event of Default in payment of principal,
premium, or interest specified in Section 6.1(1) and (2) occurs and is
continuing, the Company shall, upon demand of the Trustee, pay to it, for
the benefit of the Holders of such Notes, the whole amount then due and
payable on such Notes for principal, premium (if any) and interest, and, to
the extent that payment of such interest shall be legally enforceable,
interest on any overdue principal (and premium, if any) and on any overdue
interest, at the rate borne by the Notes, and, in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection, including compensation to, and expenses, disbursements and
advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust in favor of the
Holders, may institute a judicial proceeding for the collection of the sums
so due and unpaid, may prosecute such proceeding to judgment or final
decree and may enforce the same against the Company or any other obligor
upon the Notes and collect the moneys adjudged or decreed to be payable in
the manner provided by law out of the Property of the Company or any other
obligor upon the Notes, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem
most effective to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this Indenture or in
aid of the exercise of any power granted herein, or to enforce any other
proper remedy.
Section 6.4. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Notes or the Property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Notes
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand
on the Company for the payment of overdue principal or interest) shall be
entitled and empowered, by intervention in such proceeding or otherwise to
take any and all actions under the TIA, including
(i) to file and prove a claim for the whole amount of principal (and
premium, if any) and interest owing and unpaid in respect of the Notes and
to file such other papers or documents as may be necessary or advisable in
order to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agent and counsel) and of the Holders allowed in such judicial
proceeding, and
(ii) to collect and receive any moneys or other Property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized
by each Holder to make such payments to the Trustee and, in the event that
the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel, and any other amounts due the Trustee under Section
7.7.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement, adjustment, or composition affecting the
Notes or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding.
Section 6.5. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF NOTES.
All rights of action and claims under this Indenture or the Notes may be
prosecuted and enforced by the Trustee without the possession of any of the
Notes or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust in favor of the Holders, and any recovery of
judgment shall, after provision for the payment of compensation to, and
expenses, disbursements and advances of the Trustee, its agents and counsel,
be for the ratable benefit of the Holders of the Notes in respect of which
such judgment has been recovered.
Section 6.6. PRIORITIES.
Any money collected by the Trustee pursuant to this Article VI shall be
applied in the following order, at the date or dates fixed by the Trustee
and, in case of the distribution of such money on account of principal,
premium (if any) or interest, upon presentation of the Notes and the
notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:
FIRST: To the Trustee in payment of all amounts due pursuant to Section
7.7;
SECOND: To the Holders in payment of the amounts then due and unpaid for
principal of, premium (if any) and interest on, the Notes in respect of
which or for the benefit of which such money has been collected, ratably,
without preference or priority of any kind, according to the amounts due and
payable on such Notes for principal, premium (if any) and interest,
respectively; and
THIRD: To whomsoever may be lawfully entitled thereto, the remainder, if
any.
Section 6.7 LIMITATION ON SUITS.
No Holder of any Note shall have any right to order or direct the Trustee to
institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless
(A) such Holder has previously given written notice to the Trustee of a
continuing Event of Default;
(B) the Holders of not less than 25% in principal amount of then
outstanding Notes shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name as
Trustee hereunder;
(C) such Holder or Holders have offered to the Trustee reasonable security
or indemnity against the costs, expenses and liabilities to be incurred or
reasonably probable to be incurred in compliance with such request;
(D) the Trustee for 60 days after its receipt of such notice, request and
offer of indemnity has failed to institute any such proceeding; and
(E) no direction inconsistent with such written request has been given to
the Trustee during such 60-day period by the Holders of a majority in
principal amount of the outstanding Notes;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other
Holders, or to obtain or to seek to obtain priority or preference over any
other Holders or to enforce any right under this Indenture, except in the
manner herein provided and for the equal and ratable benefit of all the
Holders.
Section 6.8. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM
AND INTEREST.
Notwithstanding any other provision of this Indenture, the Holder of any
Note shall have the right, which is absolute and unconditional, to receive
payment of the principal of, and premium (if any) and interest on, such
Note on the Maturity Dates of such payments as expressed in such Note (in
the case of redemption, the Redemption Price on the applicable Redemption
Date, and in the case of Section 3.1, Excess Cash Flow on the applicable
date specified in Section 3.1) and to institute suit for the enforcement of
any such payment, and such rights shall not be impaired without the consent
of such Holder.
Section 6.9. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the placement or payment of
mutilated, destroyed, lost or stolen Notes in Section 2.7, no right or
remedy herein conferred upon or reserved to the Trustee or to the Holders
is intended to be exclusive of any other right or remedy, and every right
and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or
hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not
prevent the concurrent assertion or employment of any other appropriate
right or remedy.
Section 6.10. DELAY OR OMISSION NOT WAIVER.
No delay or omission by the Trustee or by any Holder of any Note to exercise
any right or remedy arising upon any Event of Default shall impair the
exercise of any such right or remedy or constitute a waiver of any such
Event of Default. Every right and remedy given by this Article VI or by
law to the Trustee or to the Holders may be exercised from time to time,
and as often as may be deemed expedient, by the Trustee or by the Holders,
as the case may be.
Section 6.11. CONTROL BY HOLDERS.
The Holder or Holders of a majority in aggregate principal amount of then
outstanding Notes shall have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred upon the Trustee, PROVIDED, that
(1) such direction shall not be in conflict with any rule of law or with
this Indenture,
(2) the Trustee shall not determine that the action so directed would be
unjustly prejudicial to the Holders not taking part in such direction, and
(3) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
Section 6.12. WAIVER OF PAST DEFAULT.
Subject to Section 6.8, the Holder or Holders of not less than a majority in
aggregate principal amount of the outstanding Notes may, by written notice
to the Trustee on behalf of all Holders, prior to the declaration of the
maturity of the Notes, waive any past default hereunder and its
consequences, except a default
(A) in the payment of the principal of, premium, if any, or interest on,
any Note as specified in clauses (1) and (2) of Section 6.1, or
(B) in respect of a covenant or provision hereof which, under Article IX,
cannot be modified or amended without the consent of the Holder of each
outstanding Note affected.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent
or other default or impair the exercise of any right arising therefrom.
Section 6.13. UNDERTAKING FOR COSTS.
All parties to this Indenture agree, and each Holder of any Note by his
acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any action
taken, suffered or omitted to be taken by it as Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such
suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such
suit, having due regard to the merits and good faith of the claims or
defenses made by such party litigant; but the provisions of this Section
6.13 shall not apply to any suit instituted by the Company, to any suit
instituted by the Trustee, to any suit instituted by any Holder, or group
of Holders, holding in the aggregate more than 10% in aggregate principal
amount of the outstanding Notes, or to any suit instituted by any Holder
for enforcement of the payment of principal of, or premium (if any) or
interest on, any Note on or after the Maturity Date of such Note.
Section 6.14. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely
to the Trustee or to such Holder, then and in every case, subject to any
determination in such proceeding, the Company, the Guarantor, the Trustee
and the Holders shall be restored severally and respectively to their
former positions hereunder and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding had
been instituted.
Section 6.15. CASH PROCEEDS FROM COLLATERAL.
The Cash proceeds of any Collateral obtained and/or disposed of pursuant to
the terms of the Collateral Documents shall be held by the Trustee in the
manner provided in Article XI hereof for the equal and ratable benefit of
the Holders without preference, priority or distinction of any thereof by
reason of difference in time of issuance, sale or otherwise.
Article VII.
TRUSTEE
The Trustee hereby accepts the trust imposed upon it by this Indenture and
covenants and agrees to perform the same, as herein expressed.
Section 7.1. DUTIES OF TRUSTEE.
(a) If a Default or an Event of Default has occurred and is continuing,
the Trustee shall exercise such of the rights and powers vested in it by
this Indenture and use the same degree of care and skill in their exercise
as a prudent person would exercise or use under the circumstances in the
conduct of his own affairs.
(b) Except during the continuance of a Default or an Event of Default:
(1) The Trustee need perform only those duties as are specifically set
forth in this Indenture and no others, and no covenants or obligations shall
be implied in or read into this Indenture which are adverse to the Trustee.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture, including
certificates or opinions of the Consulting Professional and the Construction
Manager. However, the Trustee shall examine the certificates and opinions
to determine whether or not they conform to the requirements of this
Indenture.
(c) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct,
except that:
(1) This paragraph does not limit the effect of paragraph (b) of this
Section 7.1.
(2) The Trustee shall comply with any order or directive of a Gaming
Authority that the Trustee submit an application for any license, finding of
suitability or other approval pursuant to any Gaming Law and will cooperate
fully and completely in any proceeding related to such application.
(3) The Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts.
(4) The Trustee shall not be liable with respect to any action it takes
or omits to take in good faith (i) in accordance with a direction received
by it pursuant to Section 6.12, or (ii) in reliance upon actions,
statements, judgments or representations taken or made by the Consulting
Professional or the Construction Manager in accordance with Section 11.4
hereof.
(d) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or to take or omit to take any
action under this indenture or at the request, order or direction of the
Holders or in the exercise of any of its rights or powers if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
(e) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section 7.1.
(f) The Trustee shall not be liable for interest on any assets received by
it except as the Trustee may agree in writing with the Company. Assets held
in trust by the Trustee need not be segregated from other assets except to
the extent required by law.
Section 7.2. RIGHTS OF TRUSTEE.
Subject to Section 7.1:
(a) The Trustee may rely on any document believed by it to be genuine and
to have been signed or presented by the proper person. The Trustee need
not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may consult with
counsel and may require an Officers' Certificate or an Opinion of Counsel,
which shall conform to Sections 13.4 and 13.5. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
such certificate or opinion.
(c) The Trustee may act through its attorneys and agents and shall not be
responsible for the misconduct or negligence of any agent (including the
Consulting Professional) appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights
or powers.
(e) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, notice, request, direction, consent, order, bond,
debenture, or other paper or document, but the Trustee, in its discretion,
may make such further inquiry or investigation into such facts or matters
as it may see fit.
(f) The Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request, order or direction
of any of the Holders, pursuant to the provisions of this Indenture, unless
such Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be incurred
therein or thereby.
(g) Except with respect to Section 5.1, the Trustee shall have no duty to
inquire as to the performance of the Company's covenants in Article V
hereof. In addition, the Trustee shall not be deemed to have knowledge of
any Default or Event of Default except (i) any Event of Default occurring
pursuant to Sections 6.1(1), 6.1(2) and 5.1, or (ii) any Default or Event
of Default of which the Trustee shall have received written notification or
obtained actual knowledge.
(h) The Trustee may rely on the accuracy of any amortization schedule
delivered to it by the Company pursuant to Section 5.23 hereof.
Section 7.3. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the owner or
pledgee of Notes and may otherwise deal with the Company, any Guarantor, any
of their respective Subsidiaries, or their respective Affiliates with the
same rights it would have if it were not Trustee. Any agent may do the
same with like rights. However, the Trustee must comply with Sections 7.10
and 7.11.
Section 7.4. TRUSTEE'S DISCLAIMER.
The Trustee makes no representation as to the validity or adequacy of this
Indenture or the Notes, and it shall not be responsible for any statement in
the Notes, other than the Trustee's certificate of authentication, or the
use or application of any funds received by a Paying Agent other than the
Trustee.
Section 7.5. NOTICE OF DEFAULT.
If a Default or an Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to each Noteholder notice of
the uncured Default or Event of Default within 90 days after such Default
or Event of Default occurs. Except in the case of a Default or an Event of
Default in payment of principal (or premium, if any) of, or interest on,
any Note (including the payment of the Redemption Price on the Redemption
Date), the Trustee may withhold the notice if and so long as a Trust
Officer in good faith determines that withholding the notice is in the
interest of the Holders.
Section 7.6. REPORTS BY TRUSTEE TO HOLDERS.
If required by law, within 60 days after each May 15 beginning with May 15,
1997, the Trustee shall mail to each Noteholder a brief report dated as of
such May 15 that complies with TIA Section 313(a). If required by law, the
Trustee also shall comply with TIA Section 313(b) and 313(c).
The Company shall promptly notify the Trustee in writing if the Notes become
listed on any stock exchange or automatic quotation system.
A copy of each report at the time of its mailing to Noteholders shall be
mailed to the Company and filed with the SEC and each stock exchange, if
any, on which the Notes are listed.
Section 7.7. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time reasonable
compensation for its services. The Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The
Company shall reimburse the Trustee upon request for all reasonable
disbursements, expenses and advances incurred or made by it. Such expenses
shall include the reasonable compensation, disbursements and expenses of
the Trustee's agents, accountants, experts and counsel.
The Company shall indemnify the Trustee (in its capacity as Trustee) and
each of its officers, directors, attorneys-in-fact and agents for, and hold
it harmless against, any claim, demand, expense (including but not limited
to reasonable compensation, disbursements and expenses of the Trustee's
agents and counsel), loss or liability incurred by them without negligence
or bad faith on its part, arising out of or in connection with the
administration of this trust and their rights or duties hereunder including
the reasonable costs and expenses of defending themselves against any claim
or liability in connection with the exercise or performance of any of its
powers or duties hereunder. The Trustee shall notify the Company promptly
of any claim asserted against the Trustee for which it may seek indemnity.
The Company shall defend the claim and the Trustee shall provide reasonable
cooperation at the Company's expense in the defense. The Trustee may have
separate counsel and the Company shall pay the reasonable fees and expenses
of such counsel; PROVIDED, that the Company will not be required to pay such
fees and expenses if it assumes the Trustee's defense and there is no
conflict of interest between the Company and the Trustee in connection with
such defense. The Company need not pay for any settlement made without its
written consent. The Company need not reimburse any expense or indemnify
against any loss or liability to the extent incurred by the Trustee through
its negligence, bad faith or willful misconduct.
To secure the Company's payment obligations in this Section 7.7, the Trustee
shall have a lien prior to the Notes on all assets held or collected by the
Trustee, in its capacity as Trustee, except assets held in trust to pay
principal and premium, if any, of or interest on particular Notes.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1(5) or (6) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
The Company's obligations under this Section 7.7 and any lien arising
hereunder shall survive the resignation or removal of the Trustee, the
discharge of the Company's obligations pursuant to Article VIII of this
Indenture and any rejection or termination of this Indenture under any
Bankruptcy Law.
Section 7.8. REPLACEMENT OF TRUSTEE.
The Trustee may resign by notifying the Company in writing. The Holder or
Holders of a majority in principal amount of the outstanding Notes may
remove the Trustee by so notifying the Company and the Trustee in writing
and may appoint a successor trustee with the Company's consent. The
Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.1(d) or 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver, Custodian, or other public officer takes charge of the
Trustee or its Property; or
(4) the Trustee become incapable of acting.
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
Holder or Holders of a majority in principal amount of the Notes may
appoint a successor Trustee to replace the successor Trustee appointed by
the Company.
A successor Trustee shall deliver a written acceptance of its appointment to
the retiring Trustee and to the Company. Immediately after that and
provided that all sums owing to the Trustee provided for in Section 7.7
have been paid, the retiring Trustee shall transfer all Property held by it
as Trustee to the successor Trustee, subject to the lien provided in
Section 7.7, 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. A successor Trustee
shall mail notice of its succession to each Holder.
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 Holder or Holders of at least 10% in principal amount of the
outstanding Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Noteholder may
petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section 7.8, the
Company's obligations under Section 7.7 shall continue for the benefit of
the retiring Trustee.
Section 7.9. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates with, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another
corporation, the resulting, surviving or transferee corporation without any
further act shall, if such resulting, surviving or transferee corporation
is otherwise eligible hereunder, be the successor Trustee.
Section 7.10. ELIGIBILITY; DISQUALIFICATION.
The Trustee shall at all times satisfy the requirements of TIA Section
310(a)(1) and TIA Section 310(a)(5). The Trustee shall have a combined
capital and surplus of at least $25,000,000 as set forth in its most recent
published annual report of condition. The Trustee shall comply with TIA
Section 310(b).
Section 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or
been removed shall be subject to TIA Section 311(a) to the extent
indicated.
Article VIII.
TERMINATION AND DISCHARGE
Section 8.1. TERMINATION OF OBLIGATIONS UPON CANCELLATION OF THE NOTES.
The Company and the Guarantors may terminate all of their obligations under
this Indenture (subject to Section 8.2) when:
(1) all Notes theretofore authenticated and delivered (other than Notes
which have been destroyed, lost or stolen and which have been replaced or
paid as provided in Section 2.7) have been delivered to the Trustee for
cancellation;
(2) the Company or a Guarantor has paid or caused to be paid all sums
payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officer's Certificate and
an Opinion of Counsel (who may be outside counsel to the Company, but not
in- house counsel to the Company or any of its Subsidiaries), each stating
that all conditions precedent specified herein relating to the satisfaction
and discharge of this Indenture have been complied with and that such
satisfaction and discharge will not result in a breach or violation of, or
constitute a Default under, this Indenture or any other instrument to which
the Company, any Guarantor or any of their Subsidiaries is a party or by
which it or their Property is bound.
Section 8.2. SURVIVAL OF CERTAIN OBLIGATIONS.
Notwithstanding the termination of this Indenture and of the Notes referred
to in Section 8.1 , the respective obligations of the Company, the
Guarantors and the Trustee under Sections 2.2, 2.3, 2.4, 2.5, 2.6, 2.7,
2.11, 2.12, Article III, Article IV, 5.1, 5.2, 5.4, 5.6, 5.15, 6.7, 6.8,
7.7, 7.8, 8.4, 13.1, 13.2, 13.4, 13.5, 13.7, 13.8, 13.11 and this Section
8.2 shall survive until the Notes are no longer outstanding, and thereafter
the obligations of the Company and the Trustee under Sections 6.8, 7.7,
7.8, 8.4, 13.11 and this Section 8.2 shall survive. Nothing contained in
this Article VIII shall abrogate any of the obligations or duties of the
Trustee under this Indenture.
Section 8.3. ACKNOWLEDGMENT OF DISCHARGE BY TRUSTEE.
After (i) the conditions of Section 8.1 have been satisfied, (ii) the
Company or a Guarantor has paid or caused to be paid all other sums payable
hereunder by the Company and (iii) the Company has delivered to the Trustee
an Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent referred to in clause (i), above, relating to the
satisfaction and discharge of this Indenture have been complied with, the
Trustee upon request shall acknowledge in writing the discharge of the
Company's and the Guarantors' obligations under this Indenture except for
those surviving obligations specified in Section 8.2.
Section 8.4. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any U.S. Legal Tender or
U.S. Government Obligations in accordance with Section 8.1 by reason of any
legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant
to Section 8.1 until such time as the Trustee or Paying Agent is permitted
to apply all such U.S. Legal Tender or U.S. Government Obligations in
accordance with Section 8.1 ; PROVIDED, HOWEVER, that if the Company or a
Guarantor has made any payment of principal of, premium, if any, or
interest on any Notes because of the reinstatement of its obligations, the
Company or such Guarantor shall be subrogated to the rights of the Holders
of such Notes to receive such payment from the U.S. Legal Tender or U.S.
Government Obligations held by the Trustee or Paying Agent.
Article IX.
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.1. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holder, the Company or any Guarantor, when
authorized by Board Resolutions, and the Trustee, at any time and from time
to time, may enter into one or more indentures supplemental hereto, or may
amend, modify or supplement the Collateral Documents, in form satisfactory
to the Trustee, for any of the following purposes:
(1) to cure any ambiguity, defect, or inconsistency, or to make any other
provisions with respect to matters or questions arising under this Indenture
which shall not be inconsistent with the provisions of this Indenture,
provided such action pursuant to this clause (1) shall not adversely affect
the interests of any Holder in any respect;
(2) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon the
Company or to make any other change that does not adversely affect the
rights of any Holder; provided, that the Company has delivered to the
Trustee an Opinion of Counsel stating that such change does not adversely
affect the rights of any Holder;
(3) to provide for additional Collateral for or additional Guarantors of
the Notes;
(4) to provide for uncertificated Notes in addition to or in place of
certificated Notes in compliance with this Indenture; or
(5) to comply with the TIA.
Section 9.2. AMENDMENTS, SUPPLEMENTAL INDENTURES AND WAIVERS WITH CONSENT
OF HOLDERS.
Subject to Section 6.8 and the last sentence of this paragraph, with the
consent of the Holders of a majority in aggregate principal amount of then
outstanding Notes by written act of said Holders delivered to the Company
and the Trustee, the Company and any Guarantor, when authorized by Board
Resolutions, and the Trustee may amend or supplement the Mortgage, this
Indenture or the Notes or enter into an indenture or indentures supplemental
hereto for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of the Mortgage, this Indenture or the
Notes or of modifying in any manner the rights of the Holders under the
Collateral Documents, this Indenture or the Notes. Subject to Section 6.8
and the last sentence of this paragraph, the Holder or Holders of a
majority in aggregate principal amount of then outstanding Notes not held
by Affiliates of the Issuer may waive compliance by the Company or any
Guarantor with any provision of the Collateral Documents, this Indenture or
the Notes. Notwithstanding the foregoing provisions of this Section 9.2,
no such amendment, supplemental indenture or waiver shall, without the
consent of the Holders of at least 66 2/3% of the aggregate principal
amount of outstanding Notes not held by Affiliates of the Issuer, change
any provision of Article IV, Article XII or (except for the Stated
Maturity, which is governed by clause (4) (below) extend any Maturity Date
of any Note, and no such amendment, supplemental indenture or waiver
shall, without the consent of the Holder of each outstanding Note affected
thereby:
(1) change the percentage of principal amount of Notes whose Holders must
consent to an amendment, supplement or waiver of any provision of this
indenture or the securities;
(2) reduce the rate or extend the time for payment of interest on any
Note;
(3) reduce the principal amount of any Note;
(4) change the Stated Maturity of any Note;
(5) alter the redemption provisions of Article III in a manner adverse to
any Holder;
(6) make any changes in the provisions concerning waivers of Defaults or
Events of Default by Holders of the Notes or the rights of Holders to
recover the principal or premium of, interest on, or redemption payment
with respect to, any Note;
(7) make any changes in Section 6.4, 6.7 or this third sentence of this
Section 9.2;
(8) make the principal of, or the interest on, any Note payable with
anything or in any manner other than as provided for in this Indenture and
the
Notes as in effect on the date hereof; or
(9) make the Notes subordinated in right of payment except as provided
herein to any extent or under any circumstances to any other indebtedness.
It shall not be necessary for the consent of the Holders under this Section
to approve the particular form of any proposed amendment, supplement or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders affected thereby a notice
briefly describing the amendment, supplement or waiver. Any failure of the
Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such supplemental indenture.
After an amendment, supplement or waiver under this Section 9.2 or 9.4
becomes effective, it shall bind each Holder.
In connection with any amendment, supplement or waiver under this Article
IX, the Company may, but shall not be obligated to, offer to any Holder who
consents to such amendment, supplement or waiver, or to all Holders,
consideration for such Holder's consent to such amendment, supplement or
waiver.
Section 9.3. COMPLIANCE WITH TIA.
Every amendment, waiver or supplement of this Indenture or the Notes shall
comply with the TIA as then in effect.
Section 9.4. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, waiver or supplement becomes effective, a consent to it
by a Holder is a continuing consent by the Holder and every subsequent
Holder of a Note or portion of a Note that evidences the same debt as the
consenting Holder's Note, even if notation of the consent is not made on
any Note. However, any such Holder or subsequent Holder may revoke the
consent as to his Note or portion of his Note by written notice to the
Company or the person designated by the Company as the person to whom
consents should be sent if such revocation is received by the Company or
such person before the date on which the Trustee receives an Officers'
Certificate Certifying that the Holders of the requisite principal amount
of Notes have consented (and not theretofore revoked such consent) to the
amendment, supplement or waiver.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver, which record date shall be the date so fixed by the
Company notwithstanding the provisions of the TIA. If a record date is
fixed, then notwithstanding the last sentence of the immediately preceding
paragraph, those persons who were Holders at such record date, and only
those persons (or their duly designated proxies), shall be entitled to
revoke any consent previously given, whether or not such persons continue
to be Holders after such record date. No such consent shall be valid or
effective for more than 90 days after such record date.
After an amendment, supplement or waiver becomes effective, it shall bind
every Noteholder, unless it makes a change described in any of clauses (1)
through (8) of Section 9.2, in which case, the amendment, supplement or
waiver shall bind only each Holder of a Note who has consented to it and
every subsequent Holder of a Note or portion of a Note that evidences the
same debt as the consenting Holder's Note; PROVIDED, HOWEVER, that any such
waiver shall not impair or affect the right of any Holder to receive
payment of principal and premium and interest on a Note, on or after the
respective dates set for such amounts to become due and payable expressed
in such Note, or to bring suit for the enforcement of any such payment on
or after such respective dates.
Section 9.5. NOTATION ON OR EXCHANGE OF NOTES.
If an amendment, supplement or waiver changes the terms of a Note, the
Trustee may require the Holder of the Note to deliver it to the Trustee or
require the Holder to put an appropriate notation on the Note. The Trustee
may place an appropriate notation on the Note about the changed terms and
return it to the Holder. Alternatively, if the Company or the Trustee so
determines, the Company in exchange for the Note shall issue, the
Guarantors shall endorse and the Trustee shall authenticate a new Note that
reflects the changed terms. Any failure to make the appropriate notation
or to issue a new Note shall not affect the validity of such amendment,
supplement or waiver.
Section 9.6. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall execute any amendment, supplement or waiver authorized
pursuant to this Article IX, provided, that the Trustee may, but shall not
be obligated to, execute any such amendment, supplement or waiver which
affects the Trustee's own rights, duties or immunities under this
Indenture. The Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution
of any amendment, supplement or waiver authorized pursuant to this Article
IX is authorized or permitted by this Indenture.
Article X.
MEETINGS OF NOTEHOLDERS
Section 10.1 PURPOSES FOR WHICH MEETINGS MAY BE CALLED.
A meeting of Noteholders may be called at any time and from time to time
pursuant to the provisions of this Article X for any of the following
purposes:
(a) to give any notice to the Company, any Guarantor or to the Trustee, or
to give any directions to the Trustee, or to waive or to consent to the
waiving of any Default or Event of Default hereunder and its consequences,
or to take any other action authorized to be taken by Noteholders pursuant
to any of the provisions of Article VI;
(b) to remove the Trustee or appoint a successor Trustee pursuant to the
provisions of Article VI;
(c) to consent to a waiver pursuant to the provisions of Section 9.2; or
(d) to take any other action (i) authorized to be taken by or on behalf of
the Holder or Holders of any specified aggregate principal amount of the
Notes under any other provision of this Indenture (including the selection
of the Consulting Professional), or authorized or permitted by law or (ii)
which the Trustee deems necessary or appropriate in connection with the
administration of this Indenture.
Section 10.2. MANNER OF CALLING MEETINGS.
The Trustee may at any time call a meeting of Noteholders to take any action
specified in Section 10.1, to be held at such time and at such place in The
City of New York, State of New York or elsewhere as the Trustee shall
determine. Notice of every meeting of Noteholders, setting forth the time
and place of such meeting and in general terms the action proposed to be
taken at such meeting, shall be mailed by the Trustee, first-class postage
prepaid, to the Company, the Guarantors and to the Holders at their last
addresses as they shall appear on the registration books of the Registrar,
not less than 10 nor more than 60 days prior to the date fixed for a
meeting. The Company shall pay the costs and expenses of preparing and
mailing such notice.
Any meeting of Noteholders shall be valid without notice if the Holders of
all Notes then outstanding are present in person or by proxy, or if notice
is waived before or after the meeting by the Holders of all Notes
outstanding, and if the Company and the Trustee are either present by duly
authorized representatives or have, before or after the meeting, waived
notice.
Section 10.3. CALL OF MEETINGS BY COMPANY OR HOLDERS.
In case at any time the Company, pursuant to a Board Resolution, or the
Holders of not less than 10% in aggregate principal amount of the securities
then outstanding, shall have requested the Trustee to call a meeting of
Noteholders to take any action specified in Section 10.1, by written request
setting forth in reasonable detail the action proposed to be taken at the
meeting, and the Trustee shall not have mailed the notice of such meeting
within 20 days after receipt of such request, then the Company or the
Holders of Notes in the amount above specified may determine the time and
place in The City of New York, State of New York or elsewhere for such
meeting and may call such meeting for the purpose of taking such action, by
mailing or causing to be mailed notice thereof as provided in Section 10.2,
or by causing notice thereof to be published at least once in each of two
successive calendar weeks (on any Business Day during such week) in a
newspaper or newspapers printed in the English language, customarily
published at least five days a week of a general circulation in The City of
New York, State of New York, the first such publication to be not less than
10 nor more than 60 days prior to the date fixed for the meeting.
Section 10.4. WHO MAY ATTEND AND VOTE AT MEETINGS.
To be entitled to vote at any meeting of Noteholders, a person shall (a) be
a registered Holder of one or more Notes, or (b) be a person appointed by
an instrument in writing as proxy for the registered Holder or Holders of
Notes. The only persons who shall be entitled to be present or to speak at
any meeting of Noteholders shall be the persons entitled to vote at such
meeting and their counsel and any representatives of the Trustee and its
counsel and any representatives of the Company, the Guarantors and their
counsel.
Section 10.5. REGULATIONS MAY BE MADE BY TRUSTEE; CONDUCT OF THE MEETING;
VOTING RIGHTS; ADJOURNMENT.
Notwithstanding any other provisions of this Indenture, the Trustee may make
such reasonable regulations as it may deem advisable for any action by or
any meeting of Noteholders, in regard to proof of the holding of Notes and
of the appointment of proxies, and in regard to the appointment and duties
of inspectors of votes, and submission and examination of proxies,
certificates and other evidence of the right to vote, and such other
matters concerning the conduct of the meeting as it shall think
appropriate. Such regulations may fix a record date and time for
determining the Holders of record of Notes entitled to vote at such
meeting, in which case those and only those persons who are Holders of
securities at the record date and time so fixed, or their proxies, shall be
entitled to vote at such meeting whether or not they shall be such Holders
at the time of the meeting.
The Trustee shall, by an instrument in writing, appoint a temporary chairman
of the meeting, unless the meeting shall have been called by the Company or
by Noteholders as provided in Section 10.3, in which case the Company or
the Noteholders calling the meeting, as the case may be, shall in like
manner appoint a temporary chairman. A permanent chairman and a permanent
secretary of the meeting shall be elected by vote of the holders of a
majority in principal amount of the Notes represented at the meeting and
entitled to vote.
At any meeting each Noteholder or proxy shall be entitled to one vote for
each $1,000 principal amount of Notes held or represented by him; provided,
however, that no vote shall be cast or counted at any meeting in respect of
any Notes challenged as not outstanding and ruled by the chairman of the
meeting to be not then outstanding. The chairman of the meeting shall have
no right to vote other than by virtue of Notes held by him or instruments
in writing as aforesaid duly designating him as the proxy to vote on behalf
of other Noteholders. Any meeting of Noteholders duly called pursuant to
the provisions of Section 10.2 or Section 10.3 may be adjourned from time
to time by vote of the Holder or Holders of a majority in aggregate
principal amount of the Notes represented at the meeting and entitled to
vote, and the meeting may be held as so adjourned without further notice.
Section 10.6. VOTING AT THE MEETING AND RECORD TO BE KEPT.
The vote upon any resolution submitted to any meeting of Noteholders shall
be by written ballots on which shall be subscribed the signatures of the
Holders of Notes or of their representatives by proxy and the principal
amount of the Notes voted by the ballot. The permanent chairman of the
meeting shall appoint two inspectors of votes, who shall count all votes
cast at the meeting for or against any resolution and who shall make and
file with the secretary of the meeting their verified written reports in
duplicate of all votes cast at the meeting. A record in duplicate of the
proceedings of each meeting of Noteholders shall be prepared by the
secretary of the meeting and there shall be attached to such record the
original reports of the inspectors of votes on any vote by ballot taken
thereat and affidavits by one or more persons having knowledge of the
facts, setting forth a copy of the notice of the meeting and showing that
such notice was mailed as provided in Section 10.2 or published as provided
in Section 10.3. The record shall be signed and verified by the affidavits
of the permanent chairman and the secretary of the meeting and one of the
duplicates shall be delivered to the Company and the other to the Trustee
to be preserved by the Trustee, the latter to have attached thereto the
ballots voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
Section 10.7. EXERCISE OF RIGHTS OF TRUSTEE OR NOTEHOLDERS MAY NOT BE
HINDERED OR DELAYED BY CALL OF MEETING.
Nothing contained in this Article X shall be deemed or construed to
authorize or permit, by reason of any call of a meeting of Noteholders or
any rights expressly or impliedly conferred hereunder to make such call,
any hindrance or delay in the exercise of any right or rights conferred
upon or reserved to the Trustee or to the Noteholders under any of the
provisions of this Indenture or of the Notes.
Article XI.
APPLICATION OF TRUST MONEYS
Section 11.1. "TRUST MONEYS" DEFINED.
All Cash or Cash Equivalents received by the Trustee:
(a) as Boat Conveyance Proceeds; or
(b) upon the release (other than in accordance with Section 4.3 hereof) of
Collateral from the Lien of any Collateral Document, subject to satisfaction
of any Permitted Liens on such Collateral or as otherwise permitted herein;
or
(c) as Insurance Proceeds (other than (i) any liability insurance proceeds
payable to the Trustee for any loss, liability or expense incurred by it,
and (ii) proceeds from any single casualty to Collateral (other than the
Crescent City Queen Casino, any Qualified Substitute Boat or Substitute
Boat, and the JCC Real Property) where such proceeds do not exceed $50,000
from such casualty; PROVIDED, HOWEVER, that such proceeds described in the
foregoing clause (ii) shall constitute Collateral for all other purposes
under this Indenture and the Collateral Documents) including proceeds of
any insurance received pursuant to Article I, Section 15 of the Mortgage or
pursuant to the corresponding provisions of the Other Boat Mortgage or
pursuant to Section IV of the JCC Mortgage; or
(d) as proceeds of any other sale or other disposition of all or any part
of the Collateral by or on behalf of the Trustee (including any proceeds
received pursuant to Article II, Section 2 of the Mortgage or the
corresponding provisions of the Other Boat Mortgage or pursuant to Section
VI of the CMLI Mortgage) or any collection, recovery, receipt,
appropriation or other realization of or from all or any part of the
Collateral pursuant to the Collateral Documents or otherwise; or
(e) for application under this Article XI as elsewhere provided in this
Indenture or the Collateral Documents, or whose disposition is not elsewhere
otherwise specifically provided for herein or in the Collateral Documents;
(all such moneys being herein sometimes called "Trust Moneys"; PROVIDED,
HOWEVER, that Trust Moneys shall not include any Property deposited with the
Trustee pursuant to Section 3.7 or Article VIII or delivered to or received
by the Trustee for application in accordance with Section 6.6 hereof) shall
be subject to a Lien and security interest in favor of the Trustee and
shall be held by the Trustee for the benefit of the Holders as a part of
the Collateral and, upon any entry upon or sale or other disposition of the
Collateral or any part thereof pursuant to the Collateral Documents, said
Trust Moneys shall be applied in accordance with Section 6.6; but, prior to
any such entry, sale or other disposition, all or any part of the Trust
Moneys may be withdrawn, and shall be released, paid or applied by the
Trustee, from time to time as provided in this Article XI or Article IV.
On May 13, 1996 there shall be established and, at all times hereafter until
this Indenture shall have terminated, there shall be maintained by the
Trustee , an account which shall be entitled the "Collateral Account" which
shall be established and maintained by the Trustee at its offices in the
Borough of Manhattan, The City of New York. The Collateral Account shall
initially contain the following "Basic Sub-Accounts" established by and
with the Trustee:
(i) the Boat Conveyance Proceeds Sub-Account;
(ii) the Net Awards Collateral Sub-Account;
(iii) the Guarantor Collateral Sub-Account;
(iv) the Company Collateral Sub-Account; and
(v) the Company Payment Sub-Account.
All Trust Moneys which are received by the Trustee shall be deposited in
the Collateral Account as follows:
(A) all Boat Conveyance Proceeds shall be deposited into the Boat
Conveyance Proceeds Sub-Account;
(B) all Insurance Proceeds and Net Awards shall be deposited into the
Net Awards Sub-Account;
(C) all Cash proceeds of Collateral owned by the Guarantors shall be
deposited into the Guarantor Collateral Sub-Account;
(D) all Trust Moneys paid to the Trustee for the purpose and in
anticipation of the distribution of same to the Holders pursuant to any
redemption or principal amortization shall be deposited in the Company
Payment Sub-Account; and
(E) all other Trust Moneys shall be deposited in the Company
Collateral Sub-Account.
Trust Moneys thereafter shall be held, applied and/or disbursed by the
Trustee in accordance with the terms of this Indenture. The Trustee shall
have a Lien on and security interest in the Collateral Account and the Basic
Sub-Accounts and all Cash and Cash Equivalents therein from time to time for
the benefit of the Holders as part of the Collateral.
Section 11.2. WITHDRAWALS OF INSURANCE PROCEEDS AND NET AWARDS.
To the extent that any Trust Moneys consist of Insurance Proceeds or a Net
Award received by the Trustee pursuant to the provisions of Article I,
Section 15 of the Mortgage or the corresponding provisions of the Other Boat
Mortgage (which Net Award is required to be applied, or may be applied by
the applicable mortgagor or pledgor, to effect a restoration to the affected
Collateral) or Section IV of the JCC Mortgage, such Trust Moneys may be
withdrawn by the Company and shall be paid by the Trustee upon a request by
a Company Order to reimburse the Company to repair, rebuild or replace the
Property destroyed, damaged or taken, upon receipt by the Trustee of the
following:
(a) an Officers' Certificate of the Company dated not more than 30 days
prior to the date of the application for the withdrawal and payment of such
Trust Moneys:
(i) that expenditures have been made, or costs incurred, by the Company
in a specified amount for the purpose of making certain repairs, rebuildings
and replacements of the Collateral, which shall be briefly described, and
stating the fair value thereof to the Company at the date of the expenditure
or incurrence thereof by the Company;
(ii) that no part of such expenditures or costs has been or is being
made the basis for the withdrawal of any Trust Moneys in any previous or
then pending application pursuant to this Section 11.2;
(iii) that there is no outstanding Indebtedness except as permitted
herein, other than costs for which payment is being requested and customary
retainage not to exceed ten per cent (10%);
(iv) that the Property to be repaired, rebuilt or replaced is necessary
or desirable in the conduct of the business of the Company;
(v) whether any part of such repairs, rebuildings or replacements
within six months before the date of acquisition thereof by the Company has
been used or operated by others than the Company in a business similar to
that in which such Property has been or is to be used or operated by the
Company and whether the fair value to the Company at the date of such
acquisition, of such part of such repairs, rebuildings or replacements is
at least the greater of $25,000 and 1% of the aggregate principal amount of
the outstanding Notes;
(vi) that no Default or Event of Default shall have occurred and be
continuing; and
(vii) that all conditions precedent herein provided for relating to
such withdrawal and payment have been complied with;
(b) all documentation required under Section 314(d) of the TIA;
(c) an Architect's Certificate stating:
(i) that all restoration work to which such request relates has been
done in compliance with the approved plans and specifications and in
accordance with all provisions of law;
(ii) the sums requested are required to reimburse the Company for
payments by the Company to, or are due to, the contractors, subcontractors,
materialmen, laborers, engineers, architects or other persons rendering
services or materials for the restoration, and that, when added to the sums,
if any, previously paid out by Trustee, such sums do not exceed the cost of
the restoration to the date of such Architect's Certificate;
(iii) whether or not the Estimate continues to be accurate, and if not,
what the entire cost of such restoration is then estimated to be; and
(iv) that the amount of the Insurance Proceeds or Net Award plus any
amount received by the Trustee under a surety, guaranty, letter of credit or
commitment remaining after giving effect to such payment will be sufficient
on completion of the restoration to pay for the same in full (including, in
detail, an estimate by trade of the remaining costs of completion);
(d) an Opinion of Counsel (who shall be outside counsel to the Company)
substantially stating:
(i) that the instruments that have been or are therewith delivered to
the Trustee conform to the requirements of this Indenture and the Collateral
Documents, and that, upon the basis of such requests of the Company and the
accompanying documents specified in this Section 11.2, all conditions
precedent herein provided for relating to such withdrawal and payment have
been complied with, and the Trust Moneys whose withdrawal is then requested
may be lawfully paid over under this Section 11.2;
(ii) that the Collateral Documents create a valid and perfected Lien on
such repairs, rebuildings and replacements, that the same and every part
thereof are subject to no Liens prior to the Lien of the Collateral
Documents, except Liens of the type permitted under the Collateral
Documents to which the Property so destroyed or damaged shall have been
subject at the time of such destruction or damage; and
(iii) that all of the right, title and interest in and to said repairs,
rebuildings or replacements, or combination thereof, of the Company are then
subject to the Lien of the Collateral Documents;
(e) each such request shall be accompanied by:
(i) an Opinion of Counsel or a title insurance policy, binder or
endorsement satisfactory to the Trustee confirming that there has not been
filed with respect to all or any part of the mortgaged Property any Lien
which could have priority over the Lien of the Mortgage or the Other Boat
Mortgage, as the case may be other than those Liens which will be satisfied
with the proceeds being advanced; and
(ii) an Officer's Certificate stating that all certificates, permits,
licenses, waivers, other documents, or any combination of the foregoing
required by law in connection with or as a result of such restoration to the
extent then completed have been obtained.
Upon compliance with the foregoing provisions of this Section 11.2 and the
provisions of the applicable Collateral Document, the Trustee shall pay on
the written request of the Company an amount of Trust Moneys of the
character aforesaid equal to the amount of the expenditures or costs stated
in the Officers' Certificate required by clause (i) of subsection (a) of
this Section 11.2, or the fair value to the Company of such repairs,
rebuildings and replacements stated in such Officers' Certificate (or in
such independent appraiser's or independent financial advisor's certificate,
if required by the TIA), whichever is less; PROVIDED, HOWEVER, that
notwithstanding the above, so long as no Default or Event of Default shall
have occurred and be continuing, in the case that any insurance proceeds or
award for such Property or proceeds of such sale does not exceed the lesser
of $25,000 or 1% of the principal amount of the then outstanding Notes,
and, in the good faith estimate of the Company, such destruction or damage
resulting in such insurance proceeds does not detrimentally affect the
value or use of the applicable Collateral in any material respect, upon
delivery to the Trustee of an Officers' Certificate of the Company to such
effect, the Trustee shall release to the Company such insurance proceeds or
condemnation award for such Property or proceeds of such sale, free of the
Lien hereof and of the Collateral Documents, and such proceeds shall be
deemed to have beenreleased pursuant to Section 4.6 hereof.
Section 11.3. WITHDRAWAL OF BOAT CONVEYANCE PROCEEDS FOR PURCHASE OR
QUALIFIED LESSEE LEASE OF SUBSTITUTE BOAT.
To the extent that any Trust Moneys consist of Boat Conveyance Proceeds
received by the Trustee pursuant to the provisions of Section 4.4, and the
Company intends to use such Boat Conveyance Proceeds pursuant to the
provisions of Section 4.4(b), such Boat Conveyance Proceeds may be withdrawn
by the Company and shall be paid by the Trustee to the Company (or as
otherwise directed by the Company) upon a Company Order to the Trustee and
upon receipt by the Trustee of the following:
(a) A notice (each, a "Boat Conveyance Proceeds Release Notice"), which
shall (i) refer to this Section 11.3, (ii) describe with particularity the
use to be made by the Company (including, without limitation, (A) the amount
of the purchase price of such Qualified Substitute Boat and, if such
withdrawal is for the payment of interest on or a principal installment of
the financing of such purchase price, the amount of such current payment
and the outstanding principal amount of such financing, (B) the amount and
nature of any Capital Expenditures, and (C) the calculation of Adjusted Rent
Obligations for which such Company Order is made) with respect to the
released Boat Conveyance Proceeds in accordance with Section 4.4(b) and
(iii) be accompanied by a counterpart of the instruments proposed to give
effect to the release fully executed and acknowledged (if applicable) by
all parties thereto other than the Trustee;
(b) An Officers' Certificate certifying that (i) the release of the Boat
Conveyance Proceeds complies with the terms and conditions of Section 4.4 of
this Indenture, (ii) there is no Default or Event of Default in effect or
continuing on the date thereof (both before and after giving effect to the
proposed use of the Boat Conveyance Proceeds), (iii) the release of the Boat
Conveyance Proceeds will not result in a Default or Event of Default
hereunder and (iv) all conditions precedent to such release have been
complied with;
(c) All documentation required under Section 314(d) of the TIA;
(d) If the Boat Conveyance Proceeds are to be used for in whole or in part
for the purchase price of a Qualified Substitute Boat or the financing
thereof or the servicing and amortization of such financing from time to
time, the Company shall also deliver to the Trustee:
(i) an Other Boat Mortgage and other agreements or instruments in
recordable form sufficient to grant to the Trustee, for the benefit of the
Holders, a valid perfected first priority Lien on (i) such Qualified
Substitute Boat, and (ii) all contracts, agreements and other purchase
documentation, and all other indemnification and other contract rights, of
the Company arising out of or related to its purchase of such Qualified
Substitute Boat, subject only to Liens permitted pursuant to Section 5.13
hereof;
(ii) a policy of title insurance issued by a nationally recognized
title insurance company and approved by the Trustee, which approval shall
not be unreasonably withheld (or an endorsement to the title insurance
policy issued to the trustee on the Issue Date or a commitment to issue a
policy of title insurance or an endorsement), insuring that the Lien of this
Indenture and the Collateral Documents constitutes a valid and perfected
first priority Lien on such Qualified Substitute Boat in an aggregate amount
equal to the fair value of the Qualified Substitute Boat, together with an
Officers' Certificate (or, at the request of the Trustee in its sole
discretion, an Opinion of Counsel) stating that any specific exceptions to
such title insurance are Liens permitted pursuant to Section 5.13 hereof
and containing such endorsements and other assurances of the type included
in the title insurance policy delivered to the Trustee on the Issue Date
with respect to the Mortgage; and
(iii) evidence of payment or a closing statement indicating payment of
all title premiums, recording charges, transfer taxes and other costs and
expenses, including reasonable legal fees and disbursements of counsel for
each of the Trustee (and any local counsel), that may be incurred to validly
and effectively subject the Qualified Substitute Boat to the Lien of any
applicable Collateral Document and to perfect such Lien;
PROVIDED, HOWEVER, that if the deliveries required under clauses (d)(i),
(ii), and (iii) above have been previously made to the Trustee under the
provisions of this clause (d), the Company shall be required only to
deliver an Officer's Certificate certifying that the documents, agreements
and instruments delivered under clauses (d)(i), (ii) and (iii) above are in
full force and effect;
(e) If the Boat Conveyance Proceeds are to be used in whole or in part for
the payment of the Adjusted Rent Obligations of the Company pursuant to a
Qualified Lessee Lease, the Company shall also deliver to the Trustee:
(i) a leasehold boat mortgage or other instruments in recordable form
sufficient to grant to the Trustee, for the benefit of the Holders, a valid
first priority Lien on all right, title and interest of the Company in the
Qualified Lessee Lease; PROVIDED, HOWEVER, that if the deliveries required
under this clause (i) have been previously made to the Trustee under the
provisions of this clause (e), the Company shall be required only to deliver
an Officer's Certificate certifying that the documents, agreements and
instruments delivered under this clause(i) are in full force and effect;
(ii) an Opinion of Counsel and a title insurance policy, binder or
endorsement satisfactory to the Trustee, in each case confirming that there
has not been filed with respect to all or any part of the Substitute Boat
which is the subject of the Qualified Lessee Lease any Lien which could have
priority over the Lien of the leasehold boat mortgage of the Trustee; and
(iii) an Officer's Certificate certifying that (A) such Qualified
Lessee Lease permits the interest of the Company to be encumbered by such
leasehold boat mortgage or other instruments evidencing the Liens of the
Trustee, (B) the Company's interest in such Qualified Lessee Lease is
assignable to the Trustee or its designee upon notice to, but without the
consent of, the lessor thereunder, and, in the event that it is so
assigned, is further assignable by the Trustee or its designee and their
successors and assigns upon notice to, but without a need to obtain the
consent of, such lessor, and upon such assignment the assignee shall be
fully released from all liability thereunder; (C) such Qualified Lessee
Lease is in full force and effect and no default has occurred under such
lease, nor is there any existing condition which, but for the passage of
time or the giving of notice, would result in a default under the terms of
such lease; (D) such Qualified Lessee Lease requires the lessor thereunder
to give notice of any default by the Lessee to the Trustee, and such
Qualified Lessee Lease further provides that no notice of termination given
under such lease shall be effective against the Trustee unless a copy has
been delivered to the Trustee in the manner described in such lease; (E) a
mortgagee is permitted a reasonable opportunity (including, where necessary,
sufficient time to gain possession of the interest of the Lessee under such
lease) to cure any default under such Qualified Lessee Lease, which is
curable after the receipt of notice of any such default before the lessor
thereunder may terminate such lease, and if such Qualified Lessee Lease is
terminated, the lessor thereunder shall at the option of the Trustee enter
into a new lease on exactly the terms of the Qualified Lessee Lease; (F)
such Qualified Lessee Lease does not impose any restrictions on subletting
which would be viewed as commercially unreasonable by prudent ship lending
institutions, and such Qualified Lessee Lease contains a covenant that the
lessor thereunder is not permitted, in the absence of any uncured default,
to disturb the possession, interest or quiet enjoyment of any Lessee in the
relevant portion of the Property subject to such lease for any reason, or
in any manner, which would adversely affect the security provided by the
related leasehold boat mortgage; (G) all amounts requested under the
Company Order are to pay Adjusted Rent Obligations of the Company; and (H)
the Lessee's interest in the Substitute Boat which is subject to such
Qualified Lessee Lease is not subject to any Lien other than the Qualified
Lessee Lease and any Lien for taxes not due and payable.
