SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D/A
(AMENDMENT NO. 1 TO SCHEDULE 13D)
Under the Securities Exchange Act of 1934
TRANS WORLD GAMING CORP.
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(Name of Issuer)
Shares of Common Stock, par value $0.001 per share
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(Title of Class of Securities)
0008933751
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(CUSIP NUMBER)
TIMOTHY G. EWING
VALUE PARTNERS, LTD.
c/o Ewing & Partners
Suite 4660 West
2200 Ross Avenue
Dallas, Texas 75201-2790
Tel. No.: (214) 999-1900
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
- with copies to -
Ford Lacy, P.C.
Akin, Gump, Strauss, Hauer & Feld, LLP
1700 Pacific Avenue, Suite 4100
Dallas, Texas 75201-4618
(214) 969-2800
March 31, 1998
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(Date of event which requires filing of this statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4) check the following
box [ ]
The information required in the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934, as amended ("Act"), or otherwise subject to the
liabilities of that section of the Act but shall be subject to all other
provisions of the Act.
CUSIP No. 0008933751 13D
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Value Partners, Ltd.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF
A GROUP* (a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS
IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Texas
NUMBER OF 7 SOLE VOTING POWER 6,260,257
SHARES
BENEFICIALLY 8 SHARED VOTING POWER 0
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER 6,260,257
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE POWER 0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,260,257
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
67.3%
14 TYPE OF REPORTING PERSON*
PN
*SEE INSTRUCTIONS BEFORE FILLING OUT
AMENDMENT NO. 1 TO SCHEDULE 13D
This Amendment No. 1 to Schedule 13D is being filed on behalf of
Value Partners, Ltd., a Texas limited partnership ("Value Partners") as an
amendment to the initial statement on Schedule 13D, relating to shares of
Common Stock, par value $0.001 per share (the "Common Stock"), of Trans
World Gaming Corp. (the "Issuer"), as filed with the Securities and
Exchange Commission on July 11, 1996 (the "Initial Schedule 13D"). The
Initial Schedule 13D is hereby amended and supplemented as follows:
ITEM 2. IDENTITY AND BACKGROUND
Item 2 of the Initial Schedule 13D is hereby amended and restated in
its entirety to read:
(a)-(c) This Statement is filed by Value Partners, Ltd., a Texas
limited partnership ("Value Partners"). Ewing & Partners, a Texas general
partnership (formerly known as Fisher Ewing Partners) ("Ewing & Partners"),
is the general partner of Value Partners. Timothy G. Ewing and Ewing Asset
Management, Inc., a Texas limited liability company ("EAM"), are the
general partners of Ewing & Partners, and Mr. Ewing is the managing general
partner of Ewing & Partners. EAM is controlled by Mr. Ewing. The principal
place of business for Mr. Ewing, EAM and Value Partners is Suite 4660 West,
2200 Ross Avenue, Dallas, Texas 75201.
The present principal occupation or employment of Mr. Ewing is
managing general partner of Ewing & Partners. The principal business of EAM
is acting as a general partner of Ewing & Partners. The principal business
of Ewing & Partners is the management of Value Partners. The principal
business of Value Partners is investment in and trading of capital stocks,
warrants, bonds, notes, debentures and other securities.
(d) None of Value Partners, Ewing & Partners, EAM or Mr. Ewing,
during the last five years, has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors).
(e) None of Value Partners, Ewing & Partners, EAM or Mr. Ewing
has, during the last five years, been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as a result
of such proceeding was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any violation with
respect to such laws.
(f) Mr. Ewing is a citizen of the United States of America.
ITEM 3. SOURCE AND AMOUNT OF FUNDS
Item 3 of the Initial Schedule 13D is hereby amended by adding the
following paragraphs:
On December 19, 1997, Value Partners and the Issuer executed that
certain First Amended Loan Agreement, dated as of December 19, 1997 (the
"Amended Loan Agreement"), amending that certain Loan Agreement dated
October 27, 1997. Pursuant to the Amended Loan Agreement, Value Partners
agreed to loan the Issuer from time to time up to $4,125,000 upon the terms
set forth therein. Also pursuant to the Amended Loan Agreement, the Issuer
agreed to issue Value Partners a common stock purchase warrant to purchase
.1714 shares of Common Stock for each dollar loaned or advanced from time
to time under the Amended Loan Agreement. Value Partners has made several
advances to the Issuer under the Amended Loan Agreement. The funds for such
advances came from the working capital of Value Partners. In connection
with such advances and for no additional consideration, Value Partners
received 220,760 common stock purchase warrants of the Issuer that in the
aggregate give Value Partners the right to purchase 220,760 shares of
common stock. Each of such warrants is exercisable for a period of ten (10)
years and may be exercised at any time prior to March 31, 2008. As Value
Partners makes future advances to the Issuer pursuant to the Amended Loan
Agreement, Value Partners will acquire additional Common Stock purchase
warrants as noted above.
On March 23, 1998, Value Partners advanced to the Issuer $250,000
pursuant to that certain Lender's Waiver and Option Agreement (the "Option
Agreement"), dated March 20, 1998, by and between Value Partners and the
Issuer. The funds for such advance came from the working capital of Value
Partners. In connection with the Option Agreement and for no additional
consideration, Value Partners received 104,225 common stock purchase
warrants of the Issuer that in the aggregate give Value Partners the right
to purchase 104,225 shares of Common Stock. Each of such warrants is
exercisable for a period of ten (10) years and may be exercised at any time
prior to March 31, 2008 at an exercise price of $0.01 per share.
On March 31, 1998, Value Partners restructured the $3,000,000 12%
Secured Convertible Senior Bonds of the Issuer due June 30, 1999 to
$3,000,000 12% Secured Senior Bonds of the Issuer due December 31, 2005.