(f) An Opinion of Counsel stating that the documents that have been or are
therewith delivered to the Trustee conform to the requirements of this
Indenture and that all conditions precedent herein provided for (including,
without limitation, the conditions specified in clauses (d) and (e) of this
Section 11.3) relating to such application of Boat Conveyance Proceeds have
been complied with.
Upon compliance with the foregoing provisions of this Indenture, the Trustee
shall apply the Boat Conveyance Proceeds as directed and specified by the
Company
Section 11.4. WITHDRAWAL OF BOAT CONVEYANCE PROCEEDS FOR CONSTRUCTION OF
QUALIFIED SUBSTITUTE BOAT OR FOR CAPITAL EXPENDITURES ON SUCH QUALIFIED
SUBSTITUTE BOAT.
To the extent that any Trust Moneys consist of Boat Conveyance Proceeds
received by the Trustee pursuant to the provisions of Section 4.4, and the
Company intends to use such Boat Conveyance Proceeds for the construction of
a Qualified Substitute Boat pursuant to the provisions of Section 4.4(b),
or for Permitted Capital Expenditures, such Boat Conveyance Proceeds may be
withdrawn by the Company and shall be paid by the Trustee to the Company
(or as otherwise directed by the Company) upon a Company Order to the
Trustee and upon the following terms and conditions:
(a) The Qualified Substitute Boat shall be constructed and equipped, and the
Permitted Capital Expenditures shall be made, pursuant to plans and
specifications prepared by independent, licensed architects and engineers
(collectively, the "Plans"), a construction agreement and construction
schedule (collectively the "Construction Agreement") and a budget (the
"Budget") which shall have been approved in writing by the Consulting
Professional, in its best professional opinion, and a certificate of the
Consulting Professional to that effect shall have been delivered to the
Trustee.
(b) Disbursements for costs of constructing and equipping the Qualified
Substitute Boat or the Permitted Capital Expenditures included in the
Budget, shall be made as such costs are incurred, but not more often than
monthly; the amount of the costs which have been incurred shall be as is
set forth and approved, from time to time, in a certificate of the
Consulting Professional and such other evidence as may be reasonably
required by the Trustee, less a retention of 10% of such costs until the
Qualified Substitute Boat or the Permitted Capital Expenditures have been
fully completed and equipped.
(c) If at any time the Consulting Professional determines that the unfunded
cost of completing the construction and equipping of the Qualified
Substitute Boat or the Permitted Capital Expenditures exceeds the amount of
the Boat Conveyance Proceeds remaining in the Boat Conveyance Proceeds Sub-
Account, the Company shall deposit with the Trustee in the Boat Conveyance
Proceeds Sub- Account additional funds from some other source in an amount
equal to such excess, and such funds shall be used first to complete the
construction and the equipping of the Qualified Substitute Boat or the
Permitted Capital Expenditures.
(d) Amounts shall be disbursed from the Boat Conveyance Proceeds Sub-Account
only for payment of costs specified in the Budget.
(e) The Qualified Substitute Boat, if constructed in accordance with the
Plans, will comply with all legal requirements, as evidenced by an opinion
of outside counsel for the Company satisfactory to the Consulting
Professional.
(f) Upon demand of the Consulting Professional, the Company, at its sole
cost and expense, shall correct promptly any defect in the Qualified
Substitute Boat, any material departure from the Plans and any failure to
comply with applicable legal requirements, all to the satisfaction of the
Consulting Professional.
(g) The Company, without the prior written consent of the Consulting
Professional, shall not make (a) any single change to the Plans that would
require the Company to incur greater than $25,000 in additional costs or (b)
any changes to the Plans that would in the aggregate, require the Company to
incur greater than $100,000 in additional costs. Furthermore, the Company
shall provide copies of all change orders, change bulletins and other
revisions of the Plans and the Construction Agreement to the Consulting
Professional prior to the commencement of any work reflecting such changes
or revisions, regardless of whether the Consulting Professional's prior
approval is required.
(h) The Company shall pay or reimburse the Trustee and the Consulting
Professional for all expenses incurred by the Trustee and the Consulting
Professional with respect to any and all transactions and matters
contemplated hereby including, without limitation, the fees of the
Consulting Professional.
(i) The Trustee shall have received a certificate from the Consulting
Professional certifying that:
(i) it is satisfied that all past and current (if then due and payable)
taxes and assessments applicable to the Qualified Substitute Boat, the
Permitted Capital Expenditure, or the Property on which the Permitted
Capital Expenditure is to be constructed (the "Improved Property"), or
payable by the Company have been paid;
(ii) if the Qualified Substitute Boat or the Permitted Capital
Expenditure is constructed as planned, the Qualified Substitute Boat or the
Permitted Capital Expenditure, as the case may be, shall be suitable for its
intended purpose and will be capable of being put into service without the
need for additional expenditures except as set forth in the approved Budget;
(iii) it is satisfied that, and it has received an opinion of counsel
addressed to the Trustee for the benefit of the Holders, that the Trustee
has a valid perfected security interest in the Qualified Substitute Boat,
the Permitted Capital Expenditure and the Improved Property and all
furniture, fixtures, equipment thereon or forming a part thereof or for
which advances hereunder have been made free and clear of all other Liens,
claims and encumbrances other than Liens permitted pursuant to Section 5.13
hereof;
(iv) the Contractor shall have entered into an agreement with the
Consulting Professional on behalf of the Trustee in form and substance
satisfactory to the Trustee pursuant to which the Contractor shall agree
that it shall not make any changes to the Plans or execute any change orders
except as expressly permitted hereby and that in the event of a default of
the Company under the Construction Contract or the bankruptcy of the
Company the Contractor shall, at the election of the Trustee and the
Consulting Professional continue to perform the Construction Contract on
its then executory terms for the benefit of the Trustee;
(v) the Contractor has delivered to the Consulting Professional a list
of its subcontractors which is current as of the date of the certificate;
(vi) it has received certified copies of duly executed counterparts of
the Construction Agreement and the requisite permits, licenses and
authorizations;
(vii) it has received a copy of the Plans, satisfactory in form and
content to the Trustee and the Consulting Professional.
(viii) it has received the Budget, together with a cost breakdown and
schedule for construction of the Qualified Substitute Boat or the Permitted
Capital Expenditures setting forth all items of costs and expenses and
estimating the construction trade schedules required to complete the
construction and equipping of the Qualified Substitute Boat or the Permitted
Capital Expenditures.
(ix) it has received a critical path method schedule for completion of
the construction and equipping of the Qualified Substitute Boat or the
Permitted Capital Expenditures, which schedule shall be in form and
substance satisfactory to the Consulting Professional; and
(x) it has received an Officers' Certificate from the Company
certifying that (A) the release of the Boat Conveyance Proceeds for the
construction of the Qualified Substitute Boat or the Permitted Capital
Expenditures complies with the terms and conditions of Section 4.4 of this
Indenture, (B) there is no Default or Event of Default in effect or
continuing on the date thereof (both before and after giving effect to the
proposed use of the Boat Conveyance Proceeds), (C) the release of the Boat
Conveyance Proceeds pursuant to the Company Order will not result in a
Default or Event of Default hereunder, (D) the representations and
warranties which are contained in the Indenture or any certificate,
document or financial or other statement furnished under or in connection
with the Indenture are correct on and as of the date of the advance as if
made on and as of such date, (E) all utility services and facilities
necessary for the construction of Permitted Capital Improvements without
impediment or delay will be available at or within the boundaries of the
Improved Property, and all utility services and facilities necessary for
the operation of Permitted Capital Improvements for its intended purposes
will be available at or within the boundaries of the Improved Property when
needed, (F) all required permits, authorizations, licenses and certificates
for the construction of the Qualified Substitute Boat or the Permitted
Capital Improvements have been obtained and are in full force and effect on
and as of such date, (G) expenditures have been made, or costs incurred, by
the Company in a specified amount for the construction of the Qualified
Substitute Boat or the Permitted Capital Expenditures, which shall be
briefly described, and stating the fair value thereof to the Company at the
date of the expenditure or incurrence thereof by the Company; (H) no part of
such expenditures or costs has been or is being made the basis for the
withdrawal of any Boat Conveyance Proceeds in any previous or then pending
application pursuant to this Section 11.4; (I) there is no outstanding
Indebtedness, other than costs for which payment is being requested and
customary retainage not to exceed ten per cent (10%); (J) the Qualified
Substitute Boat or Permitted Capital Expenditures is necessary or desirable
in the conduct of the business of the Company; (K) the Qualified Substitute
Boat, if constructed in accordance with the Plans, will comply with all
legal requirements; and (L) all conditions precedent to such release have
been complied with.
(j) All of the foregoing items and all other documents and legal matters
in connection with the transactions contemplated by this Indenture shall be
satisfactory in form and substance to the Trustee.
(k) The Collateral Documents shall constitute a valid lien on the
Collateral (including the Improved Property, unincorporated work and
materials) for the full amount of the Boat Conveyance Proceeds advanced to
and including such date. The Company shall deliver to the Trustee a title
insurance policy, binder or endorsement on the date of each Company Order
confirming that there has not been filed with respect to all or any part of
the Improved Property any Lien which has not been discharged of record,
other than as disclosed by surveys resulting from the prosecution of work
pursuant to the approved Plans.
(l) All materials and fixtures incorporated in the construction of the
Qualified Substitute Boat or the Permitted Capital Expenditures shall have
been purchased so that their absolute ownership shall have vested in the
Company prior to the Trustee making advances of the Boat Conveyance
Proceeds, the proceeds of which are used to purchase such materials and
fixtures, and the Company shall have produced and furnished, if required by
the Trustee, the contracts, bills of sale or other agreements under which
title to such materials and fixtures is claimed.
(m) The Consulting Professional and the Trustee shall have received a
statement of the Company, in form and substance satisfactory to the Trustee,
setting forth the names, addresses and amounts due or to become due as well
as the amounts previously paid to every contractor, subcontractor, and
supplier furnishing materials for or performing labor on the construction
of any part of the Qualified Substitute Boat.
(n) The Trustee shall have received and approved (i) an inspection report
of the Consulting Professional covering the progress of construction,
conformity of the work with the Plans, quality of work completed and
percentage of work completed prepared in a professional manner in accordance
with industry norms and (ii) an Officer's Certificate requesting such
disbursement, satisfactory in form and substance to the Consulting
Professional, with appropriate insertions, accompanied by true copies of
unpaid invoices, receipted bills and lien waivers, and such other
supporting information as the Consulting Professional may reasonably
request.
(o) All instruments relating to each advance and all actions taken on or
prior to each advance shall be reasonably satisfactory to the Trustee, and
the Trustee shall have been furnished with such documents, reports,
certificates, affidavits and other information, in form and substance
reasonably satisfactory to the Trustee, as the Trustee may require to
evidence compliance with all of the provisions of the Indenture
(p) The Company shall have furnished to the Trustee lien waivers and
subordination agreements in form and substance reasonably satisfactory to
the Consulting Professional from such contractors, subcontractors,
suppliers and materialmen as the Consulting Professional may require,
evidencing that they have been paid in full (less retainage) for all work
performed or materials supplied to the date of the Company's request for
such advance.
(q) The Qualified Substitute Boat or the Permitted Capital Expenditures
shall not have been materially damaged by fire or other casualty unless
there shall have been received, by the Trustee or a person approved by the
Trustee, insurance proceeds sufficient in the reasonable judgment of the
Trustee after consultation with the Consulting Professional, to effect
satisfactory restoration and completion of the Qualified Substitute Boat on
or before the date that is fifteen months from the last day of the Waiting
Period.
(r) The Qualified Substitute Boat or the Permitted Capital Expenditures
shall not be deemed completed for purposes of this Indenture until all of
the conditions set forth in this subsection shall have been satisfied.
(i) The Qualified Substitute Boat shall have been completed
substantially in accordance with the Plans and accepted by the Company
subject to completion of any minor "punch list" items having an aggregate
cost to complete or repair not to exceed $100,000; and
(ii) The Trustee shall have received the following, in each case in
form and substance satisfactory to the Trustee:
(A) evidence of the approval by all appropriate Governmental
Authorities of the Qualified Substitute Boat as being complete as to
construction including, without limitation, a copy of a certificate of
occupancy, if applicable, or other permits, certificates or authorizations
as the Consulting
Professional deems appropriate
(B) the certification of (1) the Architect and (2) the Contractor that
to the best of their knowledge the Qualified Substitute Boat has been
completed substantially in accordance with the Plans, that connection has
been made to all appropriate utility facilities and that the Qualified
Substitute Boat is ready for occupancy.
(s) All other documentation required under Section 314(d) of the TIA and
not described above shall be delivered to the Trustee with any Company
Order delivered pursuant to the terms of this Section 11.4.
Section 11.5. INVESTMENT OF TRUST MONEYS.
All or any part of any Trust Moneys held by the Trustee shall from time to
time be invested or reinvested by the Trustee in any Cash Equivalents
pursuant to the written direction of the Company, which shall specify the
Cash Equivalents in which Trust Moneys shall be invested. Unless an Event
of Default occurs and is continuing, any interest on such Cash Equivalents
(in excess of any accrued interest paid at the time of purchase) that may
be received by the Trustee shall be forthwith paid to the Company. Such
Cash Equivalents shall be held by the Trustee as a part of the Collateral,
subject to the same provisions hereof as the cash used by it to purchase
such Cash Equivalents.
The Trustee shall not be liable or responsible for any loss resulting from
such investments or sales except only for its own negligent action, its own
negligent failure to act or its own willful misconduct in complying with
this Section 11.5.
Article XII.
GUARANTY
Section 12.1. GUARANTY.
(a) In consideration of good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, each of the Guarantors hereby
irrevocably and unconditionally guarantees (the "Guaranty") to each Holder
of a Note authenticated and delivered by the Trustee and to the Trustee and
its successors and assigns, irrespective of the validity and enforceability
of this Indenture, the Notes or the obligations of the Company under this
Indenture or the Notes, that: (w) the principal and premium (if any) of and
interest on the Notes will be paid in full when due, whether at the maturity
or interest payment date, by acceleration, call for redemption, or
otherwise; (x) all other obligations of the Company to the Holders or the
Trustee under this Indenture or the Notes will be promptly paid in full or
performed, all in accordance with the terms of this Indenture and the
Notes; and (y) in case of any extension of time of payment or renewal of
any Notes or any of such other obligations, they will be paid in full when
due or performed in accordance with the terms of the extension or renewal,
whether at maturity, by acceleration, call for redemption or otherwise.
Failing payment when due of any amount so guaranteed for whatever reason,
each Guarantor shall be obligated to pay the same before failure so to pay
becomes an Event of Default.
(b) Each Guarantor hereby agrees that its obligations with regard to this
Guaranty shall be unconditional, irrespective of the validity, regularity or
enforceability of the Notes or this Indenture, the absence of any action to
enforce the same, any delays in obtaining or realizing upon or failures to
obtain or realize upon collateral, the recovery of any judgment against the
Company, any action to enforce the same or any other circumstances that
might otherwise constitute a legal or equitable discharge or defense of a
guarantor. Each Guarantor hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first against
the Company or right to require the prior disposition of the assets of the
Company to meet its obligations, protest, notice and all demands whatsoever
and covenants that this Guaranty will not be discharged except by complete
performance of the obligations contained in the Notes and this Indenture.
(c) If any Holder or the Trustee is required by any court or otherwise to
return to either the Company or any Guarantor, or any Custodian, Trustee, or
similar official acting in relation to either the Company or such Guarantor,
any amount paid by either the Company or such Guarantor to the Trustee or
such Holder, this Guaranty, to the extent theretofore discharged, shall be
reinstated in full force and effect. Each Guarantor agrees that it will not
be entitled to any right of subrogation in relation to the Holders in
respect of any obligations guaranteed hereby until payment in full of all
obligations guaranteed hereby. Each Guarantor further agrees that, as
between such Guarantor, on the one hand, and the Holders and the Trustee,
on the other hand, (i) the maturity of the obligations guaranteed hereby
may be accelerated as provided in Section 6.1 for the purposes of this
Guaranty, notwithstanding any stay, injunction or other prohibition
preventing such acceleration as to the Company of the obligations
guaranteed hereby, and (ii) in the event of any declaration of acceleration
of those obligations as provided in Section 6.1, those obligations (whether
or not due and payable) will forthwith become due and payable by each of
the Guarantors for the purpose of this Guaranty.
(d) It is the intention of each Guarantor and the Company that the
obligations of each Guarantor hereunder shall be in, but not in excess of,
the maximum amount permitted by applicable law. Accordingly, if the
obligations in respect of the Guaranty would be annulled, avoided or
subordinated to the creditors of any Guarantor by a court of competent
jurisdiction in a proceeding actually pending before such court as a result
of a determination both that such Guaranty was made without fair
consideration and, immediately after giving effect thereto, such Guarantor
was insolvent or unable to pay its debts as they mature or left with an
unreasonably small capital, then the obligations of such Guarantor under
such Guaranty shall be reduced by such court if such reduction would result
in the avoidance of such annulment, avoidance or subordination; PROVIDED,
HOWEVER, that any reduction pursuant to this paragraph shall be made in the
smallest amount as is strictly necessary to reach such result. For
purposes of this paragraph, "fair consideration", "insolvency", "unable to
pay its debts as they mature", "unreasonably small capital" and the
effective times of reduction, if any, required by this paragraph shall be
determined in accordance with applicable law.
Section 12.2. CERTAIN BANKRUPTCY EVENTS.
Each Guarantor hereby covenants and agrees that in the event of the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Company, such Guarantor shall not file (or join in any filing of), or
otherwise seek to participate in the filing of, any motion or request
seeking to stay or to prohibit (even temporarily) execution on the Guaranty
and hereby waives and agrees not to take the benefit of any such stay of
execution, whether under Section 362 or 105 of the United States Bankruptcy
Code or otherwise.
Article XIII.
MISCELLANEOUS
Section 13.1. TIA CONTROLS.
If any provision of this Indenture limits, qualifies, or conflicts with the
duties imposed by operation of the TIA, the imposed duties, upon
qualification of this Indenture under the TIA, shall control.
Section 13.2. NOTICES.
Any notices or other communications to the Company, the Guarantors or the
Trustee required or permitted hereunder shall be in writing, and shall be
sufficiently given if made by hand delivery, by telex, by telecopier or
registered or certified mail, postage prepaid, return receipt requested,
addressed as follows:
if to the Company or any Guarantor:
Casino Magic of Louisiana Corp.
c/o Casino Magic Corp.
711 Casino Magic Drive
Bay St. Louis. MS 39520
Attention: Chief Financial Officer
with a copy to:
Casino Magic Corp.
711 Casino Magic Drive
Bay St. Louis. MS 39520
if to the Trustee:
First Trust National Association
180 East Fifth Street
Saint Paul, Minnesota 55101
Attention: Scott Strodthoff
The Company, the Guarantors or the Trustee by notice to each other party may
designate additional or different addresses as shall be furnished in writing
by such party. Any notice or communication to the Company, the Guarantors
or the Trustee shall be deemed to have been given or made as of the date so
delivered, if personally delivered; when answered back, if telexed, when
receipt if acknowledged, if telecopied; and 5 Business Days after mailing if
sent by registered or certified mail, postage prepaid (except that a notice
of change of address shall not be deemed to have been given until actually
received by the addressee).
Any notice or communication mailed to a Noteholder shall be mailed to him by
first class mail or other equivalent means at his address as it appears on
the registration books of the Registrar and shall be sufficiently given to
him if so mailed within the time prescribed.
Failure to mail a notice or communication to a Noteholder or any defect in
it shall not affect its sufficiency with respect to other Noteholders. If
a notice or communication is mailed in the manner provided above, it is
duly given, whether or not the addressee receives it.
Section 13.3. COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS.
Noteholders may communicate pursuant to TIA Section 312(b) with other
Noteholders with respect to their rights under this Indenture or the Notes.
The Company, the Guarantors, the Trustee, the Registrar and any other person
shall have the protection of TIA Section 312(c).
Section 13.4. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate (in form and substance reasonably
satisfactory to the Trustee) stating that, in the opinion of the signers,
all conditions precedent, if any, provided for in this Indenture relating to
the proposed action have been complied with; and
(2) an Opinion of Counsel (in form and substance reasonably
satisfactory to the Trustee) stating that, in the opinion of such counsel,
all such conditions precedent have been complied with.
Section 13.5. 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 as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether or not, in the opinion of each such
person, such condition or covenant has been complied with; PROVIDED,
HOWEVER, that with respect to matters of fact an Opinion of Counsel may rely
on an Officers' Certificate or certificates of public officials.
Section 13.6. RULES BY TRUSTEE, PAYING AGENT, REGISTRAR.
The Trustee may make reasonable rules for action by or at a meeting of
Noteholders. The Paying Agent or Registrar may make reasonable rules for
its functions.
Section 13.7. LEGAL HOLIDAYS.
A "Legal Holiday" used with respect to a particular place of payment is a
Saturday, a Sunday or a day on which banking institutions in New York, New
York are not required to be open. If a payment date is a Legal Holiday in
New York, New York, payment may be made at such place on the next succeeding
day that is not a Legal Holiday, and no interest shall accrue for the
intervening period.
Section 13.8. GOVERNING LAW.
THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS
MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW. THE COMPANY AND EACH GUARANTOR HEREBY
IRREVOCABLY SUBMIT TO THE JURISDICTION OF ANY NEW YORK STATE COURT SITTING
IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK OR ANY FEDERAL COURT
SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF
ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE
AND THE NOTES, AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, JURISDICTION OR THE AFORESAID
COURTS. THE COMPANY AND EACH GUARANTOR IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT THEY MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, TRIAL BY JURY AND
ANY OBJECTION WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE
VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND
ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH
COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. NOTHING HEREIN SHALL
AFFECT THE RIGHT OF THE TRUSTEE OR ANY SECURITYHOLDER TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR
OTHERWISE PROCEED AGAINST THE COMPANY IN ANY OTHER JURISDICTION.
Section 13.9. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan or debt
agreement of any of the Company, the Guarantors or any of their respective
Subsidiaries. Any such indenture, loan or debt agreement may not be used to
interpret this Indenture.
Section 13.10. NO RECOURSE AGAINST OTHERS.
A director, officer, employee, stockholder or incorporator, as such, of the
Company or the Guarantors shall not have any liability for any obligations
of the Company or the Guarantors under the Notes or this Indenture or for
any claim based on, in respect of or by reason of such obligations or their
reactions. Each Noteholder by accepting a Note waives and releases all such
liability. Such waiver and release are part of the consideration for the
issuance of the Notes.
Section 13.11. SUCCESSORS.
All agreements of the Company and the Guarantors in this Indenture and the
Notes shall bind their successors. All agreements of the Trustee in this
Indenture shall bind its successor.
Section 13.12. DUPLICATE ORIGINALS.
All parties may sign any number of copies or counterparts of this Indenture.
Each signed copy or counterpart shall be an original, but all of them
together shall represent the same agreement.
Section 13.13. SEVERABILITY.
In case any one or more of the provisions in this Indenture or in the Notes
shall be held invalid, illegal or unenforceable, in any respect for any
reason, the validity, legality and enforceability of any such provision in
every other respect and of the remaining provisions shall not in any way be
affected or impaired thereby, it being intended that all of the provisions
hereof shall be enforceable to the full extent permitted by law.
Section 13.14. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Reconciliation and Tie Table and headings of the
Articles and the Sections of this Indenture have been inserted for
convenience of reference only, are not to be considered a part hereof and
shall in no way modify or restrict any of the terms or provisions hereof.
<PAGE>
SIGNATURE
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly
executed as of the date first written above.
CASINO MAGIC OF LOUISIANA, CORP.
By: /s/ Robert Callaway
Name: Robert Callaway
Title: Secretary
Attest: ________________
FIRST TRUST NATIONAL ASSOCIATION,
as Trustee
By: /s/ R. Prokosch
Name: Richard Prokosch
Title: Trust Officer
Attest: ________________
GUARANTORS:
JEFFERSON CASINO CORPORATION
By: /s/ Robert Callaway
Name: Robert Callaway
Title: Secretary
Attest: ________________
<PAGE>
Exhibit A
[FORM OF NOTE]
CASINO MAGIC OF LOUISIANA, CORP.
11 1/2 SENIOR SECURED NOTES
DUE 1999
No. $
Casino Magic of Louisiana Corp. a Louisiana corporation (hereinafter
called the "Company," which term includes any successor under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
______, or registered assigns, the principal sum of ________ Dollars, on
November 13, 1999 or such earlier date as is provided for in the Indenture.
Interest Payment Dates: February 15, May 15, August 15, and November
15.
Reference is made to the further provisions of this Security on the
reverse side, which will, for all purposes, have the same effect as if set
forth at this place.
IN WITNESS WHEREOF, the Company has caused this Instrument to be duly
executed under its corporate seal.
Dated: May 13, 1996
CASINO MAGIC OF LOUISIANA, CORP.
By: _____________________________
Attest:
__________________________
Secretary
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Securities described in the within mentioned Indenture.
_________________________________
FIRST TRUST NATIONAL ASSOCIATION,
as Trustee
By: ____________________________
Authorized Signatory
Dated:
<PAGE>
CASINO MAGIC OF LOUISIANA, CORP.
11 1/2% Senior Secured Notes
due 1999
1. PRINCIPAL
Casino Magic of Louisiana, Corp., a Louisiana corporation (the
"Company"), promises to pay the principal amount of this Note to the Holder
hereof on the date that is the third anniversary of the earlier of the
following dates: (i) 180 days after May 13, 1996, and (ii) the first date
that a riverboat casino is opened by the Company for public gaming play in
Bossier City, Louisiana (the "Commencement Date").
Notwithstanding the foregoing, from and after the first date on which
the aggregate principal amount of Notes issued and outstanding under the
Indenture is equal to or less than $17,500,000 (the "Release Date"), the
principal amount of the Note, together with interest accrued thereon at a
rate of 11 1/2% per annum, shall be paid by the Company to the Holder
hereof quarterly in equal installments commencing on the first Interest
Payment Date (as defined below) after the Release Date and ending on the
Maturity Date.
Notwithstanding all of the foregoing, from and after the date of the
occurrence of an Adverse State Action (as such term is defined in the
Indenture (the "Adverse State Action Date"), the principal amount of the
Note, together with interest accrued thereon at a rate of 11 1/2% per
annum, shall be paid by the Company to the Holder hereof quarterly in equal
installments commencing on the first Interest Payment Date (as defined
below) after the Adverse State Action Date and ending on the first Interest
Payment Date immediately subsequent to the date that the Adverse State
Action takes effect.
In addition to the foregoing, subject to the terms of Section 3.1 of
the Indenture, on each Interest Payment Date commencing November 15, 1996,
and ending with the second Interest Payment Date after the Release Date
occurs, the Company will unconditionally pay to each Holder such Holder's
PRO RATA share of the Excess Cash Flow (as defined in the Indenture) for
the fiscal quarter of the Company and the Guarantors ending on the Interest
Payment Date immediately preceding such Interest Payment Date in reduction
of the then outstanding principal amount of the Note by an amount equal to
such Holder's PRO RATA share of the Excess Cash Redemption Amount (as
defined below), in addition to any regularly scheduled principal payment
due on such Interest Payment Date (if any); PROVIDED, HOWEVER, that the
Company will pay to each Holder such Holder's PRO RATA share of the Excess
Cash Flow for the last fiscal quarter of a fiscal year of the Company and
the Guarantors on the SECOND Interest Payment Date following the last date
of such last fiscal quarter of the fiscal year. The obligations of the
Company under this paragraph shall continue notwithstanding an Adverse
State Action.
"EXCESS CASH REDEMPTION AMOUNT" for any Interest Payment Date means the
amount of the Aggregate Excess Cash Flow to be paid to the Holders on such
Interest Payment Date in reduction of the outstanding principal amount of
the Notes TIMES a fraction, the numerator of which is 100 and the
denominator of which is (100 plus the Excess Cash Redemption Premium for
such Interest Payment Date).
"EXCESS CASH REDEMPTION PREMIUM" means (i) on any Interest Payment Date
occurring on or before the first anniversary of the Commencement Date, zero,
(ii) on any Interest Payment Date occurring on or after the first
anniversary of the Commencement Date but on or before the second
anniversary of the Commencement Date, ten percent (10%) TIMES a fraction,
the numerator of which is the amount of calendar days having elapsed from
and including the day after the first anniversary of the Commencement Date
to and including such Interest Payment Date, and the denominator of which
is three hundred and sixty-five (365), and (iii) on any Interest Payment
Date occurring after the second anniversary of the Commencement Date but
before the third anniversary of the Commencement Date, twenty percent (20%)
TIMES a fraction, the numerator of which is the amount of calendar days
having elapsed from and including the day after the second anniversary of
the Commencement Date to and including such Interest Payment Date, and the
denominator of which is three hundred and sixty-four (364).
2. INTEREST
Casino Magic of Louisiana, Corp., a Louisiana corporation (the
"Company"), promises to pay interest from May 13, 1996 on the principal
amount of this Note at a rate of 11 1/2% per annum. To the extent it is
lawful, the Company promises to pay interest on any interest payment due
but unpaid on such principal amount at a rate of 11 1/2% per annum
compounded semi-annually.
The Company will pay interest quarterly on February 15, May 15, August 15,
and November 15 of each year (each, an "Interest Payment Date"), commencing
August 15, 1996. Interest on the Notes will accrue from the most recent
date to which interest has been paid or, if no interest has been paid, from
May 13, 1996. Interest will be computed on the basis of a 360-day year
consisting of twelve 30 day months.
3. METHOD OF PAYMENT.
The Company shall pay principal of and interest on the Notes (except
defaulted interest) to the persons who are the registered Holders at the
close of business on the Record Date immediately preceding the Interest
Payment Date. Except as provided below, the Company shall pay principal
and interest in such coin or currency of the United States of America as at
the time of payment shall be legal tender for payment of public and private
debts ("U.S. Legal Tender"). However, the Company may pay principal and
interest by wire transfer of Federal funds, or interest by its check
payable in such U.S. Legal Tender. The Company may deliver any such
interest payment to a Holder at the Holder's registered address.
Together with any installments of principal the Company will deliver to the
Paying Agent or the Trustee a sufficient number of stickers, in form
satisfactory to the Trustee, setting forth the outstanding principal amount
of each Note after having given effect to such current principal payments,
for delivery by the Trustee to the Holders for the purpose of affixing such
stickers to their respective Notes. Upon delivery to the Paying Agent or
the Trustee of this Note, the registered Holder hereof should receive a
sticker together with such principal payment, which sticker will be affixed
by the Paying Agent or the Trustee to the top of the front page of this
Note atop all such previous stickers and which sticker will set forth the
outstanding principal amount of this Note after having given effect to the
current principal payment. Notwithstanding the foregoing, the Registrar
will maintain a record of the outstanding principal amount of all
outstanding Notes. Failure by the Trustee to affix such stickers shall in
no way affect the legality, validity, or transferability of this Note;
PROVIDED, HOWEVER, that in the event of any discrepancy between the
principal amount of this Note on its face and on the records of the
Registrar, the records of the Registrar will govern absent manifest error.
4. PAYING AGENT AND REGISTRAR.
Initially, First Trust National Association (the "Trustee") will act as
Paying Agent and Registrar. The Company may change any Paying Agent,
Registrar or Co-registrar without notice to the Holders. The Company or any
of its Subsidiaries may, subject to certain exceptions, act as Paying Agent,
Registrar or Co-registrar.
5. INDENTURE
The Company issued the Notes under an Indenture, dated as of May 13,
1996 (the "Indenture"), between the Company, the Guarantors named therein
and the Trustee. Capitalized terms herein are used as defined in the
Indenture unless otherwise defined herein. The terms of the Notes include
those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act, as in effect on the date of the
Indenture. The Notes are subject to all such terms, and Holders of Notes
are referred to the Indenture and said Act for a statement of them. The
Notes are senior, secured obligations of the Company limited in aggregate
principal amount to $35,000,000.
6. REDEMPTION.
The Notes may be redeemed at any time, in whole or in part, at the
election of the Company at the Redemption Price applicable for such
Redemption Date. The Redemption Price of this Note if so optionally
redeemed is the amount equal to the principal face amount of this Note
TIMES the sum of one PLUS the Redemption Premium as of the Redemption Date
of this Note.
"REDEMPTION PREMIUM" when used with respect to this Note when redeemed
or prepaid, in whole or in part, means (i) on any Redemption Date occurring
on or before the first anniversary of the Commencement Date, zero, (ii) on
any Redemption Date occurring on or after the first anniversary of the
Commencement Date but on or before the second anniversary of the
Commencement Date, ten percent (10%) TIMES a fraction the numerator of
which is the amount of calendar days having elapsed from and including the
day after the first anniversary of the Commencement Date to and including
such Redemption Date and the denominator of which is three hundred and
sixty-five (365), and (iii) on any Redemption Date occurring after the
second anniversary of the Commencement Date and before the third
anniversary of the Commencement Date, twenty percent (20%) TIMES a fraction
the numerator of which is the amount of calendar days having elapsed from
and including the day after the second anniversary of the Commencement Date
to and including such Redemption Date and the denominator of which is three
hundred and sixty-four (364).
This Note may also be redeemed at any time pursuant to, and in
accordance with, any order of any Gaming Authority with appropriate
jurisdiction and authority relating to a Gaming License, or to the extent
necessary in the reasonable, good faith judgment of the Board of Directors
of the Company to prevent the loss, failure to obtain or material
impairment or to secure the reinstatement, of any material Gaming License,
where in any such case such redemption or acquisition is required to be
found suitable or so qualified within a reasonable period of time.
Any redemption of the Notes shall comply with Article III of the
Indenture.
7. NOTICE OF REDEMPTION.
Notice of redemption will be mailed by first class mail at least 30
days but not more than 45 days before the Redemption Date to each Holder of
Notes to be redeemed at his registered address. Notes in denominations
larger than $1,000 may be redeemed in part.
Except as set forth in the Indenture, from and after any Redemption
Date, if monies for the redemption of the Notes called for redemption shall
have been deposited with the Paying Agent on such Redemption Date, the
Notes called for redemption will cease to bear interest and the only right
of the Holders of such Notes will be to receive payment of the Redemption
Price, including any accrued and unpaid interest to the Redemption Date.
8. DENOMINATIONS; TRANSFER; EXCHANGE.
The Notes are in registered form, without coupons, in denominations of
$1,000 and integral multiples of $1,000. A Holder may register the transfer
of, or exchange Notes in accordance with, the Indenture. The Registrar may
require a Holder, among other things, to furnish appropriate endorsements
and transfer documents and to pay any taxes and fees required by law or
permitted by the Indenture. The Registrar need not register the transfer
of or exchange any Notes selected for redemption.
9. PERSONS DEEMED OWNERS.
The Registered Holder of a Note may be treated as the owner of it for
all purposes.
10. UNCLAIMED MONEY.
If money for the payment of principal or interest remains unclaimed for
two years, the Trustee and the Paying Agent(s) will pay the money back to
the Company at its written request. After that, all liability of the
Trustee and such Paying Agent(s) with respect to such money shall cease.
11. DISCHARGE PRIOR TO REDEMPTION OR MATURITY.
If the Company at any time deposits into an irrevocable trust with the
Trustee U.S. Legal Tender or U.S. Government Obligations sufficient to pay
the principal of and interest on the Notes to redemption or maturity and
complies with the other provisions of the Indenture relating thereto, the
Company will be discharged from certain provisions of the Indenture and the
Notes (including the financial covenants, but excluding its obligation to
pay the principal of and interest on the Notes).
12. AMENDMENT; SUPPLEMENT; WAIVER.
Subject to certain exceptions, the Indenture or the Notes may be
amended or supplemented with the written consent of the Holders of a
majority, and in certain cases at least two-thirds, in aggregate principal
amount of the Notes then outstanding, and any existing Default or Event of
Default or compliance with any provision may be waived with the consent of
the Holders of a majority in aggregate principal amount of the Notes then
outstanding. Without notice to or consent of any Holder, the parties
thereto may amend or supplement the Indenture or the Notes to, among other
things, cure any ambiguity, defect or inconsistency, or make any other
change that does not adversely affect the rights of any Holder of a Note.
13. RESTRICTIVE COVENANTS.
The Indenture imposes certain limitations on the ability of the Company
and its Subsidiaries to, among other things, incur additional Indebtedness
and Disqualified Capital Stock, make payments in respect of its Capital
Stock, enter into transactions with Affiliates, incur Liens, sell assets,
merge or consolidate with any other person and sell, lease, transfer or
otherwise dispose of substantially all of its properties or assets. The
limitations are subject to a number of important qualifications and
exceptions. The Company must annually report to the Trustee on compliance
with such limitations.
14. SECURITY.
In order to secure the obligations under the Indenture, the Company,
the Guarantors and the Trustee have entered into certain security
agreements in order to create security interests in and liens upon certain
assets and properties of the Company and the Guarantors.
15. GAMING LAWS.
The rights of the Holder of this Note and any owner of any beneficial
interest in this Note are subject to the Gaming Laws and the jurisdiction
and requirements of the Gaming Authorities and the further limitations and
requirements set forth in the Indenture.
16. SUCCESSORS.
When a successor assumes all the obligations of its predecessor under
the Notes and the Indenture, the predecessor will be released from those
obligations.
17. DEFAULTS AND REMEDIES.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of Notes then
outstanding may declare all the Notes to be due and payable immediately in
the manner and with the effect provided in the Indenture. Holders of Notes
may not enforce the Indenture or the Notes except as provided in the
Indenture. The Trustee may require indemnity satisfactory to it before it
enforces the Indenture of the Notes. Subject to certain limitations,
Holders of a majority in aggregate principal amount of the Notes then
outstanding may direct the Trustee in its exercise of any trust or power.
The Trustee may withhold from Holders of Notes notice of any continuing
Default or Event of Default (except a Default in payment of principal or
interest), if it determines that withholding notice is in their interest.
18. TRUSTEE DEALINGS WITH COMPANY.
The Trustee under the Indenture, in its individual or any other
capacity, may make loans to, accept deposits from, and perform services for
the Company or its Affiliates, and may otherwise deal with the Company or
its Affiliates as if it were not the Trustee.
19. NO RECOURSE AGAINST OTHERS.
No stockholder, director, officer, employee or incorporator, as such,
past, present or future, of the Company or any successor corporation shall
have any liability for any obligation of the Company under the Notes or the
Indenture. Each Holder of a Note 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.
20. AUTHENTICATION.
This Note shall not be valid until the Trustee or authenticating agent
signs the certificate of authentication on the other side of this Note.
21. ABBREVIATIONS AND DEFINED TERMS.
Customary abbreviations may be used in the name of a Holder of a Note
or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants
by the entireties), JT TEN (= joint tenants with right of survivorship and
not, as tenants in common), CUST (=Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
22. CUSIP NUMBERS.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company will cause CUSIP numbers to
be printed on the Notes as a convenience to the Holders of the Notes. No
representation is made as to the accuracy of such numbers as printed on the
Notes and reliance may be placed only on the other identification numbers
printed hereon.
<PAGE>
[FORM OF ASSIGNMENT]
I or we assign this Note to
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
(Print or type name, address and zip code of assignee)
Please insert Social Security or other identifying number of assignee
_________ and irrevocably appoint ________ agent to transfer this Note on
the books of the Company. The agent may substitute another to act for him.
Date: __________ Signed: ______________________________________
__________________________________________________________________________
(Sign exactly as your name appears on the other side of this Note)
<PAGE>
EXHIBIT B
FORM OF GUARANTY
For value received, ________________, a _______________ corporation,
hereby unconditionally guarantees to the Holder of the Note upon which this
Guaranty is endorsed the due and punctual payment, as set forth in the
Indenture pursuant to which such Note and this Guaranty were issued, of the
principal of, premium (if any) and interest on such Note when and as the
same shall become due and payable for any reason according to the terms of
such Note and which this Guaranty is endorsed will not become effective
until the Trustee signs the certificate of authentication on such Note.
__________________________________
By: _____________________________
Attest: __________________________
<PAGE>
EXHIBIT C
TAX ALLOCATION AGREEMENT
Agreement effective as of May 31, 1992, by and among Casino Magic Corp.
"(Parent)" and each of its undersigned subsidiaries.
WITNESSETH
WHEREAS, the parties hereto are members of an affiliated group
"(Affiliated Group)" as defined in Section 1504(a) of the Internal Revenue
Code of 1986, as amended; and
WHEREAS, such Affiliated Group will file a U.S. consolidated income tax
return for its tax year 1992 and is required to file consolidated tax
returns
for subsequent years; and
WHEREAS, it is the intent and desire of the parties hereto that a
method be established for allocating the consolidated tax liability of the
Affiliated Group among its members, for reimbursing the Parent for payment
of such tax liability, for compensating any party for use of its losses or
tax credits, and to provide for the allocation and payment of any refund
arising from a carryback of losses or tax credits from subsequent tax
years.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, the parties hereto agree as follows:
1. A U.S. consolidated income tax return shall be filed by the
Parent for the tax year ended December 31, 1992, and for each subsequent
taxable period in respect of which this agreement is in effect and for
which the Affiliated Group is required or permitted to file a consolidated
tax return. Each subsidiary shall execute and file such consents,
elections, and other documents that may be required or appropriate for the
proper filing of such returns.
2. a. For each tax period, each member of the Affiliated Group
shall compute its separate tax liability as if it had filed a separate tax
return and shall pay such amount to the Parent. For purposes of this
agreement, any liability for alternative minimum tax shall be treated as
part of the member's separate tax liability.
b. The separate return tax liability of each member shall be
computed in a manner consistent with the provisions of Regulation Sec.
1.1552- 1(a)(2)(ii), provided that the carryover of any tax attribute from a
prior tax year that is not available in determining the consolidated tax
liability of the group for such taxable period shall be disregarded.
c. Parent shall file on behalf of the Affiliated Group a
consolidated federal income tax return and shall make all payments required
to be paid to the Internal Revenue Service in satisfaction of the Federal
income tax liability (including estimated taxes and additions to tax,
penalties and interest) of the Affiliated Group. Payments made pursuant to
Sections 2, 3, and 6 hereof shall be the only payments required to be made
by any member of the Affiliated Group in respect of the consolidated
Federal income tax liability of the Affiliated Group for any taxable year.
3. Payment of the consolidated tax liability for a taxable period
shall include the payment of estimated tax installments due for such taxable
period, and each subsidiary shall pay to the Parent its share of each
payment within ten days of receiving notice of such payment from the Parent,
but in no event later than the due date for each such payment. Any amounts
paid by a subsidiary on account of a separate return or separate estimated
payments that are credited against the consolidated tax liability of the
Affiliated Group shall be included in determining the payments due from such
subsidiary. Any overpayment of estimated tax should be refunded to the
subsidiary.
4. If for any taxable period the separate return liability of any
member of the Affiliated Group, including the Parent, exceeds the
consolidated tax liability for such period as a result of any excess losses
or tax credits of one or more members (a "loss member"), then the Parent
shall pay to each such loss member its allocable portion of such excess
amount within ten days after the date of filing on the consolidated return
for such period.
5. If part or all of an unused loss or tax credit is allocated to a
member of the Affiliated Group pursuant to Regulation Sec. 1.1502-79, and is
carried back or forward to a year in which such member filed a separate
return or a consolidated return with another affiliated group, any refund
or reduction in tax liability arising from the carryback or carryover shall
be retained by such member. Notwithstanding the above, the Parent shall
determine in its sole discretion whether an election shall be made not to
carry back part or all of a consolidated net operating loss for any tax year
in accordance with Section 172(b)(3).
6. If the consolidated tax liability is adjusted for any taxable
period, whether by means of an amended return, claim for refund, or after a
tax audit by the Internal Revenue Service, the liability of each member
shall be recomputed to give effect to such adjustments, and in the case of
a refund, the Parent shall make payment to each member for its share of the
refund received by Parent, determined in the same manner as in paragraph 2
above, within ten days after the refund is received by the Parent, and in
the case of an increase in tax liability, each member shall pay to the
Parent its allocable share of such increased tax liability within ten days
after receiving notice of such liability from the Parent.
7. If during a consolidated return period the Parent or any
subsidiary acquires or organizes another corporation that is required to be
included in the consolidated return, then such corporation shall join in and
be bound by this agreement.
8. Each subsidiary hereby agrees to join in any state, city, or
local combined or similar income or franchise tax return to be filed by any
group of corporations of which Parent is or shall become a member for all
taxable periods for which it is so requested from time to time by Parent,
and to take no action inconsistent therewith. In the event a subsidiary is
included in a combined, joint, consolidated, or unitary state income or
franchise tax return with any member of the Affiliated Group, the parties
shall allocate and pay such taxes and compensate for the use of tax losses
or tax credits in a manner consistent with the approach provided in this
agreement for federal income taxes. Payments made pursuant to the
preceding sentence will be deemed deductible pursuant to Section 164 for
purposes of computing the separate return tax liability of a subsidiary
pursuant to Section 2(b) hereof.
9. This agreement shall apply to the tax year ending December 31,
1992, and all subsequent taxable periods unless the Parent and the
subsidiaries agree to terminate the agreement. Notwithstanding such
termination, this agreement shall continue in effect with respect to any
payment or refunds due for all taxable periods prior to termination.
10. This agreement shall be binding upon and inure to the benefit
of any successor, whether by statutory merger, acquisition of assets, or
otherwise, to any of the parties hereto, to the same extent as if the
successor had been an original party to the agreement.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to
be executed by their duly authorized representatives on May 9, 1996.
Casino Magic Corp.
by: ______________________________
its: ______________________________
Mardi Gras Casino Corp.
by: ______________________________
its: ______________________________
Biloxi Casino Corp.
by: ______________________________
its: ______________________________
Casino Magic Finance Corp.
by: ______________________________
its: ______________________________
Bay St. Louis Casino Corp.
by: ______________________________
its: ______________________________
Casino Magic Mang. Serv. Corp.
by: ______________________________
its: ______________________________
Jefferson Casino Corp.
by: ______________________________
its: ______________________________
Carolina Magic Corp.
by: ______________________________
its: ______________________________
Casino One Corp.
by: ______________________________
its: ______________________________
Boston Casino Corp.
by: ______________________________
its: ______________________________
Crawford County Casino Corp.
by: ______________________________
its: ______________________________
Magic Resorts Corp.
by: ______________________________
its: ______________________________
St. Louis Casino Corp.
by: ______________________________
its: ______________________________
Gateway Casino Co. of St. Louis
by: ______________________________
its: ______________________________
C-M of Louisiana, Inc.
by: ______________________________
its: ______________________________
Bucks County Casino Corp.
by: ______________________________
its: ______________________________
Delta Casino Corp.
by: ______________________________
its: ______________________________
Maverick Casino Corp.
by: ______________________________
its: ______________________________
Kansas Magic Corp.
by: ______________________________
its: ______________________________
Coastal Land of Florida, Inc.
by: ______________________________
its: ______________________________
Casino Magic American Corp.
by: ______________________________
its: ______________________________
Gulfport Casino Corp.
by: ______________________________
its: ______________________________
Mobile Casino Corp.
by: ______________________________
its: ______________________________
Iowa Magic Corp.
by: ______________________________
its: ______________________________
Atlantic Pacific Corp.
by: ______________________________
its: ______________________________
625 Corp.
by: ______________________________
its: ______________________________
Casino Advertising, Inc.
by: ______________________________
its: ______________________________
<PAGE>
EXHIBIT D
JCC Real Property Description
(1) TRACT "A". A TRACT OF LAND LOCATED IN SECTION 32, T18N-R13W, BOSSIER
CITY, BOSSIER PARISH, AND/OR SECTIONS 31, 32 OR 33, T18N-R13W, CADDO PARISH,
LOUISIANA. SAID TRACT BEING MORE FULLY DESCRIBED AS FOLLOWS:
BEGINNING AT A FOUND 1/2" DIAMETER IRON ROD BEING THE SOUTHWEST CORNER OF
LOT 35, COOK SUBDIVISION, AS RECORDED IN BOOK 141, PAGE 11 OF THE CONVEYANCE
RECORDS OF BOSSIER PARISH, RUN THENCE SOUTH 65_05'05" EAST ALONG THE SOUTH
LINE OF SAID COOK SUBDIVISION A DISTANCE OF 384.69 FEET TO A FOUND 1/2"
DIAMETER IRON ROD,
THENCE RUN SOUTH 12_56'40" WEST A DISTANCE OF 150.37 FEET TO A FOUND 1/2"
DIAMETER CRIMP TOP IRON PIPE,
THENCE RUN SOUTH 60_12'49" EAST A DISTANCE OF 168.20 FEET TO A FOUND 5/8"
DIAMETER IRON ROD,
THENCE RUN SOUTH 26_06'32" WEST A DISTANCE OF 251.31 FEET TO A FOUND 1/2"
DIAMETER IRON ROD BEING ON THE NORTHERLY RIGHT-OF-WAY LINE OF WOODLAWN
STREET,
THENCE RUN NORTH 70_42'00" WEST ALONG THE NORTHERLY RIGHT-OF-WAY LINE OF
WOODLAWN STREET A DISTANCE OF 575.91 FEET TO A FOUND 1/2" DIAMETER IRON PIPE
BEING AT THE INTERSECTION OF THE NORTHERLY RIGHT-OF-WAY LINE OF WOODLAWN
STREET WITH THE EASTERLY RIGHT-OF-WAY LINE OF KAYWOOD COURTS,
THENCE RUN NORTH 23_05'00" EAST ALONG THE EASTERLY RIGHT-OF-WAY LINE OF
KAYWOOD COURTS A DISTANCE OF 140.56 FEET TO A FOUND 1/2" DIAMETER IRON PIPE,
THENCE RUN NORTH 24_48'39" EAST ALONG THE EASTERLY RIGHT-OF-WAY LINE OF
KAYWOOD COURTS A DISTANCE OF 328.51 FEET TO THE POINT OF BEGINNING.
SAID TRACT CONTAINING 5.2319 ACRES.
(2) TRACT "B".A TRACT OF LAND LOCATED IN SECTION 32, T18N-R13W, BOSSIER
CITY, BOSSIER PARISH, AND/OR SECTIONS 31, 32 OR 33, T18N-R13W, CADDO
PARISH, LOUISIANA. SAID TRACT BEING MORE FULLY DESCRIBED AS FOLLOWS:
BEGINNING AT A FOUND 3/4" DIAMETER CRIMP TOP IRON PIPE BEING THE SOUTHEAST
CORNER OF LOT 8, KAYWOOD SUBDIVISION, AS RECORDED IN BOOK 339, PAGE 229 OF
THE CONVEYANCE RECORDS OF BOSSIER PARISH, RUN THENCE SOUTH 28_05'04" WEST A
DISTANCE OF 335.76 FEET TO A SET 1/2" DIAMETER IRON ROD BEING ON THE FORMER
NORTHERLY HIGH BANK OF THE RED RIVER,
THENCE RUN NORTHWESTERLY ALONG THE FORMER HIGH BANK OF THE RED RIVER A
DISTANCE OF 614.30 FEET, NORTH 55_22'23" WEST TO A FOUND 1" DIAMETER IRON
PIPE,
THENCE RUN NORTH 24_48'49" EAST A DISTANCE OF 897.25 FEET TO A FOUND 1/2"
DIAMETER IRON ROD BEING ON THE SOUTH LINE OF LOT 34, COOK SUBDIVISION, AS
RECORDED IN BOOK 141, PAGE 11 OF THE CONVEYANCE RECORDS OF BOSSIER PARISH,
THENCE RUN SOUTH 65_02'25" EAST ALONG THE SOUTH LINE OF LOT 34, A DISTANCE
OF 9.58 FEET TO A FOUND 1/2" DIAMETER IRON ROD BEING ON THE WESTERLY RIGHT-
OF-WAY LINE OF KAYWOOD COURTS,
THENCE RUN SOUTH 24_47'37" WEST ALONG THE WESTERLY RIGHT-OF-WAY LINE OF
KAYWOOD COURTS A DISTANCE OF 329.85 FEET TO A FOUND 1/2" DIAMETER IRON PIPE,
THENCE RUN SOUTH 22_34'14" WEST ALONG THE WESTERLY RIGHT-OF-WAY LINE OF
KAYWOOD COURTS A DISTANCE OF 194.43 FEET TO A FOUND 5/8" DIAMETER IRON ROD
BEING AT THE INTERSECTION OF THE WESTERLY RIGHT-OF-WAY LINE OF KAYWOOD
COURTS WITH THE SOUTHERLY RIGHT-OF-WAY LINE OF WOODLAWN STREET,
THENCE RUN SOUTH 70_42'00" EAST ALONG THE SOUTHERLY RIGHT-OF-WAY LINE OF
WOODLAWN STREET A DISTANCE OF 5.17 FEET TO A FOUND 5/8" DIAMETER IRON ROD,
THENCE RUN SOUTH 19_18'00" WEST ALONG THE WEST LINE OF LOT 1, KAYWOOD
SUBDIVISION, UNIT 2, AS RECORDED IN BOOK 450, PAGE 113 OF THE CONVEYANCE
RECORDS OF BOSSIER PARISH, A DISTANCE OF 200.26 FEET TO A SET 1/2" DIAMETER
IRON ROD BEING THE SOUTHWEST CORNER OF LOT 1,
THENCE RUN SOUTH 70_42'00" EAST ALONG THE SOUTH LINE OF KAYWOOD SUBDIVISION
UNIT 2 AND KAYWOOD SUBDIVISION A DISTANCE OF 585.48 FEET TO THE POINT-OF-
BEGINNING,
AND ALL THAT LAND LYING BETWEEN THE SOUTHERLY MOST LINE OF SAID DESCRIBED
TRACT AND THE EXISTING HIGH BANK OF THE RED RIVER, AND LYING BETWEEN THE
PROJECTED LINES OF THE EASTERLY AND WESTERLY BOUNDARIES OF SAID DESCRIBED
TRACT,
SAID TOTAL TRACT CONTAINING 4.914 ACRES.
(3) TRACT "C".A TRACT OF LAND LOCATED IN SECTION 32, T18N-R13W, BOSSIER
CITY, BOSSIER PARISH, AND/OR SECTIONS 31, 32 OR 33, T18N-R13W, CADDO
PARISH, LOUISIANA, AND BEING A PORTION OF LOT 34, COOK SUBDIVISION, AS
RECORDED IN BOOK 141, PAGE 11, OF THE CONVEYANCE RECORDS OF BOSSIER PARISH.
SAID TRACT MORE FULLY DESCRIBED AS FOLLOWS:
BEGINNING AT A FOUND 1/2" DIAMETER IRON ROD BEING THE SOUTHWEST CORNER OF
LOT 34, RUN THENCE NORTH 29_35'39" EAST ALONG THE WEST LINE OF LOT 34 A
DISTANCE OF 165.24 FEET TO A FOUND 1/2" DIAMETER IRON PIPE BEING ON THE
SOUTH RIGHT-OF-WAY LINE OF INTERSTATE 20,
THENCE RUN SOUTH 82_32'09" EAST ALONG THE SOUTH RIGHT-OF-WAY LINE OF
INTERSTATE 20 A DISTANCE OF 58.03 FEET TO A FOUND 1/2" DIAMETER IRON PIPE
BEING ON THE WESTERLY RIGHT-OF-WAY LINE OF KAYWOOD COURTS,
THENCE RUN SOUTH 29_33'17" WEST ALONG THE WESTERLY RIGHT-OF-WAY LINE OF
KAYWOOD COURTS A DISTANCE OF 190.07 FEET TO A FOUND 1/2" DIAMETER IRON ROD
BEING ON THE SOUTH LINE OF LOT 34,
THENCE RUN NORTH 65_02'25" WEST ALONG THE SOUTH LINE OF LOT 34 A DISTANCE OF
9.58 FEET TO A FOUND 1/2" DIAMETER IRON ROD,
THENCE RUN NORTH 55_34'42" WEST ALONG THE SOUTH LINE OF LOT 34 A DISTANCE OF
44.49 FEET TO THE POINT OF BEGINNING,
SAID TRACT CONTAINING 0.22 ACRES.
(4) TRACT "D".A TRACT OF LAND LOCATED IN SECTION 32, T18N-R13W, BOSSIER
CITY, BOSSIER PARISH, AND/OR SECTIONS 31, 32 OR 33, T18N-R13W, CADDO PARISH,
LOUISIANA. SAID TRACT BEING MORE FULLY DESCRIBED AS FOLLOWS:
BEGINNING AT A FOUND 1/2" DIAMETER CRIMP TOP IRON PIPE BEING THE SOUTHWEST
CORNER OF LOT 114, RIVERSIDE SUBDIVISION AS RECORDED IN BOOK 60, PAGE 157 OF
THE CONVEYANCE RECORDS OF BOSSIER PARISH, LOUISIANA, RUN THENCE SOUTH
70_23'37" EAST ALONG THE REAR LINE OF RIVERSIDE SUBDIVISION A DISTANCE OF
248.66 FEET TO A FOUND 1" DIAMETER IRON PIPE,
THENCE RUN SOUTH 29_01'37" WEST AND PARALLEL WITH THE EASTERLY LINE OF LOT
110 OF RIVERSIDE SUBDIVISION A DISTANCE OF 1021.25 FEET TO A FOUND 1"
DIAMETER IRON PIPE, BEING ON THE FORMER HIGH BANK OF THE RED RIVER,
THENCE RUN NORTH 62_19'02" WEST ALONG THE FORMER HIGH BANK OF THE RED RIVER
A DISTANCE OF 127.28 FEET TO A POINT, WHICH IS ON THE PROJECTION OF THE
WESTERLY LINE OF LOT 112, RIVERSIDE SUBDIVISION,
THENCE CONTINUE NORTH 64_07'56" WEST ALONG THE FORMER HIGH BANK OF THE RED
RIVER A DISTANCE OF 101.11 FEET TO A SET 1/2" DIAMETER IRON ROD, LOCATED ON
THE PROJECTION OF THE EASTERLY LINE OF LOT 8, KAYWOOD SUBDIVISION,
THENCE RUN NORTH 28_05'04" EAST A DISTANCE OF 335.76 FEET TO A FOUND 3/4"
DIAMETER CRIMP TOP IRON PIPE BEING THE SOUTHEAST CORNER OF LOT 8 KAYWOOD
SUBDIVISION AS RECORDED IN BOOK 339, PAGE 229 OF THE CONVEYANCE RECORDS OF
BOSSIER PARISH,
THENCE CONTINUE NORTH 28_05'04" EAST ALONG THE EASTERLY LINE OF LOT 8 A
DISTANCE OF 202.64 FEET TO A FOUND 2" DIAMETER IRON PIPE BEING THE NORTHEAST
CORNER OF LOT 8,
THENCE CONTINUE NORTH 28_05'04" EAST A DISTANCE OF 50.65 FEET TO A FOUND
1/2" DIAMETER IRON ROD,
THENCE RUN NORTH 26_06'32" EAST A DISTANCE OF 251.31 FEET TO A FOUND 5/8"
DIAMETER IRON ROD,
THENCE RUN NORTH 31_05'36" EAST A DISTANCE OF 149.25 FEET TO THE POINT OF
BEGINNING,
AND ALL THAT LAND LYING BETWEEN THE SOUTHERLY MOST LINE OF SAID DESCRIBED
TRACT AND THE EXISTING HIGH BANK OF THE RED RIVER, AND LYING BETWEEN THE
PROJECTED LINES OF THE EASTERLY AND WESTERLY BOUNDARIES OF SAID DESCRIBED
TRACT,
SAID TOTAL TRACT CONTAINING 5.753 ACRES.
(5) LOTS 1, 2 AND 4, KAYWOOD SUBDIVISION, UNIT NO. 2, A SUBDIVISION OF
BOSSIER PARISH, AND/OR CADDO PARISH, LOUISIANA AS PER PLAT RECORDED IN BOOK
450, PAGE 113 OF THE CONVEYANCE RECORDS OF BOSSIER PARISH, LOUISIANA,
(6) LOTS 6, 7 AND 8 KAYWOOD SUBDIVISION, A SUBDIVISION OF BOSSIER PARISH,
AND/OR CADDO PARISH, LOUISIANA, AS PER PLAT RECORDED IN BOOK 339, PAGE 229
OF THE CONVEYANCE RECORDS OF BOSSIER PARISH, LOUISIANA.
(7) LOTS 110, 111 AND 112, RIVERSIDE SUBDIVISION, A SUBDIVISION OF BOSSIER
PARISH, AND/OR CADDO PARISH, LOUISIANA, AS PER PLAT RECORDED IN BOOK 60,
PAGE 157 OF THE CONVEYANCE RECORDS OF BOSSIER PARISH, LOUISIANA, LESS A
STRIP OF LAND SEVEN (7') FEET IN WIDTH RUNNING BACK BETWEEN PARALLEL LINES
ALONG THE ENTIRE EASTERLY SIDE OF LOT 110.
Together with all the buildings and improvements situated on the above
described Land and all appurtenances, rights, ways, privileges, servitudes,
prescriptions and advantages thereunto belonging or in anywise appertaining,
including, but without limitation, all component parts of the above
described Land, and all component parts of any building or other
construction located on the above described Land, now or hereafter a part
of or attached to said Land or used in connection therewith.
<PAGE>
EXHIBIT E
Indebtedness of JCC under that certain Promissory Note, dated May 3, 1996,
issued by JCC and C-M of Louisiana, Inc. (n/k/a JCC) to Mark G. George, in
the original principal amount of $6,800,000, and under all agreements and
documents delivered by JCC in connection with such note.
MORTGAGE, * UNITED STATES OF AMERICA
ASSIGNMENT OF LEASES *
AND RENTS AND SECURITY * STATE OF LOUISIANA
AGREEMENT SECURING *
FUTURE ADVANCES * PARISH OF ORLEANS
*
BY *
*
C-M OF LOUISIANA, INC. *
BE IT KNOWN, that on this 11th day of May 1996, before me, the undersigned
Notary Public duly commissioned and qualified, and in the presence of the
witnesses hereinafter named and undersigned, personally came and appeared:
C-M OF LOUISIANA, INC.("MORTGAGOR") (Taxpayer I.D. No.______________), a
Louisiana corporation, represented herein by Robert A. Callaway, its
Secretary, duly authorized to appear herein by the Unanimous Written Consent
of the Sole Shareholder of Mortgagor, a multiple original of which is
attached hereto and made a part hereof, which has a mailing address of 711
Casino Magic Drive, Bay St. Louis, Mississippi 39520, who declared that
Mortgagor does by these presents declare and acknowledge an indebtedness
unto:
FIRST TRUST NATIONAL ASSOCIATION, AS INDENTURE TRUSTEE
("Mortgagee")(Taxpayer I.D. No. 41-0257700), a national association having a
place of business at 180 East Fifth Street, St. Paul, Minnesota 55101,
Attn.: Scott Strodthoff.
Recitals
A. Pursuant to that certain Indenture dated as of May 13, 1996 among
Casino Magic of Louisiana, Corp. (CASINO MAGIC LOUISIANA"), Mortgagor and
Jefferson Casino Corporation, both as Guarantors, and the Mortgagee (as
amended, amended and restated, supplemented or otherwise modified from time
to time, the "INDENTURE"), Casino Magic Louisiana issued its 11 1/2% Senior
Secured Notes due 1999 (as amended, amended and restated, supplemented or
otherwise modified from time to time, and including all 11 1/2% Senior
Secured Notes due 1999 issued in exchange or substitution therefor, the
"Notes") in the aggregate principal amount of $35 million.
B. Pursuant to Article XII of the Indenture, Mortgagor has guaranteed
(such guarantee by Mortgagor being hereinafter referred to as the
"Guarantee"), to the Noteholder(s) and to the Mortgagee, inter alia, the
Notes and the obligations of Casino Magic Louisiana under the Indenture and
the Notes.
C. Mortgagor is entering into this Mortgage, Assignment of Leases and
Rents and Security Agreement Securing Future Advances (the "Mortgage"), in
favor of Mortgagee for the benefit of the Mortgagee to secure the full and
punctual payment and performance of the Secured Obligations (as hereinafter
defined).
SECTION I - GRANTING CLAUSES
In order to secure all present and future Secured Obligations, all according
to the terms and tenor hereof, Mortgagor does by these presents specially
mortgage, affect and hypothecate, to inure to the use and benefit of
Mortgagee, the following described property (hereinafter collectively called
the "Mortgaged Property, to-wit:
(a) All those certain lots, pieces or parcels of land owned or hereafter
acquired by Mortgagor located in Bossier City, Parish of Bossier, State of
Louisiana, as more particularly described as follows, as the description of
the same may be amended, modified or supplemented from time to time, and all
and singular the reversions or remainders in and to said land and the
tenements, hereditaments, transferable development rights, servitude's,
easements (in gross and/or appurtenant), agreements, rights-of-way or use,
rights (including alley, drainage and any other rights to produce or share
in the production of anything from or attributable thereto) , privileges,
royalties and appurtenances to said land, now or hereafter belonging or in
anywise appertaining thereto, including any such right, title, interest in,
to or under any agreement or right granting, conveying or creating, for the
benefit of said land, any easement, servitude, development rights (including
"air rights"), water, water rights, riparian rights, mineral rights
(including rights in respect of oil, gas and other hydrocarbon substances),
right or license in any way affecting said land and/or other land and in, to
or under any streets, ways, alleys, vaults, gores or strips of land
adjoining said land or any parcel thereof, or in or to the air space over
said land, all rights of ingress and egress with respect to said land, and
all claims or demands of Mortgagor, either at law or in equity, in
possession or expectancy, of, in or to the same (all of the foregoing
hereinafter collectively referred to as the "Land"):
(1) TRACT "A". A TRACT OF LAND LOCATED IN SECTION 32,
T18N-R13W, BOSSIER CITY, BOSSIER PARISH, AND/OR SECTIONS 31, 32 OR 33,
T18N-R13W, CADDO PARISH, LOUISIANA. SAID TRACT BEING MORE FULLY
DESCRIBED AS FOLLOWS:
BEGINNING AT A FOUND 1/2" DIAMETER IRON ROD BEING THE SOUTHWEST CORNER OF
LOT 35, COOK SUBDIVISION, AS RECORDED IN BOOK 141, PAGE 11 OF THE CONVEYANCE
RECORDS OF BOSSIER PARISH, RUN THENCE SOUTH 65'05'05" EAST ALONG THE SOUTH
LINE OF SAID COOK SUBDIVISION A DISTANCE OF 384.69 FEET TO A FOUND 1/2"
DIAMETER IRON ROD,
THENCE RUN SOUTH 12'56'40" WEST A DISTANCE OF 150.37 FEET TO A FOUND 1/2"
DIAMETER CRIMP TOP IRON PIPE,
THENCE RUN SOUTH 60'12'49" EAST A DISTANCE OF 168.20 FEET TO A FOUND 5/8"
DIAMETER IRON ROD,
THENCE RUN SOUTH 26'06'32" WEST A DISTANCE OF 251.31 FEET TO A FOUND 1/2"
DIAMETER IRON ROD BEING ON THE NORTHERLY RIGHT-OF-WAY LINE OF WOODLAWN
STREET,
THENCE RUN NORTH 70'42'00" WEST ALONG THE NORTHERLY RIGHT-OF-WAY LINE OF
WOODLAWN STREET A DISTANCE OF 575.91 FEET TO A FOUND 1/2" DIAMETER IRON PIPE
BEING AT THE INTERSECTION OF THE NORTHERLY RIGHT OF-WAY LINE OF WOODLAWN
STREET WITH THE EASTERLY RIGHT-OF-WAY LINE OF KAYWOOD COURTS,
THENCE RUN NORTH 23'05'00" EAST ALONG THE EASTERLY RIGHT-OF-WAY LINE OF
KAYWOOD COURTS A DISTANCE OF 140.56 FEET TO A FOUND 1/2" DIAMETER IRON PIPE,
THENCE RUN NORTH 24'48'39" EAST ALONG THE EASTERLY RIGHT-OF-WAY LINE OF
KAYWOOD COURTS A DISTANCE OF 328.51 FEET TO THE POINT OF BEGINNING.
SAID TRACT CONTAINING 5.2319 ACRES.
(2) TRACT "B". A TRACT OF LAND LOCATED IN SECTION 32, T18N-R13W, BOSSIER
CITY, BOSSIER PARISH, AND/OR SECTIONS 31, 32 OR 33, T18N-R13W, CADDO PARISH,
LOUISIANA. SAID TRACT BEING MORE FULLY DESCRIBED AS FOLLOWS:
BEGINNING AT A FOUND 3/4" DIAMETER CRIMP TOP IRON PIPE BEING THE SOUTHEAST
CORNER OF LOT 8, KAYWOOD SUBDIVISION, AS RECORDED IN BOOK 339, PAGE 229 OF
THE CONVEYANCE RECORDS OF BOSSIER PARISH, RUN THENCE SOUTH 28'05'04" WEST A
DISTANCE OF 335.76 FEET TO A SET 1/2" DIAMETER IRON ROD BEING ON THE FORMER
NORTHERLY HIGH BANK OF THE RED RIVER,
THENCE RUN NORTHWESTERLY ALONG THE FORMER HIGH BANK OF THE RED RIVER A
DISTANCE OF 614.30 FEET, NORTH 55'22'23" WEST TO A FOUND 1" DIAMETER IRON
PIPE,
THENCE RUN NORTH 244849" EAST A DISTANCE OF 897.25 FEET TO A FOUND 1/2"
DIAMETER IRON ROD BEING ON THE SOUTH LINE OF LOT 34, COOK SUBDIVISION, AS
RECORDED IN BOOK 141, PAGE 11 OF THE CONVEYANCE RECORDS OF BOSSIER PARISH,
THENCE RUN SOUTH 65'02'25" EAST ALONG THE SOUTH LINE OF LOT 34, A DISTANCE
OF 9.58 FEET TO A FOUND 1/2" DIAMETER IRON ROD BEING ON THE WESTERLY RIGHT-
OF-WAY LINE OF KAYWOOD COURTS,
THENCE RUN SOUTH 24'47'37" WEST ALONG THE WESTERLY RIGHT-OF-WAY LINE OF
KAYWOOD COURTS A DISTANCE OF 329.85 FEET TO A FOUND 1/2" DIAMETER IRON PIPE,
THENCE RUN SOUTH 22'34'14" WEST ALONG THE WESTERLY RIGHT-OF-WAY LINE OF
KAYWOOD COURTS A DISTANCE OF 194.43 FEET TO A FOUND 5/8" DIAMETER IRON ROD
BEING AT THE INTERSECTION OF THE WESTERLY RIGHT-OF-WAY LINE OF KAYWOOD
COURTS WITH THE SOUTHERLY RIGHT-OF-WAY LINE OF WOODLAWN STREET,
THENCE RUN SOUTH 70'42'00" EAST ALONG THE SOUTHERLY RIGHT-OF-WAY LINE OF
WOODLAWN STREET A DISTANCE OF 5.17 FEET TO A FOUND 5/8" DIAMETER IRON ROD,
THENCE RUN SOUTH 19'1 8'00" WEST ALONG THE WEST LINE OF LOT 1, KAYWOOD
SUBDIVISION, UNIT 2, AS RECORDED IN BOOK 450, PAGE 113 OF THE CONVEYANCE
RECORDS OF BOSSIER PARISH, A DISTANCE OF 200.26 FEET TO A SET 1/2" DIAMETER
IRON ROD BEING THE SOUTHWEST CORNER OF LOT 1,
THENCE RUN SOUTH 70'42'00" EAST ALONG THE SOUTH LINE OF KAYWOOD SUBDIVISION
UNIT 2 AND KAYWOOD SUBDIVISION A DISTANCE OF 585.48 FEET TO THE POINT-OF-
BEGINNING,
AND ALL THAT LAND LYING BETWEEN THE SOUTHERLY MOST LINE OF SAID
DESCRIBED TRACT AND THE EXISTING HIGH BANK OF THE RED RIVER, AND LYING
BETWEEN THE PROJECTED LINES OF THE EASTERLY AND WESTERLY
BOUNDARIES OF SAID DESCRIBED TRACT,
SAID TOTAL TRACT CONTAINING 4.914 ACRES.
(3) TRACT "C". A TRACT OF LAND LOCATED IN SECTION 32, T18N-R13W, BOSSIER
CITY, BOSSIER PARISH, AND/OR SECTIONS 31, 32 OR 33, T18N-R13W, CADDO PARISH,
LOUISIANA, AND BEING A PORTION OF LOT 34, COOK SUBDIVISION, AS RECORDED IN
BOOK 141, PAGE 11, OF THE CONVEYANCE RECORDS OF BOSSIER PARISH. SAID TRACT
MORE FULLY DESCRIBED AS FOLLOWS:
BEGINNING AT A FOUND 1/2" DIAMETER IRON ROD BEING THE SOUTHWEST CORNER OF
LOT 34, RUN THENCE NORTH 29'35'39" EAST ALONG THE WEST LINE OF LOT 34 A
DISTANCE OF 165.24 FEET TO A FOUND 1/2" DIAMETER IRON PIPE BEING ON THE
SOUTH RIGHT-OF-WAY LINE OF INTERSTATE 20,
THENCE RUN SOUTH 82'32'09" EAST ALONG THE SOUTH RIGHT-OF-WAY LINE OF
INTERSTATE 20 A DISTANCE OF 58.03 FEET TO A FOUND 1/2" DIAMETER IRON PIPE
BEING ON THE WESTERLY RIGHT-OF-WAY LINE OF KAYWOOD COURTS,
THENCE RUN SOUTH 29'33'17" WEST ALONG THE WESTERLY RIGHT-OF-WAY LINE OF
KAYWOOD COURTS A DISTANCE OF 190.07 FEET TO A FOUND 1/2" DIAMETER IRON ROD
BEING ON THE SOUTH LINE OF LOT 34,
THENCE RUN NORTH 65'02'25" WEST ALONG THE SOUTH LINE OF LOT 34 A
DISTANCE OF 9.58 FEET TO A FOUND 1/2" DIAMETER IRON ROD,
THENCE RUN NORTH 55'34'42" WEST ALONG THE SOUTH LINE OF LOT 34 A
DISTANCE OF 44.49 FEET TO THE POINT OF BEGINNING,
SAID TRACT CONTAINING 0.22 ACRES.
(4) TRACT "D". A TRACT OF LAND LOCATED IN SECTION 32, T18N-R13W, BOSSIER
CITY, BOSSIER PARISH, AND/OR SECTIONS 31, 32 OR 33, T18N-R13W, CADDO PARISH,
LOUISIANA. SAID TRACT BEING MORE FULLY DESCRIBED AS FOLLOWS:
BEGINNING AT A FOUND 1/2" DIAMETER CRIMP TOP IRON PIPE BEING THE SOUTHWEST
CORNER OF LOT 114, RIVERSIDE SUBDIVISION AS RECORDED IN BOOK 60, PAGE 157 OF
THE CONVEYANCE RECORDS OF BOSSIER PARISH, LOUISIANA, RUN THENCE SOUTH 70-23-
37" EAST ALONG THE REAR LINE OF RIVERSIDE SUBDIVISION A DISTANCE OF 248.66
FEET TO A FOUND 1" DIAMETER IRON PIPE,
THENCE RUN SOUTH 29'01'37" WEST AND PARALLEL WITH THE EASTERLY LINE OF LOT
110 OF RIVERSIDE SUBDIVISION A DISTANCE OF 1021.25 FEET TO A FOUND 1"
DIAMETER IRON PIPE, BEING ON THE FORMER HIGH BANK OF THE RED RIVER,
THENCE RUN NORTH 62'19'02" WEST ALONG THE FORMER HIGH BANK OF THE RED RIVER
A DISTANCE OF 127.28 FEET TO A POINT, WHICH IS ON THE PROJECTION OF THE
WESTERLY LINE OF LOT 112, RIVERSIDE SUBDIVISION,
THENCE CONTINUE NORTH 64'07'56" WEST ALONG THE FORMER HIGH BANK OF THE RED
RIVER A DISTANCE OF 101.1 1 FEET TO A SET 1/2" DIAMETER IRON ROD, LOCATED ON
THE PROJECTION OF THE EASTERLY LINE OF LOT 8, KAYWOOD SUBDIVISION,
THENCE RUN NORTH 28'05'04" EAST A DISTANCE OF 335.76 FEET TO A FOUND 3/4"
DIAMETER CRIMP TOP IRON PIPE BEING THE SOUTHEAST CORNER OF LOT 8 KAYWOOD
SUBDIVISION AS RECORDED IN BOOK 339, PAGE 229 OF THE CONVEYANCE RECORDS OF
BOSSIER PARISH,
THENCE CONTINUE NORTH 28'05'04" EAST ALONG THE EASTERLY LINE OF LOT 8 A
DISTANCE OF 202.64 FEET TO A FOUND 2" DIAMETER IRON PIPE BEING THE NORTHEAST
CORNER OF LOT 8,
THENCE CONTINUE NORTH 28'05'04" EAST A DISTANCE OF 50.65 FEET TO A FOUND
1/2" DIAMETER IRON ROD,
THENCE RUN NORTH 26'06'32" EAST A DISTANCE OF 251.31 FEET TO A FOUND 5/8"
DIAMETER IRON ROD,
THENCE RUN NORTH 31'05'36" EAST A DISTANCE OF 149.25 FEET TO THE POINT OF
BEGINNING,
AND ALL THAT LAND LYING BETWEEN THE SOUTHERLY MOST LINE OF SAID DESCRIBED
TRACT AND THE EXISTING HIGH BANK OF THE RED RIVER, AND LYING BETWEEN THE
PROJECTED LINES OF THE EASTERLY AND WESTERLY BOUNDARIES OF SAID DESCRIBED
TRACT,
SAID TOTAL TRACT CONTAINING 5.753 ACRES.
(5) LOTS 1, 2 AND 4, KAYWOOD SUBDIVISION, UNIT NO. 2, A SUBDIVISION OF
BOSSIER PARISH, AND/OR CADDO PARISH, LOUISIANA AS PER PLAT RECORDED IN BOOK
450, PAGE 113 OF THE CONVEYANCE RECORDS OF BOSSIER PARISH, LOUISIANA,
(6) LOTS 6, 7 AND 8 KAYWOOD WOOD SUBDIVISION, A SUBDIVISION OF BOSSIER
PARISH, AND/OR CADDO PARISH, LOUISIANA, AS PER PLAT RECORDED IN BOOK 339,
PAGE 229 OF THE CONVEYANCE RECORDS OF BOSSIER PARISH, LOUISIANA.
(7) LOTS 110, 111 AND 112, RIVERSIDE SUBDIVISION, A
SUBDIVISION OF BOSSIER PARISH, AND/OR CADDO PARISH, LOUISIANA, AS PER
PLAT RECORDED IN BOOK 60, PAGE 157 OF THE CONVEYANCE RECORDS OF
BOSSIER PARISH, LOUISIANA, LESS A STRIP OF LAND SEVEN (7') FEET IN WIDTH
RUNNING BACK BETWEEN PARALLEL LINES ALONG THE ENTIRE EASTERLY SIDE
OF LOT 1 10.
The Land described in SUBSECTIONS I (a) (1) , (2) , (3) , (4) , (5) , (6)
AND (7) above is in accordance with the survey of Smith and Raley, Inc. ,
Consulting Engineers, made on August 23, 1991 and last revised on May 9,
1996, a copy of which is attached hereto.
Together with all the buildings and improvements situated on the above-
described Land and all appurtenances, rights, ways, privileges, servitude's,
prescriptions and advantages thereunto belonging or in anywise appertaining,
including, but without limitation, all component parts of the above-
described Land, and all component parts of any building or other
construction located on the above-described Land, now or hereafter a part of
or attached to said Land or used in connection therewith.
(b) All buildings, structures, facilities and other improvements now or
hereafter located on the Land, and all appurtenances, rights, ways,
privileges, servitude's, prescriptions and advantages thereunto belonging or
in anywise appertaining, including, but without limitation, all component
parts of the Land, and all component parts of any building or other
construction located on the Land, now or hereafter a part of or attached to
said immovable and all building material, building equipment, supplies and
fixtures of every kind and nature now or hereafter located on the Land or
attached to, contained in or used in connection with any such buildings,
structures, facilities or other improvements, and all appurtenances and
additions thereto and betterments, renewals, substitutions and replacements
thereof, owned by Mortgagor or in which Mortgagor has or shall acquire an
interest (all of the foregoing hereinafter collectively referred to as
"IMPROVEMENTS".
(c) All equipment (as defined in the Louisiana Commercial Laws, La. R.S.
10:1-101 ET SEQ. (the "UCC") now owned or hereafter acquired by the
Mortgagor or in which Mortgagor has or shall acquire an interest, wherever
situated, and now or hereafter located on, attached to, contained in or used
in connection with the properties referred to in granting clauses (a), (b),
(e) or (f) of this Section I, or placed on any part thereof, though not
attached thereto, including, but not limited to the following, to the extent
that the same are not Improvements: all machinery, apparatus, goods,
equipment, materials, fittings, fixtures, chattels and tangible personal
property and all appurtenances, accessories, parts, attachments, additions,
special tools and accessions now and hereafter affixed thereto or used in
connection therewith and betterments, renewals, substitutions and
replacements thereof and therefor, (all of the foregoing hereinafter
collectively referred to as the "IMPROVEMENTS") including all screens,
awnings, shades, blinds, curtains, draperies, carpets, rugs, furniture and
furnishings, heating, lighting, plumbing, ventilating, air conditioning,
refrigerating, incinerating and/or compacting plants, systems, fixtures and
equipment, elevators, hoists, stores, ranges, vacuum and other cleaning
systems, call systems, sprinkler systems and other fire prevention and
extinguishing apparatus and materials, motors, machinery, pipes, ducts,
conduits, dynamos, engines, compressors,, generators, boilers, stokers,
furnaces, pumps, tanks, appliances, equipment, fittings and fixtures (the
Land, the Improvements and the Equipment hereinafter collectively referred
to as the "PREMISES") . All funds, accounts, deposits, instruments,
documents, general intangibles, and notes or chattel paper arising from or
by virtue of any transactions related to the Premises; all permits,
licenses, franchises, certificates and other rights and privileges obtained
in connection with the Premises. Without limitation, Mortgagor hereby
grants to Mortgagee a security interest in and to all of Mortgagor's present
and future equipment" and general intangibles" (as defined in the UCC) in or
relating to the Premises, and Mortgagee shall have, in addition to all
rights and remedies provided herein, all of the rights and remedies of a
"secured party" under the UCC. This Mortgage constitutes and shall be
deemed to be a "security agreement" for all purposes of the UCC. If the
lien of this Mortgage is subject to a security interest covering any
property described in this granting clause (c), then all of the right, title
and interest of Mortgagor in and to any and all such property is hereby
assigned to Mortgagee, together with the benefits of all deposits and
payments now or hereafter made thereon by or on behalf of Mortgagor. It is
agreed that all Equipment is part and parcel of the Land and the
Improvements and appropriated to the use thereof and, whether affixed to the
Land and/or the Improvements or not, shall, for purposes of this Mortgage be
deemed conclusively to be real estate and mortgaged or otherwise conveyed or
encumbered hereby.
(d) All the leases, subleases, lettings and licenses and all other
contracts, bonds and agreements affecting the Premises and/or any other
property or rights conveyed or encumbered hereby, or any part thereof, now
or hereafter entered into, and all amendments, modifications, supplements,
additions, extensions and renewals thereof (all of the foregoing hereinafter
collectively called the "LEASES"), and all right, title and interest of
Mortgagor thereunder, including cash and securities deposited thereunder (as
down payments, security deposits or otherwise); the right to receive and
collect the rents, security deposits, income, proceeds, earnings, royalties,
revenues, issues and profits payable thereunder and the rights to enforce,
whether at law or in equity or by any other means, all provisions and
options thereof or thereunder (all of the foregoing hereinafter collectively
called the "RENTS"), and the right to apply the same to the payment and
performance of the Secured Obligations.
(e) Any and all moneys (other than cash received from Casino Magic Corp. as
payment for common stock with no privileges, preferences or rights to
redemption or repayment), goods, accounts, chattel paper, general
intangibles, documents, instruments, contract rights and other real and
personal property (including property exchanged therefor), of every kind and
nature, which may from time to time be subjected to the lien hereof by
Mortgagor through a supplement to this Mortgage or otherwise, or by anyone
on its behalf or with its consent, or which may come into the possession of
or be subject to the control of Mortgagee pursuant to this Mortgage, it
being the intention and agreement of Mortgagor that all property hereafter
acquired (including pursuant to any so called "tax sale" or foreclosure of
any lien) or constructed by Mortgagor with respect to the Premises shall be
subject to the lien and security interest of this Mortgage and shall
forthwith upon acquisition or construction thereof by Mortgagor and without
any act or deed by Mortgagor be subject to the lien and security interest of
this Mortgage as if such property were now owned by Mortgagor and were
specifically described in this Mortgage and conveyed or encumbered hereby or
pursuant hereto, and Mortgagee is hereby authorized to receive any and all
such property as and for additional security hereunder.
(f) All unearned premiums under insurance policies now or hereafter
obtained by Mortgagor, all proceeds (including funds, accounts, deposits,
instruments, general intangibles, notes or chattel paper) of the conversion,
voluntary or involuntary, of any of the property described in these granting
clauses into cash or other liquidated claims, including proceeds of hazard,
title and other insurance, whether attributable to the insurance loss of the
Premises or otherwise, as provided in Louisiana Revised Statutes or
otherwise, and proceeds received pursuant to any sales or rental agreements
of Mortgagor in respect of the property described in these granting clauses,
and all judgments, damages, awards, settlements and compensation (including
interest thereon) heretofore or hereafter made to the present and all
subsequent owners of the Premises and/or any other property or rights
conveyed or encumbered hereby for any injury to or decrease in the value
thereof for any reason, or by any governmental or other lawful authority for
the taking by eminent domain, condemnation or otherwise of all or any part
thereof, including awards for any change of grade of streets.
The Mortgaged Property is to remain so specially mortgaged, affected and
hypothecated unto and in favor of the Mortgagee until the full and final
payment or discharge of the Secured Obligations, and the Mortgagor is herein
and hereby bound and obligated not to sell or alienate the Mortgaged
Property to the prejudice of this act.
The maximum amount of the Secured Obligations that may be outstanding at any
time and from time to time that this Mortgage secures, including without
limitation as a mortgage, as an assignment and as a security agreement,
including all principal, interest and any expenses or advances incurred by
the Mortgagee, whether stipulated herein or otherwise, and all other amounts
included within the Secured Obligations, is fifty million ($50,000,000.00)
dollars (the "MAXIMUM Amount").
The Mortgagor acknowledges that this Mortgage secures the Secured
Obligations and advances made or incurred by the Mortgagee under or pursuant
to this Mortgage, the Indenture or otherwise, whether optional or obligatory
by the Mortgagee. This Mortgage is and shall remain effective, even though
the amount of the Secured Obligations may now be zero or may later be
reduced to zero, until all of the amounts, liabilities and obligations,
present and future, comprising the Secured Obligations have been incurred
and are extinguished. When no Secured Obligations secured by this Mortgage
exists and the Mortgagee is not bound to permit any Secured Obligations to
be incurred, this Mortgage may be terminated by the Mortgagor upon thirty
(30) days prior written notice sent by the Mortgagor to the Mortgagee in
accordance with the provisions of this Mortgage.
SECTION II - SECURITY INTEREST
(a) With respect to all personal property (both. tangible and intangible)
and any fixtures constituting a part of the Mortgaged Property, this
Mortgage shall likewise be a security agreement and a financing statement
and for valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, and for the purpose of further securing the full and
punctual payment and performance of the Secured Obligations, Mortgagor
hereby grants to Mortgagee a security interest in all of Mortgagor's rights,
titles and interests in and to the Mortgaged Property insofar as the
Mortgaged Property consists of equipment, contract rights, general
intangibles, documents, instruments, chattel paper, fixtures and any and all
other personal property of any kind or character defined in and subject to
the provisions of the UCC, including the proceeds, profits, rents, revenues
and products from any and all of such personal property. Upon the
occurrence and during the continuance of any Event of Default (as
hereinafter defined), Mortgagee is and shall be entitled to all of the
rights, powers and remedies afforded a secured party by the UCC with
reference to the personal property and fixtures in which Mortgagee has been
granted a security interest herein, or Mortgagee may proceed as to both the
real and personal property covered hereby in accordance with the rights and
remedies granted under this Mortgage in respect of the real property covered
hereby. Such rights, powers and remedies shall be cumulative and in
addition to those granted to Mortgagee under any other provision of this
Mortgage or under any other instrument executed in connection with or as
security for the Secured Obligations. A carbon or photographic or other
reproduction of this Mortgage shall be sufficient as a financing statement
covering the Mortgaged Property.
(b) Mortgagor shall, forthwith after the execution and delivery of this
mortgage and thereafter, from time to time, cause this Mortgage and any
financing statement, continuation statement or similar instrument relating
to any thereof or to any property intended to be subject to the Lien of this
Mortgage to be filed, registered and recorded in such manner and in such
places as may be required by any present or future law in order to fully
protect the validity, priority and perfection thereof or the Lien hereof
upon the Mortgaged Property and the interest and rights of Mortgagee herein
and therein. Mortgagor shall pay or cause to be paid all taxes and fees
incident to such filing, registration-ration and recording, all expenses
incident to the preparation, execution and acknowledgment thereof, and of
any instrument of further assurance, and all federal or State stamp taxes or
other taxes, duties and charges arising out of or in connection with the
execution and delivery of such instruments.
(c) Mortgagor shall, at the sole cost and expense of Mortgagor, do,
execute, acknowledge and deliver all and every such further acts, deeds,
conveyances, mortgages, assignments, notices of assignment, transfers,
financing statements, continuation statements and assurances as Mortgagee
shall from time to time reasonably request which may be necessary in the
requesting party's judgment to assure, perfect, mortgage, transfer and
confirm unto the Mortgagee the property and rights hereby mortgaged or
granted or which Mortgagor may be or may hereafter become bound to mortgage
or grant to Mortgagee or which may facilitate the performance of the terms
of this Mortgage or the filing, registering or recording of this Mortgage.
In the event Mortgagor shall fail to execute any instrument required to be
executed by Mortgagor pursuant to this SUBSECTION II (c), Mortgagee may
execute the same as the attorney in-fact for Mortgagor, such power of
attorney being coupled with an interest and irrevocable.
(d) Nothwithstanding the provisions of this Section II above, the security
interest shall not attach to property originally acquired by Casino Magic
Louisiana with Permitted FF&E financing (as defined in the Indenture).
SECTION III - SECURED OBLIGATIONS
This Mortgage is executed and delivered by Mortgagor to secure the payment
and performance of the obligations (collectively, the "Secured Obligations")
described below:
(a) Payment of and performance of any and all indebtedness, obligations and
liabilities of Mortgagor now or hereafter existing under or in respect of
the Guarantee, including, without limitation, payment of principal, premium,
if any, and interest when due and payable, and all other amounts due or to
become due under or in connection with the Indenture as in effect on the
date hereof (including, without limitation, all sums due to the Mortgagee
pursuant to Section 7.7 of the Indenture), the Notes (as defined herein and
in the Indenture) and the performance of all other obligations to the
Mortgagee and the Holders (as defined herein and in the Indenture) under the
Indenture, the Notes and the Collateral Documents (as defined in the
Indenture), according to the terms thereof;
(b) Any sums which may be advanced or paid by Mortgagee under the terms
hereof on account of the failure of Mortgagor to comply with the covenants
of Mortgagor contained herein;
(c) Payment and performance of all covenants, agreements, and obligations
of Mortgagor herein contained;
(d) all renewals, rearrangements, increases, substitutions and extensions,
and all amendments, supplements and modifications, to any of the obligations
described in the preceding clauses (a)through (c).
SECTION IV - REPRESENTATIONS, WARRANTIES AND COVENANTS
Mortgagor hereby represents, warrants and covenants as follows:
(a) GOOD TITLE; AUTHORITY AND VALIDITY. Mortgagor has good and
merchantable title to the Mortgaged Property and the landlord's interest and
estate under or in respect of the Leases, subject to the Excepted Liens, and
has, in all material respects, full corporate power and lawful authority to
mortgage, pledge and hypothecate and to grant a security interest in all of
the Mortgaged Property all in the manner and form herein provided and
without obtaining the waiver, consent or approval of any lessor, sublessor,
Governmental Authority or entity or other party whomsoever or whatsoever
which has not been obtained, except in the case of certain environmental
permits and approvals which, by their terms, are not transferable or cannot
be transferred without the prior approval of the issuing agency. The
Improvements upon the Land are all within the boundary lines of the Land or
have the benefit of valid servitude's or easements, and there are no
encroachments thereon that would materially impair the use thereof. The
Mortgaged Property is free and clear of any and all Liens or encumbrances of
any nature or kind except for the Excepted Liens and the Leases. Mortgagor
has all necessary permits, franchises, licenses, rights-of-way, servitude's
or other rights or authority needed in connection with the operation and
maintenance of the Mortgaged Property, except where the failure to have the
same would not have a Material Adverse Effect; except where such default
would not individually or in the aggregate have a Material Adverse Effect;
except as provided in the Excepted Liens, Mortgagor's grant of a Lien and
security interest in the Mortgaged Property in the manner herein provided
does not result in the creation or imposition of any other Lien or security
interest, adverse claim or option upon any of the Mortgaged Property.
Mortgagor's chief executive office and chief place of business is located at
the address set forth in Section VIII(L) of this Mortgage. Mortgagor will
not change its name, identity or corporate structure or its chief executive
office or chief place of business or its taxpayer identification number
without notifying Mortgagee at least thirty (30) days prior to the effective
date of such change.
(b) DEFENSE OF TITLE. Mortgagor will warrant and defend title to the
Mortgaged Property, subject to Excepted Liens, against the claims and
demands of all other Persons whomsoever and will maintain and preserve the
Lien created hereby so long as any of the Secured Obligations secured hereby
remains unpaid or not satisfied. Should an adverse claim be made against
the title to any material part of the Mortgaged Property, Mortgagor agrees
it will immediately notify Mortgagee in writing thereof and defend against
such adverse claim to the extent necessary to preserve Mortgagee's rights
and benefits hereunder, subject to Excepted Liens, and Mortgagor further
agrees that Mortgagee may take such other reasonable action as it deems
advisable to protect and preserve its interest in the Mortgaged Property,
and in such event Mortgagor will indemnify Mortgagee against any and all
costs, reasonable attorney's fees and other expenses which they may incur in
defending against any such adverse claim. Such obligations shall be payable
on demand and shall bear interest from the date of demand therefor until
paid at the Note Rate. Any proceeds of any policy of title insurance
maintained by Mortgagor with respect to the Mortgaged Property shall, for
the purposes of this Mortgage, be paid and applied in the same manner as
Insurance Proceeds (as hereinafter defined).