Pursuant to such restructuring, (i) all conversion rights relating to the
$3,000,000 12% Secured Convertible Senior Bonds of the Issuer due June 30,
1999 were eliminated and (ii) the Issuer issued 2,000,000 common stock
purchase warrants to Value Partners for no additional consideration, which
in the aggregate gives Value Partners the right to purchase 2,000,000
shares of Common Stock. Each of such warrants is exercisable for a period
of seven (7) years and may be exercised at any time prior to December 31,
2005 at an exercise price of $1.50 per share.
On March 31, 1998, Value Partners purchased $8,000,000 of 12% Senior
Secured Notes of the Issuer due March 17, 2005 (the "Notes"). The funds for
the purchase of the Notes came from the working capital of Value Partners.
The Notes were issued by the Issuer pursuant to that certain Indenture,
dated as of March 31, 1998, among the Issuer, TWG International U.S.
Corporation, TWG Finance Corporation. and U.S. Trust Company of Texas,
N.A., as Trustee, pursuant to which the Issuer issued $17,000,000 12%
Senior Secured Notes due March 17, 2005. In connection with the purchase of
the Notes and for no additional consideration, Value Partners received
3,335,272 common stock purchase warrants of the Issuer that in the
aggregate give Value Partners the right to purchase 3,335,272 shares of
Common Stock. Each of such warrants is exercisable for a period of ten (10)
years and may be exercised at any time prior to March 31, 2008 at an
exercise price of $0.01 per share.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
Item 5 of the Initial Schedule 13D is hereby amended by amending and
restating paragraphs (a) and (c) in their entirety to read as follows:
(a) For purposes of Rule 13d-3, as of the date hereof, Value
Partners may be deemed to be the beneficial owner of 6,260,257 shares of
Common Stock (the "Resulting Shares"). The Resulting Shares represent
approximately 67.3% of the Issuer's outstanding Common Stock as calculated
pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as
amended.
According to the Issuer's annual report on Form 10-KSB dated
March 30, 1998, a total of 3,044,286 shares of Common Stock were issued and
outstanding as of such date.
(c) The transactions in the Issuer's securities by Value
Partners during the period of October 28, 1997 to March 31, 1998 are listed
on Annex A attached hereto and made apart hereof.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER
Item 6 of the Initial Schedule 13D is hereby amended by adding
the following:
Value Partners, Ewing & Partners and Mr. Ewing have no contracts,
arrangements, understandings or relationships (legal or otherwise) between
themselves and any person with respect to any securities of the Issuer
other than those described below:
(a) First Amended Loan Agreement, dated as of December 19, 1997,
by and between Value Partners and the Issuer;
(b) Lender's Waiver and Option Agreement, dated March 20, 1998,
between Value Partners and the Issuer;
(c) First Amended Indenture, dated as of March 31, 1998, between
the Issuer, Trans World Gaming of Louisiana, Inc. and U.S.
Trust Company of Texas, N.A., as Trustee; and
(d) Indenture, dated as of March 31, 1998, by and among the
Issuer, TWG International U.S. Corporation, TWG Finance
Corp. and U.S. Trust Company of Texas, N.A., as Trustee.
ITEM 7. MATERIALS TO BE FILED AS EXHIBITS
Item 7 of the Initial Schedule 13D is hereby amended by adding
the following:
The following are filed as exhibits to this Amendment No. 1 to
Schedule 13D:
(a) First Amended Loan Agreement, dated as of December 19, 1997,
by and between Value Partners and the Issuer;
(b) Lender's Waiver and Option Agreement, dated March 20, 1998,
between Value Partners and the Issuer;
(c) First Amended Indenture, dated as of March 31, 1998, between
the Issuer, Trans World Gaming of Louisiana, Inc. and U.S.
Trust Company of Texas, N.A., as Trustee; and
(d) Indenture, dated as of March 31, 1998, by and among the
Issuer, TWG International U.S. Corporation, TWG Finance
Corp. and U.S. Trust Company of Texas, N.A., as Trustee.
ANNEX A
Transaction Buy/ Quantity Dollar
Date Sell Security (shares) Amount
----------- ---- -------- --------- -------
10/28/97 Buy IBET Bridge Warrant
Exp. 03/31/2008 73,356 ---
12/22/97 Buy IBET Bridge Warrant
Exp. 03/31/2008 57,419 ---
01/15/98 Buy IBET Bridge Warrant
Exp. 03/31/2008 89,985 ---
03/23/98 Buy IBET Warrants
Exp. 03/31/2008 104,225 ---
03/31/98 N/A Restructuring of Trans
World Gaming 12% Note
due 06/30/1999; conversion
rights eliminated (600,000) ---
03/31/98 Buy IBET Warrants
Exp. 12/31/2005 2,000,000 ---
03/31/98 Buy IBET Warrants
Exp. 03/31/2008 3,335,272 ---
---------
5,060,257
=========
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
the undersigned certifies that the information set forth in this statement
is true, complete and correct.
Dated: April 14, 1998
VALUE PARTNERS, LTD.
By: Ewing & Partners
as General Partner
By: /S/TIMOTHY G. EWING
-------------------------------
Timothy G. Ewing
General Partner
EXHIBIT A
FIRST AMENDED
LOAN AGREEMENT
This FIRST AMENDED LOAN AGREEMENT ("AGREEMENT") is made and entered
into as of this 19 day of December, 1997, by and between Value Partners,
Ltd., a Texas Limited Partnership ("LENDER") and Trans World Gaming Corp.,
a Nevada Corporation (the "BORROWER").
R E C I T A L S
1. By that certain Loan Agreement dated October 27, 1997, Lender
agreed to loan to Borrower up to the sum of $2,625,000.00 upon the terms
and conditions set forth therein (the "Prior Loan Agreement"). This
Agreement amends, renews, reinstates, modifies, restates and replaces in
its entirety the prior Loan Agreement and that certain Senior Secured
Promissory Note dated October 27, 1997 in relation thereto (the "Prior
Note"). This Agreement is entitled to all of the liens, benefits,
priorities, rights and privileges of the Prior Loan Agreement and Prior
Note. Pursuant to the terms and conditions hereof, Lender is agreeing to
loan to Borrower and Borrower is agreeing to borrow from Lender a total of
$4,125,000.00.