(c) FIRST LIEN. This Mortgage is, and always will be kept, a direct first
Lien and security interest upon the Mortgaged Property, subject to the
Excepted Liens, and Mortgagor will not create or suffer to be created or
permit to exist any Lien, security interest or charge prior or junior to or
on parity with the Lien and security interest of this Mortgage upon the
Mortgaged Property or any part thereof or upon the Rents therefrom, except
for the Excepted Liens.
(d) MAINTENANCE OF MORTGAGED PRO-PROPERTY. Mortgagor will at its own
expense do or cause to be done all things necessary to preserve and keep in
full repair, working order and efficiency, reasonable wear and tear
excepted, all of the Mortgaged Property, including, without limitation, all
equipment, machinery and facilities, and from time to time will make all the
needful and proper repairs, renewals and replacements so that at all times
the state and condition of the Mortgaged Property will be fully preserved
and maintained.
(e) PERFORMANCE OF CONTRACTS. Mortgagor will promptly pay and discharge
all rentals, or other payments and will perform or cause to be performed
each and every act, matter or thing required by, each and all of the
contracts, instruments or agreements executed in connection with or incident
to the ownership and operation of the Mortgaged Property and will do all
other things necessary to keep unimpaired Mortgagor's rights with respect
thereto and to prevent any forfeiture thereof or default thereunder.
Mortgagor will operate the Mortgaged Property in a good and workmanlike
manner and in accordance with the practices of the industry and in
compliance with all Governmental Requirements affecting ownership and
operation of such facilities, including without limitation, Environmental
Laws.
(f) PAYMENT BY MORTGAGEE. Mortgagor agrees that if Mortgagor fails to
perform any act or to take any action which Mortgagor is required to perform
or take hereunder or pay any money which Mortgagor is required to pay
hereunder (taking into account applicable grace or cure periods), Mortgagee
in Mortgagor's name or its own name may, but shall not be obligated to,
perform or cause to perform such act or take such action or pay such money,
and any expenses so incurred by Mortgagee and any money so paid by Mortgagee
shall be a demand obligation owing by Mortgagor to Mortgagee, and Mortgagee,
upon making such payment, shall be subrogated to all of the rights of the
Person receiving such payment. Each amount due and owing by Mortgagor to
Mortgagee pursuant to this Mortgage shall bear interest from the date of
such expenditure or payment or other occurrence which gives rise to such
amount being owed to Mortgagee until paid at the Note Rate, and all such
amounts together with such interest thereon shall be a part of the Secured
Obligations and shall be secured by this Mortgage.
(g) NAME OF MORTGAGOR. Mortgagor does not do business with respect to the
Mortgaged Property under any name other than C-M of Louisiana, Inc.
(h) OPERATION BY THIRD PARTIES. To the extent any of the Mortgaged
Property is operated by a party or parties other than Mortgagor, Mortgagor's
covenants as expressed in this SECTION IV are modified to require that
Mortgagor use its best efforts (including without limitation the reasonable
exercise of all rights and remedies as are available to Mortgagor) to obtain
compliance with such covenants by the operator or operators of the Mortgaged
Property.
(I) COMPLIANCE WITH LAWS. The Mortgaged Property complies and at all times
will comply with all local zoning, land use, setback and other development,
use and occupancy requirements of Governmental Authorities.
(i) PAYMENT OF TAXES, INSURANCE PREMIUMS, ASSESSMENTS; COMPLIANCE WITH LAW
AND INSURANCE REQUIREMENTS.
(I) Unless contested in accordance with the provisions of SUBSECTION IV
(j)(v) hereof, Mortgagor shall pay and discharge or cause to be paid and
discharged, from time to time when the same shall become due, all real
estate and other taxes, special assessments, levies, permits, inspection and
license fees, all premiums for insurance, all water and sewer rents and
charges, and all other public charges imposed upon or assessed against the
Mortgaged Property or any part thereof or upon the revenues, rents, issues,
income and profits of the Mortgaged Property, including, without limitation,
those arising in respect of the occupancy, use or possession thereof.
(ii) During the continuance of an Event of Default, Mortgagor shall deposit
with Mortgagee, on the first day of each month, an amount reasonably
estimated by Mortgagee to be equal to one-twelfth (1/12th) of the annual
taxes, assessments and other items required to be discharged by Mortgagor
under SUBSECTION IV (j)(i) and amounts reasonably estimated by Mortgagor to
be necessary to maintain the insurance coverages contemplated in SUBSECTION
IV (1) below, which estimates shall not be less than one-twelfth (1/12th) of
the annual taxes, assessments, insurance premiums and other items required
to be discharged by Mortgagor during the year immediately preceding the year
during which such Event of Default occurred. Such amounts shall be held by
Mortgagee without interest to Mortgagor and applied to the payment of each
obligation in respect of which such amounts were deposited, in such order or
priority as Mortgagee shall determine, on or before the date on which such
obligation would become delinquent. If at any time the amounts so deposited
by Mortgagor shall, in Mortgagee's judgment, be insufficient (when added to
the installments anticipated to be paid thereafter) to discharge any of such
obligations when due, Mortgagor shall, immediately upon demand, deposit with
Mortgagee such additional amounts as may be requested by Mortgagee. Nothing
contained in this SUBSECTION IV (j) shall affect any right or remedy of
Mortgagee under any provision of this Mortgage or of any statute or rule of
law to pay any such amount from its own funds (provided, however, that
Mortgagee shall not in any event be obligated to pay any of such amounts
from its own funds) and to add the amount so paid, together with interest at
the Note Rate, to the Secured Obligations, or relieve Mortgagor of its
obligations to make or provide for the payment of the annual taxes,
assessments and other charges required to be discharged by Mortgagor under
SUBSECTION IV (j)(i) . Mortgagor hereby grants to Mortgagee a security
interest in all sums held pursuant to this SUBSECTION IV (j)(ii) to secure
payment and performance of the Secured Obligations. During the continuance
of any Event of Default, Mortgagee may apply all or any part of the sums
held pursuant to this SUBSECTION IV (j)(ii) to the payment and performance
of the Secured Obligations in accordance with the provisions of the
Indenture. Mortgagor shall redeposit with Mortgagee an amount equal to all
amounts so applied as a condition to the cure, if any, of such Event of
Default, in addition to fulfillment of any other required conditions.
(iii) Unless contested in accordance with the provisions of SUBSECTION IV
(j)(v) , Mortgagor shall timely pay (or obtain a bond in the amount of) all
lawful claims and demands of mechanics, materialmen, laborers, warehousemen,
employees, suppliers, government agencies administering worker's
compensation insurance, old age pensions and social security benefits, and
all amounts owed under collective bargaining agreements and all other
claims, judgments, demands or amounts of any nature which, if unpaid or not
bonded, could result in or permit the creation of a Lien (other than an
Excepted Lien) on the Mortgaged Property or any part thereof or the Rents
arising therefrom, or which might result in forfeiture of all or any part of
the Mortgaged Property.
(iv) Mortgagor shall maintain, or cause to be maintained, in full force and
effect, all permits, certificates, authorizations, consents, approvals,
registrations, filings, licenses, franchises or other instruments now or
hereafter required by any Governmental Authority to operate or use and
occupy the Mortgaged Property and the Equipment for its intended uses
(collectively, the "Permits"; each, a "Permit"). Mortgagor represents that,
to is knowledge and subject to those requirements for notice, approval or
reissuance set forth by applicable law, none of the Permits will be subject
to cancellation, forfeiture or any limitation on the scope thereof solely by
virtue of the execution of this Mortgage or the f foreclosure of the Lien
hereof. Unless contested in accordance with the provisions of SUBSECTION IV
(j)(v), Mortgagor shall comply promptly with, or cause prompt compliance
with, all requirements set forth in the Permits and all Governmental
Requirements applicable to all or any part of the Mortgaged Property or the
condition, use or occupancy of all or any part thereof or any recorded deed
of restriction, declaration, covenant running with the land or otherwise,
now or hereafter in force. Mortgagor shall not initiate or consent to any
change in the zoning, subdivision or any other use classification of the
Land.
(v) Mortgagor may at its own expense contest the amount or applicability of
any of the obligations described in SUBSECTIONS IV (j)(i), IV(j)(iii) and IV
(j)(iv) by appropriate legal proceedings, prosecution of which operates to
prevent the collection or enforcement thereof or the sale or forfeiture of
the Mortgaged Property or any part thereof to satisfy such obligations;
PROVIDED, HOWEVER, that (A) any such contest shall be conducted in good
faith by appropriate legal proceedings promptly instituted and diligently
conducted and (B) in connection with such contest, Mortgagor shall have made
provision for the payment or performance of such contested obligation on
Mortgagor's books if and to the extent required by generally accepted
accounting principles then utilized by Mortgagor in the preparation of its
financial statements, or shall have deposited with Mortgagee a sum
sufficient to pay and discharge such obligation and Mortgagee's estimate of
all interest and penalties related thereto. Notwithstanding the foregoing
provisions of this SUBSECTION IV (j)(v), (A) no contest of any such
obligations may be pursued by Mortgagor if such contest would expose
Mortgagee or any other Secured Party to any possible criminal liability, or
any civil liability for failure to comply with such obligations and (B) if
at any time payment or performance of any obligation contested by Mortgagor
pursuant to this SUBJECTION IV (j)(v) shall become necessary to prevent the
a tax sale conveying the Mortgaged Property or any portion thereof because
of nonpayment or nonperformance, Mortgagor shall pay or perform the same in
sufficient time to prevent the tax sale.
(vi) Mortgagor shall not in its use and occupancy of the Mortgaged Property
or the Equipment (including, without limitation, in the making of any
Alteration, as hereinafter defined) take any action that would cause the
termination, revocation or denial of any insurance coverage required to be
maintained under this Mortgage or that pursuant to written notice from any
applicable insurer, would be the basis for a defense to any claim under any
insurance policy maintained in respect of the Mortgaged Property or the
Equipment and Mortgagor shall otherwise comply with the requirements of any
insurer that issues a policy of insurance in respect of the Mortgaged
Property or the Equipment.
(vii) Mortgagor shall, promptly upon receipt of any written notice
regarding any failure by Mortgagor to pay or discharge any of the
obligations described in SUBSECTION IV (j),(i),(ii), (iii) OR (vi), furnish
a copy of such notice to Mortgagee. Mortgagor shall, promptly upon receipt
of any written notice regarding any failure by mortgagor to pay or discharge
any of the obligations described in SUBSECTION IV (j) or (iv), furnish a
copy of such notice to Mortgagee.
(k) CERTAIN TAX LAW CHANGES. In the event of the passage after the date of
this Mortgage of any law deducting from the value of real property, for the
purpose of taxation, amounts in respect of any Lien thereon or changing in
any way the laws for the taxation of mortgages or debts secured by mortgages
for federal, state or local purposes or the manner of the collection of any
such taxes, and imposing a new tax, either directly or indirectly, on this
Mortgage or the interest of Mortgagee or any other Secured Party in any
Mortgaged Property (other than income, franchise or similar taxes imposed on
Mortgagee or such Secured Party), Mortgagor shall promptly pay Mortgagee or
such Secured Party such amount or amounts as may be necessary from time to
time to pay such tax and such amount shall bear interest at the Note rate
from the date due until paid in full.
1) REQUIRED INSURANCE POLICIES.
(I) Mortgagor shall maintain, or cause to be maintained, in full force and
effect the following insurance coverages, as applicable, in respect of the
Mortgaged Property and the Equipment:
(A) Physical hazard insurance on an "all risk" basis covering hazards
commonly covered by fire and extended coverage, lightning, tornado, wind
damage, civil commotion, hail, riot, strike, water damage, sprinkler
leakage, collapse and malicious mischief, in an amount equal to the full
replacement cost of the Improvements and all Equipment, with such
deductibles as would be maintained by a prudent operator of property similar
in use and configuration to the Mortgaged Property and located in the
locality where the Mortgaged Property is located. "Full replacement cost"
means the Cost of Construction to replace the Improvements and the
Equipment, exclusive of depreciation, excavation, foundation and footings,
as determined from time to time by a proper officer of Mortgagor in
consultation with its insurance company or insurance agent, as appropriate;
(B) Comprehensive general liability insurance against claims for bodily
injury, death or property damage occurring on, in or about the Mortgaged
Property and any adjoining streets, sidewalks and passageways and covering
any and all claims, including, without limitation, all legal liability,
subject to customary exclusions, to the extent insurable, imposed upon
Mortgagee or any other Secured Party and all court costs and attorneys,
fees, arising out of or connected with the possession, use, leasing,
operation or condition of the Mortgaged Property, with policy limits and
deductibles in such amounts as would be maintained by a prudent operator of
property similar in use and configuration to the Mortgaged Property and
located in the locality where the Mortgaged Property is located, but in no
event less than $10,000,000.00;
(C) Workers compensation insurance as required by the laws of the State to
protect Mortgagor against claims for injuries sustained in the course of
employment at the Mortgaged Property;
(D) Comprehensive boiler and machinery insurance to cover sudden and
accidental breakdown, including but not limited to, explosion of any boilers
and machinery located on the Mortgaged Property or comprising any Equipment,
with policy limits and deductibles in such amounts as would be maintained by
a prudent operator of property similar in use and configuration to the
Mortgaged Property and the Equipment and located in the locality where the
Mortgaged Property is located, but in no event less than $35,000,000.00;
(E) Comprehensive automobile liability insurance policy against claims for
bodily injury, death and property damage covering all owned, leased, non-
owned and hired motor vehicles, including loading and unloading in such
amounts as would be maintained by a prudent operator of property similar in
use and configuration to the Mortgaged Property and the Equipment and
located in the locality where the Mortgaged Property is located, but in no
event less than $1,000,000.00;
(F) Business interruption insurance on an annual basis in amounts not less
than (1) the projected gross profit of the Mortgaged Property during the
applicable twelve-month period or (2) the amount necessary to pay the fixed
charges and other expenses of owning, operating and maintaining the
Mortgaged Property for the same period;
(G) To the extent not otherwise covered by the insurance required under
clauses (A) and (B) of this SUBSECTION IV (1)(i), during the performance of
any alterations, renovations, repairs, restorations or construction, broad
form Builders Risk Insurance on an all risk completed value basis; and
(H) Such other insurance, against such risks and with policy limits and
deductibles in such amounts as would be maintained by a prudent operator of
property similar in use and configuration to the Mortgaged Property and
located in the locality in which the Mortgaged Property is located.
(ii) Mortgagor may maintain the coverages required by this subsection
IV(l) under blanket policies covering the Mortgaged Property and other
locations owned or operated by Mortgagor if the terms of such blanket
policies otherwise comply with the provisions of this subsection IV(l) and
contain specific coverage allocations in respect of the Mortgaged Property
determined in accordance with the provisions of this subsection IV(l). All
insurance policies in respect of the coverages required by subsections IV
(1)(i)(A) , IV(1)(i)(D), IV(1)(i)(G) and, if applicable, IV(l)(i)(H) shall
be in amounts at least sufficient to prevent coinsurance liability and all
losses thereunder shall be payable to Mortgagee, as loss payee, subject to
the terms of the Indenture, pursuant to a standard noncontributory New York
mortgage endorsement or local equivalent, and each such policy shall, to the
extent obtainable at commercially reasonable costs, (A) include effective
waivers (whether under the terms of such policy or otherwise) by the insurer
of all claims for insurance premiums against all loss payees and named
insureds other than Mortgagor and all rights of subrogation against any
named insured, and (B) provide that any losses thereunder shall be payable
notwithstanding (1) any act, failure to act, negligence of, or violation or
breach of warranties, declarations or conditions contained in such policy by
Mortgagor or Mortgagee or any other named insured or loss payee, (2) the
occupation or use of the Mortgaged Property or the Equipment for purposes
more hazardous than permitted by the terms of the policy, (3) any
foreclosure or other proceeding relating to the Mortgaged Property or the
Equipment or (4) any change in the title to or ownership or possession of
the Mortgaged Property or the Equipment; provided, however, that (with
respect to items contemplated in clauses (3) and (4) above) any notice
requirements of the applicable policies are satisfied. All insurance
policies in respect of the coverages required by subsections IV(l) ' shall
name Mortgagee as an additional insured. Each policy of insurance required
under this subsection IV(l) shall provide that (A) notices of any failure by
Mortgagor to pay any insurance premium in respect thereof, be furnished to
Mortgagee contemporaneously with any such notice given to Mortgagor and (B)
it may not be canceled or otherwise terminated without at least thirty (30)
days, prior written notice to Mortgagee and shall permit Mortgagee to pay
any premium therefor within thirty (30) days after receipt of any notice
stating that such premium has not been paid when due. The policy or
policies of such insurance or certificates of insurance evidencing the
required coverages and all renewals or extensions thereof shall be delivered
to Mortgagee upon receipt by Mortgagor. Settlement of any claim under any
of the insurance policies referred to in this subsection IV(l) (other than
the insurance contemplated in clause(C) of this subsection IV(l)(i)) shall
require the prior approval of Mortgagee and Mortgagor shall use its best
efforts to cause each such insurance policy to contain a provision to such
effect.
(iii) At least thirty (30) days prior to the expiration of any insurance
policy required by this subsection IV (1) , Mortgagor shall deliver to
Mortgagee evidence that such policy or policies shall be renewed or extended
and Mortgagor shall deliver promptly to Mortgagee after receipt thereof the
policy or policies renewing or extending such expiring policy or renewal or
extension certificates.
(iv) Mortgagor shall not purchase additional policies in respect of the
insurance coverages required to be maintained under this subsection IV(l),
unless Mortgagee is included thereon as an additional named insured and, if
applicable, with loss payable to Mortgagee under an endorsement containing
the provisions described in subsection IV(l) (ii) and the policy evidencing
such insurance otherwise complies with the requirements of ' subsection
IV(l)(ii). Mortgagor immediately shall notify Mortgagee whenever any such
separate insurance policy is obtained and promptly shall deliver to
Mortgagee the policy or certificate evidencing such insurance.
(m) Inspection. Mortgagor shall permit Mortgagee, by any of its officers,
employees, agents, accountants and attorneys, to visit and inspect the
Mortgaged Property, examine the books and records and accounts of the
Mortgagor, take copies and extracts therefrom, and discuss the affairs,
finances and accounts of the Mortgagor with the Mortgagor's officers,
accountants and auditors, all upon reasonable prior notice at such times as
may be reasonably requested by Mortgagee.
(n) Mortgagor To Maintain Improvements. Mortgagor shall not commit any
waste on the Mortgaged Property or with respect to any Equipment or make any
change in the use of the Mortgaged Property or any Equipment. Mortgagor
represents and warrants that (i) to Mortgagor's knowledge, the Mortgaged
Property is served by all electric, gas, sewer, water facilities and any
other utilities required or necessary for the current and contemplated use
thereof and any easements or servitude's necessary to the furnishing of such
utility service by Mortgagor have been obtained and duly recorded, and (ii)
Mortgagor has access to the Mortgaged Property from public roads sufficient
to allow Mortgagor and its tenants and invitees to conduct its and their
businesses at the Mortgaged Property as it is currently conducted and is
contemplated to be conducted. Mortgagor shall not alter the occupancy or
use of the Mortgaged Property without the prior written consent of
Mortgagee. No Improvements comprising a portion of the Mortgaged Property
may be demolished nor shall any Equipment be removed without the prior
written consent of Mortgagee.
(o) Leases.
(i) All of the Leases are valid and effective in accordance with their
respective terms, except that the enforcement thereof may be subject to (i)
bankruptcy, insolvency, reorganization, moratorium or other similar law
affecting or relating to enforcement of creditors' rights generally, and
(ii) general equitable principles. To
Mortgagor's knowledge, Mortgagor is not in breach of or in default (and to
Mortgagor's knowledge, no event has occurred which with due notice or lapse
of time or both, may constitute such a breach or default) under any Lease,
and no party to any Lease has given Mortgagor written notice of or made a
claim with respect to any breach or default.
(ii) Mortgagor shall manage and operate the Mortgaged Property or cause the
Mortgaged Property to be managed and operated in a reasonably prudent manner
and, except as otherwise permitted under subsection IV(p), will not enter
into any Lease (or any amendment or modification thereof) or other agreement
subsequent to the date hereof with any Person which, individually or in the
aggregate, would have a Material Adverse Effect on the value of the property
subject thereto.
(iii) Mortgagor shall not:
(A) receive or collect, or permit the receipt or collection of, any rental
or other payments under any Lease more than one (1) month in advance of the
respective period in respect of which they are to accrue, except that (a) in
connection with the execution and delivery of any Lease or of any amendment
to any Lease, rental payments thereunder may be collected and received in
advance in an amount not in excess of one (1) month' s rent and (b)
Mortgagor may receive and collect escalation and other charges in accordance
with the terms of each Lease;
(B) assign, transfer or hypothecate (other than to Mortgagee hereunder or
as otherwise permitted under subsection IV(p) of this Mortgage) any rental
or other payment under any Lease whether then due or to accrue in the
future, the interest of Mortgagor as lessor under any Lease or the rents,
issues, revenues, profits or other income of the Mortgaged Property;
(C) enter into any Lease after the date hereof that does not contain terms
to the effect as follows:
(1) such Lease and the rights of the tenant thereunder shall be subject and
subordinate to the rights of Mortgagee under and the Lien of this Mortgage;
(2) such Lease has been assigned as collateral security by Mortgagor as
landlord thereunder to Mortgagee under this Mortgage;
(3) in the case of any foreclosure hereunder, the rights and remedies of
the tenant in respect of any obligations of any successor landlord
thereunder shall be limited to the equity interest of such successor
landlord in the Mortgaged Property and any successor landlord shall not (a)
be liable for any act, omission or default of any prior landlord under the
Lease or (b) be required to make or complete any tenant improvements or
capital improvements or repair, restore, rebuild or replace the demised
premises or any part thereof in the event of damage, casualty or
condemnation or (c) be required to pay any amounts to tenant arising under
the Lease prior to such successor landlord taking possession;
(4) the tenant I s obligation to pay rent and any additional rent shall not
be subject to any abatement, deduction, counterclaim or setoff as against
Mortgagee or any purchaser upon the foreclosure of any portion of the
Mortgaged Property or the giving or granting of a deed in lieu thereof
(dation en paiement) by reason of a landlord default occurring prior to such
foreclosure, and Mortgagee or such purchaser will not be bound by any
advance payments of rent in excess of one month or any security deposits
unless such security was actually received by Mortgagee; and
(5) the tenant agrees to attorn, at the option of Mortgagee or any
purchaser of the Mortgaged Property, to the successor owner upon a
foreclosure of the Mortgaged Property or the giving or granting of a deed in
lieu thereof (dation en paiement); and
(D) terminate or permit the termination of any Lease of space, accept
surrender of all or any portion of the space demised under any Lease prior
to the end of the term thereof or accept assignment of any Lease to
Mortgagor which, individually or in the aggregate, would have a Material
Adverse-Effect or materially impair the Lien of this Mortgage therein
unless:
(1) the tenant under such Lease has not paid the equivalent of two months I
rent and Mortgagor has made reasonable efforts to collect such rent; or
(2) Mortgagor shall deliver to Mortgagee an Officer's Certificate to the
effect that Mortgagor has entered into a new Lease (or Leases) for the space
covered by the terminated or assigned Lease with a term (or terms) which
expire(s) no earlier than the date on which the terminated or assigned Lease
was to expire (excluding renewal options), and with a tenant (or tenants)
having a creditworthiness sufficient to pay the rent and other charges due
under the new Lease (or Leases), and the tenant(s) shall have commenced
paying rent, including, without limitation, all operating expenses and other
amounts payable under the new Lease (or Leases), without any abatement or
concession, in an amount at least equal to the amount which would have then
been payable under the terminated or assigned Lease.
(iv) Mortgagor timely shall perform and observe all the terms, covenants
and conditions required to be performed and observed by Mortgagor under each
Lease and will not engage in any conduct in respect of any Lease which would
have individually or in the aggregate a Material Adverse Effect or
materially impair the Lien of this Mortgage or the security interest created
hereby. Mortgagor promptly shall notify Mortgagee of the receipt of any
notice from any lessee under any Lease claiming that Mortgagor is in default
in the performance or observance of any of the terms, covenants or
conditions thereof to be performed or observed by Mortgagor and will cause a
copy of each such notice to be delivered promptly to Mortgagee.
(p) Transfer Restrictions. Mortgagor shall not, without the prior written
consent of Mortgagee, further mortgage, encumber, hypothecate, sell, convey,
assign or lease all or any part of the Mortgaged Property or suffer any of
the foregoing to occur by operation of law or otherwise (each a "Transfer"),
except in accordance with the provisions of Section 5.20 of the Indenture,
the terms of which are incorporated herein by this reference.
Notwithstanding the foregoing, the Mortgagor may grant a mortgage junior to
this Mortgage for improvements to the Mortgaged Property consistent with the
contemplated use of such property.
(q) Destruction; Condemnation.
(i) Destruction: Insurance Proceeds. If there shall occur any damage to,
or loss or destruction of, the Improvements and Equipment, or any part of
any thereof (each, a "Destruction"), Mortgagor shall promptly send to
Mortgagee a notice setting forth the nature and extent of such Destruction.
The proceeds of any insurance payable in respect of any such Destruction are
hereby assigned and shall be paid to Mortgagee to be held in the Collateral
Account. All insurance proceeds paid to Mortgagee pursuant to this
subsection, less the amount of any expenses incurred in litigating,
arbitrating, compromising or settling any claim arising out of such
Destruction (the "Insurance Proceeds"), shall constitute Trust Moneys and be
applied in accordance with the provisions of subsections IV(a)(iii),
IV(q)(iv) and IV (q)(v).
(ii) Condemnation; Assignment of Award. If there shall occur any taking of
the Mortgaged Property or any part thereof, in or by condemnation or other
eminent domain proceedings pursuant to any law, general or special, or by
reason of the temporary requisition of the use or occupancy of the Mortgaged
Property or any part thereof, by any Governmental Authority, civil or
military (each, a "Taking") , Mortgagor immediately shall notify Mortgagee
upon receiving notice of such Taking or commencement of proceedings
therefor. Mortgagee may (but shall not be obligated to) participate in any
proceedings or negotiations which might result in any Taking. Mortgagee may
be represented by counsel satisfactory to it at the expense of Mortgagor.
Mortgagor shall deliver or cause to be delivered to Mortgagee all
instruments requested by it to permit such participation. Mortgagor shall
in good faith and with due diligence file and prosecute what would otherwise
be Mortgagor's claim for any such award or payment and cause the same to be
collected and paid over to Mortgagee, and hereby irrevocably authorizes and
empowers Mortgagee, in the name of Mortgagor as its true and lawful
attorney-in-fact or otherwise to collect and to receipt for any such award
or payment, and, in the event Mortgagor fails so to act, to file and
prosecute such claim. Mortgagor shall pay all costs, fees and expenses
incurred by Mortgagee in connection with any Taking and seeking and
obtaining any award or payment on account thereof. Any proceeds, award or
payment in respect of any Taking are hereby assigned and shall be paid to
Mortgagee to be held in the Collateral Account. Mortgagor shall take all
steps necessary to notify the condemning authority of such assignment. Such
proceeds, award or payment paid to Mortgagee, less the amount of any
expenses incurred in litigating, arbitrating, compromising or settling any
claim arising out of such Taking ("Net Award") , shall constitute Trust
Moneys and be applied in accordance with the provisions of subsections
IV(q)(iii), IV(q)(iv)- and IV(q)(v).
Payment or Restoration. So long as no Event of Default shall have occurred
and be continuing, Mortgagor shall have the right, at Mortgagor's option, to
require Mortgagee to apply such Net Award or Insurance Proceeds to the
payment of the Secured Obligations, in accordance with the Indenture or to
perform a restoration (each, a "Restoration") of the affected portions of
the Mortgaged Property and the Equipment. In the event that Mortgagor
elects to make such payment, such Net Award or Insurance Proceeds shall be
delivered to Mortgagee to be held as Trust Moneys subject to withdrawal and
application by Mortgagee in accordance with the provisions of the Indenture.
In the event Mortgagor elects to perform a Restoration, Mortgagor shall give
written notice ("Restoration Election Notice") of such election to Mortgagee
within twenty (20) business days after the date that Mortgagee receives the
applicable Insurance Proceeds or Net Award, as the case may be. Mortgagor
shall, within twenty (20) business days following the date of delivery of a
Restoration Election Notice, commence and diligently continue to perform the
Restoration of that portion or portions of the Mortgaged Property and
Equipment subject to such Destruction or affected by such Taking so that,
upon the completion of the Restoration, the Mortgaged Property shall be in
the same condition and shall be of at least equal utility for its intended
purposes as the Mortgaged Property was immediately prior to such Destruction
or Taking. Mortgagor shall so complete such Restoration with its own funds
to the extent that the amount of any Net Award or Insurance Proceeds is
insufficient for such purpose. In the event Mortgagee does not receive a
Restoration Election Notice within such twenty (20) business day period,
Mortgagee shall apply such Insurance Proceeds or Net Award to the payment of
the Secured Obligations, in accordance with the provisions of the Indenture.
(iv) Restoration. In the event a Restoration is to be performed under this
subsection IV(a)(iv), Mortgagee shall not release any part of the Net Award
or the Insurance Proceeds except in accordance with the provisions of '
subsection IV (c[) (v) and Mortgagor shall, prior to commencing any work to
effect a Restoration of the Mortgaged Property and the Equipment, promptly
(but in no event later than sixty (60) days following any Destruction or
Taking) furnish to Mortgagee:
(A) complete plans and specifications (the "Plans and Specifications")
for the Restoration;
(B) an officer's certificate stating that all permits and approvals
required by law to commence work in connection with the Restoration have
been obtained;
(C) a certificate (an "Architect's Certificate") of an independent,
reputable architect or engineer acceptable to Mortgagee and licensed in the
State (1) stating that the Plans and Specifications have been reviewed and
approved by the signatory thereto, (2) containing such signatory's estimate
(an "Estimate") of the costs of completing the Restoration, and (3) upon
completion of such Restoration in accordance with the Plans and
Specifications, the utility of the Mortgaged Property and the Equipment will
be equal to or greater than the utility thereof immediately prior to the
Destruction or Taking relating to such Restoration; and
(D) if the Estimate exceeds the Insurance Proceeds or the Net Award, as
the case may be, by $5,000,000 or more, an Additional Undertaking in an
amount equal to not less than the Estimate less the amount of the Insurance
Proceeds or the Net Award, as the case may be, then held by Mortgagee for
application toward the cost of such Restoration.
Upon receipt by Mortgagee of each of the items required pursuant to clauses
(A) through (D) above, Mortgagee shall acknowledge receipt of the Plans and
Specifications. Promptly upon such acknowledgment of receipt by Mortgagee,
Mortgagor shall commence and diligently continue to perform the Restoration
substantially in accordance with such Plans and Specifications and in
material compliance with all Governmental Requirements, free and clear of
all Liens except Excepted Liens. Mortgagor shall so complete such
Restoration with its own funds to the extent that the amount of any Net
Award or Insurance Proceeds is insufficient for such purpose.
(v) Restoration Advances Following Destruction or Taking of Mortgaged
Property. In the event Mortgagor performs a Restoration of the Mortgaged
Property and Equipment as provided in subsection IV (a) (iv) , Mortgagee
shall apply any Insurance Proceeds or Net Award held by Mortgagee on account
of the Destruction or Taking to the payment of the cost of performing such
Restoration pursuant to the relevant provisions of the Indenture. In the
event there shall be any surplus after application of the Net Award or the
Insurance Proceeds to Restoration of the Mortgaged Property and the
Equipment, such surplus shall be paid by Mortgagor to the Mortgagee for
application in accordance with the Indenture; provided, however, that if an
Event of Default shall have occurred and be continuing, such surplus shall
be applied by Mortgagee to the payment of the Secured Obligations.
Notwithstanding anything to the contrary herein, if a Destruction or Taking
of all or substantially all of the Mortgaged Property occurs on a date which
is less than 12 months prior to Maturity, as such term is defined in the
Indenture, all Insurance Proceeds and Net Awards shall be applied to the
permanent repayment or prepayment of any Secured Obligations then
outstanding in accordance with the Indenture.
(r) Alterations mortgagor shall not make any material structural
addition, modification or change (each, an "Alteration") to the Mortgaged
Property or the Equipment, except as is necessary to achieve the
contemplated use of the Mortgaged Property.
(s) Hazardous Material.
(i) Mortgagor holds all Permits required to permit Mortgagor to conduct
its business in the manner now or contemplated to be conducted and none of
the Mortgagor I s operations are being conducted in a manner that violates
the terms and conditions under which any such Permit was granted, including
without limitation, under any Environmental Laws; all such Permits are valid
and in full force and effect; and to the knowledge of Mortgagor, no
suspension, cancellation, revocation or termination of any such Permit is
threatened.
(ii) There are no claims, actions, suits, proceedings or investigations
pending or to the knowledge of Mortgagor, threatened, before any
Governmental Authority or before any arbitrator brought by or against
Mortgagor or with respect to any of the Mortgaged Property the basis of
which is any Environmental Law.
(iii) Mortgagor shall (A) comply with any and all applicable present
and future Environmental Laws relating to the Mortgaged Property; (B) pay in
a timely fashion the cost of any removal, response measure or corrective
action relating to any Hazardous Materials required by any Environmental Law
or any order, regulation, consent decree or similar agreement or instrument
and keep the Mortgaged Property free of any Lien imposed pursuant to any
Environmental Law; (C) not release, discharge or dispose of any Hazardous
Materials on, under or from the Mortgaged Property in violation of any
Environmental Law; (D) apply any insurance proceeds or other sums received
by it in respect of the removal of any Hazardous Material or any other
corrective action relating to any Hazardous Material to such removal or
corrective action; and (E) not take, or fail to take any action with respect
to any Environmental Laws or in connection with any Hazardous Materials that
could reasonably be expected to result in the incurrence of any obligation
or liability of Mortgagee or any other Secured Party. In the event
Mortgagor fails to comply with the covenants in the preceding sentence,
Mortgagee may, in addition to any other remedies set forth herein, but shall
not be obligated to, as Mortgagee for and at Mortgagor's sole cost and
expense cause to be taken, any remediation, removal, response or corrective
action relating to Hazardous Materials that is required by Environmental Law
and is not being done or contested by Mortgagor. Any costs or expenses
incurred by Mortgagee for such purpose shall be immediately due and payable
by Mortgagor and shall bear interest at the Note Rate. Mortgagor shall
provide to Mortgagee and its agents and employees access to the Mortgaged
Property to take any action required by Environmental Laws, or in connection
with any Hazardous Materials, that could be expected to result in the
incurrence of any obligation or liability of Mortgagee or any other Secured
Party, if Mortgagor fails to do so and such action or removal is required
under any Environmental Laws as provided above. Upon written request by
Mortgagee, and which shall be made not more frequently than once in any six-
month period or at any time that Mortgagee is exercising its remedies under
this Mortgage, Mortgagee shall have the right, but shall not be obligated,
at the sole cost and expense of Mortgagor, to conduct an environmental audit
or review of the Mortgaged Property relating to the specific items as
required in writing or relating to- the remedy that Mortgagee is exercising
under this Mortgage by persons or firms appointed by Mortgagee, and
Mortgagor shall cooperate in all reasonable respects in the conduct of such
environmental audit or review, including, without limitation, by providing
reasonable access to the Mortgaged Property and to all records relating
thereto. Nothing contained herein shall result in Mortgagee or any other
Secured Party being deemed an "owner" or "operator" under applicable
Environmental Law.
(iv) Mortgagor may at its own expense contest the amount or
applicability of any of the obligations described in the first sentence of
subsection IV(s)(iii) by appropriate legal proceedings, prosecution of which
operates to prevent the enforcement thereof; provided, however, that (A) any
such contest shall be conducted in good faith by appropriate legal
proceedings promptly instituted and diligently conducted and (B) in
connection with such contest, Mortgagor shall have made provision for the
payment or performance of such contested obligation on Mortgagee's books if
and to the extent required by generally accepted accounting principles then
utilized by Mortgagor in the preparation of its financial statements, or
shall have deposited with Mortgagee a sum sufficient to pay and discharge
such obligation and Mortgagee's estimate of all interest and penalties
related thereto. Notwithstanding the foregoing provisions of this
subsection IV (s) (iv) , no contest of any such obligations may be pursued
by Mortgagor if such contest would expose Mortgagee or any other Secured
Party to any possible criminal liability, or any civil liability for failure
to comply with such obligations.
(t) Asbestos. Mortgagor shall not install nor permit to be installed
in the Mortgaged Property asbestos or any asbestos containing material
(collectively, "ACM") . With respect to any ACM currently present in the
Mortgaged Property, Mortgagor shall comply with all federal, state or local
laws, regulations or orders applicable to ACM located on the Mortgaged
Property, all at Mortgagor's sole cost and expense. If Mortgagor shall fail
so to comply with such laws or regulations, Mortgagee may, but shall not be
obligated to, in addition to any other remedies set forth herein, take those
steps reasonably necessary to comply with applicable law, regulations or
orders. Any costs or expenses incurred by Mortgagee for such purpose shall
be immediately due and payable by Mortgagor and bear interest at the Note
Rate. Mortgagor shall provide to Mortgagee and its agents and employees
reasonable access to the Mortgaged Property upon reasonable prior notice to
remove such ACM if Mortgagor fails to do so; provided, however, that nothing
contained herein shall obligate Mortgagee to exercise any rights under such
license. Mortgagor shall indemnify and hold the Mortgagee or any other
Secured Party harmless from and against all loss, cost, damage and expense
that Mortgagee or any other Secured Party may sustain as a result of the
presence in or on the Mortgaged Property of any ACM and any removal thereof.
(u) Books and Records; Reports. Mortgagor shall keep proper books of
record and account, which shall accurately represent the financial condition
of Mortgagor and the business affairs of Mortgagor relating to the Mortgaged
Property. Mortgagee and its authorized representatives shall have the
right, from time to time, upon reasonable prior notice to examine the books
and records of Mortgagor relating to the operation of the Mortgaged Property
at the office of Mortgagor.
(v) No Claims Against Mortgagee. Nothing contained in this Mortgage
shall constitute any consent or request by Mortgagee, express or implied,
for the performance of any labor or services or the furnishing of any
materials or other property in respect of the Mortgaged Property or any part
thereof, nor as giving Mortgagor any right, power or authority to contract
for or permit the performance of any labor or services or the furnishing of
any materials or other property in such fashion as would permit the making
of any claim against Mortgagee in respect thereof or any claim that any Lien
based on the performance of such labor or services or the furnishing of any
such materials or other property is prior to the Lien of this Mortgage.
(w) Utility Services. Mortgagor shall pay, or cause to be paid, when
due all charges for all public or private utility services, all public or
private rail and highway services, all public or private communication
services, all sprinkler systems, and all protective services, any other
services of whatever kind or nature at any time rendered to or in connection
with the Mortgaged Property or any part thereof, shall comply in all
material respects with all contracts relating to any such services, and
shall do all other things reasonably required for the maintenance and
continuance of all such services to the extent required to fulfill the
obligations set forth in subsection IV(n).
(x) Notwithstanding any provisions herein to the contrary, Mortgagor
shall retain the right, at all times prior to foreclosure [or deed-in-lieu
(dation en paiement) thereof], to exercise custody and control with respect
to actions to be taken at the Mortgaged Property relating to the
environmental condition thereof.
(y) Prohibition of Construction of Unowned Improvements. Mortgagor
shall not allow the construction of any improvements on the Land that will
not be owned by Mortgagor ("'Unowned Improvements"), unless the owner of the
Unowned Improvements shall execute a mortgage ("New Mortgage") bearing
against the Unowned Improvements to further secure the Secured Obligations.
The New Mortgage is to be: (i) in form and substance substantially similar
to this Mortgage and acceptable to Mortgagee, (ii) a first Lien upon a good
and merchantable title to the Unowned Improvements, and (iii) fully executed
and filed for registry prior to (A) the filing of the Notice of any contract
for the Unowned Improvements, as required by Louisiana Revised Statutes
9:4811, and (B) the beginning of the work for the Unowned Improvements, as
defined by Louisiana Revised Statutes 9:482OA(2).
(z) All of the representations and warranties contained in this Section
or elsewhere in this Mortgage shall be true through and until the date on
which all obligations of Mortgagor under this Mortgage and the Secured
Obligations are fully paid or satisfied, and Mortgagor shall promptly notify
Mortgagee of any event which would render any of said representations and
warranties untrue or misleading.
SECTION V - ASSIGNMENT OF LEASES, RENTS, ISSUES AND PROFITS
(a) To further secure the full and punctual payment and performance of
the Secured Obligations up to the Maximum Amount outstanding at any time and
from time to time, the Mortgagor does hereby assign and pledge unto
Mortgagee, and grant a continuing security interest in and to, subject to
the terms and conditions
hereof, all of the Mortgagor's estate, right, title and interest (the
"Mortgagor's Interest") in the Leases and Rents including, without
limitation, the following:
(i) the immediate and continuing right to receive and collect Rents
payable by all tenants or other parties pursuant to Leases;
(ii) all claims, rights, powers, privileges and remedies of Mortgagor,
whether provided for in any Lease or arising by statute or at law or in
equity or otherwise, consequent on any failure on the part of any tenant to
perform or comply with any term of any Lease;
(iii) all rights to take all actions upon the happening of a default
under any Lease as shall be permitted by such Lease or by law, including,
without limitation, the commencement, conduct and consummation of
proceedings at law or in equity; and
(iv) the full power and authority, in the name of Mortgagor or
otherwise, to enforce, collect, receive and receipt for any and all of the
foregoing and to do any and all other acts and things whatsoever which
Mortgagor or any landlord is or may be entitled to do under the Leases or by
law.
(b) Any Rents received by Mortgagee hereunder, after payment of all
proper costs and charges, shall be applied to all amounts due and owing with
respect to the Secured Obligations. Mortgagee shall be accountable to
Mortgagor only for Rents actually received by Mortgagee pursuant to this
assignment. The collection of such Rents and the application thereof shall
not cure or waive any Event of Default or waive, modify or affect notice of
an Event of Default or invalidate any act done pursuant to such notice.
(c) So long as no Event of Default shall have occurred and be
continuing, Mortgagor shall have a license to collect and apply the Rents
and to enforce the obligations of tenants under the Leases. Immediately
upon the occurrence and during the continuance of any Event of Default, the
license granted in the immediately preceding sentence shall cease and
terminate, with or without any notice, action or proceeding. Upon such
Event of Default and during the continuance thereof, Mortgagee may (but
shall not be obligated to) to the fullest extent permitted by the Leases (i)
exercise any of Mortgagor's rights under the Leases, (ii) enforce the
Leases, (iii) demand, collect, sue for, attach, levy, recover, receive,
compromise and adjust, and make, execute and deliver receipts and releases
for all Rents or other payments that may then be or may thereafter become
due, owing or payable with respect to the Leases and (iv) generally do,
execute and perform any other act, deed, matter or thing whatsoever that
ought to be done, executed and performed in and about or with respect to the
Leases, as fully as allowed or authorized by the Mortgagor's Interest.
(d) During the continuance of each and every Event of Default,
Mortgagor hereby irrevocably authorizes and directs the tenant under each
Lease to pay directly to, or as directed by, Mortgagee all Rents accruing or
due under its Lease. Mortgagor hereby authorizes the tenant under each
Lease to rely upon and comply with any notice or demand from Mortgagee for
payment of Rents to Mortgagee and Mortgagor shall have no claim against any
tenant for Rents paid by such tenant to Mortgagee pursuant to such notice or
demand.
(e) Mortgagor at its sole cost and expense shall enforce all material
provisions of the Leases in accordance with their terms. Neither this
Mortgage nor any action or inaction on the part of Mortgagee shall release
any tenant under any Lease, any guarantor of any Lease or Mortgagor from any
of their respective obligations under the Leases or constitute an assumption
of any such obligation on the part of Mortgagee. No action or failure to
act on the part of Mortgagor shall adversely affect or limit the rights of
Mortgagee under this Mortgage or, through this Mortgage, under the Leases.
(f) All rights, powers and privileges of Mortgagee herein set forth are
coupled with an interest and are irrevocable, subject to the terms and
conditions hereof, and Mortgagor shall not take any action under the Leases
or otherwise which is inconsistent with this Mortgage or any of the terms
hereof and any such action inconsistent herewith or therewith shall be void.
Mortgagor shall, from time to time, upon request of Mortgagee, execute all
instruments and further assurances and all supplemental instruments and take
all such action as Mortgagee from time to time may request in order to
perfect, preserve and protect the interests intended to be assigned to
Mortgagee hereby.
(g) Mortgagor shall not, unilaterally or by agreement, subordinate,
amend, modify, extend, discharge, terminate, surrender, waive or otherwise
change any term of any of the Leases in any manner which would violate this
Mortgage. If the Leases shall be amended as permitted hereby, they shall
continue to be subject to the provisions hereof without the necessity of any
further act by any of the parties hereto.
(h) Nothing contained herein shall operate or be construed to (I)
obligate Mortgagee to perform any of the terms, covenants or conditions
contained in the Leases or otherwise to impose any obligation upon Mortgagee
with respect to the Leases (including, without limitation, any obligation
arising out of any covenant of quiet enjoyment contained in the Leases in
the event that any tenant under a Lease shall have been joined as a party
defendant in any action by which the estate of such tenant shall be
terminated) or (ii) place upon Mortgagee any responsibility for the
operation, control, care, management or repair of any portion of the
Mortgaged Property.
(i) The assignment of Leases and Rents contained in this Section V is
made pursuant to provisions of La. R.S. 9:4401 et sea.
SECTION VI - EVENTS OF DEFAULT
(a) Events of Default. As used in this Mortgage, "Event of Default" shall
mean:
(i) The occurrence of an Event of Default under the Indenture, or
(ii) A breach or violation of the terms of this Mortgage,
or
(iii) If any representation or warranty made by the Mortgagor proves to
have been incorrect in any material respect, or
(iv) A writ or warrant of executory process, fieri facias, attachment
or any similar process being issued by any court against the Mortgaged
Property, and such writ or warrant is not released or bonded within ten (10)
days after its entry.
(b) Remedies. Upon the occurrence and during the continuance of any
Event of Default, in addition to any other rights and remedies Mortgagee may
have pursuant to this Mortgage or as provided by law, the Mortgagee may
declare the entire principal amount of the Secured Obligations then
outstanding including interest accrued thereon to be immediately due and
payable without presentment, demand, protest, notice of protest or dishonor
or other notice of default of any kind, all of which are hereby expressly
waived by the Mortgagor, and without limitation, Mortgagee may take such
action, without notice or demand, as it deems advisable and is permitted by
law to protect and enforce its rights against Mortgagor and in and to the
Mortgaged Property, including, but not limited to, the following actions,
each of which may be pursued concurrently or otherwise, at such time and in
such manner and order as Mortgagee may determine, in its sole discretion,
without impairing or otherwise affecting the other rights and remedies of
Mortgagee, except to the extent otherwise provided by law:
(i)
(A) Mortgagee shall have the right and option to proceed with
foreclosure of the Mortgaged Property in such manner as permitted or
required by applicable law relating to the sale of real estate and exercise
all rights of a secured party under the UCC whether relating to the sale of
collateral after default by a debtor, or otherwise,(as such applicable laws
and UCC now exist or as may be hereafter amended)or by any other present or
subsequent articles or enactments relating to the sale of real estate or
collateral.
(B) Mortgagor agrees to surrender possession of the hereinabove
described Mortgaged Property to the purchaser at the aforesaid sale,
immediately after such sale, in the event such possession has not previously
been surrendered by Mortgagor. The right of sale hereunder shall not be
exhausted by one or more such sales, and Mortgagee may cause to occur other
and successive sales until all of the Mortgaged Property be legally sold or
all of the Secured Obligations shall have been paid.
(ii)
(A) Upon the occurrence and during the continuance of any Event of
Default, Mortgagee shall have the right and power to proceed by a suit or
suits in equity or at law, whether for the specific performance of any
covenant or agreement herein contained or in aid of the execution of any
power herein granted, or for any foreclosure hereunder or for the sale of
the Mortgaged Property under the judgment or decree of any court or courts
of competent jurisdiction, or for the appointment of a receiver or keeper
pending any foreclosure hereunder or the sale of the Mortgaged Property
under the order of a court or courts of competent jurisdiction or under
executory or other legal process, or for the enforcement of any other
appropriate legal or equitable remedy. Any money advanced by Mortgagee in
connection with any such receivership shall be a demand obligation (which
obligation Mortgagor hereby expressly promises to pay) owing by Mortgagor to
Mortgagee and shall bear interest from the date of making such advance by
Mortgagee until paid at the Note Rate, all of which shall constitute a
portion of the Secured Obligations and shall be secured by this Mortgage and
by any other instrument securing the Secured Obligations.