2. Borrower has requested that Lender loan to Borrower and Lender is
willing to loan to Borrower up to the sum of $4,125,000.00 (the "Loan
Amount") upon the terms and subject to conditions hereinafter set forth. To
further induce this loan, Borrower has offered to issue to Lender warrants
to purchase .1714 shares of Common Stock of the Borrower for each dollar
loaned Borrower, as set forth hereinafter (the "Warrant(s)"). To evidence
this loan, Borrower shall execute that certain First Amended Senior Secured
Promissory Note (the "Note") in the form attached hereto as Exhibit A, that
certain Certificate of No Oral Agreements in the form attached hereto as
Exhibit "B" (the "Certificate") and all other documents as set forth on the
Certificate and such other documents as are necessary to this loan
transaction or otherwise required pursuant to the terms hereof (the
"Related Documents") (this Agreement, the Warrants, in the form attached
hereto as Exhibit C, the Note, the Certificate and the Related Documents
shall be referred to collectively as the "Loan Documents"). For purposes
of this Agreement all exhibits attached hereto are by this reference
incorporated herein. The term "Holder", as used herein, refers to the
Lender and each successive owner and holder of the Note.
3. As of December 17, 1997, $1,228,000.00 of the Loan Amount has
been advanced by Lender to Borrower.
AGREEMENT:
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and legal sufficiency of which are
hereby acknowledged, Lender and Borrower agree:
1. REFERENCES IN LOAN DOCUMENTS. All references in the Loan Documents
to the Note shall henceforth include references to the Note, as such Note
may, from time to time, be amended, modified, extended, renewed,
reinstated, decreased, and/or increased.
2. EXECUTION OF DOCUMENTS. Subject to the terms and conditions set
forth herein, Borrower will execute in favor of Lender the Loan Documents.
Upon execution of the Loan Documents, the Prior Note shall be returned to
Borrower marked cancelled.
3. PURPOSE OF LOAN. Borrower represents that it is negotiating an
agreement to acquire two casinos and related assets and permission to
license a third casino in the Czech Republic (the "Czech Transaction"), is
exploring an opportunity to acquire a casino in Zaragoza, Spain and a new
license for a downtown casino (the "Zaragoza Transaction"), is exploring an
opportunity to enter into a management agreement to operate the gambling
operation of an ocean going vessel off of the Florida Coast (the "Florida
Transaction"); and is negotiating an agreement to invest in and manage two
separate facilities, a casino and a slot machine facility, in Bishkek,
Kyrgyzstan (the "Bishkek Transaction"). The Czech Transaction, the
Zaragoza Transaction, the Bishkek Transaction and the Florida Transaction
are referred to herein collectively as the "Transaction(s)". All
agreements related to such Transactions must be approved in writing by
Lender as to form and content. Copies of agreements or term sheets related
thereto are attached hereto as Exhibits D, E, F and G respectively.
Attachment hereto shall not constitute approval by the Lender of these
documents. Subject to this Agreement, proceeds of this loan are to be used
(a) to fund an escrow account established pursuant to agreements executed
with respect to the Czech Transaction ($525,000), (b) the purchase price of
the Fuentes Stock, as defined herein, the purchase price of collateral for
a letter of credit and certain operating expenses pursuant to agreements
executed with respect to the Zaragoza Transaction ($1,968,074.24), (c) the
purchase price, operating expenses and cage funds pursuant to agreements
executed with respect to the Florida Transaction ($450,000), and (d) the
refurbishing and funding of the casino and the refurbishing, funding and
purchase of slot machines as to the "slot room" with respect to the Bishkek
Transaction ($450,000). The sum of $821,074.24 was advanced in relation to
the Zaragoza Transaction on October 28, 1997, as set forth in more detail
in paragraph 9 herein. The sum of $406,925.76 was advanced on October 29,
1997 and was used in part to repay to Lender on October 30, 1997 all sums
due under that certain $350,000 Senior Promissory Note executed by Borrower
in favor of Lender as of June 11, 1997 as referenced in paragraph 5(h)
below, and the balance for general operating needs of Borrower. On or
about December 18, 1997, Borrower repaid to Lender the sum of $800,018.30
from sums placed in escrow by Borrower pursuant to paragraph 9(a) herein.
4. CONVERSION RIGHTS. The Borrower represents to Lender that it
intends to issue debt and equity instruments, in form and substance
acceptable to Lender if Lender is a member of the investor group (including
through conversion as set forth herein), in the approximate total sum of up
to $16,000,000, the proceeds of which are contemplated to be used to
complete the Czech Transaction, and for other needs of Borrower, as set
forth in Exhibit "H" (the "New Issue"). Attachment hereto does not
constitute approval by Lender of the business plan. At the option of
Lender, Lender may (i) require immediate repayment of all or a portion of
sums due under the Note and Loan Documents pursuant to the terms thereof
from the first dollars received by Borrower from the New Issue, and/or (ii)
convert all or a portion of the unpaid principal sum due Lender under the
Note to indebtedness and equity, on a dollar for dollar basis, issued
pursuant to the New Issue. In the event of such conversion, Lender shall
be entitled to all benefits of the New Issue, on a pari passu basis with
the other investors in the New Issue. In the event of such a conversion,
the Warrants shall be converted to the terms of the warrants, in form and
substance acceptable to Lender included within the New Issue. The number
of shares of New Issue warrants issued in the event of conversion shall be
the greater of (a) Warrants issued to Lender pursuant to the terms of this
Agreement as to such sums converted, or (b) warrants convertible into
shares of Common Stock which an investor in the New Issue who invests the
converted sum would receive. Should the New Issue occur, Borrower shall
provide written notice thereof and Holder shall, not less than (20) twenty
days prior to the date the New Issue must be closed, be provided notice and
all relevant documents comprising the New Issue. Holder shall, not less
than five days prior to the New Issue closing date notify the Borrower if
it desires to convert the Note or require repayment of the Note from the
proceeds of the New Issue. In the event Holder makes no election, the Loan
Documents shall continue in full force and effect. In the event of
conversion, all unpaid interest and other sums due under the Note, other
than unpaid converted principal, shall be paid in full in cash on the date
conversion occurs. The right to convert shall expire when all principal due
pursuant to the Note is paid in full in conformance with the Loan
Documents. Borrower may not prepay the principal obligation arising under
the Note without the written consent of Holder. There shall be no penalty
for authorized prepayment of the Note. Nothing herein shall excuse the
Borrower from any payment or other obligations required under the terms of
the Note or be deemed a waiver of any right or remedy granted Lender in the
Loan Documents, including acceleration. A "Business Day" is any day that
commercial banks are permitted to be open for business in New York City,
New York, U.S.A.