(B) Mortgagor agrees to the full extent that it lawfully may, that, in
case one or more of the Events of Default shall have occurred and shall not
have been remedied, then, and in every such case, Mortgagee shall have the
right and power to enter into and upon and take possession of all or any
part of the Mortgaged Property in the possession of Mortgagor, its
successors or assigns, or its or their agents or servants, and may exclude
Mortgagor, its successors or assigns, and all persons claiming under
Mortgagor, and its or their agents or servants wholly or partly therefrom;
and, holding the same, Mortgagee may use, administer, manage, operate and
control the Mortgaged Property and conduct the business thereof to the same
extent as Mortgagor, its successors or assigns, might at the time do and may
exercise all rights and powers of Mortgagor, in the name, place and stead of
Mortgagor, or otherwise as Mortgagee shall deem best. All costs, expenses
and liabilities of every character incurred by Mortgagee in administering,
managing, operating, and controlling the Mortgaged Property shall constitute
a demand obligation (which obligation Mortgagor hereby expressly promises to
pay) owing by Mortgagor to Mortgagee and shall bear interest from date of
expenditure until paid at the Note Rate, all of which shall constitute a
portion of the Secured Obligations and shall be secured by this Mortgage and
by any other instrument securing the Secured Obligations. In connection
with any action taken by Mortgagee pursuant to this subsection (ii),
Mortgagee shall not be liable for any loss sustained by Mortgagor resulting
from any act or omission of Mortgagee in administering, managing, operating
or controlling the Mortgaged Property, including a loss arising from the
ordinary negligence of Mortgagee, unless such loss is caused by its own
gross negligence or willful misconduct and bad faith, nor shall Mortgagee be
obligated to perform or discharge any obligation, duty or liability of
Mortgagor.
(C) Mortgagor shall and does herein agree to indemnify Mortgagee for,
and to hold Mortgagee harmless from, any and all liability, loss or damage
which may or might be incurred by Mortgagee by reason of this Mortgage or
the exercise of rights or remedies hereunder, including a loss arising from
the ordinary negligence of the Mortgagee, except as such liability, loss or
damage is occasioned by the gross negligence or willful misconduct of such
party; should Mortgagee make any expenditure on account of any such
liability, loss or damage, the amount thereof, including costs, expenses and
reasonable attorneys, fees, shall be a demand obligation (which obligation
Mortgagor hereby expressly promises to pay) owing by Mortgagor to Mortgagee
and shall bear interest from the date expended until paid at the Note Rate,
shall be a part of the Secured Obligations and shall be secured by this
Mortgage and any other instrument securing the Secured Obligations.
(D) Mortgagor hereby assents to, ratifies and confirms any and all
actions of Mortgagee with respect to the Mortgaged Property taken under this
paragraph (ii).
(iii) Every right, power and remedy herein given to Mortgagee shall be
cumulative and in addition to every other right, power and remedy herein
specifically given or now or hereafter existing in equity, at law or by
statute; and each and every right, power and remedy whether specifically
herein given or otherwise existing may be exercised from time to time and so
often and in such order as may be deemed expedient by Mortgagee, and the
exercise, or the beginning of the exercise, of any such right, power or
remedy shall not be deemed a waiver of the right to exercise, at the same
time or thereafter any other right, power or remedy. No delay or omission
by Mortgagee in the exercise of any right, power or remedy shall impair any
such right, power or remedy or operate as a waiver thereof or of any other
right, power or remedy then or thereafter existing.
(iv) To the extent permitted under applicable law, Mortgagee shall have
the right (but shall not be obligated to) to become the purchaser at any
sale held by any receiver or public officer, whether by judicial procedure
or otherwise, and shall have the right (but shall not be obligated to) to
have all or any part of the Secured Obligations then owing credited against
the amount of the bid made by Mortgagee at such sale.
(v) Upon any sale, whether or by virtue of judicial proceedings or
otherwise, it shall not be necessary for any public officer acting under
execution or order of court to have physically present or constructively in
his or her possession any of the Mortgaged Property, and Mortgagor hereby
agrees to deliver all of such personal property to the purchasers at such
sale on the date of sale, and if it should be impossible or impracticable to
make actual delivery of such property, then the title and right of
possession to such property shall pass to the purchaser at such sale as
completely as if such property had been actually present and delivered.
(vi) Upon any sale, whether made or by virtue of judicial proceedings
or otherwise, the receipt of the officer making a sale under judicial
proceedings, shall be a sufficient discharge to the purchaser or purchasers
at any sale for his or her or their purchase money, and such purchaser or
purchasers, his or her or their assigns or personal representatives, shall
not,-after paying such purchase money and receiving such receipt of such
officer therefor, be obliged to see to the application of such purchase
money, or be in anywise answerable for any loss, misapplication or
nonapplication thereof.
(vii)
(A) Any sale or sales of the Mortgaged Property or any part thereof,
whether under and by virtue of judicial proceedings or otherwise, shall
operate to divest all right, title, interest, claim and demand whatsoever,
either at law or in equity, of Mortgagor of, in and to the Premises and the
Mortgaged Property sold, and shall be a perpetual bar, both at law and in
equity, against Mortgagor, its successors and assigns, and against any and
all persons claiming or who shall thereafter claim all or any of the
property sold from, through or under Mortgagor, its successors and assigns;
and Mortgagor, if requested by Mortgagee to do so, shall join in the
execution and delivery of all proper conveyances,, assignments and transfers
of the properties so sold.
(B) The proceeds of any sale of the Mortgaged Property or any part
thereof and all other moneys received by Mortgagee in any proceedings for
the enforcement hereof, whose application has not elsewhere herein been
specifically provided for, shall be applied first, to the payment of all
expenses incurred by Mortgagee incident to the enforcement of this Mortgage
or any of the Secured Obligations (including, without limiting the
generality of the foregoing, expenses of any entry or taking of possession,
of any sale, of advertisement thereof, and of conveyances, and court costs,
compensation of agents and employees and reasonable attorneys' fees), and to
the payment of all other charges, expenses, liabilities and advances
incurred or made by Mortgagee under this Mortgage; and then to the payment
of the Secured Obligations in such order and manner as is determined by
Mortgagee in its sole discretion.
(C) Mortgagee may resort to any security given by this Mortgage or to
any other security now existing or hereafter given to secure the payment of
any of the Secured Obligations secured hereby, in whole or in part, and in
such portions and in such order as may seem best to Mortgagee in its sole
discretion and any such action shall not in anywise be-considered as a
waiver of any of the rights, benefits or Liens created by this Mortgage.
(D) Mortgagor agrees, to the full extent that it may lawfully so agree,
that it will not at any time insist upon or plead or in any manner whatever
claim or take the benefit or advantage of any appraisement, valuation, stay,
extension or redemption law now or hereafter in force, in order to prevent
or hinder the enforcement or foreclosure of this Mortgage or the absolute
sale of the Mortgaged Property or the possession thereof by any purchaser at
any sale made pursuant to any provision hereof, or pursuant to the decree of
any court of competent jurisdiction; but Mortgagor, for itself and all who
may claim through or under it, so far as it or they now or hereafter
lawfully may, hereby waives the benefit of all such laws. Mortgagor, for
itself and all who may claim through or under it, waives any and all right
to have the property included in the Mortgaged Property marshaled upon any
foreclosure of the Lien hereof, and agrees that any court having
jurisdiction to foreclose such Lien may sell the Mortgaged Property as an
entirety. If any law referred to herein and now in force, of which
Mortgagor or its successor or successors might take advantage despite the
provisions hereof, shall hereafter be repealed or cease to be in force, such
law shall not thereafter be deemed to constitute any part of the contract
herein contained or to preclude the operation or application of the
provisions hereof.
(E) If the proceeds of any sale or other lawful disposition of the
Mortgaged Property by Mortgagee are insufficient to pay the Secured
Obligations, then Mortgagor shall pay or cause to be paid any deficiency.
(viii) Without in any manner limiting the generality of any of the
other provisions of this Mortgage; (A) some portions of the goods described
or to which reference is made herein are or are to become fixtures on the
Land described or to which reference is made herein; (B) the security
interests created hereby under the UCC will, to the extent not covered by
the mortgage created herein, attach to minerals including oil and gas; (C)
this Mortgage may be filed as a financing statement; and (D) Mortgagor is
the record owner of the real estate or interests in the real estate
comprised of the Mortgaged Property.
(ix) The Mortgaged Property may be sold in one or more parcels or as a
whole and in such manner and order as Mortgagee, in its sole discretion, may
determine.
(x) For purposes of Louisiana executory process, Mortgagor acknowledges
the Secured Obligations secured hereby, whether now existing or to arise
hereafter, and confesses judgment thereon if not paid when due, including,
but not limited to, principal, interest, late charges, attorneys' fees,
court costs, and any and all other sums due from Mortgagor to Mortgagee.
Upon the occurrence of an Event of Default hereunder and at any time
thereafter so long as the same shall be continuing, and in addition to all
other rights and remedies granted Mortgagee hereunder, it shall be lawful
for and Mortgagor hereby authorizes Mortgagee without making a demand or
putting Mortgagor in default, a putting in default being expressly waived,
to cause all and singular the Mortgaged Property to be seized and sold,
Mortgagor-waiving the benefit of any and all laws or parts of laws relative
to appraisement of property, seized and sold under executory process or
other legal process, and consenting that the Mortgaged Property be sold
without appraisement, either in its entirety or in lots or parcels, as
Mortgagee may determine, to the highest bidder for cash or on such other
terms as the plaintiff in such proceedings may direct. In addition,
Mortgagee shall have all of the rights and remedies available to it under
this Mortgage, as a mortgagee under Louisiana law or as a secured party
under the UCC, then in effect.
(xi) Mortgagor hereby waives in favor of the Mortgagee:
(A) the benefit of appraisement provided for in Articles 2332, 2336,
2723 and 2724 of the Louisiana Code of Civil Procedure and all other laws
conferring the same;
(B) the demand f or payment and three (3) days notice of demand for
payment as provided in Articles 2639 and 2721 of the Louisiana Code of Civil
Procedure;
(C) the notice of seizure provided by Articles 2293 and 2721 of the
Louisiana Code of Civil Procedure; and
(D) the three (3) days delay provided for in Articles 2331 and 2722 of
the Louisiana Code of Civil Procedure;
(E) the benefit of the other provisions of Articles 2331, 2722 and 2723
of the Louisiana Code of Civil Procedure, not specifically mentioned above;
and
(F) any and all exemptions of seizure or otherwise to which Mortgagor
is or may be entitled under the constitution and statutes of the State of
Louisiana insofar as the Mortgaged Property is concerned.
(xii) In the event the Mortgaged Property, or any part thereof, is
seized as an incident to an action for the recognition or enforcement of
this Mortgage by executory process, ordinary process, sequestration, writ of
fieri facias or otherwise, the Mortgagor and the Mortgagee agree that the
court issuing any such order shall, if petitioned for by Mortgagee, direct
the applicable sheriff to appoint as a keeper of the Mortgaged Property, the
Mortgagee or any agent designated by Mortgagee or any person named by
Mortgagee at the time such seizure is effected, without bond. This
designation is pursuant to Louisiana Revised Statutes 9:5136 through 5140.2,
inclusive, as the same may be amended, and the Mortgagee shall be entitled
to all the rights and benefits afforded thereunder. It is hereby agreed
that the keeper shall be entitled to receive as compensation, in excess of
its reasonable costs and expenses incurred in the administration or
preservation of the Mortgaged Property, an amount equal to 5% of the gross
revenues of the Mortgaged Property, which shall be included in the Secured
Obligations secured by this Mortgage. The designation of keeper made herein
shall not be deemed to require the Mortgagee to provoke the appointment of
such a keeper.
(xiii) Any and all declarations of facts made by authentic act before a
notary public in the presence of two witnesses by a person declaring that
such facts lie within his knowledge, shall constitute authentic evidence of
such facts for the purpose of executory process. The Mortgagor specifically
agrees that such an affidavit by a representative of the Mortgagee as to the
existence, amount, terms and maturity of the Secured Obligations and of a
default thereunder shall constitute authentic evidence of such facts for the
purpose of executory process.
Mortgagee's exercise of the foregoing remedies will not be construed to
constitute Mortgagee as a mortgagee in possession of the Mortgaged Property
nor to obligate Mortgagee to take any action or to incur expenses or perform
or discharge any obligation, duty or liability of Mortgagor under any lease,
or for the control, care, management, or repair of the Mortgaged Property;
nor will it operate to make Mortgagee responsible or liable for any waste
committed on the Mortgaged Property by any Person or for any dangerous or
defective condition of the Mortgaged Property, or for any act or omission
relating to the management, upkeep, repair, or control of the Mortgaged
Property that results in loss or injury or death to any Person.
SECTION VII - CERTAIN DEFINITIONS
As used herein, the following terms shall have the following meanings:
"Additional Undertaking" shall mean (a) cash or cash equivalents or (b)
a Surety Bond, an Additional Undertaking Guarantee or an Additional
Undertaking Letter of Credit which is provided by a Person whose long-term
unsecured debt is rated at least "AA" (or equivalent) by a nationally
recognized statistical rating agency and is otherwise satisfactory to
Mortgagee. Additional Undertakings shall be addressed directly to Mortgagee
and shall name Mortgagee as the beneficiary thereof and the party entitled
to make claims thereunder.
"Additional Undertaking Guarantee" shall mean the unconditional
guarantee of payment of any corporation or partnership organized and
existing under the laws of the United States of America or any State or the
District of Columbia or Canada or province thereof that has a long-term
unsecured debt rating satisfactory to Mortgagee at the time such guarantee
is delivered, given to Mortgagee, accompanied by an opinion of counsel to
such guarantor to the effect that such guarantee has been duly authorized,
executed and delivered by such guarantor and constitutes the legal, valid
and binding obligation of such guarantor enforceable against such guarantor
by Mortgagee in accordance with its terms, subject to customary exceptions
at the time for opinions for such instruments, together with an opinion of
counsel to the effect that, taking into account the purpose under this
Mortgage for which such guarantee will be given, such guarantee and
accompanying opinion are responsive to the requirements of this Mortgage.
"ADDITIONAL UNDERTAKING LETTER OF CREDIT" shall mean a clean, irrevocable,
unconditional letter of credit in favor of Mortgagee and entitling Mortgagee
to draw thereon in The City of New York issued by a bank satisfactory to
Mortgagee, accompanied by an opinion of counsel to such bank to the effect
that such letter of credit has been duly authorized, executed and delivered
by such bank and constitutes the legal, valid and binding obligation of such
bank enforceable against such bank by Mortgagee in accordance with its terms
subject to customary exceptions at the time for opinions for such
instruments, together with an opinion of counsel to the effect that, taking
into account the purpose under - this Mortgage for which such letter of
credit will be given, such letter of credit and accompanying opinion are
responsive to the requirements of this Mortgage.
"COLLATERAL ACCOUNT" shall have the meaning set forth in the Indenture.
"ENVIRONMENTAL LAW" or "ENVIRONMENTAL LAWS" means any and all present and
future statutes, rules, regulations, orders, administrative orders, judicial
orders, judgments, judicial decisions, decrees, laws, rulings, permits,
licenses, certificates, codes and ordinances from any and all federal,
state, parish, district, municipal, city, local and other legislative
bodies, courts, boards, agencies, administrative agencies, commissions,
bodies, councils, offices and authorities of any nature whatsoever in any
way relating to or applicable to (a) the protection of health, safety, and
the indoor and outdoor environment, (b) the conservation, management, and
use of natural resources and wildlife, (c) the protection and use of surface
water and groundwater, (d) the management, manufacture, possession,
presence, use, generation, transportation, treatment, storage, disposal,
release, threatened release, abatement, removal, remediation or handling of,
or exposure to, any Hazardous Materials (as defined herein), and (e)
pollution (including any release to air, land, surface water, and
groundwater), and includes, but is not limited to, the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended
by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C.
559601 et seq., the Solid Waste Disposal Act, as amended by the Resources
Conservation and Recovery Act of 1976 and the Hazardous and Solid Waste
Amendments of 1984, 42 U.S.C. Sec.'s 6901 et seq., the Federal Water
Pollution Control Act, 33 U.S.C. Sec.'s 1251 et seq., the Clean Air Act, 42
U.S.C. 557401 et seq., the Toxic Substances Control Act, 15 U.S.C. 552601 et
seq., the Coastal Zone Management Act of 1972, 16 U.S.C. Sec.'s 51451, et
seq., the Endangered Species Act of 1973, 16 U.S.C. 551531, et seq., the
Coastal Wetlands Planning, Protection and Restoration Act, 16 U.S.C. Sec.'s
3951, et seq., the Hazardous Materials Transportation Act, 49 U.S.C. 551801
et seq., the Occupational Safety and Health Act of 1970, 29 U.S.C. Sec.'s
651 et seq., the Oil Pollution Act of 1990, 33 U.S.C. Sec.'s 52701 et seq.,
the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C.
Sec.'s 11001 et seq., the National Environmental Policy Act of 1969, 42
U.S.C. 554321 et seq., the Noise Control Act of 1972, 42 U.S.C. Sec.'s 4901,
et seq., the Safe Drinking Water Act,' 42 U.S.C. Sec.'s 5300(f) et seq., the
Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. Sec.'s 136 et
seq., any and all similar or related state laws and regulations, including,
but not limited to, the Louisiana Environmental Quality Act, La. R.S.
Sec.'s 30:2001 et seq., the State and Local Coastal Resources Management Act
of 1978, La. R. S. Sec.'s 549:214.21 et seq., the Louisiana Coastal
Wetlands Conservation and Restoration Act, La. R.S. Sec.'s 49:214.1 et seq.,
the Louisiana Abandoned Oilfield Waste Site Law, La. R.S. Sec.'s 30:71 et
seq., the Louisiana Oilfield Site Restoration Law, La. R. S. Sec.'s 30:80
et seq., the Louisiana Hazardous Materials Transportation and Motor Carrier
Safety Act, La. R.S. Sec.'s 532:1501 et seq., the Louisiana Pesticide Law,
La. R.S. Sec.'s 3:3301 et seq., the Natural Resources and Energy Act of
1973 and the Louisiana Hazardous Liquid Pipeline Law, La. R.S. Sec.'s
30:501 et seq., the Surface Mining and Reclamation Act, La. R.S. Sec.'s
30:901 et seq., the Threatened and Endangered Species Conservation Law, La.
R.S. 5556:1901 et seq., any and all similar, implementing or successor laws,
and any and all amendments, rules, regulations orders and directives issued
thereunder or relating thereto.
"EXCEPTED-LIENS" shall mean those Liens listed on Exhibit A attached hereto.
"GOVERNMENTAL AUTHORITY" shall include the country, the state, parish, city
and political subdivisions in which any Person or such Person's Property is
located or which exercises valid jurisdiction over any such Person or such
Person's Property, and any court, agency, department, commission, board,
bureau or instrumentality of any of them including monetary authorities
which exercises valid jurisdiction over any such Person or such Person's
Property. Unless otherwise specified, all references to Governmental
Authority herein shall mean a Governmental Authority having jurisdiction
over, where applicable, Mortgagor or Mortgagee or any other Secured Party.
"GOVERNMENTAL REQUIREMENT" shall mean any law, statute, code, ordinance,
order, determination, rule, regulation, judgment, decree, injunction,
franchise, permit, certificate, license, authorization or other directive or
requirement, including, without limitation, Environmental Laws, energy
regulations and occupational safety and health standards or controls, of any
Governmental Authority.
"HAZARDOUS MATERIALS" means any and all hazardous or toxic chemicals, waste,
by-products, pollutants, contaminants, compounds, products or substances,
including, without limitation, medical waste, biological waste, asbestos
(including asbestos containing materials or substances), polychlorinated
byphonyls, petroleum (including crude oil or any fraction thereof, petroleum
derivatives, and petroleum by-products), any and all materials of any and
every kind, the exposure to, or manufacture, possession, presence, use,
generation, storage, transportation, treatment, spill, release, disposal,
abatement, clean-up, removal, remediation or handling of which, either by
itself or in combination with other materials located or expected to be on
or near the Mortgaged Property, (a) is prohibited, controlled or regulated
by any Environmental Law, (b) poses a threat or nuisance to health, safety,
welfare, the environment, or the Mortgaged property, (c) due to its
characteristics or interaction with one or more other substances, wastes,
chemicals, compounds or mixtures, damages or threatens to damage health,
safety, or the environment or is required to be remediated by any law,
including, but not limited to, Environmental Laws, (d) is hazardous, toxic,
ignitable, radioactive, corrosive, or reactive and which is regulated by any
law, including, but not limited to, Environmental Laws, (e) is regulated or
monitored by any governmental authority, or (f) is a basis for potential
liability of Mortgagor to any governmental authority or third party under
any Environmental Law or any other applicable law, rule, judgment, order or
regulation. Hazardous Materials shall include, but are not limited to,
hydrocarbons, petroleum, gasoline, crude oil and any products or byproducts
thereof.
"HOLDER" or "NOTEHOLDER" shall mean the person in whose name the Notes, or
any one of them is officially registered from time to time pursuant to the
terms of the Indenture.
"LIEN" shall mean any interest in the Mortgaged Property owed to, or a claim
by a Person, whether such interest is based on law, statute or contract, and
whether such obligation or claim is fixed or contingent, and including but
not limited to the lien or security interest arising from a mortgage,
encumbrance, pledge, security agreement, conditional sale or trust receipt
or a lease, consignment or bailment for security purposes. The term "LIEN"
shall also include reservations, exceptions, encroachments, easements,
rights of way, covenants, conditions, restrictions, leases and other title
exceptions and encumbrances affecting the Mortgaged Property.
"MATERIAL ADVERSE EFFECT" shall mean, as to any Person, asset or Property, a
material adverse effect on the business, assets, properties, condition
(financial or other), operations or results of operations of such Person,
asset or Property, which effect is not adequately and effectively insured or
indemnified against by a financially sound insurance company, and excepting
effects arising solely out of general national economic conditions and/or
effects arising solely out of matters affecting the industry in which such
Person, asset or Property conducts business a whole.
"NOTE RATE" shall mean the rate borne by the Notes, that is 11-1/2% per
annum.
"NOTEHOLDER" see "HOLDER"
"PERSON" shall mean any individual, corporation, company, voluntary
association, partnership, joint venture, trust, unincorporated organization
or government or any agency, instrumentality or political subdivision
thereof, or any other form of entity.
"PROPERTY" shall mean any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible.
"STATE" shall mean the state where the Land is located.
"SURETY BOND" shall mean a clean irrevocable surety bond or credit insurance
policy in favor of Mortgagee issued by an insurance company the claims
paying ability rating of which at the time such surety bond or credit
insurance policy is delivered is satisfactory to Mortgagee, accompanied by
an opinion of counsel to such insurance company to the effect that such
surety bond or credit insurance policy has been duly authorized, executed
and delivered by such insurance company and constitutes the legal, valid and
binding obligation of such insurance company enforceable against such
insurance company by Mortgagee in accordance with its terms subject to
customary exceptions at the time for opinions for such instruments, together
with an opinion of counsel to the effect that, taking into account the
purpose under this Mortgage for which such surety bond will be given, such
surety bond and accompanying opinions are responsive to the requirements of
this Mortgage.
"Trust Money" shall mean those certain proceeds set forth in subsections
IV(a)(i) and IV(a)(ii).
SECTION VIII - MISCELLANEOUS
(a) CHOICE OF LAW. The terms and provisions of this Mortgage and the
enforcement hereof shall be governed by and construed in accordance with the
laws of the State of Louisiana.
(b) SEVERABILITY. If any provision hereof is invalid or unenforceable
in any jurisdiction, the other provisions hereof shall remain in full force
and effect in such jurisdiction and the remaining provisions hereof shall-be
liberally construed in favor of Mortgagee in order to effectuate the
provisions hereof, and the invalidity or unenforceability of any provision
hereof in any jurisdiction shall not affect the validity or enforceability
of any such provision in any other jurisdiction. If any part of the Secured
Obligations cannot be lawfully secured by this Mortgage or if any part of
the Mortgaged Property cannot be lawfully subject to the Lien and security
interest hereof to the full extent of such Secured Obligations, then all
payments made shall be applied on said Secured Obligations first in
discharge of that portion thereof which is not secured by this Mortgage.
(c) CONSTRUCTION OF THIS INSTRUMENT. This instrument may be construed
as a mortgage, assignment, security agreement, fixture filing, pledge,
financing statement, hypothecation or contract, or any one or more of them,
in order fully to effectuate the Lien hereof and the purposes and agreements
herein set forth.
(d) CAPTIONS; GENDER AND NUMBER. The captions and section headings of
this Mortgage are for convenience only and are not to be used to define the
provisions hereof. The term "Mortgagee" as used herein shall mean and
include any successors to or assigns of First Trust National Association in
its capacity as Indenture Trustee under the Indenture. The terms used to
designate Mortgagee and Mortgagor shall be deemed to include the respective
heirs, legal representatives, successors and assigns of such parties. All
terms contained herein shall be construed, whenever the context of this
Mortgage so requires, so that the singular includes the plural and so that
the masculine includes the feminine.
(e) RIGHTS OF MORTGAGEE. The Lien, security interest and other
security rights of Mortgagee hereunder shall not be impaired by any
indulgence, moratorium or release granted by Mortgagee, including, but not
limited to, any renewal, extension or modification with respect to any
Secured Obligation, or any surrender, compromise, release, renewal,
extension, exchange or substitution which Mortgagee may grant in respect of
the Mortgaged Property, or any part thereof or any interest therein, or any
release or indulgence granted to any endorser, guarantor or surety of any
Secured obligation.
(f) WAIVER OF AN EVENT OF DEFAULT. Mortgagee may waive any Event of
Default without waiving any other prior or subsequent Event of Default.
Mortgagee may remedy any Event of Default without waiving the Event of
Default remedied. No single or partial exercise by Mortgagee of any right,
power or remedy hereunder shall exhaust the same or shall preclude any other
or further exercise thereof, and every such right, power or remedy hereunder
may be exercised at any time and from time to time. No modification or
waiver of any provision hereof nor consent to any departure by Mortgagor
therefrom shall in any event be effective unless the same shall be in
writing and signed by Mortgagee and then such waiver or consent shall be
effective only in the specific instances, for the purpose for which given
and to the extent therein specified. No notice to nor demand on Mortgagor
if any case shall of itself entitle Mortgagor to any other or further notice
of demand in similar or other circumstances. Acceptance by Mortgagee of any
payment in an amount less than the amount then due on any Secured
Obligations shall be deemed an acceptance on account only and shall not in
any way excuse the existence of an Event of Default hereunder.
(g) SUCCESSOR MORTGAGOR. In the event the ownership of the Mortgaged
Property or any part thereof becomes vested in a person other than
Mortgagor, Mortgagee may, without notice to Mortgagor, deal with such
successor or successors in interest with reference to this Mortgage and the
Secured Obligations in the same manner as with Mortgagor, without in any way
vitiating or discharging Mortgagor's liability hereunder or for the payment
of the Secured Obligations or performance of the obligations secured hereby.
No transfer of the Mortgaged Property, no forbearance on the part of
Mortgagee and/or any other Secured Party, and no extension of the time for
the payment of the Secured Obligations, in whole or in part, shall affect
the liability of Mortgagor or any other person hereunder or for obligations
secured hereby.
(h) LEFT BLANK INTENTIONALLY
(i) COVENANTS RUNNING WITH THE LAND. The covenants and agreements
herein contained shall constitute covenants running with the land and
interests covered or affected hereby and shall be binding upon the heirs,
legal-representatives, successors and assigns of the parties hereto.
(j) NOTICES. All notices requests, demands and other communications
provided for or permitted hereunder shall be in writing (including telex and
telecopy communications) and shall be sent by mail, telex, telecopier or
hand delivery:
If to Mortgagor, to the following address:
C-M of Louisiana, Inc.
711 Casino Magic Drive
Bay St. Louis, Mississippi 39520
Attention: Robert A. Callaway
With a copy to:
Daniel K. Rester, Esq.
Hoffman Sutterfield Ensenat
P. 0. Drawer 4407
2431 South Acadian Thruway, Suite 600
Baton Rouge, Louisiana 70821-4407
If to Mortgagee, to the following address:
First Trust National Association
180 East Fifth Street
St. Paul, Minnesota 55101
Attention: Scott Strodthoff
With a copy to:
Mark G. Rabogliatti, Esq.
Oppenheimer Wolff & Donnelly
Plaza VII
45 South Seventh Street, Suite 3400
Minneapolis, Minnesota 55402
All such notices, requests, demands and communications shall be deemed to
have been duly given or made, when delivered by hand or five (5) business
days after being deposited in the mail, postage paid, when telexed answer
back received and when telecopied, receipt acknowledged. Any party hereto
may change its address set forth in this subsection (1) by notice to the
other parties given in accordance with the provisions of this subsection
(1).
(k) MORTGAGEE'S CONSENT. Except where otherwise expressly provided
herein, in any instance hereunder where the approval, consent or the
exercise of judgment of Mortgagee is required, the granting or denial of
such approval or consent and the exercise of such judgment shall be within
the sole discretion of Mortgagee, and Mortgagee shall not, for any reason or
to any extent, be required to grant such approval or consent or exercise
such judgment in any particular manner, regardless of the reasonableness of
either the request or Mortgagee's judgment.
(l) FORECLOSURE. In the event there is a foreclosure sale hereunder,
and at the time of such sale Mortgagor or Mortgagor's successors or assigns
or any other person claiming any interest in the Mortgaged Property by,
through or under Mortgagor, are occupying or using the Mortgaged Property or
any part thereof, each and all shall immediately become the tenant of the
purchaser at such sale, which tenancy shall be a tenancy from day to day,
terminable at the will of either the landlord or tenant, at a reasonable
rental per day based upon the value of the property occupied, such rental to
be due daily to the purchaser; to the extent permitted by applicable law,
the purchaser at such sale shall, notwithstanding any language herein
apparently to the contrary, have the sole option to demand immediate
possession following the sale or to permit the occupants to remain as
tenants at will. In the event the tenant fails to surrender possession of
said property upon demand, the purchaser shall be entitled to institute and
maintain a summary action for possession of the Mortgaged Property in any
court having jurisdiction. The purchaser or purchasers at foreclosure shall
have the right to affirm or disaffirm any lease of the Mortgaged Property or
any part thereof.
(m) REIMBURSEMENT. Mortgagor shall reimburse Mortgagee, upon demand,
for all fees, including reasonable attorneys' fees, costs and expenses
incurred by Mortgagee in connection with the administration and enforcement
of this Mortgage and/or the Secured Obligations. If any action or
proceedings, including, without limitation, bankruptcy or insolvency
proceedings, is commenced to which action or proceeding Mortgagee is made a
party or in which it becomes necessary to defend or uphold the Lien or
validity of this Mortgage, Mortgagor shall, upon demand, reimburse Mortgagee
for all expenses (including, without limitation, attorneys, and agents' fees
and disbursement) incurred by Mortgagee in such action or proceedings. In
any action or proceeding to foreclose this Mortgage or to recover or collect
the Secured Obligations, the provisions of law relating to the recovery of
costs, disbursements and allowances shall prevail unaffected by this
covenant. Mortgagor's obligations under this subsection VIII (M) shall
survive the satisfaction of this Mortgage and the discharge of Mortgagor's
other obligations hereunder.
(n) WAIVER OF STAY.
(i) Mortgagor agrees that in the event that Mortgagor or any
property or assets of Mortgagor shall hereafter become subject of a
voluntary or involuntary proceeding under the Bankruptcy Code or Mortgagor
shall otherwise be a party to any federal or state bankruptcy, insolvency,
moratorium or similar proceeding to which the provisions relating to the
automatic stay under Section 362 of the Bankruptcy Code or any similar
provision in any such law is applicable, then, in any such case, whether or
not Mortgagee has commenced foreclosure proceedings under this Mortgage,
Mortgagee shall be entitled to relief from any such automatic stay as it
relates to the exercise of any of the rights and remedies (including,
without limitation, any foreclosure proceedings) available to Mortgagee as
provided in this Mortgage or in any other document evidencing or securing
the Secured Obligations.
(ii) Mortgagee shall have the right to petition or move any court
having Jurisdiction over any proceeding described in subsection VIII(n)(i)
for the purposes provided therein, and Mortgagor agrees (a) not to oppose
any such petition or motion and (b) at Mortgagor's sole cost and expense, to
assist and cooperate with Mortgagee, as may be requested by Mortgagee from
time to time, in obtaining any relief requested by Mortgagee, including,
without limitation, by filing any such petitions, supplemental petitions,
requests for relief, documents, instruments or other items from time to time
requested by Mortgagee or any such court.
(o) Waiver of Jury Trial. To the extent permitted by law, Mortgagor
hereby knowingly, voluntarily and intentionally waives any rights it may
have to a trial by jury in the respect of any litigation based hereon, or
directly or indirectly arising out of, under or in connection with, this
Mortgage or any course of conduct, course of dealing, statements (whether
verbal or written) or actions of Mortgagor or Mortgagee.
(p) LEFT BLANK INTENTIONALLY
(q) ACCEPTANCE. The acceptance of this Mortgage by Mortgagee is
presumed, and therefore this Mortgage has not been executed and need not be
executed by Mortgagee.
(r) PROVISIONS OF THE INDENTURE. Notwithstanding anything to the
contrary contained in this Mortgage, it is the understanding of the parties
hereto that any actions by Mortgagee are subject to the provisions of the
Indenture; provided that (i) the provisions of this Mortgage shall govern
and control to the extent any provision of the Indenture would negate or
adversely affect the enforceability, validity, perfection or priority of the
Lien or security interest created by this Mortgage, and (ii) the provisions
of Sections I, II, III and V hereof shall govern and control in the event of
a conflict with the Indenture.
(s) ENVIRONMENTAL INDEMNITY. The Mortgagor will defend, indemnify and
hold Mortgagee and any other Secured Party and their directors, officers,
agents and employees harmless from and against all claims, demands, causes
of action, liabilities, losses, costs and expenses (including, without
limitation, costs of suit, reasonable attorneys' fees and fees of expert
witnesses) arising from or in connection with (i) the presence in, on or
under or the removal from the Mortgaged Property of any hazardous substances
or solid wastes (as defined elsewhere in this Mortgage), or any releases or
discharges of any hazardous substances or solid wastes on, under or from
such property, (ii) any activity carried on or undertaken on or off the
Mortgaged Property, whether prior to or during the term of this Mortgage,
and whether by Mortgagor or any predecessor in title or any officers,
employees, agents, contractors or subcontractors of Mortgagor or any
predecessor in title, or any third persons at any time occupying or present
on the Mortgaged Property, in connection with the handling, use, generation,
manufacture, treatment, removal, storage, decontamination, clean-up,
transport or disposal of any hazardous substances or solid wastes at any
time located or present on or under the Mortgaged Property, (iii) the
Mortgagor exercising its rights, whether under subsections IV(s)(iii) or
IV(t), or otherwise, including, but not limited to, the taking of any
remediation, removal, response or corrective action relating to Hazardous
Materials on the Mortgaged Property or the conducting of an environmental
audit or review of the Mortgaged Property or taking steps reasonably
necessary to comply with applicable law, regulations or orders, or (iii) any
breach of any representation, warranty or covenant under the terms of this
Mortgage. The foregoing indemnity shall further apply to any residual
contamination on or under the Mortgaged Property, or affecting any natural
resources, and to any contamination of the Mortgaged Property or natural
resources arising in connection with the generation, use, handling, storage,
transport or disposal of any such hazardous substances or solid wastes, and
irrespective of whether any of such activities were or will be undertaken in
accordance with applicable laws, regulations, codes and ordinances. Without
prejudice to the survival of any other agreements of the Mortgagor
hereunder, the provisions of this Section shall survive the final payment
and performance of the Secured Obligations and the termination of this
Mortgage and shall continue thereafter in full force and effect.
(t) CONTEMPLATED USE. The use of the phrases "contemplated use" and
"contemplated to be conducted" herein refers to the plans of the Mortgagor
to construct or have constructed and operate or have operated on the
Mortgaged Property a berthing facility for vessels, a land based boarding
facility, parking lot(s), restaurant(s), hotel and entertainment complex and
ancillary activities related thereto.
(u) CERTIFICATES. The production of mortgage, conveyance, tax research
or other certificates is waived by consent, and the Mortgagor and the
Mortgagee agree to hold me, Notary, harmless for failure to procure and
attach same.
THUS DONE AND PASSED, on the date first above written, in the presence
of the undersigned competent witnesses, who hereunto sign their names with
Mortgagor and me, Notary, after due reading of the whole.
WITNESSES: C-M OF LOUISIANA, INC. MORTGAGOR
BY: /s/ ROBERT A. CALLAWAY
/s/ NAME: ROBERT A. CALLAWAY
TITLE: SECRETARY
/s/
/S/ BERNARD H. BERINS
BERNARD H. BERINS, NOTARY PUBLIC
<PAGE>
EXHIBIT "A"
EXCEPTED LIENS
None
<PAGE>
UNANIMOUS WRITTEN CONSENT OF THE SOLE
SHAREHOLDER OF C-M OF LOUISIANA, INC.
The undersigned, the sole shareholder of C-M of Louisiana, Inc. having
voting power on the matters set forth herein, hereby consents, pursuant to
Section 76 of the Louisiana Business Corporation Law, to the following
corporate action:
WHEREAS, this corporation is a business corporation organized under the laws
of the State of Louisiana, and under its Charter and said laws has full
power and authority to assign, transfer, sell and deliver its own property;
to borrow money and to secure payment of the same by mortgage or pledge of
its own property, or otherwise, and all prerequisite steps and proceedings,
acts and things preliminary to the adoption of these resolutions have been
taken and done in due and proper form, time and matter.
WHEREAS, on the 21st day of February, 1996 a Stock Purchase Agreement
("Stock Purchase Agreement") was entered into among Casino Magic Corp.
("Magic"), a Minnesota corporation, Jefferson Casino Corporation ("JCC"), a
Louisiana Corporation, this corporation, Capital Gaming International, Inc.
("CGII"), a New Jersey corporation and Casino Magic of Louisiana, Corp., a
Louisiana corporation ("Casino Magic Louisiana" and together with CGII,
"Sellers"), with respect to the purchase by Magic, through JCC or another of
its wholly owned subsidiaries to which the Stock Purchase Agreement is
assigned in accordance with Paragraph 9 therein, of all of the newly issued
capital stock of reorganized Casino Magic Louisiana, which owns the Crescent
City Queen riverboat, the associated Louisiana riverboat gaming license
issued by the Louisiana Department of Public Safety and Corrections,
Riverboat Gaming Enforcement Division of the Office of State Police and
certain related assets.
WHEREAS, this corporation has agreed to enter, along with others, into that
certain Indenture dated as of the 13th day of May, 1996 by and among Casino
Magic Louisiana, as issuer, the Guarantors named therein, and First Trust
National Association, as Trustee, in the amount of $35,000,000.00
("Indenture").
WHEREAS, pursuant to Article XII of the Indenture, this corporation will
guarantee (such guaranty by this corporation being hereinafter referred to
as the "Guarantee") to the Noteholder(s) (as defined in the Indenture) and
to First Trust National Association, inter alia, the Notes (as defined in
the Indenture) or the obligations of Casino Magic Louisiana under the
Indenture, the Notes, and the other Collateral Documents (as defined in the
Indenture).
WHEREAS, an affiliate of this corporation, JCC will also, pursuant to
Article XII of the Indenture, guarantee the Notes or the obligations of
Casino Magic Louisiana under the Indenture or the Notes.
WHEREAS Casino Magic Louisiana as of the time of its execution of the
Indenture will be an affiliate of this corporation.
WHEREAS, the Noteholders are not willing to enter into the Indenture without
the execution by this corporation of the Guarantee.
WHEREAS, it is in the best interest of this corporation to assist Casino
Magic Louisiana in obtaining the financial accommodation set forth in the
Indenture because this corporation will receive an advantage and benefit
arising out of the Indenture, including, but not limited to the utilization
of the Real Property (as defined below).
WHEREAS, this corporation is the owner of that certain real property more
particularly described on Exhibit "A" attached hereto and made a part hereof
(hereinafter referred to as the "Real Property").
WHEREAS, this corporation has agreed to secure the Guarantee by executing a
Mortgage, Assignment of Leases and Rents and Security Agreement Securing
Future Advances, which said mortgage is to bear against the Real Property
and other property owned by or to be owned by this corporation.
WHEREAS, this corporation has agreed to enter into that certain Pledge and
Security Agreement dated as of the 13th day of May, 1996 by and among Casino
Magic Louisiana, this corporation. JCC, and First Trust National
Association ("Pledge").
RESOLVED that this corporation does hereby confirm and ratify any and all
actions taken on its behalf by Ed Ernst, its President, in the Stock
Purchase Agreement.
RESOLVED that Robert A. Callaway, this corporation's Secretary, be and is
hereby authorized and directed on behalf of this corporation to execute the
Indenture, including the Guarantee, and the Pledge, which Indenture,
Guarantee and Pledge to be in the form, substance and content as said
officer may deem necessary or appropriate.
FURTHER RESOLVED that as collateral and security for the Guarantee, this
corporation mortgage, pledge, hypothecate, deliver or grant a security
interest in any or all of the assets and properties of this corporation of
any nature whatsoever, whether immovable or movable, corporeal or
incorporeal, both now owned and hereafter acquired, together with all
proceeds thereof, including, but not limited to the following described
property, to-wit:
1. The Real Property;
2. All buildings, structures, facilities and other improvements now or
hereafter located on the Real Property;
3. All equipment (as, defined in the Louisiana Commercial Laws LA. RS
10:1101 et seq. (the "UCC")) now owned or hereafter acquired by this
corporation;
4. All of the leases, subleases, lettings and licenses and all other
contracts, bonds and agreements affecting the Real Property, the
improvements thereon and/or any other property or rights described herein
and all of the rents deriving therefrom;
5. Any and all moneys, goods, accounts, chattel paper, general and
tangibles, documents, instruments, contract rights and other real and
personal property (including property exchanged therefor) of every kind and
nature, which may from time to time be subjected to the lien granted by this
corporation to secure the Guarantee whether through a supplement to the
mortgage to be granted or otherwise;
6. All unearned premiums under insurance policies now or hereafter
obtained by mortgagor and all proceeds for conversion, voluntary or
involuntary of any of the property described herein.
FURTHER RESOLVED that Robert A. Callaway, this corporation's Secretary, be
and is hereby authorized and directed on behalf of this corporation to
execute and deliver to First Trust National Association one (1) or more
mortgages, whether a Mortgage, Assignment of Leases and Rents and Security
Agreement Securing Future Advances, or otherwise, in conventional or
collateral form, Security Agreements, Pledge Agreements, Assignments,
Financing Statements, Agreements and Certificates, as may be now or
hereafter required by First Trust National Association from time to time to
secure all or any portion of the Guarantee, including without limitation
supplemental or additional collateral documents encumbering assets and
properties of this corporation in the future. All such Mortgages, Security
Agreements, Pledge Agreements, Assignments, Financing Statements, Agreements
and Certificates to contain such terms, covenants and conditions as may be
approved by the said officer of this corporation, said officer's execution
and delivery thereof on behalf of this corporation to be conclusive evidence
of said officer's approval.
FURTHER RESOLVED that the documents described in the above paragraphs may
contain a confession of judgment, pact de non alienando, authorization of
executory process, waiver of appraisal, consent to private sale and other
remedial clauses as determined by First Trust National Association in its
sole discretion.
FURTHER RESOLVED that Robert A. Callaway, this corporation's Secretary, is
hereby authorized to do such further acts and things and execute any and all
documents and instruments, both original and amendatory, of every kind and
character on behalf of this corporation as may be necessary or appropriate,
in said officer's judgment, from time to time to carry out the terms of the
Indenture, Guarantee, Pledge, mortgages, Security
Agreements, Pledge Agreements, Assignments, Financing Statements, Agreements
and Certificates and the purposes of these Resolutions.
FURTHER RESOLVED that this corporation does hereby ratify and confirm any
action which Robert A. Callaway, this corporation's Secretary, may take
pursuant to these Resolutions.
This Unanimous Written Consent of the Sole Shareholder is dated May 9, 1996.
CASINO MAGIC CORP.,
SOLE SHAREHOLDER
BY: /s/ ROBERT A. CALLAWAY
NAME: ROBERT A. CALLAWAY
TITLE: SECRETARY
C E R T I F I C A T E
I, the undersigned Secretary of C-M of Louisiana, Inc., certify that (1) the
subscriber to the foregoing Unanimous Written Consent constitutes the sole
shareholder of this Corporation having voting power on the matters set forth
therein, (2) the same is the only action taken with respect to the matters
referred to therein and that such resolutions were not thereafter altered,
amended or repealed; and (3) the above and foregoing resolutions are good,
valid and binding upon C-M of Louisiana, Inc.
May 11, 1996
/s/ ROBERT A. CALLAWAY
ROBERT A. CALLAWAY, Secretary
C-M of Louisiana, Inc.
<PAGE>
EXHIBIT "A"
1. TRACT "A"
A TRACT OF LAND LOCATED IN SECTION 32, T18N-R13W, BOSSIER CITY, BOSSIER
PARISH, AND/OR SECTIONS 31,32 OR 33, Tl8N-Rl3W, CADDO PARISH, LOUISIANA.
SAID TRACT BEING MORE FULLY DESCRIBED AS FOLLOWS:
BEGINNING AT A FOUND 1/2" DIAMETER IRON ROD BEING THE SOUTHWEST CORNER
OF LOT 35, COOK SUBDIVISION, AS RECORDED IN BOOK 141, PAGE 11 OF THE
CONVEYANCE RECORDS OF BOSSIER PARISH, RUN THENCE SOUTH 65-05'05" EAST ALONG
THE SOUTH LINE OF SAID COOK SUBDIVISION A DISTANCE OF 384.69 FEET TO A FOUND
1/2" DIAMETER IRON ROD,
THENCE RUN SOUTH 12'56'40" WEST A DISTANCE OF 150.37 FEET TO A FOUND
1/2" DIAMETER CRIMP TOP IRON PIPE,
THENCE RUN SOUTH 60'12'49" EAST A DISTANCE OF 168.20 FEET TO A FOUND
5/8" DIAMETER IRON ROD,
THENCE RUN SOUTH 26'06'32" WEST A DISTANCE OF 251.31 FEET TO A FOUND
1/2" DIAMETER IRON ROD BEING ON THE NORTHERLY RIGHT-OF-WAY LINE OF WOODLAWN
STREET,
THENCE RUN NORTH 70'42'00" WEST ALONG THE NORTHERLY RIGHT-OF-WAY LINE OF
WOODLAWN STREET A DISTANCE OF 575.91 FEET TO A FOUND 1/2" DIAMETER IRON PIPE
BEING AT THE INTERSECTION OF THE NORTHERLY RIGHT-OF-WAY LINE OF WOODLAWN
STREET WITH THE EASTERLY RIGHT-OF-WAY LINE OF KAYWOOD COURTS,
THENCE RUN NORTH 23'05'00" EAST ALONG THE EASTERLY RIGHT-OF-WAY LINE OF
KAYWOOD COURTS A DISTANCE OF 140.56 FEET TO A FOUND 1/2" DIAMETER IRON PIPE,
THENCE RUN NORTH 24'48'39" EAST ALONG THE EASTERLY RIGHT-OF-WAY LINE OF
KAYWOOD COURTS A DISTANCE OF 328.51 FEET TO THE POINT OF BEGINNING.
SAID TRACT CONTAINING 5.2319 ACRES.
2. TRACT "B"
A TRACT OF LAND LOCATED IN SECTION 32, T18N-R13W, BOSSIER CITY, BOSSIER
PARISH, AND/OR SECTIONS 31, 32 OR 33, Tl8N-Rl3W, CADDO PARISH, LOUISIANA.
SAID TRACT BEING MORE FULLY DESCRIBED AS FOLLOWS:
BEGINNING AT A FOUND 3/4" DIAMETER CRIMP TOP IRON PIPE BEING THE
SOUTHEAST CORNER OF LOT 8, KAYWOOD SUBDIVISION, AS RECORDED IN BOOK 339,
PAGE 229 OF THE CONVEYANCE RECORDS OF BOSSIER PARISH, RUN THENCE SOUTH
28'05'04" WEST A DISTANCE OF 335.76 FEET TO A SET 1/2" DIAMETER IRON ROD
BEING ON THE FORMER NORTHERLY HIGH BANK OF THE RED RIVER,
THENCE RUN NORTHWESTERLY ALONG THE FORMER HIGH BANK OF THE RED RIVER A
DISTANCE OF 614.30 FEET, NORTH 55'22'23" WEST TO A FOUND 1" DIAMETER IRON
PIPE,
THENCE RUN NORTH 24'48'49" EAST A DISTANCE OF 897.25 FEET TO A FOUND
1/2" DIAMETER IRON ROD BEING ON THE SOUTH LINE OF LOT 34, COOK SUBDIVISION,
AS RECORDED IN BOOK 141, PAGE 11 OF THE CONVEYANCE RECORDS OF BOSSIER
PARISH,
THENCE RUN SOUTH 65'02'25" EAST ALONG THE SOUTH LINE OF LOT 34, A
DISTANCE OF 9.58 FEET TO A FOUND 1/2" DIAMETER IRON ROD BEING ON THE
WESTERLY RIGHT-OF-WAY LINE OF KAYWOOD COURTS,
THENCE RUN SOUTH 24'47'37" WEST ALONG THE WESTERLY RIGHT-OF-WAY LINE OF
KAYWOOD COURTS A DISTANCE OF 329.85 FEET TO A FOUND 1/2" DIAMETER IRON PIPE,
THENCE RUN SOUTH 22'34'14" WEST ALONG THE WESTERLY RIGHT-OF-WAY LINE OF
KAYWOOD COURTS A DISTANCE OF 194.43 FEET TO A FOUND 5/8" DIAMETER IRON ROD
BEING AT THE INTERSECTION OF THE WESTERLY RIGHT-OF-WAY LINE OF KAYWOOD
COURTS WITH THE SOUTHERLY RIGHT-OF-WAY LINE OF WOODLAWN STREET,
THENCE RUN SOUTH 70'42'00" EAST ALONG THE SOUTHERLY RIGHT-OF-WAY LINE OF
WOODLAWN STREET A DISTANCE OF 5.17 FEET TO A FOUND 5/8" DIAMETER IRON ROD,
THENCE RUN SOUTH 19'1 8'00" WEST ALONG THE WEST LINE OF LOT 1, KAYWOOD
SUBDIVISION, UNIT 2, AS RECORDED IN BOOK 450, PAGE 113 OF THE CONVEYANCE
RECORDS OF BOSSIER PARISH, A DISTANCE OF 200.26 FEET TO A SET 1/2" DIAMETER
IRON ROD BEING THE SOUTHWEST CORNER OF LOT 1,
THENCE RUN SOUTH 70'42'00" EAST ALONG THE SOUTH LINE OF KAYWOOD
SUBDIVISION UNIT 2 AND KAYWOOD SUBDIVISION A DISTANCE OF 585.48 FEET TO THE
POINT-OF-BEGINNING,
AND ALL THAT LAND LYING BETWEEN THE SOUTHERLY MOST LINE OF SAID
DESCRIBED TRACT AND THE EXISTING HIGH BANK OF THE RED RIVER, AND LYING
BETWEEN THE PROJECTED LINES OF THE EASTERLY AND WESTERLY BOUNDARIES OF SAID
DESCRIBED TRACT,
SAID TOTAL TRACT CONTAINING 4.914 ACRES.
3. TRACT "C"
A TRACT OF LAND LOCATED IN SECTION 32, T18N-R13W, BOSSIER CITY, BOSSIER
PARISH, AND/OR SECTIONS 31, 32 OR 33, Tl8N-Rl3W, CADDO PARISH, LOUISIANA,
AND BEING A PORTION OF LOT 34, COOK SUBDIVISION, AS RECORDED IN BOOK 141,
PAGE 11, OF THE CONVEYANCE RECORDS OF BOSSIER PARISH. SAID TRACT MORE FULLY
DESCRIBED AS FOLLOWS:
BEGINNING AT A FOUND 1/2" DIAMETER IRON ROD BEING THE SOUTHWEST CORNER
OF LOT 34, RUN THENCE NORTH 29'35'39" EAST ALONG THE WEST LINE OF LOT 34 A
DISTANCE OF 165.24 FEET TO A FOUND 1/2" DIAMETER IRON PIPE BEING ON THE
SOUTH RIGHT-OF-WAY LINE OF INTERSTATE 20,
THENCE RUN SOUTH 82'32'09" EAST ALONG THE SOUTH RIGHT-OF-WAY LINE OF
INTERSTATE 20 A DISTANCE OF 58.03 FEET TO A FOUND 1/2" DIAMETER IRON PIPE
BEING ON THE WESTERLY RIGHT-OF-WAY LINE OF KAYWOOD COURTS,
THENCE RUN SOUTH 29'33'17" WEST ALONG THE WESTERLY RIGHT-OF-WAY LINE OF
KAYWOOD COURTS A DISTANCE OF 190.07 FEET TO A FOUND 1/2" DIAMETER IRON ROD
BEING ON THE SOUTH LINE OF LOT 34,
THENCE RUN NORTH 65'02'25" WEST ALONG THE SOUTH LINE OF LOT 34 A
DISTANCE OF 9.58 FEET TO A FOUND 1/2" DIAMETER IRON ROD,
THENCE RUN NORTH 55'34'42" WEST ALONG THE SOUTH LINE OF LOT 34 A
DISTANCE OF 44.49 FEET TO THE POINT OF BEGINNING, SAID TRACT CONTAINING 0.22
ACRES.
4. TRACT "D"
A TRACT OF LAND LOCATED IN SECTION 32, T18N-R13W, BOSSIER CITY, BOSSIER
PARISH, AND/OR SECTIONS 31, 32 OR 33, Tl8N-Rl3W, CADDO PARISH, LOUISIANA.
SAID TRACT BEING MORE FULLY DESCRIBED AS FOLLOWS:
BEGINNING AT A FOUND 1/2" DIAMETER CRIMP TOP IRON PIPE BEING THE
SOUTHWEST CORNER OF LOT 114, RIVERSIDE SUBDIVISION AS RECORDED IN BOOK 60,
PAGE 157 OF THE CONVEYANCE RECORDS OF BOSSIER PARISH, LOUISIANA, RUN THENCE
SOUTH 70-23-37" EAST ALONG THE REAR LINE OF RIVERSIDE SUBDIVISION A DISTANCE
OF 248.66 FEET TO A FOUND 1" DIAMETER IRON PIPE,
THENCE RUN SOUTH 29'01'37" WEST AND PARALLEL WITH THE EASTERLY LINE OF
LOT 110 OF RIVERSIDE SUBDIVISION A DISTANCE OF 1021.25 FEET TO A FOUND 1"
DIAMETER IRON PIPE, BEING ON THE FORMER HIGH BANK OF THE RED RIVER,
THENCE RUN NORTH 62'19'02" WEST ALONG THE FORMER HIGH BANK OF THE RED
RIVER A DISTANCE OF 127.28 FEET TO A POINT, WHICH IS ON THE PROJECTION OF
THE WESTERLY LINE OF LOT 112, RIVERSIDE SUBDIVISION,
THENCE CONTINUE NORTH 64'07'56" WEST ALONG THE FORMER HIGH BANK OF THE
RED RIVER A DISTANCE OF 101.11 FEET TO A SET 1/2" DIAMETER IRON ROD, LOCATED
ON THE PROJECTION OF THE EASTERLY LINE OF LOT 8, KAYWOOD SUBDIVISION,
THENCE RUN NORTH 28'05'04" EAST A DISTANCE OF 335.76 FEET TO A FOUND
3/4" DIAMETER CRIMP TOP IRON PIPE BEING THE SOUTHEAST CORNER OF LOT 8
KAYWOOD SUBDIVISION AS RECORDED IN BOOK 339, PAGE 229 OF THE CONVEYANCE
RECORDS OF BOSSIER PARISH,
THENCE CONTINUE NORTH 28'05'04" EAST ALONG THE EASTERLY LINE OF LOT 8 A
DISTANCE OF 202.64 FEET TO A FOUND 2" DIAMETER IRON PIPE BEING THE NORTHEAST
CORNER OF LOT 8,
THENCE CONTINUE NORTH 28'05'04" EAST A DISTANCE OF 50.65 FEET TO A FOUND
1/2" DIAMETER IRON ROD,
THENCE RUN NORTH 26'06'32" EAST A DISTANCE OF 251.31 FEET TO A FOUND
5/8" DIAMETER IRON ROD,
THENCE RUN NORTH 31'05'36" EAST A DISTANCE OF 149.25 FEET TO THE POINT
OF BEGINNING,
AND ALL THAT LAND LYING BETWEEN THE SOUTHERLY MOST LINE OF SAID DESCRIBED
TRACT AND THE EXISTING HIGH BANK OF THE RED RIVER, AND LYING BETWEEN THE
PROJECTED LINES OF THE EASTERLY AND WESTERLY BOUNDARIES OF SAID DESCRIBED
TRACT,
SAID TOTAL TRACT CONTAINING 5.753 ACRES.
5. LOTS 1, 2 AND 4, KAYWOOD SUBDIVISION, UNIT NO. 2, A SUBDIVISION OF
BOSSIER PARISH, AND/OR CADDO PARISH, LOUISIANA AS PER PLAT RECORDED IN BOOK
450, PAGE 113 OF THE CONVEYANCE RECORDS OF BOSSIER PARISH, LOUISIANA.
6. LOTS 6, 7 AND 8 KAYWOOD SUBDIVISION, A SUBDIVISION OF BOSSIER PARISH,
AND/OR CADDO PARISH, LOUISIANA, AS PER PLAT RECORDED IN BOOK 339, PAGE 229
OF THE CONVEYANCE RECORDS OF BOSSIER PARISH, LOUISIANA.
7. LOTS 110, 111 AND 112, RIVERSIDE SUBDIVISION, A SUBDIVISION OF BOSSIER
PARISH, AND/OR CADDO PARISH, LOUISIANA, AS PER PLAT RECORDED IN BOOK 60,
PAGE 157 OF THE CONVEYANCE RECORDS OF BOSSIER PARISH, LOUISIANA, LESS A
STRIP OF LAND SEVEN (7') FEET IN WIDTH RUNNING BACK BETWEEN PARALLEL LINES
ALONG THE ENTIRE EASTERLY SIDE OF LOT 110.
AMENDMENT OF MORTGAGE, * UNITED STATES OF AMERICA
ASSIGNMENT OF LEASES *
AND RENTS AND SECURITY * STATE OF LOUISIANA
AGREEMENT SECURING *
FUTURE ADVANCES * PARISH OF ORLEANS
*
BY *
*
JEFFERSON CASINO *
CORPORATION and *
*
FIRST TRUST NATIONAL *
ASSOCIATION, AS *
INDENTURE TRUSTEE *
BE IT KNOWN, that on this 13th day of May 1996, before me, the undersigned
Notary Public duly commissioned and qualified, and in the presence of the
witnesses hereinafter named and undersigned, personally came and appeared:
JEFFERSON CASINO CORPORATION ("JCC") (Taxpayer I.D. No. 72-1310739), a
Louisiana corporation, represented herein by Robert A. Callaway, its
secretary, duly authorized to appear herein by the Unanimous Written Consent
of the Sole Shareholder of Mortgagor, a multiple original of which is
attached hereto and made a part hereof, which has a mailing address of 711
Casino Magic Drive, Bay St. Louis, Mississippi 39520,
and
FIRST TRUST NATIONAL ASSOCIATION, AS INDENTURE TRUSTEE
("MORTGAGEE")(TAXPAYER I.D. No. 41-0257700), a national association having a
place of business at 180 East Fifth Street, St. Paul, Minnesota 55101,
Attn.: Scott Strodthoff, represented herein by Richard Prokosch, its Trust
Officer, Corporate Finance, duly authorized,
who declared that:
1. C-M of Louisiana, Inc. ("CMLI"), as mortgagor executed an Act of
Mortgage, Assignment of Leases and Rents and Security Agreement Securing
Future Advances dated May 11, 1996 and passed before Bernard H. Berins,
Notary Public for the Parish of Orleans, State of Louisiana and which
mortgage was recorded (a) in the mortgage records of Bossier Parish on May
13, 1996 at 11:27 a.m. as Instrument No. 614182 and (b) in the mortgage
records of Caddo Parish on May 13, 1996 at 11:11 a.m. as Instrument No.
1515166 ("MORTGAGE").
2. Subsequent to the execution and recordation of the Mortgage, but prior
to the execution of this Act of Amendment of Mortgage, Assignment of Leases
and Rents and Security Agreement Securing Future Advances ("AMENDMENT") CMLI
was merged into JCC ("MERGER") all in accordance with the Certificate of the
Secretary of State of the State of Louisiana, a copy of which is attached
hereto as Exhibit "A".
NOW, THEREFORE, JCC and Mortgagee hereby amend the Mortgage as follows:
Recitals A and B of the Mortgage are amended so henceforth they shall read
as follows:
A. Pursuant to that certain Indenture date as of May 13, 1996 among Casino
Magic of Louisiana, Corp. ("CASINO MAGIC LOUISIANA"), JCC, as Guarantor,
and the Mortgagee (as amended, amended and restated, supplemented or
otherwise modified from time to time, the "INDENTURE"), Casino Magic
Louisiana issued its 11 1/2% Senior Secured Notes due 199 (as amended,
amended and restated, supplemented or otherwise modified from time to time,
and including all 11 1/2% Senior Secured Notes due 1999 issued in exchange
or substitution therefor, the "NOTES") in the aggregate principal amount of
$35 million.
B. Pursuant to Article XII of the Indenture, JCC has guaranteed (such
guarantee by Mortgagor being hereinafter referred to as the "GUARANTEE"), to
the Noteholder(s) and to the Mortgagee, inter alia, the Notes and the
obligations of Casino Magic Louisiana under the Indenture and the Notes.
Except as set forth above, all of the remaining terms, provisions and
conditions of the Mortgage shall remain in full force and effect. This
Amendment shall be deemed to be an amendment of the Mortgage and shall not
constitute a novation of the Mortgage, or the indebtedness secured thereby.
JCC as the surviving entity under the Merger, herewith ratifies and confirms
the Mortgage, as amended herein
THUS DONE AND PASSED, on the date first above written, in the presence of
the undersigned competent witnesses, who hereunto sign their names with
Mortgagor and me, Notary, after due reading of the whole.
WITNESSES: JEFFERSON CASINO CORPORATION
/s/------------------- BY: /s/ ROBERT A. CALLAWAY
Name: ROBERT A. CALLAWAY
Title: SECRETARY
/s/-------------------
FIRST TRUST NATIONAL ASSOCIATION, AS
INDENTURE TRUSTEE
BY: /s/ RICHARD PROKOSCH
Name: RICHARD PROKOSCH
TITLE: TRUST OFFICER
/s/ BERNARD H. BERINS, NOTARY PUBLIC
BENARD H. BERINS
<PAGE>
UNANIMOUS WRITTEN CONSENT OF THE SOLE
SHAREHOLDER OF JEFFERSON CASINO CORPORATION
The undersigned, the sole shareholder of Jefferson Casino Corporation having
voting power on the matters set forth herein, hereby consents, pursuant to
Section 76 of the Louisiana Business Corporation Law, to the following
corporate action:
WHEREAS, this corporation is a business corporation organized under the laws
of the State of Louisiana, and under its Charter and said laws has full
power and authority to assign, transfer, sell and deliver its own property;
to borrow money and to secure payment of the same by mortgage or pledge of
its own property, or otherwise, and all prerequisite steps and proceedings,
acts and things preliminary to the adoption of these resolutions have been
taken and done in due and proper form, time and matter.
WHEREAS, on the 21st day of February, 1996 a Stock Purchase Agreement
("Stock Purchase Agreement") was entered into among Casino Magic Corp.
("Magic"), a Minnesota corporation, C-M of Louisiana, Inc. ("CMLI"), a
Louisiana Corporation, this corporation, Capital Gaming International, Inc.
("CGII"), a New Jersey corporation and Casino Magic of Louisiana, Corp., a
Louisiana corporation ("Casino Magic Louisiana" and together with CGII,
"Sellers"), with respect to the purchase by Magic, through this corporation
or another of Magic's wholly owned subsidiaries to which the Stock Purchase
Agreement is assigned in accordance with Paragraph 9 therein, of all of the
newly issued capital stock of reorganized Casino Magic Louisiana, which owns
the Crescent City Queen riverboat, the associated Louisiana riverboat gaming
license issued by the Louisiana Department of Public Safety and Corrections,
Riverboat Gaming Enforcement Division of the Office of State Police and
certain related assets.
WHEREAS, this corporation has agreed to enter, along with others, into that
certain Indenture dated as of the 13th day of May, 1996 by and among Casino
Magic Louisiana, as issuer, the Guarantors named therein, and First Trust
National Association, as Trustee, in the amount of $35,000,000.00
("Indenture").
WHEREAS, pursuant to Article XII of the Indenture, this corporation will
guarantee (such guaranty by this corporation being hereinafter referred to
as the "Guarantee") to the Noteholder(s) (as defined in the Indenture) and
to First Trust National Association, inter alia. the Notes (as defined in
the Indenture) or the obligations of Casino Magic Louisiana under the
Indenture, the Notes, and the other Collateral Documents (as defined in the
Indenture).
WHEREAS, Casino Magic Louisiana as of the time of its execution of the
Indenture will be an affiliate of this corporation.
WHEREAS, the Noteholders are not willing to enter into the Indenture without
the execution by this corporation of the Guarantee.
WHEREAS, it is in the best interest of this corporation to assist Casino
Magic Louisiana in obtaining the financial accommodation set forth in the
Indenture because this corporation will receive an advantage and benefit
arising out of the Indenture, including, but not limited to the utilization
of that certain real property more particularly described on Exhibit "A"
attached hereto and made a part hereof (hereinafter referred to as the "Real
Property").
WHEREAS, CMLI had agreed to secure its proposed guarantee, inter alia, of
the Notes or the obligations of Casino Magic Louisiana under the Indenture,
the Notes, and the other Collateral Documents by executing on May 11, 1996 a
Mortgage, Assignment of - Leases and Rents and Security Agreement Securing
Future Advances ("Mortgage"), in which Mortgage as collateral and security
for the proposed guarantee, CMLI mortgaged, pledged, hypothecated, delivered
or granted a security interest in any or all of the assets and properties of
CMLI of any nature whatsoever, whether immovable or movable, corporeal or
incorporeal, whether then owned or thereafter to be acquired, together with
all proceeds thereof, including, but not limited to the following described
property, to-wit:
1. The Real Property
2. All buildings, structures, facilities and other improvements now or
hereafter located on the Real Property;
3. All equipment (as defined in the Louisiana Commercial Laws LA. RS 10:1-
101 et seq. (the "UCC")) now owned or hereafter acquired by CMLI;
4. All of the leases, subleases, lettings and licenses and all other
contracts, bonds and agreements affecting the Real Property, the
improvements thereon and/or any other property or rights described herein
and all of the rents deriving therefrom;
5. Any and all monies, goods, accounts, chattel paper, general and
tangibles, documents, instruments, contract rights and other real and
personal property (including property exchanged therefor) of every kind and
nature, which may from time to time be subjected to the lien granted by CMLI
to secure the guarantee whether through a supplement to the mortgage to be
granted or otherwise;
6. All unearned premiums under insurance policies now or hereafter obtained
by mortgagor and all proceeds for conversion, voluntary or involuntary of
any of the property described herein,
all as is more fully described in the Mortgage.
WHEREAS, the Mortgage was recorded (a) in the mortgage records of Bossier
Parish on May 13, 1996 at 11:27 a.m. as Instrument No. 614182 and (b) in the
mortgage records of Caddo Parish on May 13, 1996 at 11:11 a.m. as Instrument
No. 1515166.
WHEREAS, on May 13, 1996, following the execution of the Mortgage, CMLI was
merged into this corporation ("Merger").
WHEREAS, the Noteholders require this corporation to execute an Amendment of
the Mortgage ("Amendment") to reflect, the changes in the parties executing
the Indenture as a result of the Merger.
WHEREAS, this corporation has agreed to enter into that certain Pledge and
Security Agreement dated as of the 13th day of May, 1996 by and among Casino
Magic Louisiana, this corporation and First Trust National Association
("Pledge").
RESOLVED that this corporation does hereby confirm and ratify any and all
actions taken on its behalf by Ed Ernst, its President, in the Stock
Purchase Agreement.
RESOLVED that Robert A. Callaway, this corporation's Secretary, be and is
hereby authorized and directed on behalf of this corporation to execute the
Indenture, including the Guarantee, and the Pledge, which Indenture,
Guarantee and Pledge to be in the form, substance and content as said
officer may deem necessary or appropriate.
RESOLVED that Robert A. Callaway, this corporation's Secretary, be and is
hereby authorized and directed on behalf of this corporation to execute the
Amendment, with the Amendment including without limitation, a ratification
and confirmation by this corporation of the Mortgage, and which Amendment to
be in the form, substance and content as said officer may deem necessary or
appropriate.
FURTHER RESOLVED that the documents described in the above paragraphs may
contain a confession of judgment, pact de non alienando, authorization of
executory process, waiver of appraisal, consent to private sale and other
remedial clauses as determined by First Trust National Association in its
sole discretion.
FURTHER RESOLVED that Robert A. Callaway, this corporation's Secretary, is
hereby authorized to do such further acts and things and execute any and all
documents and instruments, both original and amendatory, of every kind and
character on behalf of this corporation as may be necessary or appropriate,
in said officer's judgment, from time ,o time to carry out the terms of the
Indenture, Guarantee, Pledge, Amendment and the purposes of these
Resolutions.
FURTHER RESOLVED that this corporation does hereby ratify and confirm any
action which Robert A. Callaway, this corporation's Secretary, may take
pursuant to these Resolutions.
This Unanimous Written Consent of the Sole Shareholder is dated May 13,
1996.
CASINO MAGIC CORP.,
SOLE SHAREHOLDER
BY:/S/ ROBERT A. CALLAWAY
NAME: ROBERT A. CALLAWAY
TITLE: SECRETARY
C E R T I F I C A T E
I, the undersigned Secretary of Jefferson Casino Corporation, certify that
(1) the subscriber to the foregoing Unanimous Written Consent constitutes
the sole shareholder of this Corporation having voting power on the matters
set forth therein, (2) the same is the only action taken with respect to the
matters referred to therein and that such resolutions were not thereafter
altered, amended or repealed; and (3) the above and foregoing resolutions
are good, valid and binding upon Jefferson Casino Corporation.
May 13, 1996
/S/ ROBERT A. CALLAWAY
ROBERT A. CALLAWAY, SECRETARY
Jefferson Casino Corporation
<PAGE>
EXHIBIT "A"
1. TRACT "A"
A TRACT OF LAND LOCATED IN SECTION 32, T18N-R13W. BOSSIER CITY, BOSSIER
PARISH, AND/OR SECTIONS 31, 32 OR 33, T18N-R13W, CADDO PARISH, LOUISIANA.
SAID TRACT BEING MORE FULLY DESCRIBED AS FOLLOWS.
BEGINNING AT A FOUND 1/2" DIAMETER IRON ROD BEING THE SOUTHWEST CORNER OF
LOT 35, COOK SUBDIVISION, AS RECORDED IN BOOK 141, PAGE 11 OF THE CONVEYANCE
RECORDS OF BOSSIER PARISH, RUN THENCE SOUTH 65'05'05" EAST ALONG THE SOUTH
LINE OF SAID COOK SUBDIVISION A DISTANCE OF 384.69 FEET TO A FOUND 1/2"
DIAMETER IRON ROD,
THENCE RUN SOUTH 12'56'40" WEST A DISTANCE OF 150.37 FEET TO A FOUND 1/2"
DIAMETER CRIMP TOP IRON PIPE,
THENCE RUN SOUTH 60'12'49" EAST A DISTANCE OF 168.20 FEET TO A FOUND 5/8"
DIAMETER IRON ROD.
THENCE RUN SOUTH 26'06'32" WEST A DISTANCE OF 251.31 FEET TO A FOUND 1/2"
DIAMETER IRON ROD BEING ON THE NORTHERLY RIGHT-OF-WAY LINE OF WOODLAWN
STREET,
THENCE RUN NORTH 70'42'00" WEST ALONG THE NORTHERLY RIGHT-OF-WAY LINE OF
WOODLAWN STREET A DISTANCE OF 575.91 FEET TO A FOUND 1/2" DIAMETER IRON PIPE
BEING AT THE INTERSECTION OF THE NORTHERLY RIGHT-OF-WAY LINE OF WOODLAWN
STREET WITH THE EASTERLY RIGHT-OF-WAY LINE OF KAYWOOD COURTS,
THENCE RUN NORTH 23'05'00" EAST ALONG THE EASTERLY RIGHT-OF-WAY LINE OF
KAYWOOD COURTS A DISTANCE OF 140.56 FEET TO A FOUND 1/2" DIAMETER IRON PIPE,
THENCE RUN NORTH 24'48'39" EAST ALONG THE EASTERLY RIGHT-OF-WAY LINE OF
KAYWOOD COURTS A DISTANCE OF 328.51 FEET TO THE POINT OF BEGINNING.
SAID TRACT CONTAINING 5.2319 ACRES.
2. TRACT "B"
A TRACT OF LAND LOCATED IN SECTION 32, T18N-R13W, BOSSIER CITY, BOSSIER
PARISH, AND/OR SECTIONS 31, 32 OR 33, T18N-R13W, CADDO PARISH, LOUISIANA.
SAID TRACT BEING MORE FULLY DESCRIBED AS FOLLOWS:
BEGINNING AT A FOUND 3/4" DIAMETER CRIMP TOP IRON PIPE BEING THE SOUTHEAST
CORNER OF LOT 8, KAYWOOD SUBDIVISION, AS RECORDED IN BOOK 339, PAGE 229 OF
THE CONVEYANCE RECORDS OF BOSSIER PARISH, RUN THENCE SOUTH 28'05'04" WEST A
DISTANCE OF 335.76 FEET TO A SET 1/2" DIAMETER IRON ROD BEING ON THE FORMER
NORTHERLY HIGH BANK OF THE RED RIVER.
THENCE RUN NORTHWESTERLY ALONG THE FORMER HIGH BANK OF THE RED RIVER A
DISTANCE OF 614.30 FEET, NORTH 55'22'23" WEST TO A FOUND 1" DIAMETER IRON
PIPE,
THENCE RUN NORTH 24'48'49" EAST A DISTANCE OF 897.25 FEET TO A FOUND 1/2"
DIAMETER IRON ROD BEING ON THE SOUTH LINE OF LOT 34, COOK SUBDIVISION. AS
RECORDED IN BOOK 141, PAGE 11 OF THE CONVEYANCE RECORDS OF BOSSIER PARISH,
THENCE RUN SOUTH 65'02'25" EAST ALONG THE SOUTH LINE OF LOT 34, A DISTANCE
OF 9.58 FEET T0 A FOUND 1/2" DIAMETER IRON ROD BEING ON THE WESTERLY RIGHT-
OF-WAY LINE OF KAYWOOD COURTS,
THENCE RUN SOUTH 24'47'37" WEST ALONG THE WESTERLY RIGHT-OF-WAY LINE OF
KAYWOOD COURTS A DISTANCE OF 329.85 FEET TO A FOUND 1/2" DIAMETER IRON PIPE.
THENCE RUN SOUTH 22'34'14" WEST ALONG THE WESTERLY RIGHT-OF-WAY LINE OF
KAYWOOD COURTS A DISTANCE OF 194.43 FEET TO A FOUND 5/8" DIAMETER IRON ROD
BEING AT THE INTERSECTION OF THE WESTERLY RIGHT-OF-WAY LINE OF KAYWOOD
COURTS WITH THE SOUTHERLY RIGHT-OF-WAY LINE OF WOODLAWN STREET,
THENCE RUN SOUTH 70'42'00" EAST ALONG THE SOUTHERLY RIGHT-OF-WAY LINE OF
WOODLAWN STREET A DISTANCE OF 5.17 FEET TO A FOUND 5/8" DIAMETER IRON ROD,
THENCE RUN SOUTH 19'18'00" WEST ALONG THE WEST LINE OF LOT 1, KAYWOOD
SUBDIVISION, UNIT 2. AS RECORDED IN BOOK 450, PAGE 113 OF THE CONVEYANCE
RECORDS OF BOSSIER PARISH, A DISTANCE OF 200.26 FEET TO A SET 1/2" DIAMETER
IRON ROD BEING THE SOUTHWEST CORNER OF LOT 1,
THENCE RUN SOUTH 70'42'00" EAST ALONG THE SOUTH LINE OF KAYWOOD SUBDIVISION
UNIT 2 AND KAYWOOD SUBDIVISION A DISTANCE OF 585.48 FEET TO THE POINT-OF-
BEGINNING,
AND ALL THAT LAND LYING BETWEEN THE SOUTHERLY MOST LINE OF SAID DESCRIBED
TRACT AND THE EXISTING HIGH BANK OF THE RED RIVER, AND LYING BETWEEN THE
PROJECTED LINES OF THE EASTERLY AND WESTERLY BOUNDARIES OF SAID DESCRIBED
TRACT.
SAID TOTAL TRACT CONTAINING 4.914 ACRES.
3. TRACT "C"
A TRACT OF LAND LOCATED IN SECTION 32, T18N-R13W, BOSSIER CITY, BOSSIER
PARISH, AND/OR SECTIONS 31, 32 OR 33, T18N-R13W, CADDO PARISH, LOUISIANA,
AND BEING A PORTION OF LOT 34, COOK SUBDIVISION, AS RECORDED IN BOOK 141,
PAGE 11, OF THE CONVEYANCE RECORDS OF BOSSIER PARISH. SAID TRACT MORE FULLY
DESCRIBED AS FOLLOWS:
BEGINNING AT A FOUND 1/2" DIAMETER IRON ROD BEING THE SOUTHWEST CORNER OF
LOT 34, RUN THENCE NORTH 29'35'39" EAST ALONG THE WEST LINE OF LOT 34 A
DISTANCE OF 165.24 FEET TO A FOUND 1/2" DIAMETER IRON PIPE BEING ON THE
SOUTH RIGHT-OF-WAY LINE OF INTERSTATE 20.
THENCE RUN SOUTH 82'32'09" EAST ALONG THE SOUTH RIGHT-OF-WAY LINE OF
INTERSTATE 20 A DISTANCE OF 58.03 FEET TO A FOUND 1/2" DIAMETER IRON PIPE
BEING ON THE WESTERLY RIGHT-OF-WAY LINE OF KAYWOOD COURTS,
THENCE RUN SOUTH 29'33'17" WEST ALONG THE WESTERLY RIGHT-OF-WAY LINE OF
KAYWOOD COURTS A DISTANCE OF 190.07 FEET TO A FOUND 1/2" DIAMETER IRON ROD
BEING ON THE SOUTH LINE OF LOT 34,
THENCE RUN NORTH 65'02'25" WEST ALONG THE SOUTH LINE OF LOT 34 A DISTANCE OF
9.58 FEET TO A FOUND 1/2" DIAMETER IRON ROD,
THENCE RUN NORTH 55'34'42" WEST ALONG THE SOUTH LINE OF LOT 34 A DISTANCE OF
44.49 FEET TO THE POINT OF BEGINNING, SAID TRACT CONTAINING 0.22 ACRES.
4 TRACT "D"
A TRACT OF LAND LOCATED IN SECTION 32, T18N-R13W, BOSSIER CITY, BOSSIER
PARISH, AND/OR SECTIONS 31, 32 OR 33, T18N-R13W, CADDO PARISH, LOUISIANA.
SAID TRACT BEING MORE FULLY DESCRIBED AS FOLLOWS:
BEGINNING AT A FOUND 1/2" DIAMETER CRIMP TOP IRON PIPE BEING THE SOUTHWEST
CORNER OF LOT 114. RIVERSIDE SUBDIVISION AS RECORDED IN BOOK 60, PAGE 157
OF THE CONVEYANCE RECORDS OF BOSSIER PARISH, LOUISIANA, RUN THENCE SOUTH
70'23'37" EAST ALONG THE REAR LINE OF RIVERSIDE SUBDIVISION A DISTANCE OF
248.66 FEET TO A FOUND 1" DIAMETER IRON PIPE.
THENCE RUN SOUTH 29'01'37" WEST AND PARALLEL WITH THE EASTERLY LINE OF LOT
110 OF RIVERSIDE SUBDIVISION A DISTANCE OF 1021.25 FEET TO A FOUND 1"
DIAMETER IRON PIPE, BEING ON THE FORMER HIGH BANK OF THE RED RIVER.
THENCE RUN NORTH 62'19'02" WEST ALONG THE FORMER HIGH BANK OF THE RED RIVER
A DISTANCE OF 127.28 FEET TO A POINT. WHICH IS ON THE PROJECTION OF THE
WESTERLY LINE OF LOT 112, RIVERSIDE SUBDIVISION,
THENCE CONTINUE NORTH 64'07'56" WEST ALONG THE FORMER HIGH BANK OF THE RED
RIVER A DISTANCE OF 101.11 FEET TO A SET 1/2" DIAMETER IRON ROD, LOCATED ON
THE PROJECTION OF THE EASTERLY LINE OF LOT 8, KAYWOOD SUBDIVISION,
THENCE RUN NORTH 28'05'04" EAST A DISTANCE OF 335.76 FEET TO A FOUND 3/4"
DIAMETER CRIMP TOP IRON PIPE BEING THE SOUTHEAST CORNER OF LOT 8 KAYWOOD
SUBDIVISION AS RECORDED IN BOOK 339, PAGE 229 OF THE CONVEYANCE RECORDS OF
BOSSIER PARISH,
THENCE CONTINUE NORTH 28'05'04" EAST ALONG THE EASTERLY LINE OF LOT 8 A
DISTANCE OF 202.64 FEET TO A FOUND 2" DIAMETER IRON PIPE BEING THE NORTHEAST
CORNER OF LOT 8,
THENCE CONTINUE NORTH 28'05'04" EAST A DISTANCE OF 50.65 FEET TO A FOUND
1/2" DIAMETER IRON ROD,
THENCE RUN NORTH 26'06'32" EAST A DISTANCE OF 251.31 FEET TO A FOUND 5/8"
DIAMETER IRON ROD,
THENCE RUN NORTH 31'05'36" EAST A DISTANCE OF 149.25 FEET TO THE POINT OF
BEGINNING,
AND ALL THAT LAND LYING BETWEEN THE SOUTHERLY MOST LINE OF SAID DESCRIBED
TRACT AND THE EXISTING HIGH BANK OF THE RED RIVER, AND LYING BETWEEN THE
PROJECTED LINES OF THE EASTERLY AND WESTERLY BOUNDARIES OF SAID DESCRIBED
TRACT,
SAID TOTAL TRACT CONTAINING 5.753 ACRES.
5. LOTS 1, 2 AND 4, KAYWOOD SUBDIVISION, UNIT NO. 2. A SUBDIVISION OF
BOSSIER PARISH, AND/OR CADDO PARISH, LOUISIANA AS PER PLAT RECORDED IN BOOK
450, PAGE 113 OF THE CONVEYANCE RECORDS OF BOSSIER PARISH, LOUISIANA.
6. LOTS 6, 7 AND 8 KAYWOOD SUBDIVISION, A SUBDIVISION OF BOSSIER PARISH,
AND/OR CADDO PARISH, LOUISIANA, AS PER PLAT RECORDED IN BOOK 339, PAGE 229
OF THE CONVEYANCE RECORDS OF BOSSIER PARISH, LOUISIANA.
7. LOTS 110, 111 AND 112, RIVERSIDE SUBDIVISION. A SUBDIVISION OF BOSSIER
PARISH, AND/OR CADDO PARISH, LOUISIANA, AS PER PLAT RECORDED IN BOOK 60,
PAGE 157 OF THE CONVEYANCE RECORDS OF BOSSIER PARISH, LOUISIANA, LESS A
STRIP OF LAND SEVEN (7') FEET IN WIDTH RUNNING BACK BETWEEN PARALLEL LINES
ALONG THE ENTIRE EASTERLY SIDE OF LOT 110.
<PAGE>
EXHIBIT A
UNITED STATES OF AMERICA
STATE OF LOUISIANA
DUPLICATE
FOX MCKEITHEN
SECRETARY OF STATE
The Secretary of State of the State of Louisiana, I do hereby Certify that
a Joint Merger Agreement whereby C-M OF LOUISIANA, INC., domiciled at
Shreveport, Louisiana, is merged into
JEFFERSON CASINO CORPORATION
Domiciled at Baton Rouge, Louisiana,
Certified by the Secretary of each corporation as having been approved by
the shareholders, and signed and acknowledged by the Vice-President of each
corporation on May 13, 1996,
Was recorded in this Office on May 13, 1996, the date merger became
effective, and filed in Record of Charters Book 345,
By virtue of this agreement, I further certify that C-M OF LOUISIANA, INC.,
domiciled at Shreveport, Louisiana, is no longer qualified to transact
business in this State.
In testimony whereof, I have hereunto set
my hand and caused the Seal of my Office
to be affixed at the City of Baton Rouge on.
May 13, 1996
/s/ FOX MCKEITHEN
(STATE SEAL)
DOB
Secretary of State
<PAGE>
UNITED STATES OF AMERICA
STATE OF LOUISIANA
FOX MCKEITHEN
SECRETARY OF STATE
As Secretary of State of the State of Louisiana. I do hereby Certify that
the annual transcript was prepared by and in this office from the record on
file of which to be a copy and that is filed true and correct.
In testimony whereof, I have hereunto set
my hand and caused the Seal of my Office
to be affixed at the City of Baton Rouge on
May 13, 1996
/s/ FOX MCKEITHEN
(STATE SEAL)
Secretary of State
<PAGE>
JOINT MERGER AGREEMENT
STATE OF LOUISIANA
PARISH OF ORLEANS
This Joint Merger Agreement dated as of the 13th day of May, 1996, is
entered into pursuant to the provisions of Section 112 of the Louisiana
Business Corporation Law, by and between a majority of the directors of
JEFFERSON CASINO CORPORATION (hereinafter referred to as "Surviving
Corporation") and a majority of the directors of C-M OF LOUISIANA, INC.
(hereinafter referred to as the "Assimilated Corporation").
WITNESSETH:
WHEREAS, the parties hereto desire that the Assimilated Corporation be
merged with and into the Surviving Corporation pursuant to this Joint Merger
Agreement (the "Agreement") providing for such merger (the "Merger"), on the
date and at the time provided for herein (the "Effective Date"); and
WHEREAS, the Agreement provides for the issuance of shares of the surviving
Corporation stock ("Stock") upon the merger being effective; and
WHEREAS, the parties hereto desire to set forth certain representations,
warranties, and covenants made by each to the other as an inducement to the
execution and delivery of this Agreement and certain additional agreements
related to the Merger,
NOW THEREFORE, in consideration of the premises and of the mutual
representations, warranties, and covenants herein contained, the parties
hereby agree as follows:
ARTICLE I
CONDITIONS PRECEDENT
1.01 This agreement is effective only if approved by the shareholders of
both the Surviving Corporation and the Assimilated Corporation. If the
shareholders for each corporation approve this Agreement by the vote
required by Section 112C of the Louisiana Business Corporation Law, the fact
of such approval shall be certified hereon by the secretary or assistant
secretary of each corporation, and this Agreement so approved and certified
shall be signed and acknowledged by the president or vice president of each
corporation.
1.02 This Agreement, when and if so approved, certified, signed and
acknowledged, shall be delivered to the Secretary of State of Louisiana for
filing and recording, and a copy of the Certificate of Merger issued by the
Secretary of State, certified by him, shall be filed for record in the
Office of the Recorder of Mortgages in each Parish in this State in which
either corporation has its registered office, and shall also be recorded in
the Conveyance Records of each Parish in this State in which either
corporation has immovable property, title to which will be transferred as a
result of the merger.
1.03 As provided in Section 114 of the Louisiana Business Corporation Law,
the merger shall be effective as of the date (the "Effective Date) when this
Agreement is filed with the Secretary of State, as aforesaid.
1.04 On the Effective Date the Surviving Corporation shall issue and
deliver to the shareholders of the Assimilated Corporation the number of
shares set out opposite the name of such shareholders in accordance with
this Agreement.
ARTICLE 2
THE ASSIMILATED CORPORATION'S
REPRESENTATIONS AND WARRANTIES
The Assimilated Corporation represents and warrants to the surviving
corporation as of the date hereof and on the Effective Date as follows:
2.01 GOOD STANDING. The Assimilated Corporation is a corporation duly
organized and validly existing in good standing under the laws of the State
of Louisiana, and it is duly authorized, qualified and licensed under all
applicable laws, regulations, ordinances, and orders of public authorities
to carry on its business in the places and in the manner as now conducted.
The character and location of the assets now owned or regularly leased by
the Assimilated Corporation (as hereinafter defined) in the conduct of and
the nature of the business as now owned by it do not require qualification
as a foreign corporation in any jurisdiction which they are not so
registered.
2.02 STOCKHOLDERS AND STOCK. The authorized capital stock of the
Assimilated Corporation consists solely of 100 shares of Common Stock, $0.00
par value, of which shares are issued and outstanding. Each share of said
Stock is duly and validly authorized and issued, fully paid, and
nonassessable. No option, warrant, call, or commitment of any kind
obligating the Assimilated Corporation to issue any of its capital stock
exists.
2.03 FINANCIAL STATEMENTS. The Assimilated Corporation has delivered to
the Surviving Corporation copies of all relevant financial statements of the
Assimilated Corporation:
Except as and only to the extent expressly disclosed by the Assimilated
Corporation and identified as being delivered pursuant to this Section
2.03(a), such financial statements have been prepared in accordance with
generally accepted accounting principles, applied on a consistent basis
throughout the periods indicated.
2.04 LIABILITIES. The Assimilated Corporation has delivered to the
Surviving Corporation an accurate list as of the 13th day of May, 1996 of
all liabilities of the Assimilated Corporation.
2.05 ACCOUNT RECEIVABLES. The Assimilated Corporation has delivered to the
Surviving Corporation an accurate list as of the 13th day of May, 1996 of
the accounts and notes receivable of the Assimilated Corporation except to
the extent of the reserve for bad debts reflected thereon, to the best
knowledge of the Assimilated Corporation, such accounts and notes are
collectible in the amounts shown on said list.
2.06 FIXED ASSETS. The Assimilated Corporation has delivered to the
Surviving Corporation an accurate list and a substantially complete
description as of the 13th day of May, 1996 of all the fixed assets of the
Assimilated Corporation including true and correct copies of leases on
properties on which are situated buildings, warehouses, workshops, and other
structures used in the operation of the business of the Assimilated
Corporation. Substantially all of the machinery, and equipment of the
Assimilated Corporation are in reasonably good working order and condition
to the knowledge and belief of the Assimilated Corporation.
Such leases are in full force and effect and constitute valid and binding
agreements of the parties thereto in accordance with their respective terms.
Except as indicated on the fist contemplated by Section 2.06, the
Assimilated Corporation has neither acquired nor sold nor otherwise disposed
of any fixed assets, except in the ordinary course of business. All fixed
assets used either by the Assimilated Corporation in the operation of its
business are either owned by the Assimilated Corporation or leased under an
agreement reflected on the schedule hereto.
2.07 Title. To the knowledge and belief of the Assimilated Corporation,
the Corporation has good and marketable title to all properties, assets and
leasehold estates, real and personal owned and used in its business, and
which is material to the operation of that business (except as since sold or
otherwise disposed of in the ordinary course of business), subject to no
mortgage, pledge, lien conditional sales agreement, encumbrance, or charge,
except for:
a. Liens securing specified liabilities (with respect to which no default
exists); and
b. Liens for current taxes and assessments not in default; and
C. Liens arising by operation of law of which, except to the extent
disclosed, the Assimilated Corporation has no knowledge of any such liens
existing.
2.08 Between the date of this Agreement and the Closing Date:
a. The Assimilated Corporation will afford to the officers and authorized
representatives of the Surviving Corporation access to the properties,
books, and records of the Assimilated Corporation and will furnish the
Surviving Corporation with such additional financial and operating data and
other information as to the business and properties of the Assimilated
Corporation as the Surviving Corporation may from time to time reasonably
request.
b. The Assimilated Corporation will:
1. Carry on their business in substantially the same manner as they have
heretofore, and not introduce any material new method of management,
operation, or accounting.
2. Maintain their properties and facilities in as good working order and
condition as at present, ordinary wear and tear excepted;
3. Perform all their material obligations under agreements relating to or
affecting its assets, properties, and rights;
4. Keep in full force and effect present insurance polices or other
comparable insurance coverage; and
5. Use their best efforts to maintain and preserve their business
organization intact, retain their present employees and maintain their
relationships with suppliers, customers, and others having business
relations with them.
C. The Assimilated Corporation will not, without the prior written consent
of the Surviving Corporation:
1. Make any change in their Articles of Incorporation;
2. Issue any securities;
3. Declare or pay any divided or make any distribution in respect of their
stock whether now or hereafter outstanding, or purchase, redeem, or
otherwise acquire or retire for value any shares of their stock,
4. Enter into any contract or commitment or incur or agree to incur any
liability or make any capital expenditures except in the normal course of
business;
5. Increase the compensation payment or become payable to any officer,
employee or agent, or make any bonus payment to any such person;
6. Create, assume, or permit any mortgage pledge, or other hen or
encumbrance upon any assets or properties whether now owned or hereafter
acquired;
7. Sell, assign, lease or otherwise transfer or dispose of any property or
equipment except in the normal course of business; or
8. Merge or consolidate or agree to merge or consolidate with or into any
other corporation.
ARTICLE 3
CONDITIONS TO THE OBLIGATIONS
OF THE ASSIMILATED CORPORATION
3.01 CONDITIONS. The obligations of the Assimilated Corporation hereunder
are at its option, subject to the satisfaction on or prior to the Effective
Date of the following conditions:
a. True Representations. The representations and warranties of the
Surviving Corporation contained in the Agreement shall be true on and as of
the Effective Date with the same effect as though such representations and
warranties had been made on and as of such date; any and all of the
agreements of the Surviving Corporation to be performed on or before the
Closing Date pursuant to the terms hereof shall have been performed; and the
Surviving Corporation shall have delivered to the Assimilated Corporation a
certificate dated the Closing Date and signed by it to all such effects.
b. Surviving Corporation's Condition. No material adverse change in the
results of operations, financial condition, or business of the Surviving
Corporation shall have occurred, and the Surviving Corporation shall not
have suffered any material loss or damage to any of its properties or
assets, whether or not covered by insurance, since April 1, 1996, which
change, loss or damage materially affects or impairs the ability of the
Surviving Corporation to conduct its business and the Assimilated
Corporation shall have received a certificate signed by the Surviving
Corporation.
c. Continued Representations: The representations and warranties of the
Surviving Corporation contained in this Agreement shall be accurate as of
the Effective Date as though such representations and warranties had been
made at and as of that time; all of the terms, covenants, and conditions of
this Agreement to be complied with and performed by the Surviving
Corporation on or before the Effective Date shall have been duly complied
with and performed; and a certificate to the foregoing effect dated the
Effective Date and signed by a party authorized by the Board of Directors of
the Surviving Corporation shall have been delivered to the Stockholders.
e. Board Authority. The Assimilated Corporation shall have received a copy
of the resolutions authorizing the execution, delivery and performance of
this Agreement by the Surviving Corporation certified by the Secretary of
the Surviving Corporation to have been adopted by the Board of Directors of
the Surviving Corporation and to be in full force and effect as of the
Effective Date.