5. AGREEMENT TO ADVANCE. Upon Borrower's compliance with the
requirements of Lender set forth in this Agreement and subject to the terms
and conditions hereof, Lender shall advance to Borrower a total amount not
to exceed four million one hundred twenty-five thousand dollars and no
cents ($4,125,000.00) in increments as set forth below. Borrower agrees
that advances of the Loan Amount shall be made only for the following
purposes, in the following increments, in compliance with the terms hereof:
a. Purchase Price - ninety percent of
authorized, issued Common Stock
of Casino de Zaragoza from the
owner of Casino de Zaragoza
(advanced October 28, 1997) $821,074.24<F1>
b. Recapitalization of Casino de
Zaragoza $250,000
c. Recapture of costs incurred by
Borrower associated with Casino
de Zaragoza $172,000
d. Acquisition fee - Florida Transaction $250,000
e. Funds to operate Florida Casino -
Florida Transaction $100,000
f. Money to fund the "cage" - Florida
Transaction $100,000
<F1>As is set forth in paragraphs 3 and 9, $800,018.30 of this amount was
repaid on December 18, 1997. Such sum may be readvanced in compliance
with this Agreement.
g. Escrow Deposit with Sellers of Czech
Casinos $525,000
h. General operations of Borrower and
repayment of $350,000 Senior Promissory
Note ($406,925.76 advanced October 29,
1997) $731,925.76
i. To Purchase Certificate of Deposit
to secure letter of credit in favor
of the Diputacion General de Aragon
of the Provincial Government of
Zaragoza Transaction Aragon, Spain
(the "DGA") - $725,000
j. To fund obligations related to operation
of casino in Bishkek Transaction $200,000
k. To fund obligations related to operation
of "slot room" in Bishkek Transaction $250,000
6. CONDITIONS PRECEDENT FOR ADVANCES. Prior to any advance of a
portion of the Loan Amount, other than that sum designated for general
requirements and repayment of the $350,000 Senior Promissory Note (section
5(h)), the following conditions shall be met:
a. A Certificate of the President of Borrower ("Certificate of
Borrower") in a form acceptable to Lender shall be delivered
to Lender wherein Borrower certifies as follows:
(i) That all documents and agreements requisite to such
an advance, including as to the Transaction for which
such advance is to be made, have been executed (or
are ready for execution) and that such sum is payable
by Borrower.
(ii) That Borrower and any present or future, wholly or
partially owned subsidiary, direct or indirect,
and/or affiliate (collectively the "Affiliate" or
the "Affiliates") have complied with all documents
and agreements related to such an advance, including
the Loan Documents and documents related to such
Transaction. Affiliate shall not be construed to
create personal liability for individual officers,
directors and/or employees of the Borrower or any
Affiliate.
(iii) That there are no liens or encumbrances against
assets acquired by Borrower or Affiliates with the
proceeds of such advance, other than as granted to
Lender in connection herewith or consented to in
writing by Lender.
(iv) That no default exists under the Loan Documents and
that no event has occurred as of such date that with
the giving of notice or otherwise would constitute an
event of default of the Loan Documents.
(v) That, to the actual knowledge of Borrower, Borrower
and/or Affiliates can perform all terms and
conditions of the Transaction as to which the advance
is requested, including those unrelated to the
advance.
(vi) That all representations and warranties of Borrower
in the Loan Documents are true and correct at the
time of such request.
(vii) Borrower knows of no event or circumstance which
makes it unlikely that the Transaction can be
successfully completed and its business purpose
achieved, as that purpose is described in Exhibit "H"
hereto.
b. All statements set forth in such Certificate of Borrower are
true and correct.
c. Any consents, certificates, approvals, permits, licenses,
bonds,
agreements, releases, lien waivers, evidence of partial or
final completion, bills, invoices, receipts, subordinations,
affidavits, or such other documents as required by
applicable law or by the Loan Documents or as Lender may
otherwise reasonably require have been obtained.
d. In addition, as to the Zaragoza Transaction, the following
shall be delivered to Lender:
(i) By Borrower, documents evidencing that the bank
guarantee required to be provided in favor of the DGA
as well as similar guarantees as may be necessary with
respect of other preferred creditors, has been obtained
on terms and conditions acceptable to Lender, in
Lender's sole and absolute discretion.
(ii) An opinion from counsel to Lender domiciled in Spain in
a form acceptable to Lender that the Zaragoza
Transaction complies with all applicable laws,
including those of the province of Zaragoza and the
federal government of Spain and the European Economic
Community. This is for the benefit of the Lender and
may not be relied upon or required by Borrower. Lender
may waive such requirement at its sole discretion or
may postpone requesting such opinion to permit Lender
to utilize rights granted it in paragraph 9 hereto.
7. ADDITIONAL OBLIGATIONS. As soon as is reasonably possible
following an advance, Borrower shall, where permissible under applicable
law, cause the following to occur:
a. Delivery by Borrower to Lender of a guaranty of the
Borrower's obligations under the Loan Documents in a form
reasonably acceptable to Lender by every Affiliate involved
in any manner in any of the Transactions or by any entity
created or acquired by Borrower to facilitate any of the
Transactions.
b. Delivery by Borrower to Lender in form and substance
acceptable to Lender of documents granting to Lender a
perfected security interest in all property of any kind or
nature acquired with the advances. Borrower shall cause any
Affiliate which acquires property with such advance to
execute documents in a form and substance acceptable to
Lender which grant to Lender a first lien and security
interest in such property. Borrower shall execute documents
necessary to grant to Lender a first lien and security
interest in the capital stock of each Affiliate which
benefits, either directly or indirectly, from such an
advance and shall cause each Affiliate which benefits
directly or indirectly, to execute a security interest in
each of their Affiliates and/or assets acquired with such
advances. This shall be construed as broadly as possible in
favor of Lender and shall include any parent of any
Affiliate that owns acquired property, any parent of such
parent, such that all direct or indirect subsidiaries of
Borrower involved in the Transaction are pledged to Lender.
Such entities shall also execute a guaranty of such
indebtedness as a component of such transaction. Borrower
and such Affiliates shall also take all steps necessary to
perfect such security interests in favor of Lender.
Borrower acknowledges that this includes, but is not limited
to a security interest in the following property if the
advance related to such Transaction is made:
(i) Promissory Note in the sum of $250,000 executed in
favor of Borrower by Boca Casino Cruises, Inc. in the
Florida Transaction.
(ii) The Casino Management Contract and Consulting
Agreement and cash flow resulting therefrom (Florida
Transaction).
(iii) Sums escrowed by Borrower with sellers of property to
Borrower or Affiliate (Czech Transaction and Zaragoza
Transaction). Such escrow agreement shall also
include irrevocable provisions providing that such
sums shall be wire transferred to Lender in lieu of
being returned to Borrower or an Affiliate or agent
of Borrower or Affiliate. Such sums shall be deemed
a payment by Borrower on the Note.
(iv) $100,000 cage cash - Florida Transaction
(v) Stock of Art Marketing, Ltd., a British Corporation,
and each Affiliate which holds assets, directly, or
indirectly, acquired pursuant to the Zaragoza
Transaction.
(vi) All real and personal property comprising Casino de
Zaragoza.
(vii) Bank Accounts of Borrower in Czech Republic.
(viii)Certificate of Deposit pledged to secure the DGA
letter of credit obligation.
(ix) Any management contract and/or consulting agreement
related to the Bishkek Transaction.
(x) All personal property acquired by the Borrower or any
Affiliate thereof with advances made in the Bishkek
Transaction, with standard after acquired property
protection.
8. ADVANCES.
a. Lender shall advance proceeds in compliance with the terms
hereof. All such advances shall be charged against the
Note.
b. At least five (5) Business Days prior to the date on which
each advance is to be made, all documents, instruments, and
writings that may then be required by Lender shall be
delivered to Lender. The proceeds of each advance shall be
applied solely to the payment of those items set forth in
such requisition and approved by Lender. Any advances made
by Lender prior to the fulfillment by Borrower of any
requirements of Lender or any condition precedent set forth
in this Agreement shall not be deemed a waiver of Lender's
right to have such requirement or condition precedent
fulfilled, including prior to advancing future Loan Amounts.
The failure to subsequently fulfill such requirements or
conditions precedent within the time period reasonably
required by Lender shall be deemed a default by Borrower.
Lender may, but shall not be obligated to, advance an amount
that exceeds the face amount of the Note.
c. Lender shall have no obligation to make any advance if, at
the time of such advance is to be made:
(i) Borrower is in default with respect to any provision of
the Loan Documents or of any instrument, document or
writing referenced herein.
(ii) Lender determines, in good faith, that Borrower is
incapable of performing under the terms of any of the
documents executed with respect to the Transaction
related to such advance.
(iii) Lender determines that Borrower cannot complete
any of the Transactions which are the purpose of this
Agreement.
(iv) Lender determines Borrower cannot obtain funding for
the New Issue.
(v) Lender has not approved the form of documents related
to the Transaction for which such advance is requested.
(vi) Lender does not approve of the Transaction for any
reason, in its sole discretion, as to which the advance
is requested.
(vii) Lender determines in good faith after consultation
with Borrower that Borrower has not fulfilled each of
the conditions precedent with respect to such advance.
d. Lender shall have no obligation, either express or implied,
to Borrower, or to any third parties to verify that advances
made pursuant to this Agreement are actually used for the
purpose herein. No party may be a third party beneficiary
of this Agreement.
e. Lender shall have no liability or obligation, either express
or implied, to Borrower or to any third parties, in
connection with the Transactions, except to advance monies
as provided under this Agreement. Further, Lender is not
liable for the performance of any other third parties nor
for any failure of such party to perform any obligations to
Borrower. Nothing under this Agreement shall be construed
as a representation or warranty, express or implied, on
Lender's part, to any party, other than Lender's
representations to Borrower as set forth in paragraph 14
herein. Any advance made by Lender shall not be deemed an
agreement by Lender that Borrower is in compliance with
this Agreement, that Lender has determined that Borrower has
so complied or that any of those factors as set forth in
paragraph 8(c) hereto are correct.
9. ZARAGOZA TRANSACTION. Borrower represents and agrees as follows:
a. ACQUISITION OF STOCK. Borrower has requested and received
an advance related to the Zaragoza Transaction in the sum of
$821,074.24, which advance Borrower placed into a bank
account in Spain controlled only by Borrower. Had certain
conditions occurred, this money was to be used to acquire
ninety percent (90%) of the shares of Common Stock of Casino
de Zaragoza SA from SR Alfonso Fuentes ("Fuentes Stock").