ARTICLE 4
REPRESENTATIONS OF SURVIVING CORPORATION
4.01 Representations and Warranties of Surviving Corporation. The
Surviving Corporation represents and warrants to the Assimilated Corporation
as of the date hereof and on the Effective Date as follows (all
representations and warranties being joint and several):
a. Good Standing. The Surviving Corporation is a corporation duly
organized and validly existing in good standing under the laws of the State
of Louisiana, and it is duly authorized qualified and licensed under all
applicable laws, regulations, ordinances, and orders of public authorities
to carry on its business in the places and in the manner as now conducted.
The character and location of the assets now owned or regularly leased by
the Surviving Corporation (as hereinafter defined) in the conduct of its
businesses and the nature of the business as now transacted by it do not
require qualification as a foreign corporation in any jurisdiction.
b. Stockholders and Stock. The authorized capital stock of the Surviving
Corporation consists solely of 100 shares of Common Stock, $0.00 par value,
of which shares are issued and outstanding. Each share of Surviving
Corporation Stock is duly and validly authorized and issued, fully paid and
nonassessable, and was not issued in violation of the preemptive rights of
any Stockholder. No option, warranty, call, or commitment of any kind
obligating the Surviving Corporation to issue any of its capital stock
exists.
ARTICLE 5
EFFECT OF MERGER
Upon the consummation of the merger as hereinabove provided (the "Effective
Date"), the effect of the merger shall be that established by Section 115 of
the Louisiana Business Corporation Law, and without limitation thereof,
shall include the following:
a. The Surviving Corporation and the Assimilated Corporation shall be one
corporation, which shall be the Surviving Corporation, and which shall
survive the merger for that purpose.
b. The separate existence of the Assimilated Corporation shall cease.
C. The Surviving Corporation shall possess all the rights, privileges, and
franchises previously possessed by it, and those possessed by the
Assimilated Corporation.
d. All of the property and assets of whatsoever kind or description of the
Assimilated Corporation and all debts due on whatever account to it, shall
be taken and be deemed to be transferred to and vested in the Surviving
Corporation without further act or deed.
e. The Surviving Corporation shall be responsible for all the liabilities
and obligations of the Assimilated Corporation.
ARTICLE 6
MANNER OF CONVERSION OF SHARES
6.01 The manner and basis of converting the shares of the Assimilated
Corporation into shares of the Surviving Corporation shall be as follows:
a. All shares of Common Stock of the Surviving Corporation now authorized
and issued and outstanding shall remain outstanding and shall not be
affected by the Merger.
b. Each share of Common Stock of the Assimilated Corporation issued and
outstanding on the Effective Date shall forthwith be converted into 1
share(s) of the Common Stock of the Surviving Corporation, and each holder
of Common Stock of the Assimilated Corporation, upon presentation and
surrender to the Surviving Corporation of the certificate or certificates
representing such stock of the Assimilated Corporation, shall be entitled to
receive in exchange therefor certificates representing shares of Common
Stock of the Surviving Corporation on the basis herein provided.
ARTICLE 7
ARTICLES OF INCORPORATION AND
BY-LAWS OF SURVIVING CORPORATION
7.01 The Articles of Incorporation and the By-laws of the Surviving
Corporation are not altered or otherwise affected by virtue of the merger.
ARTICLE 8
GENERAL
8.01 Additional Instruments. The parties hereto shall deliver or cause to
be delivered the Effective Date, and at such times and places as shall be
reasonably agreed on, such additional instruments as any party may
reasonably request for the purpose of carrying out this Agreement. The
Surviving Corporation and the Assimilated Corporation will cooperate and use
their best efforts to have the present Officers, Directors, and employees of
the Surviving Corporation and the Assimilated Corporation cooperate on and
after the Effective Date in furnishing information evidence, proceedings,
arrangements, or disputes of any nature with respect to matters pertaining
to all periods prior to the Effective Date.
8.02 Assignment. This Agreement and the rights of the Assimilated
Corporation hereunder may not be assigned (except by operation of law) and
shall be binding upon and shall insure to the benefit of the parties hereto,
and the successors of and the heirs and legal representatives of the parties
hereto. However, the Surviving Corporation shall have the right at the
Effective Date or subsequently thereto, to cause the stock of the
Assimilated Corporation to be transferred to a wholly-owned subsidiary of
the Surviving Corporation.
8.03 Entire Agreement. This Agreement and the documents delivered pursuant
hereto constitute the entire agreement and understanding between the parties
hereto and supersede any prior agreement and understanding relating to the
subject matter of this Agreement. This Agreement may be modified or amended
only by duly authorized written instrument executed by the parties hereto.
8.04 Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original and all of
which together shall constitute but one and the same instrument. It shall
not be necessary that any single counterpart hereof be executed by all
parties hereto as long as at least one counterpart is executed by each
party.
8.05 Notices. Any notice or communication required or permitted hereunder
shall be sufficiently given if sent by first class mail postage prepaid:
(a) To the Surviving Corporation:
Daniel K. Rester
Attorney at Law
2431 S. Acadian Thruway, Suite 600
P. 0. Drawer 4407
Baton Rouge LA 70821-4407
(b) To the Assimilated Corporation:
Mr. S. Judd Tooke
Attorney at Law
1700 Irving Place
Shreveport LA 71101
8.06 Survivorship. All warranties, covenants, representations, and
guarantees shall survive the closing and execution of the documents
contemplated by this Agreement. The parties hereto in executing, and in
carrying out the provision of this Agreement are relying solely on the
representations, warranties, and agreements contained in this Agreement or
in any writing delivered p t to provisions of this Agreement or at the
closing of the transactions herein provided for and not upon any
representation warranty, agreement, promise, or information, written or
oral, made by any person other than as specifically set forth herein or
therein.
8.07 Law. This Agreement shall be construed in accordance with the laws of
the State of Louisiana.
IN WITNESS WHEREOF, a majority of the Board of Directors of each corporation
has signed this Agreement on this 13th day of May, 1996.
JEFFERSON CASINO CORPORATION C-M OF LOUISIANA, INC.
(SURVIVING CORPORATION) ASSIMILATED CORPORATION)
/S/ DANIEL K. RESTER /S/ DANIEL K. RESTER
Daniel K. Rester, Vice-President Daniel K. Rester, Vice-President
CERTIFICATE
The undersigned, Secretary of JEFFERSON CASINO CORPORATION (the "Surviving
Corporation"), hereby certifies that the above Joint Merger Agreement was
adopted by a majority of the Board of Directors of the Surviving Corporation
on the 13th day of May, 1996.
/S/ ROBERT A. CALLAWAY
ROBERT A. CALLAWAY, SECRETARY
CERTIFICATE
The undersigned, Secretary of C-M OF LOUISIANA, INC. (the "Assimilated
Corporation"), hereby certifies that the above Joint Merger Agreement was
adopted by a majority of the Board of Directors of the Assimilated
Corporation on the 13th day of May, 1996.
/s/ ROBERT A. CALLAWAY
ROBERT A. CALLAWAY, SECRETARY
CERTIFICATE
The undersigned, Secretary of Jefferson Casino Corporation (the "Surviving
Corporation") hereby certifies that the above Joint Merger Agreement was
adopted by vote of at least two-thirds of the voting present at the special
meeting of the Shareholders of the corporation called for such
purpose on the 13th day of May, 1996.
/S/ ROBERT A. CALLAWAY
ROBERT A. CALLAWAY, SECRETARY
CERTIFICATE
The undersigned, Secretary of C-M of Louisiana, Inc. (the "Assimilated
Corporation") hereby certifies that the above Joint Merger Agreement was
adopted by vote of at least two-thirds of the voting present at the special
meeting of the shareholders of the corporation called for such purpose
on the 13th day of May, 1996.
/S/ ROBERT A. CALLAWAY
ROBERT A. CALLAWAY, SECRETARY
ACKNOWLEDGMENT
STATE OF LOUISIANA
PARISH OF ORLEANS
On this 13th day of May, 1996, before me, personally carne and appeared
DANIEL K, RESTER. Vice-President of JEFFERSON CASINO CORPORATION , who being
duly sworn, did depose and say that he is the Vice-President of JEFFERSON
CASINO CORPORATION, the Corporation described in and which executed the
foregoing instrument as its free act and deed, and he signs Es name hereto
by order of resolution of the Board of Directors of said corporation.
WITNESSES: JEFFERSON CASINO CORPORATION
/S/ ----------------- BY: /S/ DANIEL K. RESTER
DANIEL K. RESTER, VICE-PRESIDENT
/S/ -----------------
/S/ ---------------------
NOTARY PUBLIC
ACKNOWLEDGMENT
STATE OF LOUISIANA
PARISH OF ORLEANS
On this 13th day of May, 1996, before me, personally came and appeared
DANIEL K, RESTER, Vice-President of C-M OF LOUISIANA, INC., who being duly
sworn, did depose and say that he is the Vice-President of C-M OF LOUISIANA
INC., the Corporation described in and which executed the foregoing
instrument as its free act and deed, and he signs his name hereto by order
of resolution of the Board of Directors of said corporation.
WITNESSES: C-M OF LOUISIANA, INC.
BY: /S/ DANIEL K. RESTER
DANIEL K. RESTER, VICE-PRESIDENT
/S/ ------------------
/S/ ------------------
/S/ ------------------
NOTARY PUBLIC
<PAGE>
RESOLUTION OF THE BOARD OF DIRECTORS
OF
C-M OF LOUISIANA, INC.
Robert A. Callaway, Secretary of C-M of Louisiana, Inc., a Louisiana
Corporation, hereby certifies that the following resolutions were adopted by
the Board of Directors of C-M of Louisiana, Inc., at a duly held telephonic
meeting Confirmed by written consent thereof on May 13, 1996, and that the
resolutions are in full force and effect as of the date of this certificate,
without modification:
RESOLVED, that C-M OF LOUISIANA, INC., through this Board enter into a Joint
Agreement of Merger with JEFFERSON CASINO CORPORATION, such Joint Agreement
to be in substantially the same form as the draft of the Joint Agreement
attached hereto and incorporated herein by reference.
BE IT FURTHER RESOLVED, that once a majority of the respective directors of
C-M of Louisiana, Inc. and Jefferson Casino Corporation have executed the
Joint Agreement in accordance with law, the Joint Agreement be submitted to
the shareholders of this corporation for their comments and approval at a
meeting to be held in the City of New Orleans, State of Louisiana, on the
13th day of May, 1996, at 12:00 o'clock P.M., and that the Secretary of the
of the Corporation shall promptly prepare and give due notice of such
meeting in accordance with the provisions of Section 112C of the Louisiana
Business Corporation Act, the By-laws of the Corporation and such other law
as may be applicable under the circumstances.
BE IT FURTHER RESOLVED, that an appropriate proxy statement be prepared by
the Secretary of the Corporation, with the assistance of counsel for the
Corporation and such other special counsel as may be employed therefor,
soliciting proxies to vote for the approval of such Joint Agreement of
Merger consistent with the requirements of Rule 145 promulgated by the
Securities and Exchange Commission.
BE IT FURTHER RESOLVED, that if said plan of Merger is approved by the
Stockholders, the Officers of the Corporation are authorized to take such
actions and to execute, deliver, and file such documents as may be necessary
or appropriate to carry out the plan of Merger.
RESOLVED, that the Joint Agreement of Merger presented to this meeting, a
copy of which attached hereto, between the Corporation and Jefferson Casino
Corporation, be and the same hereby is approved in all respects in the form
submitted.
RESOLVED, further, that Directors and Officers of the Corporation are
authorized to take such actions and to execute, deliver, and file such
documents as may be necessary or appropriate to carry out the plan of
Merger.
/S/ ROBERT A. CALLAWAY
ROBERT A. CALLAWAY Secretary
<PAGE>
RESOLUTION OF THE BOARD OF DIRECTORS
OF
. JEFFERSON CASINO CORPORATION
Robert A. Callaway, Secretary of Jefferson Casino Corporation, a Louisiana
corporation, hereby certifies that the following resolutions were adopted by
the Board of Directors of Jefferson Casino Corporation, at a duly held
telephonic meeting confirmed by written consent thereof on May 13, 1996, and
that the resolutions are in full force and effect as of the date of this
certificate, without modification:
RESOLVED, that JEFFERSON CASINO CORPORATION, through this Board enter into a
Joint Agreement of Merger with C-M OF LOUISIANA, INC., such Joint Agreement
to be in substantially the same form as the draft of the Joint Agreement
attached hereto and incorporated herein by reference.
BE IT FURTHER RESOLVED, that once a majority of the respective directors of
Jefferson Casino Corporation and C-M of Louisiana, Inc. have executed the
Joint Agreement in accordance with law, the Joint Agreement be submitted to
the shareholders of this corporation for their comments and approval at a
meeting to be held in the City of New Orleans, State of Louisiana, on the
13th day of May, 1996, at 12:00 o'clock P.M., and that the Secretary of the
of the Corporation shall promptly prepare and give due notice of such
meeting in accordance with the provisions of Section 112C of the Louisiana
Business Corporation Act, the By-laws of the Corporation and such other law
as may be applicable under the circumstances.
BE IT FURTHER RESOLVED, that an appropriate proxy statement be prepared by
the Secretary of the Corporation, with the assistance of counsel for the
Corporation and such other special counsel as may be employed therefor,
soliciting proxies to vote for the approval of such Joint Agreement of
Merger consistent with the requirements of Rule 145 promulgated by the
Securities and Exchange Commission.
BE IT FURTHER RESOLVED, that if said plan of Merger is approved by the
Stockholders, the Officers of the Corporation are authorized to take such
actions and to execute, deliver, and file such documents as may be necessary
or appropriate to carry out the plan of Merger.
RESOLVED, that the Joint Agreement of Merger presented to this meeting, a
copy of which attached hereto, between the Corporation and C-M of Louisiana,
Inc., be and the same hereby is approved in all respects in the form
submitted.
RESOLVED, further, that Directors and Officers of the Corporation are
authorized to take such actions and to execute, deliver, and file such
documents as may be necessary or appropriate to carry out the plan of
Merger.
/s/ ROBERT A. CALLAWAY
ROBERT A. CALLAWAY, Secretary
<PAGE>
Resolution of the Shareholders
of
Jefferson Casino Corporation
The Shareholders by a majority vote have approved the merger of Jefferson
Casino Corporation and C-M of Louisiana, Inc.
DONE this 13th day of May, 1996.
/s/ Robert A. Callaway
Robert A. Callaway, Secretary
<PAGE>
Resolution of the Shareholders
of
C-M of Louisiana, Inc.
The Shareholders by a majority vote have approved the merger of Jefferson
Casino Corporation and C-M of Louisiana, Inc.
DONE this 13th day of May, 1996.
/s/ Robert A. Callaway
Robert A. Callaway, Secretary
=========================================================================
PLEDGE AND SECURITY AGREEMENT
DATED AS OF MAY 13, 1996
AMONG
CASINO MAGIC OF LOUISIANA CORP.
JEFFERSON CASINO CORPORATION,
as Grantors
and
FIRST TRUST NATIONAL ASSOCIATION
As Agent
FOR THE BENEFIT OF
THE HOLDERS OF
11 1/2% SENIOR SECURED NOTES DUE 1999
=========================================================================
PLEDGE AND SECURITY AGREEMENT ("Security Agreement") dated as of May 13,
1996, made by CASINO MAGIC OF LOUISIANA CORP., a Louisiana corporation (the
"Company") and JEFFERSON CASINO CORPORATION, a Louisiana corporation ("JCC"
and, together with the Company, the "Grantors"), to FIRST TRUST NATIONAL
ASSOCIATION, as agent (the "Trustee") for the benefit of the holders (the
"Holders") from time to time of the Notes hereinafter referred to. Except
as otherwise defined herein, terms used herein and defined in the Indenture
(as hereinafter defined) shall be used herein as so defined.
W I T N E S S E T H
WHEREAS, in accordance with that certain Stock Purchase Agreement, dated
February 21, 1996, among the Company, Capital Gaming International, Inc.,
JCC, C-M of Louisiana, Inc. (n/k/a JCC) and Casino Magic Corp., and the
Second Amended Plan of Reorganization of the Company, dated March 15, 1996,
the Company will issue $35,000,000 aggregate principal amount of Senior
Secured Notes Due 1999 (as same may be from time to time amended, modified
or supplemented, the "Notes", which term shall include all securities issued
under the Indenture as the same may be from time to time amended, modified
or supplemented, pursuant to an Indenture (the "Indenture"), dated as of May
13, 1996, among the Company, as issuer, JCC, as guarantor, and the Trustee,
as Trustee;
WHEREAS, the Grantors are the legal and beneficial owners of the Collateral
(as hereinafter defined);
WHEREAS, it is a condition precedent to the purchase of the Notes under the
Indenture that the Grantors execute and deliver to the Trustee this Security
Agreement; and
WHEREAS, Grantors desire to execute this Security Agreement to satisfy the
condition described in the preceding paragraph;
NOW, THEREFORE, in consideration of the benefits accruing to the Grantors,
the receipt and sufficiency of which are hereby acknowledged, the Grantors
hereby make the following representations and warranties to the Trustee and
hereby covenant and agree with Trustee as follows:
1. CERTAIN DEFINED TERMS. (a) As used in this Security Agreement, the
following terms have the meanings specified below (such meanings being
equally applicable to both the singular and plural forms of the terms
defined):
"ACCOUNT" means any "account," as such term is defined in Section 9-106 of
the UCC, now owned or hereafter acquired by any Grantor and, in any event,
includes, without limitation, (i) all accounts receivable, book debts and
other forms of obligations (other than forms of obligations evidenced by
Chattel Paper, Documents or Instruments) now owned or hereafter received or
acquired by or belonging or owing to any Grantor (including, without
limitation, under any trade name, style or division thereof) whether arising
out of goods sold or services rendered by such Grantor, or from any other
transaction, whether or not the same involves the sale of goods or services
by any Grantor (including, without limitation, any such obligation which
might be characterized as an account or contract right under the UCC), (ii)
all of any Grantor's rights in, to and under all purchase orders or receipts
now owned or hereafter acquired by it for goods or services, and all of any
Grantor's rights to any goods represented by any of the foregoing
(including, without limitation, unpaid seller's rights of rescission,
replevin, reclamation and stoppage in transit and rights to returned,
reclaimed or repossessed goods), (iii) all moneys due or to become due to
any Grantor under all contracts for the sale of goods or the performance of
services or both by any Grantor (whether or not yet earned by performance on
the part of any Grantor or in connection with any other transaction), now in
existence or hereafter occurring, including, without limitation, the right
to receive the proceeds of said purchase orders and contracts, and (iv) all
collateral security and guarantees of any kind given by any Person with
respect to any of the foregoing.
"CHATTEL PAPER" means any "chattel paper," as such term is defined in
Section 9-105(i)(b) of the UCC, now owned or hereafter acquired by any
Grantor.
"COMPUTER HARDWARE AND SOFTWARE" means, with respect to any Grantor, (i) all
computer and other electronic data processing hardware, whether now owned,
licensed or leased or hereafter acquired by such Grantor, including, without
limitation, all integrated computer systems, central processing units,
memory units, display terminals, printers, features, computer elements, card
readers, tape drives, hard and soft disk drives, cables, electrical supply
hardware, generators, power equalizers, accessories and all peripheral
devices and other related computer hardware; (ii) all software programs,
whether now owned, licensed or leased or hereafter acquired by such Grantor,
designed for use on the computers and electronic data processing hardware
described in clause (i) above, including, without limitation, all operating
system software, utilities and application programs in whatsoever form
(source code and object code in magnetic tape, disk or hard copy format or
any other listings whatsoever); (iii) all firmware associated therewith,
whether now owned, licensed or leased or hereafter acquired by such Grantor;
and (iv) all documentation for such hardware, software and firmware
described in the preceding clauses (i), (ii) and (iii) above, whether now
owned, licensed or leased or hereafter acquired by such Grantor, including,
without limitation, flow charts, logic diagrams, manuals, specifications,
training materials, charts and pseudo codes.
"CONTRACTS" means all contracts, undertakings or other agreements (other
than Chattel Paper, Documents or Instruments) in or under which any Grantor
may now or hereafter have any right, title or interest, including, without
limitation, with respect to an Account, any agreement relating to the terms
of payment or the terms of performance thereof.
"DOCUMENTS" means any "document," as such term is defined in Section 9-
105(l)(f) of the UCC, now owned or hereafter acquired by any Grantor.
"EQUIPMENT" means any "equipment," as such term is defined in Section 9-
109(2) of the UCC, now owned or hereafter acquired by any Grantor and, in
any event, includes, without limitation, all machinery, equipment,
furnishings, fixtures, vehicles, computers and other electronic data-
processing and office equipment now owned or hereafter acquired by any
Grantor and any and all additions, substitutions and replacements of any of
the foregoing, wherever located, together with all attachments, components,
parts, equipment and accessories installed thereon or affixed thereto.
"GENERAL INTANGIBLES" means any "general intangibles," as such term is
defined in Section 9-106 of the UCC, now owned or hereafter acquired by any
Grantor and, in any event, includes, without limitation, all uncertificated
partnership interests, uncertificated interests in limited liability
companies and other entities, dividends or distributions payable in respect
of equity interests owned by any Grantor and proceeds from the sale or other
disposition of any equity interest owned by any Grantor to the extent such
equity interest does not otherwise constitute collateral for the
obligations, customer lists, trademarks, patents, rights in intellectual
property, licenses, permits, copyrights, trade secrets, proprietary or
confidential information, inventions (whether patented or patentable or not)
and technical information, procedures, designs, knowledge, know-how,
software, data bases, data, skill, expertise, experience, processes, models,
drawings, materials and records, goodwill, rights of indemnification and all
right, title and interest which any Grantor may now or hereafter have in or
under any Contract, now owned or hereafter acquired by any Grantor.
"INSTRUMENT" means any "instrument," as such term is defined in Section 9-
105(l)(i) of the UCC, now owned or hereafter acquired by any Grantor, other
than instruments that constitute, or are a part of a group of writings that
constitute, Chattel Paper.
"INVENTORY" means any "inventory," as such term is defined in Section 9-
109(4) of the UCC, now owned or hereafter acquired by any Grantor, and
wherever located, and, in any event, includes, without limitation, all
inventory, merchandise, goods and other personal property now owned or
hereafter acquired by any Grantor which are held for sale or lease or are
furnished or are to be furnished under a contract of service or which
constitute raw materials, work in process or materials used or consumed or
to be used or consumed in any Grantor's business, or the processing,
packaging, delivery or shipping of the same, and all finished goods.
"PLEDGED COLLATERAL" means, collectively,
(i) all of the capital stock described in Schedule 1 hereto as being
owned by JCC and issued by the Company (the "Stock");
(ii) all additional shares of capital stock or other securities of the
Company from time to time acquired by any Grantor in any manner (any such
shares being "Additional Shares");
(iii) the certificates representing the shares referred to in clauses (i)
and (ii) above; and
(iv) all dividends, distributions, cash, Instruments and other property
or proceeds from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all of the foregoing.
"UCC" means the Uniform Commercial Code as the same may, from time to time,
be in effect in the State of Louisiana; PROVIDED, HOWEVER, in the event
that, by reason of mandatory provisions of law, any or all of the
attachment, perfection or priority of the Trustee's and the Secured Parties'
security interest in any Collateral is governed by the Uniform Commercial
Code as in effect in a jurisdiction other than the State of Louisiana, the
term "UCC" shall mean the Uniform Commercial Code as in effect in such other
jurisdiction for purposes of the provisions hereof relating to such
attachment, perfection or priority and for purposes of definitions related
to such provisions.
(b) As used in this Security Agreement, the terms "certificated
securities," "deposit account," "fixtures," "goods," "proceeds," and
"uncertificated securities" shall have the meanings given to such terms in
the UCC.
(c) Capitalized terms used but not otherwise defined herein shall have
the meaning given to such terms in the Indenture.
2. SECURITY FOR NOTES, ETC. This Security Agreement is given by the
Grantors in favor of the Trustee for the benefit of the Trustee and the
Holders (referred to herein as the "Secured Creditors") to secure (i) the
payment in full when due, whether at stated maturity, by acceleration or
otherwise (including, without limitation, the payment of interest and other
amounts which would accrue and become due but for the filing of a petition
in bankruptcy or the operation of the automatic stay under Section 362(a) of
the Bankruptcy Code, 11 U.S.C. Sec. 362(a)) of (a) the principal of and
interest on the Notes and (b) all other obligations and indebtedness of the
Grantors, now existing or hereafter incurred under, arising out of or in
connection with the Notes, the Guaranty, the Collateral Documents and the
Indenture (together with this Agreement, collectively, the "Credit
Documents"); and (ii) the due performance of and compliance with the terms
of the Credit Documents by the Grantors, to the extent of any such Grantor's
respective obligations thereunder (all such principal, interest, obligations
and liabilities being herein collectively called the "Obligations")
3. DEFINITION OF SECURITIES. As used herein, the term "Stock" shall
mean all of the shares of the Company from time to time issued and
outstanding. The Grantors represent and warrant that on the date hereof (i)
the Stock consists of 100 shares of Common Stock, par value $ .01 per share;
(ii) JCC is the sole legal and beneficial owner of the Stock; and (iii) all
such shares of the Stock are validly issued, fully paid and nonassessable.
4. PLEDGE AND ASSIGNMENT.
4.1. PLEDGE AND ASSIGNMENT. To secure the obligations and for the
purposes set forth in Section 2, the Grantors hereby pledge, assign,
transfer, grant and deposit with the Trustee a continuing first priority
security interest in and to all of the right, title and interest of the
Grantors in and to the following property, whether now existing or hereafter
acquired (collectively, the "Collateral"):
(i) all Accounts;
(ii) all Chattel Paper;
(iii) all Computer Hardware and Software and all rights with respect
thereto, including, without limitation, any and all licenses, options,
warranties, service contracts, program services, test rights, maintenance
rights, support rights, improvement rights, renewal rights and
indemnifications, and any substitutions, replacements, additions or modern
conversions of any of the foregoing;
(iv) all Contracts and any and all claims of the Grantors for damages
arising out of or for breach of or a default under any Contract and the
rights of the Grantors to perform or to compel performance under any
Contract and to exercise all remedies thereunder;
(v) all Documents;
(vi) all Equipment;
(vii) all General Intangibles;
(viii) all Instruments;
(ix) all Inventory;
(x) all Pledged Collateral;
(xi) all other certificated securities and all other uncertificated
securities;
(xii) all Boat Conveyance Proceeds and all other cash of the Grantors;
(xiii) all deposit accounts of the Grantors;
(xiv) all other goods and personal property of the Grantors whether
tangible or intangible or whether now owned or hereafter acquired by the
Grantors and wherever located (collectively, the "General Collateral,");
(xv) all books, records, writings, data bases, information and other
property relating to, used or useful in connection with, evidencing,
embodying, incorporating, or referring to any of the foregoing; and
(xvi) to the extent not otherwise included, all proceeds of each of the
foregoing and all accessions to, substitutions and replacements for, and
rents, profits and products of, each of the foregoing;
PROVIDED, HOWEVER, that the Collateral shall expressly not include (a)
furniture, fixtures and Equipment of the Company, (1) owned by the Company
on May 13, 1996 (including, but not limited to, furniture, fixtures and
Equipment subject to Liens securing the Indebtedness arising out of the
claims of Bally Gaming, Inc. and International Gaming Corp. or their
respective successors, assigns, affiliates or agents pursuant to the Stock
Purchase Agreement) or (2) acquired by the Company after May 13, 1996 with
Permitted FF&E Financing the terms of which forbid any Lien on such
furniture, fixtures and equipment in favor of any other person (including
the Trustee for the benefit of the Holders), (b) cash of the Company
obtained by the Company solely from the sale of Inventory or the provision
of services in the ordinary course of the Company's gaming operations, and
(c) cash of JCC received from Parent Equity Contributions or as proceeds of
Indebtedness which JCC may incur under clause (g) of Section 5.11 of the
Indenture.
4.2. DELIVERY OF COLLATERAL. The Grantors shall deliver to the Trustee
on the date hereof, and with respect to any Stock acquired by the Grantors
after the date hereof, within five (5) days of such receipt, all
certificates representing the Stock, accompanied by stock powers duly
executed in blank by the Company.
5. APPOINTMENT OF SUB-AGENTS. The Trustee shall have the right to
appoint one or more sub-agents at the Grantors' expense for the purpose of
retaining physical possession of the Collateral.
6. RIGHTS, ETC., WHILE NO EVENT OF DEFAULT. Unless and until an Event
of Default (such term to mean an Event of Default under, and as defined in,
the Indenture) shall have occurred and be continuing, the Grantors shall be
exclusively entitled to exercise all rights with respect to the Collateral,
including with respect to the Stock, the rights, including voting rights,
set forth in the Certificate of Incorporation of the Company as it relates
to the Stock (the "Certificate,,) and, if authorized by such Certificate or
by law, to give consents, waivers or ratifications in respect thereof;
PROVIDED, HOWEVER, that no rights shall be exercised or any consent, waiver
or ratification given or any action taken which would violate or be
inconsistent with any of the terms of this Security Agreement, any other
Credit Document or any other instrument or agreement referred to therein, or
which could reasonably be expected to have a material adverse effect on the
value of the Collateral or the security intended to be provided by this
Security Agreement. In case an Event of Default shall occur and be
continuing, the rights granted to the Grantors under this Section 6 shall
cease and the rights of the Trustee under Section 8 hereof shall become
applicable.
7. DIVIDENDS AND OTHER DISTRIBUTIONS. Unless and until an Event of
Default shall have occurred and be continuing, the Grantors shall be
entitled to retain all cash dividends and other cash distributions (in each
case to the extent authorized by the terms of the Indenture) in respect of
the Stock. All dividends and other distributions in the form of
certificated securities shall be delivered to the Trustee within five days
of receipt thereof. After an Event of Default and while any Event of
Default is continuing, the right of the Grantors to retain all cash
dividends and distributions shall cease, and all dividends and distributions
shall immediately be delivered by the Grantors to the Trustee.
8. REMEDIES IN CASE OF EVENT OF DEFAULT. (a) In case an Event of Default
shall have occurred and be continuing, the Trustee shall be entitled to
exercise, in accordance with the terms of the Indenture, all of the rights,
powers and remedies (whether vested in it by this Security Agreement, the
Certificate, any other Credit Document or by law) for the protection and
enforcement of its rights in respect of the Collateral, including without
limitation, the following rights:
(i) to receive all amounts payable (if any) in respect of the
Collateral;
(ii) to transfer all or any part of the Collateral into the Trustee's
name, the names of the respective Holders or the names of their respective
nominees;
(iii) to vote all or any part of the Collateral (whether or not
transferred into the name of the Trustee) and to give all consents, waivers
and ratifications and to otherwise exercise all rights available to it in
respect of the Collateral and otherwise to act with respect thereto as
though it were the outright owner thereof (the Grantors hereby irrevocably
constituting and appointing the Trustee the proxy and attorney-in-fact of
the Grantors, with full power of substitution to do so) in accordance with
the rights granted under the Certificate, the Collateral or applicable law;
and
(iv) at any time or from time to time to sell, assign and deliver, or
grant options to purchase, all or any part of the Collateral, or any
interest therein, at any public or private sale, for cash, for immediate or
future delivery without any assumption of credit risk, and for such price or
prices and on such terms as may be reasonable; PROVIDED, HOWEVER, that at
least 10 days' notice of the time and place of any such sale shall be given
to the Grantors. At any such sale, unless prohibited by applicable law, the
Trustee on behalf of the Secured Creditors may bid for and purchase all or
any part of the Collateral so sold free from any right or equity of
redemption of the Grantors. Neither the Trustee nor any Secured Creditor
shall be liable for failure to collect or realize upon any or all of the
Collateral or for any delay in so doing nor shall any of them be under any
obligation to take any action whatsoever with regard thereto.
Notwithstanding the foregoing, the Trustee shall not be obligated to take
any action with respect to the exercise of any rights or remedies hereunder
or pursuant to the instructions of Holders owning a majority of the
principal amount of the Notes unless the Trustee receives indemnity
satisfactory to it against any risk, claim, liability, loss, cost or
expense.
(b) The provisions of this Section 8(b) shall, without limiting the
generality of any other provision of this Agreement, be applicable in the
event any foreclosure shall take place in Louisiana on any Collateral or
proceeds or, in connection with any foreclosing hereunder, Louisiana law
shall otherwise be applicable. The Trustee, instead of exercising the power
of sale herein conferred upon it, may proceed by a suit or suits at law or
in equity to foreclose the security interests and sell the Collateral and
the proceeds, or any portion thereof, under a judgment or decree of a court
or courts of competent jurisdiction. For the purposes of Louisiana
executory process procedures, the Grantors do hereby acknowledge the
Obligations and confess judgment in favor of the Trustee and the Secured
Parties for the full amount of the Obligations. The Grantors do by these
presents consent and agree that upon the occurrence of an Event of Default
it shall be lawful for the Trustee to cause all and singular the Collateral
and the proceeds to be seized and sold under executory or ordinary process,
at the Trustee's sole option, without appraisement, appraisement being
hereby expressly waived, in one lot as an entirety or in separate parcels or
portions as the Trustee may determine, to the highest bidder, and otherwise
exercise the rights, powers and remedies afforded herein and under
applicable Louisiana law. Any and all declarations of fact made by
authentic act before a notary public in the presence of two witnesses by a
person declaring that such facts lie within his knowledge shall constitute
authentic evidence of such for the purpose of executory process. The
Grantors hereby waive in favor of the Trustee: (a) the benefit of
appraisement as appraisement as provided in Louisiana Code of Civil
Procedure Articles 2332, 2336, 2723 and 2724, and all other laws conferring
the same; (b) the demand and three days delay accorded by Louisiana Code of
Civil Procedure Articles 2639 and 2721; (c) the notice of seizure required
by Louisiana Code of Civil Procedure Articles 2293 and 2721; (d) the three
days delay provided by Louisiana Code of Civil Procedure Articles 2331 and
2722; and (e) the benefit of the other provisions of Louisiana Code of Civil
Procedure Articles 2331, 2722 and 2723, not specifically mentioned above.
In the event the Collateral (or the proceeds) or any part thereof is seized
as an incident to an action for the recognition or enforcement of this
Agreement by executory process, ordinary process, sequestration, writ of
fierl facias, or otherwise, the Grantors and the Trustee agree that the
court issuing any such order shall, if petitioned for by the Trustee, direct
the applicable sheriff or marshall to appoint as a keeper of the Collateral
and the proceeds, the Trustee or any agent designated by the Trustee or any
person named by the Trustee at the time such seizure is effected. This
designation is pursuant to Louisiana Revised Statutes 9:5136-9:5140.2 and
the Trustee shall be entitled to all the rights and benefits afforded
thereunder as the same may be amended. It is hereby agreed that the keeper
shall be entitled to receive as compensation, in excess of its reasonable
costs and expenses incurred in the administration or preservation of the
Collateral and the proceeds, an amount equal to $250.00 pr day payable on a
monthly basis. The designation of keeper made herein shall not be deemed to
require the Trustee to provoke the appointment of such a keeper.
9. REMEDIES, ETC., CUMULATIVE. Each right, power and remedy of the
Trustee provided for in this Security Agreement, the Certificate or the
Credit Documents shall be cumulative and concurrent and shall be in addition
to every other such right, power or remedy now or hereafter existing at law
or in equity or by statute. The exercise or commencement of the exercise by
the Trustee or any Secured Creditor of any one or more of the rights, powers
or remedies provided for in this Security Agreement, the Certificate, the
Credit Documents or by applicable law shall not preclude the simultaneous or
later exercise by the Trustee or any Secured Creditor of all such other
rights, powers or remedies, and no failure or delay on the part of the
Trustee or any Secured Creditor to exercise any such right, power or remedy
shall operate as a waiver thereof.
10. APPLICATION OF PROCEEDS. All moneys collected by the Trustee upon any
sale or other disposition of the Collateral, together with all other moneys
received by the Trustee hereunder, shall be applied: (i) first, to the
payment of all costs and expenses incurred by the Trustee in connection with
such sale, the delivery of the Collateral or the collection of any such
moneys (including, without limitation, reasonable attorneys' fees and
expenses); (ii) second, to the extent moneys remain after the application
pursuant to preceding clause (i), to the Holders of the Notes to pay
principal of or interest on the Notes and all reasonable expenses; and (iii)
third, to the extent moneys remain after the application pursuant to
preceding clause (ii), to the Grantors.
11. PURCHASERS OF COLLATERAL. Upon any sale of the Collateral by the
Trustee hereunder (whether by virtue of the power of sale herein granted,
pursuant to judicial process or otherwise) the receipt by the Trustee or the
officer making the sale of the purchase price for such Collateral shall be a
sufficient discharge to the purchaser or purchasers of the Collateral so
sold, and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to the Trustee or
such officer or be answerable in any way for the misapplication or
nonapplication thereof.
12. INDEMNITY. Each of the Grantors, jointly and severally, agrees to
indemnify and hold harmless the Trustee from and against any and all claims,
demands, losses, judgments and liabilities (including liabilities for
penalties) of whatsoever kind or nature, and to reimburse the Trustee for
all costs and expenses, including reasonable attorneys, fees and
disbursements arising out of or resulting from this Security Agreement or
the exercise by the Trustee of any right or remedy granted to it hereunder
or under the Certificate, the Indenture, the Collateral Documents, the
Collateral or applicable law, except to the extent that it is finally
judicially determined that such claims, demands, losses, judgments and
liabilities arose primarily out of the gross negligence or willful
misconduct of the Trustee. In no other event shall the Trustee be liable
for any matter or thing in connection with this Security Agreement other
than to account for moneys actually received by it in accordance with the
terms hereof. If and to the extent that the obligations of the Grantors
under this Section 12 are unenforceable for any reason, the Grantors hereby
agree to make the maximum contribution to the payment and satisfaction of
such obligations which is permissible under applicable law.
The Grantors will upon demand pay to the Trustee the amount of any and all
reasonable expenses, including fees and disbursements of its counsel and
agents, which the Trustee may incur in connection with performance of
Trustee's duties and administration of this Security Agreement or the
exercise or enforcement of any of its rights or remedies hereunder or any
action otherwise taken pursuant to this Security Agreement.
13. FURTHER ASSURANCES. The Grantors agree that they will, at the
Grantors' own expense, file and refile such financing statements,
continuation statements and other documents in such offices as may be
necessary or appropriate or that the Trustee may reasonably request and
wherever required or permitted by law in order to perfect and preserve the
Trustee's security interest in the Collateral and hereby authorize the
Trustee to file financing statements and amendments thereto relative to all
or any part of the Collateral without the signature of the Grantors where
permitted by law, and agree to do such further acts and things and to
execute and deliver to the Trustee such additional conveyances, assignments,
supplements, agreements and instruments as may be necessary or appropriate
or that the Trustee may reasonably require or deem advisable to carry into
effect the purposes of this Security Agreement or to further assure and
confirm unto the Trustee its rights, powers and remedies hereunder.
14. THE TRUSTEE AS AGENT. The Trustee will hold in accordance with this
Security Agreement all items of the Collateral at any time received by it
under this Security Agreement. The interest of each Secured Creditor in the
Collateral shall be in proportion to the aggregate unpaid principal amount
of the obligations owed to and held by such Secured Creditor plus accrued
and unpaid interest thereon and except with respect to the claims of the
Trustee as agent hereunder and under the Indenture, without priority or
preference of any Secured Creditor over the other. It is expressly
understood and agreed that the obligations of the Trustee as holder of the
Collateral and interests therein and with respect to the disposition
thereof, and otherwise under this Security Agreement, are only those
expressly set forth in this Security Agreement and the Indenture. Nothing
contained herein shall impose any duties on the Trustee beyond the duties of
Trustee as Trustee under the Indenture.
15. TRANSFER BY THE GRANTORS. The Grantors will not sell or otherwise
dispose of, grant any option with respect to, or mortgage, pledge or
otherwise encumber any of the Collateral or any interest therein (except
pursuant to the Indenture or this Security Agreement).
16. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE GRANTORS. Each
Grantor represents, warrants and covenants, as applicable, that: (a) it is
the beneficial owner of, and has good and marketable title to, the
Collateral pledged by it in Section 4 subject to no pledge, lien, mortgage,
hypothecation, security interest, charge, option or other encumbrance
whatsoever, except the liens and security interests created by this Security
Agreement; (b) each Contract pledged by it is in full force and effect, has
not been amended or modified, has not been assigned by such Grantor to any
party, and no party has sent or received any notice of default thereunder
and no event has occurred as of the date hereof which with the passage of
time or the giving of notice, or both, would constitute a default
thereunder; (c) no material amendment or modification of any Contract which
would have a material adverse effect on the Trustee or the assignment and
security interest granted hereby to the Trustee shall be effective without
the prior written consent of the Trustee; (d) the delivery of this Security
Agreement by it does not constitute the basis for a default under any
Contract pledged by it; (e) there is not pending or threatened any claim or
litigation against or affecting it contesting the validity of any of the
Collateral; (f) it has full power, authority and legal right to pledge all
the Collateral pledged by it pursuant to this Security Agreement; (g) this
Security Agreement has been duly authorized, executed and delivered by such
Grantor and constitutes a legal, valid and binding obligation of such
Grantor enforceable in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors, rights
generally or by equitable principles relating to enforceability; (h) no
consent of any other party (including without limitation any stockholder or
creditor of such Grantor, or any of its subsidiaries) and, except for UCC
filings made on or contemporaneously with the date hereof in the
jurisdictions and appropriate offices set forth on Schedule 2 hereto, no
consent, license, permit, approval or authorization of, exemption by, notice
or report to, or registration, filing or declaration with, any governmental
authority is required to be obtained by such Grantor in connection with the
execution, delivery or performance of this Security Agreement or to obtain a
valid and perfected first security interest in the Collateral; (i) the
execution, delivery and performance of this Security Agreement will not
violate any provision of any applicable law or regulation or of any order,
judgment, writ, award or decree of any court, arbitrator or governmental
authority, domestic or foreign, or of the certificate of incorporation or
by-laws of such Grantor or of any securities issued by such Grantor, or of
any mortgage, indenture, lease, contract or other agreement, instrument or
undertaking to which such Grantor is a party or which purports to be binding
upon such Grantor or upon any of its assets, and will not result in the
creation or imposition of any lien or encumbrance on any of the assets of
the Grantors except as contemplated by this Security Agreement; (j) each
Grantor's chief executive office and principal place of business are as set
forth on Schedule 3 hereto, and each other location where Inventory or
Equipment of each Grantor is located, and any other location where any
Grantor maintains a place of business, are as set forth on Schedule 4
hereto;(k) all the shares of the Stock have been duly and validly issued,
are fully paid and nonassessable; and (1) the pledge, assignment and
delivery of the Stock and, after certain financing statements have been
filed with respect to the Collateral, this Security Agreement, creates a
valid and perfected first security interest in the Collateral, subject to no
prior lien or encumbrance or to any agreement purporting to grant to any
third party a lien or encumbrance on the property or assets of such Grantor
which would include the Collateral.
The Grantors covenant and agree that they will defend the Trustee's right,
title and security interest in and to the Collateral against the claims and
demands of all persons whomsoever; and the Grantors covenant and agree that
they will have like title to and right to pledge any other property at any
time hereafter pledged to the Trustee as Collateral hereunder and will
likewise defend the right thereto and security interest therein of the
Trustee and the Secured Creditors.
The Grantors shall notify Trustee in the event any Grantor receives any
material notice or communication with respect to any Agreement, including,
without limitation, notices of default, and shall promptly forward copies of
any such communications to Trustee.
Each Grantor agrees that it will not move its chief executive office or
change its name without giving the Trustee at least 30 days prior written
notice thereof.
17. GRANTORS' OBLIGATIONS ABSOLUTE, ETC. Except as otherwise required by
law, the Obligations of the Grantors under this Security Agreement shall be
absolute and unconditional and shall remain in full force and effect without
regard to, and shall not be released, suspended, discharged, terminated or
otherwise affected by, any circumstances or occurrence whatsoever,
including, without limitation: (a) any renewal, extension, amendment or
modification of or addition or supplement to or deletion from the Indenture
or the Collateral Documents or any other instrument or agreement referred to
therein, or any assignment or transfer of any thereof; (b) any waiver,
consent, extension, indulgence or other action or inaction under or in
respect of any such agreement or instrument or this Security Agreement; (c)
any furnishing of any additional security to the Trustee or its assignee or
any acceptance thereof or any release of any security by the Trustee or its
assignee; (d) any limitation on any party's liability or obligations under
any such instrument or agreement or any invalidity or unenforceability, in
whole or in part, of any such instrument or agreement or any term thereof;
or (e) any bankruptcy, insolvency, reorganization, composition, adjustment,
dissolution, liquidation or other like proceeding relating to a Grantor or
any subsidiary of a Grantor, or any action taken with respect to the
Security Agreement by any trustee or receiver, or by any court, in any such
proceeding, whether or not such Grantor shall have notice or knowledge of
any of the foregoing.
18. TERMINATION; RELEASE. On the date when no Notes are outstanding and
all obligations have been indefeasibly paid in full, this Security Agreement
shall terminate, and the Trustee, at the request and expense of the
Grantors, will execute and deliver to the Grantors a proper instrument or
instruments acknowledging the satisfaction and termination of this Security
Agreement, and will duly assign, transfer and deliver to the Grantors a
proper instrument or instruments acknowledging the satisfaction and
termination of this Security Agreement, and will duly assign, transfer and
deliver to the Grantors (without recourse and without any representation or
warranty other than a representation and warranty that the Trustee has
complied with all of the requirements of this Security Agreement) such of
the Collateral as may be in the possession of the Trustee and as has not
theretofore been sold or otherwise applied or released pursuant to this
Security Agreement, together with any moneys at the time held by the Trustee
hereunder, will return to the Grantors all of the documents delivered by the
Grantors to the Trustee pursuant to this Security Agreement and will execute
and file under the UCC or other applicable law such termination statements
and other documents in such offices as the Grantors may deem necessary or
appropriate and wherever required or permitted by law in order to terminate
the Trustee's security interest in the Collateral, and agrees to do such
further acts and things and to execute and deliver to the Grantors such
additional instruments as the Grantors may reasonably require or deem
advisable to terminate such security interest.
Notwithstanding the foregoing, so long as no Default or Event of Default
shall have occurred under the Indenture and be continuing, then provided the
Trustee shall have received notice from the Company fifteen (15) days before
the Release Date (as such term is defined in the Indenture) of the Release
Date, the Trustee shall on the Release Date (or, in the case of failure of
the Company to timely notify the Trustee in accordance with this Section 18,
fifteen (15) days from the date of actual receipt by the Trustee of such
notice of the Release Date) release or cause to be released all Liens of
this Security Agreement securing obligations other than (i) those Liens
granted to the Trustee in respect of a lease by the Company of the Crescent
City Queen Casino pursuant to Section 4.4(b) of the Indenture, and (ii)
those Liens securing proceeds from the foregoing. The Trustee shall release
such Liens pursuant to this Section 18 in accordance with the provisions of
Article XI of the Indenture, the Collateral Documents and the TIA.
19. NOTICES, ETC. All notices and other communications hereunder shall be
in writing and shall be delivered or mailed in the manner set forth in the
Indenture, addressed as follows:
(a) if to a Grantor, at:
Casino Magic of Louisiana Corp.
c/o Casino Magic Corp.
711 Casino Magic Drive
Bay St. Louis. MS 39520
Attention: Chief Financial Officer
with a copy to:
Casino Magic Corp.
711 Casino Magic Drive
Bay St. Louis. MS 39520
(b) if to the Trustee, at:
First Trust National Association
180 East Fifth Street
Saint Paul, Minnesota 55101
Attention: Scott Strodthoff
or at such other address as shall have been furnished in writing by any
Person described above to the party required to give notice hereunder. All
notices to any Holder shall be given by delivering or mailing such notice to
the Trustee under the Indenture.
20. MISCELLANEOUS. This Security Agreement shall be binding upon the
successors and assigns of the Grantors and shall inure to the benefit of and
be enforceable by the Trustee and its successors and assigns. This Security
Agreement shall be construed and enforced in accordance with and governed by
the laws of the State of Louisiana. The headings in this Security Agreement
are for purposes of reference only and shall not limit or define the meaning
hereof. This Security Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which shall
constitute one instrument. In the event that any provision of this Security
Agreement shall prove to be invalid or unenforceable, such provision shall
be deemed to be severable from the other provisions of this Security
Agreement which shall remain binding on all parties thereto.