Because terms and conditions regarding the acquisition of
the Fuentes Stock as well as the acquisition of a new casino
in downtown Zaragoza did not occur, the sum of $800,018.30
was released from the escrow and repaid to Lender on
December 18, 1997. Because this sum of $800,018.30 was
repaid in this manner, Lender has agreed to waive its right
to receive Warrants pursuant to Section 11 herein as to such
advance. Should sums related to the Zaragoza Transaction be
requested in the future and advanced by Lender, Section 11
shall apply to such sums.
b. LETTER OF CREDIT. Borrower may request an advance related
to the Zaragoza Transaction in the sum of $725,000.00, which
advance shall be used to purchase certificates of deposit to
be used as collateral ("Collateral CD's") in favor of a
financial institution located in the United States of
America mutually acceptable to Borrower and Lender. Such
Collateral CD's are to be used to secure a letter of credit
by Borrower in favor of a bank in Spain which issues a bank
guarantee or similar instrument in the sum of approximately
$700,000.00 in favor of the DGA. This bank guarantee is
required by the DGA as a component of the Zaragoza
Transaction. Lender shall be granted a security interest in
such Collateral CD's. Documents controlling these
Collateral CD's shall provide for the release of such
Collateral CD's to Lender as a payment on the Note in the
event the DGA approval of the Zaragoza Transaction is not
obtained or in the event the Fuentes Stock is not acquired
by Borrower or an Affiliate. Borrower shall not request nor
be eligible to receive this advance unless the ability of
the DGA to draw under the terms of the contemplated bank
guarantee is conditioned upon Borrower or an Affiliate
having received from the DGA irrevocable authorization to
operate a casino in downtown Zaragoza (as opposed to and in
addition to a change in the law by the local legislature
permitting such a license). Such letter of credit or bank
guarantee shall not become irrevocable until such conditions
are met and until Borrower or an Affiliate has acquired the
Fuentes Stock. Borrower shall only enter into such letter
of credit and/or bank guarantee upon obtaining the written
approval of Lender to do so. Lender shall not be required
to make this advance unless it, in its sole discretion,
approves the form of all documents related to such advance,
including the letter of credit and bank guarantee.
10. PAYMENTS. Borrower shall, until all obligations under the terms of
the Loan Documents are satisfied, on or before the 10th calendar day
following each three (3) calendar month period, with the first three month
period to commence as of October 1, 1997, pay or cause to be paid the sum
equal to forty percent (40%) of all cash received during that prior three
(3) month period, if any, by it or its wholly owned subsidiary, Tottenham &
Co., d/b/a ART Marketing Ltd. (the "Subsidiary") for services rendered by
Borrower or the Subsidiary as to the Boxer Casino located in the city of
Gyandja (Azerbaijon Republic), including pursuant to that Joint Activity
Agreement dated March 31, 1997 by and between Subsidiary and Mahmud
Audiyev, provided that in no event shall such sum exceed the unpaid
principal balance of the Note, together with accrued unpaid interest and
other sums due Lender under the Loan Documents as of the date of such
payment. The payment shall be applied first to unpaid fees and expenses of
Lender arising in relation to the Loan Documents, next to unpaid interest
and then to unpaid principal. The entire unpaid principal balance under
the Loan Documents and all accrued unpaid interest therein is due and
payable December 31, 1998 ("Final Maturity Date"). The obligation to pay
and all obligations arising under the Loan Documents are a general
obligation of the Borrower and are not limited to proceeds received from
the operation of the Boxer Casino. All payments to be made by Borrower to
the Lender hereunder shall be made to the Lender at 2200 Ross Avenue, Suite
4660 West, Dallas, Texas 75201, (or to such other address as Holder may
notify the Borrower pursuant to Section 30 hereof) not later than 4:00 p.m.
Central Time on the date when due in lawful money of the United States of
America and immediately available funds. The Borrower will promptly and
punctually pay when due (whether on a scheduled payment date or at maturity
or upon the prepayment of such Note) the principal of and interest on the
Note, without any presentment thereof, directly to Holder of the Note, at
the address of such Holder shown in the register maintained by the Borrower
for such purposes or at such other addresses the Holder may from time to
time designate in writing to the Borrower or, if a bank account is
designated in any written notice to Borrower from such Holder, the Borrower
will make such payments by wire transfer or other immediately available
funds to such bank account, marked for attention as indicated, or in such
other manner or to such other account of the Holder in any bank in the
United States of America as such Holder may from time to direct in writing.
The Holder of the Note agrees that in the event it shall sell or transfer
the Note it will, prior to the delivery of the Note make a notation thereon
of all principal, if any, prepaid on such Note and will also note thereon
the date to which interest has been paid on such Note. Upon repayment in
full of the Note, the Holder of the Note shall deliver such Note to the
Borrower for cancellation. Borrower shall not be charged a penalty in the
event of prepayment of the Note, to the extent such prepayment is consented
to in writing by the Holder.
11. WARRANTS. Immediately upon receipt of an advance, Borrower shall
execute a Warrant, in the form attached hereto as Exhibit C, permitting
Lender to acquire .1714 shares of Common Stock of Borrower for each dollar
advanced.
12. CONFIRMATION OF RIGHTS. Lender shall have the right to exercise
all rights and remedies of Lender and/or any Holder under the Loan
Documents and under applicable law upon the occurrence of any default or
event of default under any of the Loan Documents and under any and all
amendments or modifications to any of the Loan Documents or to the terms
thereof.
13. REPRESENTATIONS AND WARRANTIES OF BORROWER. Borrower represents,
and warrants to the Lender as follows:
a. ORGANIZATION. STANDING. ETC. Borrower is a corporation
duly organized, validly existing and in good standing under
the laws of the State of Nevada and has all requisite
corporate power and authority to own its assets and carry on
its business as presently conducted. Borrower has all
requisite corporate power and authority to (i) execute,
deliver and perform its obligations under the Loan
Documents, (ii) issue and perform its obligations under the
Warrants, and (iii) execute, deliver and perform its
obligations under all other agreements and instruments
executed and delivered by it pursuant to or in connection
with the Loan Documents.
b. AUTHORIZATION AND EXECUTION; SHARES VALIDLY ISSUED. The
execution, delivery and performance by Borrower of the Loan
Documents and the issuance of the Warrants hereunder have
been duly and validly authorized and Borrower has the
corporate power and authority to execute, deliver and
perform this Agreement and execute the Loan Documents and
issue the Warrants hereunder. The Loan Documents have been
duly authorized, executed, issued and delivered by Borrower
and constitute a valid and binding agreement of Borrower
enforceable in accordance with its terms except to the
extent enforceability may be limited by bankruptcy,
reorganization, insolvency or other laws affecting the
enforcement of creditor's rights generally or the
availability of equitable remedies subject to the discretion
of the court.
c. CONTRAVENTION. The execution, delivery and performance of
this Agreement and the consummation of the transactions
contemplated hereby do not contravene or constitute a
default under or violate (i) any provision of applicable law
or regulation the violation of which would have a material
adverse effect on Borrower or on the Loan Documents or
Warrants, (ii) the Articles of Incorporation or Bylaws of
Borrower, or (iii) any agreement, judgment, injunction,
order, decree or other instrument binding upon Borrower or
any of its assets or properties, the violation of which
would have a material adverse effect on Borrower or result
in the creation or imposition of any lien on any asset of
Borrower, on the Loan Documents or the Warrants.
d. LITIGATION, PROCEEDINGS, DEFAULTS. Other than a lawsuit
commenced by the Borrower against the State of Louisiana,
Docket No. 434,700-D, pending in East Baton Rouge Parish and
the lawsuit, MONARCH CASINOS, INC. OF LOUISIANA ET. AL. THE
TRANS WORLD GAMING CORP., 15th Judicial District Court, Case
No. 97-5037, division B, Lafayette Parish, Louisiana, there
is no action, suit, investigation or proceeding pending
against, or to the knowledge of the Borrower threatened
against or affecting, Borrower or its assets before or by
any court or arbitrator or any governmental body, agency,
department, instrumentality or official. Borrower is not in
violation of its Articles of Incorporation or Bylaws, and
Borrower is not in violation of, or in default under any
provision of any applicable law or regulation or of any
agreement, judgment, injunction, order, decree or other
instrument binding upon Borrower which violation or default
(i) would effect the validity of this Agreement, the Note,
or the Warrants or any other document or agreement executed
or to be executed by Borrower pursuant hereto or in
connection herewith, or (ii) would impair the ability of
Borrower to perform in any material respect the obligations
which it has under the Loan Documents or the Warrants, or
any such other document or agreement.
e. GOVERNMENTAL REGULATION. Except as required pursuant to the
Securities Act of 1933 as amended, (the "Act") and State
securities laws, Borrower is not subject to any Federal or
State law or regulation limiting its ability to execute the
Loan Documents or issue the Warrants.
f. CAPITALIZATION OF BORROWER. Borrower's authorized capital
stock consists of 50,000,000 shares of Common Stock.. As of
the date of this Agreement, 3,044,286 shares of Common Stock
were issued and outstanding. All outstanding shares have
been duly authorized, validly issued and are fully paid and
nonassessable. Except with the Lender's prior consent, which
shall not be unreasonably withheld or delayed, and until the
loan is repaid or converted, and except as to the New Issue,
the Borrower will not issue additional rights,
subscriptions, warrants, options, conversion rights, or
agreements of any kind to purchase from the Borrower, or
otherwise require the Borrower to issue, any shares of
capital stock of the Borrower nor issue additional
securities or obligations of any kind convertible into or
exchangeable for any shares of capital stock of the Borrower
and the Borrower will not be subject to any new obligation
(contingent or otherwise) to repurchase or otherwise acquire
or retire any shares of its capital stock, except for the
Warrants, stock options under the 1993 Employee Stock Option
Plan and up to 150,000 warrants to Lippert Heilshorn
Associates pursuant to an agreement for public relations
work.
g. OWNERSHIP OF PROPERTY. Borrower has good record title in
fee simple to, or valid and subsisting leasehold interests
in, all its real property, and good title to all its other
property, in each case which is necessary or useful in the
conduct of its business. Each lease agreement under which
Borrower holds an interest in leased property is in full
force and effect.
h. DOCUMENTATION; NO MATERIAL MISSTATEMENTS. All of the
necessary documents related to the consummation of this
transaction requested by Lender have been provided by
Borrower to the Lender hereby and are true, correct and
complete in all material respects, and no written
representation, warranty or statement made by the Borrower
in or pursuant to this Agreement contains or will contain,
when made, any untrue statement of a material fact or omits
or will omit to state any material fact necessary to make
such representation, warranty or statement not misleading to
a prospective purchaser of securities from Borrower, who is
seeking full information with respect to Borrower.
i. ADDITIONAL REPRESENTATIONS, COVENANTS, AND AGREEMENTS.
Borrower further covenants and agrees:
(i) To perform all obligations under the documents
related to the Transactions, the Loan Documents and
any instrument, document, or writing referenced
herein, and to promptly pay when due, from proceeds
of the Loan Amount or from Borrower's separate funds,
all other costs, charges, and expenses incurred in
connection with the Transactions.
(ii) To keep all property to be pledged to Lender pursuant
to the Loan Documents free and clear of any and all
liens, claims and encumbrances, other than those
granted to Lender, and except as are consented to in
writing by Lender.
(iii) That all properties, real or personal, of any kind or
nature, acquired pursuant to the Transactions, either
directly or indirectly, and all property owned by any
entity acquired pursuant to the Transactions, real or
personal, shall be subject to the first lien and
security interest of Lender, subject only to those
encumbrances as are consented to in writing by
Lender.