IN WITNESS WHEREOF, the Grantors and the Trustee have caused this Security
Agreement to be executed by their duly authorized officers as of the date
first above written.
CASINO MAGIC OF LOUISIANA, CORP.,
Grantor
By: /s/ Robert Callaway
Name: Robert Callaway
Title: Secretary
JEFFERSON CASINO CORPORATION,
Grantor
By: /s/ Robert Callaway
Name: Robert Callaway
Title: Secretary
FIRST TRUST NATIONAL
ASSOCIATION, as agent
By: /s/ R. Prokesd
Name: Richard Prokesd
Title: Trust Officer
<PAGE>
SCHEDULE 1
to
Pledge and Security Agreement
dated as of May 13, 1996
among
Casino Magic of Louisiana, Corp
C-M of Louisiana, Inc.
Jefferson Casino Corporation, as Grantors
and
First Trust National Association, as Agent
for the benefit of the Holders of
ll 1/2% Senior Secured Notes Due 1999
*************************************************
100 shares newly issued by Crescent City Capital Development
Corporation as debtor-in-possession
<PAGE>
SCHEDULE 2
Orleans Parish, Louisiana Recorder of Mortgages
<PAGE>
SCHEDULE 3
to
Pledge and Security Agreement
dated as of May 13, 1996
among
Casino Magic of Louisiana, Corp
C-M of Louisiana, Inc.
Jefferson Casino Corporation, as Grantors
and
First Trust National Association, as Agent
for the benefit of the Holders of
11 1/2% Senior Secured Notes Due 1999
************************************************
711 Casino Magic Drive
Bay St. Louis, MS 39520
<PAGE>
SCHEDULE 4
to
Pledge and Security Agreement
dated as of May 13, 1996
among
Casino Magic of Louisiana, Corp
C-M of Louisiana, Inc.
Jefferson Casino Corporation, as Grantors
and
First Trust National Association, as Agent
for the benefit of the Holders of
11 1/2% Senior Secured Notes Due 1999
*************************************************
Casino Magic of Louisiana, Corp. will have inventory in the following
parishes in the State of Louisiana:
Orleans
Bossier
Caddo
Terrebonne
FIRST PREFERRED SHIP MORTGAGE
This FIRST PREFERRED SHIP MORTGAGE (this "Mortgage") dated May 13, 1996 from
CASINO MAGIC OF LOUISIANA, CORP., a Louisiana corporation, herein
represented by its undersigned duly authorized officer, (address: 711 Casino
Magic Drive, Bay St. Louis, Mississippi, 39250) (the "Owner") to First Trust
National Association, (a United States national banking association),
(address: 180 East Fifth Street, St. Paul, MN 55101, Attn: Scott Stradthoff)
as Trustee (in such capacity, together with any successor appointed pursuant
to the Indenture, the "Trustee" or the "Mortgagee") for the benefit of the
holders (the "Holders") under an Indenture dated as of May 13, 1996 among
the Owner, the Guarantors and the Trustee relating to the issuance by the
owner of its $35,000,000 of Senior Secured Notes due 1999.
Terms used herein and not otherwise defined herein are used as defined in or
by reference to the Indenture. A copy of said Indenture is attached hereto
as Exhibit A and made a part hereof.
WITNESSETH That:
WHEREAS:
A. The Owner is the sole owner of the whole of the vessel, duly documented
in the name of the Owner under the laws and f lag of the United States of
America with its hailing port at New Orleans, Louisiana (the "Vessel"), and
described as follows:
- ----------------------------------------------------------------------------
OFFICIAL GROSS
NAME NUMBER TONNAGE HAILING PORT
Crescent City 1028319 10507 New Orleans,
Queen Louisiana
- ----------------------------------------------------------------------------
B. Pursuant to the terms of the Indenture, the owner will issue its
$35,000,000 Senior Secured Notes due 1999;
C. The Owner is a wholly owned subsidiary of Guarantor, Jefferson Casino
Corporation, and an affiliate of Guarantor, C-M of Louisiana, Inc.; the
Guarantors have guaranteed the Notes unconditionally, as to premium, if any,
principal, and interest, jointly and severally with the Owner.
D. The Owner, in order to secure repayment of the Notes, the Guaranty and
the Indenture Obligations, and to secure the performance and observance and
compliance with all of the agreements, covenants and conditions in this
Mortgage and the performance and observance and compliance with all of the
agreements, covenants and conditions in the Indenture, has granted,
conveyed, mortgaged, pledged, set over and confirmed and does by
(Received 96 MAY 13 stamp by NATIONAL VESSEL DOCUMENTATION CENTER)
<PAGE>
these presents grant, convey, mortgage, pledge, set over and confirm unto
Mortgagee, its successors and assigns, the whole of the Vessel, together
with all of the machinery, covers, anchors, chains, tackle, apparel,
furniture, fittings and navigation equipment, and all other appurtenances
thereto appertaining or belonging, whether now owned or hereafter acquired,
whether on board or not, and all additions, improvements and replacements
hereafter, made in or to the Vessel, but excepting existing gaming equipment
(including but not limited to gaming equipment securing claims of Bally
Gaming, Inc. and International Game Technology Corp.) or property acquired
with Permitted FF&E Financing;
NOW, THEREFORE, THIS MORTGAGE WITNESSETH:
That in consideration of the premises and the sums lent as above recited and
of other good and valuable consideration, the receipt whereof is hereby
acknowledged, and in order to secure the payment of the principal and
interest and premium on the said indebtedness loaned, and to be loaned,
according to the terms of the Notes, the Guaranty, the Indenture and this
Mortgage and all other amounts due and to become due under or pursuant to
the Indenture (all such principal and interest and other sums being
hereinafter called the "Indebtedness hereby secured") , and to secure the
performance and observance of and compliance with the covenants, terms and
conditions herein and in the Notes, the Guaranty and the Indenture, the
Owner has granted, conveyed, mortgaged, pledged, set over and confirmed and
does by these presents grant, convey, mortgage, pledge, set over and confirm
unto the Mortgagee, its successors and assigns, the whole of the Vessel,
together with all of the machinery, covers, anchors, chains, tackle,
apparel, furniture, fittings and navigation equipment, and all other
appurtenances thereto appertaining or belonging, whether now owned or
hereafter acquired, whether on board or not, and all additions, improvements
and replacements hereafter made in or to the Vessel hereinafter referred to
as the "Vessel" or the "Collateral, 11 but excepting existing gaming
equipment (including but not limited to gaming equipment securing claims of
Bally Gaming, Inc. and International Game Technology Corp.) or property
acquired with Permitted FF&E Financing;
TO HAVE AND TO HOLD the Collateral unto the Mortgagee, its successors and
assigns, to its and its successors' and assigns, own use and behoof forever,
PROVIDED only, and the condition of these presents is such, that if the
Owner, or its successors or assigns, shall pay or cause to be paid the
Indebtedness hereby secured as and when the same shall become due and
payable in accordance with the terms of this Mortgage, the Notes, the
Guaranty and the Indenture, and shall perform, observe and comply with the
covenants, terms and conditions in this Mortgage, the Notes, the Guaranty
and the Indenture, expressed or implied, to be performed, observed or
complied with, by and on the part of the Owner, then these presents and the
rights hereunder shall cease, determine and be void, otherwise to be and
remain in full force and effect.
IT IS HEREBY COVENANTED, DECLARED AND AGREED that the Collateral above
described is to be held subject to the further covenants, conditions,
provisions, terms and uses hereinafter set forth.
ARTICLE I
Covenants of the Owner
SECTION 1. Subject to the conditions and limitations set forth in this
Mortgage, the owner will pay or cause to be paid the Indebtedness hereby
secured in accordance with the terms of the Indenture, the Notes and the
Guaranty, and will observe, perform and comply with the covenant terms and
conditions herein, expressed or implied, on its part to be observed,
performed or complied with.
SECTION 2. The Owner is qualified to own and operate the Vessel under the
flag of the United States and engage in the coastwise trade of the United
States, and will continue to be so qualified during the life of this
Mortgage; and subject to the conditions and limitations set forth in this
Mortgage, the Indebtedness hereby secured is and will be the valid and
binding obligation of the owner enforceable in accordance with its terms.
SECTION 3. The owner lawfully owns and is lawfully possessed of the Vessel
free from any security interest, lien, charge or encumbrance whatsoever
other than (a) this Mortgage, (b) liens for current crew's wages, (c) liens
covered by valid policies of insurance held by the Mortgagee and meeting the
requirements of Section 15 below, (d) liens not covered by insurance,
incurred in the ordinary course of business and not more than thirty (30)
days past due, and will warrant and defend the title and possession thereto
and to every part thereof for the benefit of the Mortgagee against the
claims and demands of all persons whomsoever.
SECTION 4. The Owner will comply with and satisfy all the provisions of
Chapter 313 of Title 46 of the Untied States Code, as at any time amended,
in order to establish and maintain this Mortgage as a first preferred ship
mortgage thereunder upon the Vessel and upon all renewals, improvements and
replacements made in or to the same.
SECTION 5. The Owner will not cause or permit the Vessel to be operated in
any manner contrary to law, will not abandon the Vessel in a foreign port,
will not engage in any unlawful trade or violate any law or carry any cargo
that will expose the Vessel to penalty, forfeiture or capture, and will not
do, or suffer or permit to be done, anything which can or may injuriously
affect the registration or enrollment of the Vessel or its qualification to
engage in the United States coastwise trade under the laws and regulations
of the United States of America and will at all times keep the Vessel duly
documented thereunder for such purpose. without the prior written consent of
the Mortgagee, the Owner covenants and agrees that the Vessel will not be
removed from the inland waterways of the United States.
SECTION 6. The Owner will pay and discharge or cause to be paid and
discharged when due and payable, from time to time, all taxes, assessments,
governmental charges, fines and penalties lawfully imposed on the Vessel and
any income therefrom.
SECTION 7. Except as otherwise provided in the Indenture, neither the Owner,
any charterer, the Master of the Vessel nor any other person has or shall
have any right, power or authority to create, incur or permit to have placed
or imposed or continued upon the Vessel any lien whatsoever other than liens
listed in Section 3(a), (b), (c) and (d) of Article I above, and liens for
salvage, provided that such liens listed in such subsection (c) and (d)
shall not have priority over this mortgage.
SECTION 8. The Owner will place, and at all times and places retain, a
properly certified copy of this Mortgage with the Master of the Vessel or
with her papers and will cause such certified copy and such Vessel's marine
document to be exhibited to any and all persons having business therewith
which might give rise to any lien thereon other than liens for crew's wages
and salvage, and to any representative of the Mortgagee; and will place with
the Master of the Vessel a framed printed notice in plain type reading as
follows:
NOTICE OF MORTGAGE
"This Vessel is owned by the Owner and is covered by a First Preferred Ship
Mortgage under authority of Chapter 313 of Title 46 of the United States
Code in favor of First Trust National Association, a national banking
association, as Trustee (the "Mortgagee,,) , under an Indenture dated as of
May 13, 1996 relating to the issuance of Thirty-Five Million Dollars
($35,000,000) Senior Secured Notes due 1999. Under the terms of said
Mortgage, neither the owner, any charterer, nor the Master of this Vessel
has any right, power or authority to create, incur or permit to be imposed
upon this vessel any lien whatsoever other than for current crew's wages and
salvage."
SECTION 9. Except as otherwise provided for in the Indenture and except for
the lien of this Mortgage, the owner will not suffer to be continued any
lien, encumbrance or charge on the Vessel, and in due course and in any
event within thirty (30) days after the same becomes due and payable, or
within fourteen (14) days after being requested to do so by the Mortgagee,
will pay or cause to be discharged or make adequate provision for the
satisfaction or discharge of all claims or demands, or will cause the Vessel
to be released or discharged from any lien, encumbrance or charge therefor.
SECTION 10. If a libel or complaint be filed against the Vessel or the
Vessel be otherwise attached, levied upon or taken into custody by virtue of
any legal proceeding in any court, the owner will promptly notify the
Mortgagee thereof by facsimile or telex, confirmed by letter, at its
address, as specified in this Mortgage, and within fifteen (15) days after
the Owner receives notice of such event will cause the Vessel to be released
and all liens thereon other than this Mortgage to be discharged and will
promptly notify the Mortgagee thereof in the manner aforesaid.
SECTION 11. The Owner will at all times and without cost or expense to the
Mortgagee maintain and preserve, or cause to be maintained and preserved,
the Vessel and all its equipment, outfit and appurtenances, tight, staunch,
strong, in good condition, working order and repair and in all respects
seaworthy and fit for its intended service, except ordinary wear and tear.
The Vessel shall, and the Owner covenants that she will, at all times comply
with all applicable laws, treaties and conventions to which the United
States of America is party, and rules and regulations issued thereunder, and
shall have on board as and when required thereby valid certificates showing
compliance therewith. The Owner will not make, or permit to be made, any
substantial change in the structure, type or speed of the Vessel or change
in her rig, without first receiving the written approval thereof by the
Mortgagee.
SECTION 12. Unless restricted by Gaming Law, as defined in the Indenture:
(a) The Owner will at all reasonable times afford the Mortgagee or its
authorized representative full and complete access to the Vessel for the
purpose of inspecting and valuing the Vessel and her cargo and papers and,
at the request of the Mortgagee, the owner will deliver for inspection
copies of any and all contracts and documents relating to the Vessel,
whether on board or not.
(b) The Owner hereby agrees to furnish the Mortgagee promptly on written
demand, all charter parties or contracts of affreightment relating to the
Vessel and full details as to the parties, times of delivery and the like
pertaining thereto.
SECTION 13. The Owner will not transfer or change the flag or hailing port
of the Vessel without the written consent of the Mortgagee first had and
obtained, and any such written consent to any one transfer or change of flag
or hailing port shall not be construed to be a waiver of this provision with
respect to any subsequent proposed transfer or change of flag or hailing
port. The Owner may require the transfer or change of the hailing port of
the Vessel subject to the terms hereof and of the Indenture.
SECTION 14. Except as otherwise provided in the Indenture, the owner will
not sell, mortgage, charter or transfer the Vessel without the written
consent of the Mortgagee first had and obtained, and any such written
consent to any one sale, mortgage, charter or transfer shall not be
construed to be a waiver of this provision with respect to any subsequent
proposed sale, mortgage, charter or transfer. Except as otherwise provided
in the Indenture, any such sale, mortgage, charter or transfer of the Vessel
shall be subject to the provisions of this Mortgage and of the Indenture.
SECTION 15. (a) The Owner will at all times keep the Vessel adequately
insured in conformity with good marine practice, including obtaining hull
and machinery insurance with an all risks addendum, in a minimum amount of
$30 million to cover the Vessel and $10 million to cover gaming equipment,
for the protection of the interests of both the owner and the Mortgagee, but
without expense to the Mortgagee. Whenever required by the Mortgagee, the
owner will cause to be carried and maintained on and in respect of the
Vessel without expense to the Mortgagee insurance in such amounts (with such
deductibles or franchises), against such risks (including, without
limitation, pollution risks) , in such form (including, without limitation,
the form of the loss payable clause and the designation of named assured) ,
in United States Dollars and with such insurance companies, underwriters,
associations, clubs or funds, as the Mortgagee shall from time to time
require or approve. The Owner will also without expense to the Mortgagee
have the Vessel fully entered in a Protection and Indemnity Association,
club or insurance company in good standing and acceptable to the Mortgagee,
for such amount as the Mortgagee may require or approve, in both protection
and indemnity classes, or keep the Vessel similarly insured against such
risks in a manner acceptable to the Mortgagee.
(b) The Owner will furnish the Mortgagee at the closing of this Mortgage
and from time to time on request and, in any event, on the date hereof and
thereafter at least annually, a detailed report signed by a firm of marine
insurance brokers or insurance companies acceptable to the Mortgagee with
respect to the insurance carried and maintained on the Vessel, together with
their opinion as to the adequacy thereof and its compliance with the
provisions of this Mortgage and any requirements which the Mortgagee may
have notified to the Owner. The Owner will cause such firm to agree to
advise the Mortgagee promptly of any default in the payment of any premium
or call and of any other act or omission on the part of the owner of which
they have knowledge and which might invalidate or render unenforceable, in
whole or in part, any insurance on the Vessel. The Owner will assign to the
Mortgagee its rights under any policies of insurance in respect to the
Vessel and use its best efforts to cause the insurer to acknowledge notice
of such assignment.
(c) Unless the Mortgagee shall otherwise agree, all insurance must (i)
name the Mortgagee as an assured, but without liability for premiums, calls
or assessments, (ii) contain a cancellation clause providing that the
insurers undertake not to exercise any right of cancellation which they may
have by reason of non-payment of premiums or calls when due without giving
thirty (30) days, prior written notice of such cancellation to the Mortgagee
and an opportunity of paying any such unpaid premium or call, (iii) contain
a provision that the insurance will not be permitted to lapse or be
materially modified without thirty (30) days, prior written notice being
given to the Mortgagee and (iv) contain the agreement of the insurer that
any loss thereunder shall be payable to the Mortgagee notwithstanding any
action, inaction or breach of representation or warranty by the owner,
except to the extent provided by subsection (d) hereof.
(d) All amounts of whatsoever nature payable under any insurance must be
payable to the Mortgagee as Trustee for distribution first to itself as set
forth in Section 9 of Article II of this Mortgage and Article XI, Section
11.2 of the Indenture, and thereafter to the Owner or others as their
interests may appear.
(e) All amounts paid to the Mortgagee in respect of any insurance on the
Vessel shall be deposited and disbursed from Net Awards Sub-Account under
Section 11.2 of the Indenture as follows:
(i) for so long as no Event of Default (as such term is defined in
Section 1 of Article II hereof) has occurred and is continuing, any amount
which might have been paid at the time, in accordance with the provisions
hereof directly to the Owner or others, shall be paid by the Mortgagee, to,
or as directed by, the Owner.
(ii) all amounts paid to the Mortgagee in respect of an actual or
constructive or arranged total loss or seizure or requisition of the Vessel
shall be applied by the Mortgagee as set forth in Section 9 of Article II of
this Mortgage;
(iii) all other amounts paid to the Mortgagee in respect of any
insurance on the Vessel, may in the sole discretion of the Mortgagee, be
held and applied to the prepayment of the principal amount of the
Indebtedness hereby secured or to making of needed repairs or other work on
the Vessel, or to the payment of other claims incurred by the Owner relating
to the Vessel, or may be paid to the Owner or whomsoever may be entitled
thereto.
(f) In the event that any claim or lien is asserted against the Vessel
for loss, damage or expense which is covered by insurance required hereunder
and it is necessary for the Owner to obtain a bond or supply other security
to prevent arrest of the Vessel or to release the Vessel from arrest on
account of such claim or lien, the Mortgagee, on request of the Owner, may,
in the sole discretion of the Mortgagee, assign to any person, firm or
corporation executing a surety or guarantee bond or other agreement to save
or release the Vessel from such arrest, all right, title and interest of the
Mortgagee in and to said insurance covering said loss, damage or expense, as
collateral security to indemnify against liability under said bond or other
agreement.
(g) The Owner shall deliver to the Mortgagee upon request certified
copies and, whenever so requested by the Mortgagee, the originals of all
certificates of entry, cover notes, binders, evidences of insurance and
policies for the purpose of inspection or safekeeping, or, alternatively,
satisfactory letters of undertaking from the broker holding the same.
(h) The Owner agrees that it will not execute or permit or willingly
allow to be done any act by which any insurance may be suspended, impaired
or canceled, and that it will not permit or allow the Vessel to undertake
any voyage or run any risk or transport any cargo which may not be permitted
by the policies in force, without having previously insured the Vessel by
additional coverage to extend to such voyages, risks or cargoes.
(i) The Owner will comply with and satisfy all of the provisions of any
applicable law, conventions, regulation, proclamation or order concerning
financial responsibility for liabilities imposed on the owner or the vessel
with respect to pollution by any state or nation or political subdivision
thereof and will maintain all certificates or other evidence of financial
responsibility as may be required by any such law, convention, regulation,
proclamation or other with respect to the trade in which the Vessel is from
time to time engaged and the cargo carried by it.
(j) The Owner represents and warrants that it has and will have and
maintain all "licenses" and "permits" necessary, requisite or desirable for
the Vessel to be operated as a "riverboat" as such terms are defined by the
Louisiana Riverboat Economic Development and Gaming Control Act, La. R.S.
4:501, et seg. (the 'Act'), and that it shall comply in all respects with
the Act, the rules and regulations promulgated thereunder, and the orders of
all governmental agencies, boards and commissions enforcing the provisions
of the Act.
SECTION 16. The Owner will reimburse the Mortgagee, within ten (10) days
after written request, with interest as set forth in the Indenture, for any
and all expenditures which the Mortgagee may from time to time make, lay out
or expend in providing such protection in respect to insurance, discharge or
purchase of liens, taxes, dues, assessments, governmental charges, fines and
penalties lawfully imposed, repairs, attorney's fees, necessary transaction
fees and other matters as the owner is obligated hereunder to provide, but
fails to provide. Such obligation of the owner to reimburse the Mortgagee
shall be secured by this Mortgage, and shall be payable by the owner on
demand. The Mortgagee, though privileged so to do, shall be under no
obligation to the Owner to make any such expenditures, nor shall the making
thereof relieve the Owner of any default in that respect.
SECTION 17. The Owner will fully perform any and all charter parties or
other contracts which it may enter into with respect to the Vessel.
SECTION 18. In the event that this Mortgage or any provision hereof shall
be deemed invalidated in whole or in part by reason of any present or future
law or any decision of any authoritative court, or if the documents at any
time held by the Mortgagee shall be deemed by the Mortgagee for any reason
insufficient to carry out the true intent and spirit of this Mortgage, then
from time to time, the owner will execute, within ten (10) days after
delivery of such documents to the Owner on its own behalf, such other and
further assurances and documents as in the reasonable opinion of such
Mortgagee may be required more effectively to subject the Vessel to the
payment of the Indebtedness hereby secured, as in this Mortgage provided,
and the performance of the terms and provisions of this Mortgage, the
Indenture, the Notes and the Guaranty.
ARTICLE II
Events of Default and Remedies
SECTION 1. Each of the following events shall constitute an "Event of
Default" under this Mortgage subject to the notice and cure provisions as
applicable set forth in Section 6.1 of the Indenture:
(a) an Event of Default under the Indenture; or
(b) any other payment in respect of the Indebtedness hereby secured has not
been received by the Mortgagee when due; or
(c) the statements in Sections 2 and 3 of Article I of this Mortgage shall
prove to be untrue in a material way; or
(d) a default by the Owner shall have occurred in the due and punctual
observance and performance of any of the agreements, covenants or conditions
of this Mortgage;
Then, and in each and every such case, the Mortgagee shall have the right
to:
(1) Declare all the then unpaid Indebtedness hereby secured to be due
and payable immediately as set forth in Section 6.1 of the Indenture, and
upon such declaration the same, including interest to date of declaration,
and all other costs, fees and other charges, shall become and be immediately
due and payable;
(2) Exercise all of the rights and remedies in foreclosure and otherwise
given to mortgagees by the provisions of Chapter 313 of Title 46 of the
United States Code, or other applicable law including the law of any other
jurisdiction where the Vessel may be found;
(3) Bring suit at law, in equity or in admiralty, in any court of any
nation in the world, as it may be advised, to recover judgment for the
Indebtedness hereby secured, and collect the same out of any and all
property of the Owner covered by this Mortgage;
(4) Take and enter into possession of the Vessel, at any time, wherever
the same may be, without legal process and without being responsible for
loss or damage, and the Owner or other person in possession forthwith upon
demand of the Mortgagee shall surrender to the Mortgagee possession of the
Vessel and the Mortgagee may, without being responsible for loss or damage,
hold, lay up, lease, charter, operate or otherwise use the Vessel for such
time and upon such terms as it may deem to be for its best advantage
(subject to any Approvals as may be necessary) , and demand, collect and
retain all hire, freights, earnings, issues, revenues, income, profits,
return premiums, salvage awards or recoveries, recoveries in general
average, and all other sums due or to become due in respect to the Vessel or
in respect of any insurance thereon from any person whomsoever, accounting
only for the net profits, if any, arising from such use of the Vessel and
charging upon all receipts from the use of the Vessel or from the sale
thereof by court proceedings or pursuant to Subsection . (S) next following,
all costs, expenses, charges, damages, or losses by reason of such use; and
if at any time the Mortgagee shall avail itself of the right herein given it
to take the Vessel, the Mortgagee shall have the right to dock the Vessel,
for a reasonable time at any dock, pier or other premises of the Owner
without charge, or to dock her at any other place at the cost and expense of
the owner;
(5) Take and enter into possession of the Vessel, at any time, wherever
the same may be, without legal process, and if it seems desirable to the
Mortgagee and without being responsible for loss or damage, sell the Vessel
at any place and at such time as the Mortgagee may specify and in such
manner and upon such terms and conditions as the Mortgagee may deem
advisable, free from any claim by the Owner in admiralty, in equity, at law
or by statute, at public or private sale, by sealed bids or otherwise, by
mailing, by air or otherwise, notice of such sale, whether public or
private, addressed to the Owner at its last known address, fourteen (14)
days prior to the date fixed for entering into the contract for sale. Any
sale may be held at such place and at such time as the Mortgagee by notice
may have specified, or may be adjourned by the Mortgagee from time to time
by announcement at the time and place appointed for such sale or for such
adjourned sale, and without further notice or publication the Mortgagee may
make any such sale at the time and place to which the same shall be so
adjourned; and any sale may be conducted without bringing the Vessel to the
place designated-for such sale and in such manner as the Mortgagee may deem
to be for its best advantage, and the Mortgagee may become the purchaser at
any sale.
SECTION 2. Any sale of the vessel made in pursuance of this Mortgage,
whether under the power of sale hereby granted or any judicial proceedings,
shall operate to divest all right, title and interest of any nature
whatsoever of the Owner therein and thereto, and shall bar the Owner, its
successors and assigns, and all persons claiming by, through or under them.
No purchaser shall be bound to inquire whether notice has been given, or
whether any default has occurred, or as to the propriety of the sale, or as
to the application of the proceeds thereof. In case of any such sale, if
the Mortgagee is the purchaser, the Mortgagee shall be entitled, for the
purpose of making settlement or payment for the property purchased, to use
and apply the Indebtedness hereby secured in order that there may be
credited against the amount remaining due and unpaid thereon the sums
payable out of the net proceeds of such sale to the Mortgagee after allowing
for the costs and expenses of sale and other charges; and thereupon such
purchaser shall be credited, on account of such purchase price, with the net
proceeds that shall have been so credited upon the Indebtedness hereby
secured. At any such sale, the Mortgagee may bid for and purchase such
property and upon compliance with the terms of sale may hold, retain and
dispose of such property without further accountability therefor.
SECTION 3. The Mortgagee is hereby appointed attorney-in-fact of the Owner
to execute and deliver to any purchaser aforesaid, said attorney-in-fact
being hereby vested with full power and authority to make, in the name and
on behalf of the Owner, a good conveyance of the title to the Vessel so
sold. In the event of any sale of the Vessel under any power herein
contained, the owner will, if and when required by the Mortgagee, execute
such form of conveyance of the Vessel as the Mortgagee may direct or
approve.
SECTION 4. The Mortgagee is hereby appointed attorney-in-fact of the Owner,
upon the occurrence and during the continuance of an Event of Default, in
the name of the Owner to demand, collect, receive, compromise and sue for,
so far as may be permitted by law, all freight, hire, earnings, issues,
revenues, income and profits of the Vessel and all amounts due from
underwriters under any insurance thereon as payment of losses or as return
of premiums or otherwise, salvage awards and recoveries, recoveries in
general average or otherwise, and all other sums due or to become due at the
time of the happening of an Event of Default in respect of the Vessel, or in
respect of any insurance thereon, from any person whomsoever, and to make,
give and execute in the name of the Owner acquittances, receipts, releases
or other discharges for the same, whether under seal or otherwise, and to
endorse and accept in the name of the owner all checks, notes, drafts,
warrants, agreements and other instruments in writing with respect to the
foregoing.
SECTION 5. Whenever any right to enter and take possession of the Vessel
accrues to the Mortgagee, it may require the Owner to deliver, and the Owner
shall on demand, at its own cost and expense, deliver to the Mortgagee the
Vessel as demanded. If any legal proceedings shall be taken to enforce any
right under this Mortgage, the Mortgagee shall be entitled as a matter of
right to the appointment of a receiver or keeper of the vessel and of the
freights, hire, earnings, issues, revenues, income and profits due or to
become due and arising from the operation thereof.
SECTION 6. The Owner authorizes and empowers the Mortgagee, or its
appointees or any of them on behalf of the Mortgagee, to appear in the name
of the owner, its successors and assigns, in any court of any country or
nation of the world where a suit is pending against the Vessel because of or
on account of an alleged lien against the Vessel from which the Vessel has
not been released and to take such proceedings as the Mortgagee may consider
proper towards the defense of such suit and the purchase or discharge of
such lien, and all expenditures made or incurred by the Mortgagee for the
purpose of such defense or purchase or discharge shall be a debt due from
the Owner, its successors and assigns, to the Mortgagee, and shall be
secured by the lien of this Mortgage in like manner and extent as if the
amount and description thereof were written herein. The authority and power
hereby conferred upon the Mortgagee or its appointees does not preclude the
right and power of the Owner to sue in its own name or to enter into
agreements with third parties with respect to the Vessel prior to the
occurrence of an Event of Default, subject always to the restrictions
imposed by this Mortgage. The Mortgagee shall give 10 days written notice
to Owner before exercising this right, unless quicker action is necessary in
order to prevent prejudice to rights of the Vessel, Owner or Mortgagee.
SECTION 7. Each and every power and remedy herein given to the Mortgagee
shall be cumulative and shall be in addition to every other power and remedy
herein given or now or hereafter existing at law, in equity, in admiralty or
by statute, and each and every power and remedy whether herein given or
otherwise existing may be exercised from time to time and as often and in
such order as may be deemed expedient by the Mortgagee, and the exercise or
the beginning of the exercise of any power or remedy shall not be construed
to be a waiver of the right to exercise at the same time or thereafter any
other power or remedy. No delay or omission by the Mortgagee in the
exercise of any right or power or in the pursuance of any remedy accruing
upon an Event of Default shall impair any such right, power or remedy or be
construed to be a waiver of such Event of Default or to be an acquiescence
therein; nor shall the acceptance by the Mortgagee of any security or of any
payment of or on account of the Indebtedness hereby secured maturing after
an Event of Default or of any payment on account of any past default be
construed to be a waiver of any right to take advantage of any future Event
of Default or of any past Event of Default not completely cured thereby. No
consent, waiver or approval of the Mortgagee shall be deemed to be effective
unless in writing and duly signed by an authorized signatory of the
Mortgagee.
SECTION 8. In case the Mortgagee shall have proceeded to enforce any right,
power or remedy under this Mortgage by foreclosure, entry or otherwise, and
such proceedings shall have been discontinued or abandoned for any reason or
shall have been determined adversely to the Mortgagee, then and in every
such case the Owner and the Mortgagee shall be restored to their former
positions and rights hereunder with respect to the property subject or
intended to be subject to this Mortgage, and all rights, remedies and powers
of the Mortgagee shall exist as if no such proceedings had been taken.
SECTION 9. The proceeds of any sale of the Vessel received by the Mortgagee,
and the net earnings of any charter operation or other use of the Vessel
after acceleration of the Indebtedness hereby secured, or insurance received
by the Mortgagee, and any and all other moneys received by the Mortgagee
pursuant to or under the terms of this Mortgage or in any proceedings
hereunder, the application of which has not elsewhere herein been
specifically provided for, shall be applied as set forth in the Indenture.
SECTION 10. Until an Event of Default shall occur, the owner
(a) shall be suffered and permitted to retain actual possession and use
of the Vessel and (b) shall have the right, from time to time, in its
discretion, and without application to the Mortgagee, and without obtaining
a release thereof by the Mortgagee, to dispose of, free from the lien
hereof, boilers, machinery, rigging, anchors, chains, tackle, apparel,
furniture, fittings, covers, equipment or any other appurtenances of the
Vessel that are no longer useful, necessary, profitable or advantageous in
the operation of the Vessel, first or simultaneously replacing the same by
new machinery, rigging, anchors, chains, tackle, apparel, furniture,
fittings, covers, equipment, or other appurtenances of substantially equal
value to the Owner, which shall forthwith become subject to the lien of this
Mortgage as a first preferred mortgage thereon.
SECTION 11. (a) If any provision of the Indenture, the Notes, the Guaranty
or this Mortgage should be deemed invalid or shall be deemed to affect
adversely the preferred status of this Mortgage under any applicable law,
such provision shall cease to be a part of this Mortgage without affecting
the remaining provisions, which shall remain in full force and effect.
(b) In the event that any provision of this Mortgage, the Notes, the
Guaranty or the Indenture or any of the documents or instruments which may
from time to time be delivered hereunder or thereunder or any provision
hereof shall be deemed invalidated by present or future law of any nation or
by decision of any court, this shall not affect the validity or
enforceability, or both, of all or any other parts of this Mortgage, the
Notes, the Indenture, the Guaranty, any of such documents or instruments
and, in any such case, the Owner covenants and agrees that, on demand, it
will execute and deliver such other and further agreements or documents or
instruments, or any of them, and do such things as the Mortgagee in its sole
discretion may deem to be necessary to carry out the true intent of this
Mortgage, the Indenture, the Guaranty and of the Notes secured hereby.
(c) Anything herein to the contrary notwithstanding, it is intended that
nothing herein shall waive the preferred status of this Mortgage and that,
if any provision in this Mortgage or portion thereof shall be construed to
waive the preferred status of this Mortgage, then such provision to such
extent shall be void and of no effect.
SECTION 12. The Owner hereby acknowledges and agrees that the Mortgagee
shall not be required to have the Vessel marshalled (upon any sale of the
Vessel pursuant to this Mortgage or otherwise) or be required to realize on
any other collateral prior to its realization on the Vessel.
ARTICLE III
Sundry Provisions
SECTION 1. If the principal of, premium, if any, interest and all costs,
fees and other charges on the Owner's Notes should not be satisfied from the
proceeds from the sale of the Vessel, the owner shall remain fully liable
for any deficiency.
SECTION 2. All of the covenants, promises, stipulations and agreements of
the Owner in this Mortgage contained shall bind the owner and its successors
and assigns. In the event of any assignment or transfer of this Mortgage,
the term "Mortgagee", as used in this Mortgage, shall be deemed to mean and
include any such assignee or transferee. This Mortgage may not be amended
or supplemented orally but may be amended or supplemented from time to time
by an instrument in writing executed by the Owner and the Mortgagee.
SECTION 3. Wherever and whenever herein any right, power or authority is
granted or given to the Mortgagee such right, power or authority may be
exercised in all cases by the Mortgagee or by such agent or agents of the
Mortgagee which, when taken, shall constitute the act of the Mortgagee
hereunder.
SECTION 4. This Mortgage may be executed in any number of counterparts, each
of which shall be an original, but such counterparts shall together
constitute but one and the same instrument.
SECTION 5. Any notices or other communications required or permitted
hereunder shall be in writing, and shall be sufficiently given if made by
hand delivery, by telex, by facsimile or registered or certified mail,
postage prepaid, return receipt requested, addressed as provided in Section
13.2 of the Indenture. Any party hereto may by notice to the other party
designate such additional or different addresses as shall be furnished in
writing by such party in the manner provided in the Indenture. Any notice
or communication to any party shall be deemed to have been given or made as
of the date so delivered, if personally delivered, when answered back, if
telexed; when receipt is acknowledged, if faxed, and five calendar days
after mailing, if sent by registered or certified mail (except that a notice
of change of address shall not be deemed to have been given until actually
received by the addressee) . The Grantor may give notice to the Holders at
the addresses set forth for them in the register kept by the Registrar under
the Indenture or may request that the Trustee notify the Holders at such
addresses.
SECTION 6. For purposes of this Mortgage and for purposes of recording this
Mortgage as required by Chapter 313 of Title 46 of the United States Code,
the total amount of this Mortgage is THIRTY-FIVE MILLION DOLLARS
($35,000,000) and interest and performance of mortgage covenants; there is
no separate discharge amount.
SECTION 7. For purposes of this Mortgage, except as otherwise expressly
provided herein, or unless the context shall otherwise require, capitalized
terms used herein that are not defined herein but that are defined in or by
reference in the Indenture shall have the respective meanings stated in or
referred to in the Indenture.
SECTION 8. Each of the provisions of this Mortgage is subject to, and shall
be enforced in compliance with, the provisions of the Gaming Laws.
SECTION 9. This Mortgage shall be governed by and construed in accordance
with the laws of the State of Louisiana as applied to contracts made and
performed within the State of Louisiana without regard to principles of
conflicts of law.
SECTION 10. In the event that any term or provision of this Mortgage shall
be inconsistent with the terms of the Indenture, the Indenture should
control, accept as otherwise required by the Ship Mortgage Act or the
general maritime law of the United States.
IN WITNESS WHEREOF, the Owner has caused this First Preferred Ship Mortgage
covering the Vessel to be duly executed and delivered the day and year first
above written.
WITNESSES: CASINO MAGIC OF LOUISIANA, CORP.
/s/ JoLynn M. Marino By: /s/ Robert Callaway
Name: Robert Callaway
Title: Secretary
<PAGE>
ACKNOWLEDGMENT
STATE OF LOUISIANA
PARISH OF ORLEANS
BEFORE ME, the undersigned Notary Public, duly commissioned and qualified
within and for the State and Parish aforesaid, personally came and appeared:
CASINO MAGIC OF LOUISIANA, CORP., appearing herein through the undersigned
officer, who declared and acknowledged to me, Notary, and to the undersigned
witnesses that he signed and executed the above and foregoing instrument by
order of the Board of Directors of said corporation, for the objects,
purposes and considerations therein expressed, as his own free act and as
the free will, act and deed of the said corporation.
IN WITNESS WHEREOF, this instrument is executed in the presence of the
undersigned witnesses and me, Notary, on this 13th day of May, 1995.
WITNESSES: CASINO MAGIC OF LOUISIANA, CORP.
/s/ JoLynn M. Marino By: /s/ Robert Callaway
Name: Robert Callaway
Title: Secretary
/s/ Notary Public (name unreadable)
NOTARY PUBLIC
ASSUMPTION AGREEMENT
This Agreement, dated the 13th day of May, 1996, is entered into among
Casino Magic Corp.("Magic"), Jefferson Casino Corp. ("JCC"), (Magic and JCC,
"Purchasers"), Capital Gaming International, Inc. ("CGII"), and Crescent
City Capital Development Corp. ("CCCDC").
RECITALS:
WHEREAS, CCCDC is currently debtor in possession in a Chapter 11 bankruptcy
proceeding pending in the United States Bankruptcy Court for the Eastern
District of Louisiana (the "Bankruptcy Case"); and
WHEREAS, pursuant to a Stock Purchase Agreement dated February 21, 1996,
Purchasers agreed to purchase all of the newly issued capital stock of
Reorganized CCCDC pursuant to a Plan of Reorganization submitted in the
Bankruptcy Case; and
WHEREAS, pursuant to paragraph 4 of the Stock Purchase Agreement, Purchasers
agreed to assume at the Closing all the secured obligations of CCCDC to
Bally Gaming, Inc. and International Game Technology collateralized by
security interests in gaming equipment manufactured and sold by Bally
Gaming, Inc. and International Game Technology to CCCDC in an aggregate
amount not exceeding $6,500,000 (the "Assumed Liabilities"); and
WHEREAS, on April 29, 1996, a Second Amended Plan of Reorganization was
confirmed in the Bankruptcy Case which provided for the consummation of the
Stock Purchase Agreement conditioned, among other things, on the assumption
of the Assumed Liabilities as set forth in paragraph 4 of the Stock Purchase
Agreement; and
WHEREAS, Purchasers, in connection with the Closing of the Stock Purchase
Agreement, wish to confirm the assumption of indebtedness required by the
Letter Agreement and the Plan.
NOW, THEREFORE, in consideration of the above, it is agreed as follows:
1. ASSUMPTION. Purchasers hereby assume all liability and obligation with
respect to the Assumed Liabilities.
2. INDEMNIFICATION. Purchasers agree to indemnify, defend and hold harmless
CGII, CCCDC, and their respective officers, directors, attorneys and agents,
from and against any liability, cost or expense (including reasonable
attorneys fees) arising out of or resulting from Purchasers' failure to
fulfill its obligations as set forth in paragraph 1 above.
IN WITNESS WHEREOF, the undersigned have executed this Assumption Agreement
as of the date and year first written above.
CASINO MAGIC CORP.
By: /s/ Robert Callaway
Name: Robert Callaway
Title: Secretary
JEFFERSON CASINO CORP.
By: /s/ Robert Callaway
Name: Robert Callaway
Title: Secretary
CAPITAL GAMING INTERNATIONAL, INC.
By: /s/ Edward M. Tracey
Name: Edward M. Tracy
Title: President and CEO
CRESCENT CITY CAPITAL
DEVELOPMENT CORP.
By: /s/ Edward M. Tracey
Name: Edward M. Tracy
Title: President and CEO
PROMISSORY NOTE
$1,975,000.00 May 13, 1996
New Orleans, Louisiana
FOR VALUE RECEIVED, I, we, and each of us, in solido, whether as
makers, endorsers or sureties, (all hereinafter collectively the
"Borrower"), promise to pay to the order of Bally Gaming, Inc. (the
"Lender") at 6601 South Bermuda Road, Las Vegas, Nevada 89119, the principal
sum of One Million Nine Hundred Seventy-five Thousand and 00/100
($1,975,000.00) Dollars, plus interest thereon, at the rate of eleven per
cent (11%) per annum, from date until paid, or so much thereof as may be
outstanding from time to time, payable as follows:
A $296,250.00 principal payment shall be made by Borrower to Lender by May
28, 1996, with the balance payable monthly, in 36 equal payments of
principal and interest of $55,676.85, beginning sixty days after the
commencement of gaming operations on the M/V Crescent city Queen, official
Number 1028319 ("vessel"), or sixty days from date hereof, whichever is
later. Notwithstanding the foregoing, Borrower may, at Borrower's sole
option, fully satisfy Borrower's obligations under this note by making a
single payment in the amount of $1,700,000.00, by wire transfer of
immediately available funds to Lender's bank account number 1840087346, at
First Interstate Bank, ABA Routing number 121200019, at 3800 Howard Hughes
Parkway, Las Vegas, Nevada 89193, on or before May 28, 1996, which payment
shall constitute full and final payment of Borrower's obligations under this
note.
The term "commencement of gaming operations" shall mean the first day
after the date of this agreement on which members of the general public is
admitted to the Vessel for the purpose of conducting gaming activities.
All payments and prepayments made by the Borrower hereunder shall be
made in lawful money of the United states to the Lender in immediately
available funds before 5:00 P.M. (Pacific time) on the date that such
payment is required to be made. The Borrower hereby authorizes the Lender,
if and to the extent payment is not made when due hereunder, to charge from
time to time against any of the Borrower's accounts with the Lender any
amount so due. Any payment received and accepted by the Lender after such
time shall be considered for all purposes (including the calculation of
interest, to the extent permitted by law) as having been made on the
Lender's next following Business Day. If the day for any payment or
prepayment hereunder falls on a day which is not a Business Day, then for
all purposes of this Note, the same shall be deemed to have fallen on the
next following Business Day, and such extension of time shall in such case
be included in the computation of payments of interest. For the purposes of
this paragraph "Business Day" shall mean a day other than a Saturday, Sunday
or legal holiday for commercial banks in Las Vegas, Nevada.
The Borrower and any guarantor, accommodation party, endorser or other
person or entity liable for the demand or collection of this Note expressly
waive demand and presentment for payment, notice of nonpayment, protest,
notice of protest, notice of dishonor, bringing of suit, diligence in taking
any action to collect amounts called for hereunder and in the handling of
property at any time existing as security in connection herewith, and shall
be directly and primarily liable, in solido, for the payment of all sums
owing and to be owing hereon, regardless of and without any notice,
diligence, act or omission as or with, respect to the collection of any
amount called for hereunder or in connection with any right, lien, interest
or property at any and all times had or existing as security for any amount
called for hereunder.
Any of the following events shall be considered an "Event of Default" as
that term is used herein: (i) the Borrower fails to make payment when due of
any principal or interest installment on this Note; (ii) the Borrower
defaults in the payment of any amounts due to the Lender or in the
observance or performance of any of the covenants, or agreements contained
in any security or credit agreements, notes, leases, collateral or other
documents relating to any debt of the Borrower to the Lender, including the
indebtedness represented by this Note; (iii) the Borrower defaults in the
payment of any amounts due to any person (other than the Lender) or in the
observance or performance of any of the covenants or agreements contained in
any security or credit agreements, notes, leases, collateral or other
documents relating to any Debt of the Borrower to any person (other than the
Lender) in excess of $500,000.00, and any grace period applicable to such
default has elapsed; (iv) a receiver, conservator, liquidator or trustee of
the Borrower, or of any of its property is appointed by order or decree of
any court or agency or supervisory authority having jurisdiction; or an
order for relief is entered against the Borrower, under the Federal
Bankruptcy Code; or the Borrower is adjudicated bankrupt or insolvent or any
material portion of the property of any of the Borrower is sequestered by
court order and such order remains in effect for more than 30 days after
such party obtains knowledge thereof, or a petition is filed against the
Borrower under any state, reorganization, arrangement, insolvency,
readjustment of debt, dissolution, liquidation or receivership law of any
jurisdiction, whether now or hereafter in affect, and such petition is not
dismissed within 60 days; (v) the Borrower files a case under the Federal
Bankruptcy Code or seeking relief under any provision of any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt, dissolution
or liquidation law of any jurisdiction, whether now or hereafter in effect,
or consents to the filing of any case or petition against it under any such
law;' (vi) the Borrower makes an assignment for the benefit of its
creditors, or admits in writing its inability to pay its debts generally as
they become due, or consents to the appointment of a receiver, trustee or
liquidator of the Borrower or of all or any part of its property; (vii)
judgment for the payment of money in excess of $500,000.00 (which is not
covered by insurance) is rendered by any court or other governmental body
against the Borrower, and the Borrower does not discharge the same or
provide for its discharge in accordance with its terms, or procure a stay of
execution thereof within 30 days from the date of entry thereof, and within
said 30-day period or such longer period during which execution of such
judgment shall have been stayed, appeal therefrom and cause the execution
thereof to be stayed during such appeal while providing such reserves
therefor as may be required under generally accepted accounting principles;
or (viii) a writ or warrant of attachment or any similar process shall be
issued by any court against all or any material portion of the property of
the Borrower, and such writ or warrant of attachment or any similar process
is not released or bonded within 30 days after its entry.
Upon the happening of any Event of Default specified in the preceding
paragraph (other than clauses (iv) and (v) thereof), the Lender may, without
notice to the Borrower, declare the entire principal amount of the Note plus
interest accrued hereon to be immediately due and payable without
presentment, demand, protest, notice of protest or dishonor or other notice
of default of any kind, all of which are hereby expressly waived by the
Borrower. Upon the happening of any Event of Default specified in clauses
(iv) or (v) of the preceding paragraph, the entire principal amount of this
Note plus interest accrued hereon shall, without notice or action by the
Lender, be immediately due and payable without presentment, demand, protest,
notice of protest or dishonor or other notice of default of any kind, all of
which are hereby expressly waived by the Borrower.
Upon the occurrence of any Event of Default, the Lender shall have the
right to set-off any funds of the Borrower in the possession of the Lender
against any amounts then due by the Borrower to the Lender on this note.
If an Event of Default occurs and this Note is placed in the hands of an
attorney for collection, or suit is filed hereon, or proceedings are had in
bankruptcy, probate, receivership or other judicial proceedings for the
establishment or collection of any amount called for hereunder, or any
amount payable or to be payable hereunder is collected through any such
proceedings, the Borrower agrees it is also to pay the owner and holder of
this Note twenty-five (25%) percent of all sums due hereunder as attorneys'
fees.
This Note shall be governed by and construed under the laws of the
state of Louisiana.
IN WITNESS WHEREOF, the Borrower has caused this Note to be executed
and delivered on the day first written above.
CASINO MAGIC OF LOUISIANA, CORP.
BORROWER
By: /s/ Robert A. Callaway
ROBERT A. CALLAWAY, Secretary