(iv) That the monies to be advanced to Borrower under this
Agreement, together with other funds now available to
Borrower, are sufficient to meet the purposes as set
forth in this Agreement.
(v) That each advance made under this Agreement shall be
used solely for those uses as set forth herein.
(vi) That the property to be acquired pursuant to the
Transactions ("Property") is not now being used and
to the best of Borrower's knowledge has not been used
in violation of any federal, state, or local
environmental law, ordinance, or regulation; that
Borrower has not filed or been required to file any
federal, state, or local report of hazardous
substances found or disposed on any real property now
owned by Borrower; that no proceeding has been
commenced or notice received concerning any violation
of any environmental law, ordinance, or regulation;
that to the best of Borrower's knowledge the Property
is free of underground storage tanks, out-of-use
transformers, hazardous, radioactive or toxic wastes,
contamination, oil, or other materials; that the
Property shall not be used in conjunction with or for
any activity involving, directly or indirectly, the
generation, treatment, storage, transportation,
manufacture, use or disposition of hazardous or toxic
chemicals, materials, substances, or waste of any
kind; that neither the Property, the soil making up
the portion thereof, nor the ground water thereunder
making up any portion thereof shall be contaminated
so as to be subject to any "clean-up", or similar
requirement under any applicable rule, requirement,
regulation, ordinance, or law of governmental
authority that would in any way inhibit, delay, or
increase the cost of the improvement, operation, or
use of the Property; and that Borrower shall not
install, or allow to remain upon the Property, any
chemical, material, or substance, exposure to which
is prohibited, limited, or regulated by any federal,
state, or county, regional, or local authority, or
which, even if not so regulated, may or could pose a
hazard to the health and safety of the occupants of
the Property, to the owners of the properties
adjacent to the Property, or to any person.
(vii) To indemnify and hold harmless from any and all
actions, claims, demands, damages, costs, expenses,
and other liabilities, including without limitation
attorney's fees, that Lender may incur that in any
way relate to or arise out of this Agreement, the
Loan Documents and the Transactions, including
without limitation those arising out of the
negligence of Lender, but not the gross negligence,
willful misconduct, fraud or violation of law by
Lender.
(viii)That this Agreement or any right or obligation that
Borrower has under this Agreement shall not be
assigned or transferred by Borrower without the
express written consent of Lender, and that Borrower
and Borrower's successors, and assigns shall be bound
by this Agreement.
(ix) That each of the Transactions complies with all
applicable law.
14. REPRESENTATIONS AND WARRANTIES OF LENDER. The Lender represents
and warrants to Borrower as follows:
a. AUTHORIZATION AND EXECUTION. The Lender has full legal
right, power, and authority (including the due authorization
by all necessary partnership action) to enter into this
Agreement and to perform the Lender's obligations hereunder
without the need for the consent of any other person; and
this Agreement has been duly authorized, executed and
delivered and constitutes the legal, valid and binding
obligation of the Lender enforceable against the Lender in
accordance with the terms hereof, except to the extent
enforceability may be limited by bankruptcy, reorganization,
insolvency or the laws affecting the enforcement of
creditor's rights generally or the availability of equitable
remedies subject to the discretion of the court.
b. FINANCIAL RISK. The Lender is in a financial position
to hold the Note until maturity and is able to bear the
economic risk and withstand a complete loss of investment in
the Note.
c. KNOWLEDGE AND EXPERIENCE. The Lender has such knowledge
and experience in financial and business matters that the
Lender is capable of evaluating the merits and risks of the
prospective investment in the Note and the Warrants and has
the net worth to undertake such risks.
d. ADVICE. The Lender has obtained, to the extent the Lender
has deemed necessary, legal and other professional advice
and the Lender's own personal professional advice with
respect to the risks inherent in the investment in the Note,
and the suitability of the investment in the Note and the
Warrants in light of the Lender's financial condition and
investment needs.
e. SUITABLE INVESTMENT. The Lender believes that the investment
in the Note and the Warrants is suitable for the Lender
based upon the Lender's investment objectives and financial
needs, and the Lender has adequate means for providing for
the Lender's current financial needs and has no need for
liquidity of investment with respect to the Note.
f. RISK FACTORS. The Lender realizes that (i) the purchase of
the Note and the Warrants is a long term investment; (ii)
the Lender must bear the economic risk of investment until
Note matures and because the Note and the Warrants have not
been registered under the Securities Act, the Note, the
Warrants and the Common Stock for which the Warrants are
exercisable cannot be sold unless each is subsequently
registered under the Act or an exemption from such
registration is available; and (iii) there is presently no
public market for the Note or the Warrants and the Lender
may not be able to liquidate the Lender's investment in the
event of an emergency or pledge the Note or the Warrants as
collateral security for loans.
g. OWN ACCOUNT. The Lender acknowledges that the Note and the
Warrants are being purchased for the Lender's own account
and for investment and without the intention of reselling or
redistributing the same, and that the Lender made no
agreement with others regarding any of such Note, and the
Warrant.
h. NO AGREEMENTS. The Lender has no agreements (written or
oral), arrangements, understandings or commitments with any
other investor subscribing for Note or the Warrants in this
private placement of same.
i. ACCREDITED INVESTOR. The Lender is an "accredited
investor" as defined under Regulation D under the Act.
j. ENTITY REPRESENTATIONS. The Lender was not organized for
the specific purpose of acquiring the Note and has total
assets in excess of $5,000,000.
15. AFFIRMATIVE COVENANTS. Borrower covenants and agrees that so long
as the Note shall be outstanding:
a. PRINCIPAL AND INTEREST. Borrower will pay or cause to be
paid punctually the principal of and interest on the Note at
the times and places and in the manner specified in the
Note.
b. MAINTENANCE AND EXISTENCE. Borrower will at all times do or
cause to be done all things necessary to maintain, preserve
and renew its existence and its rights, patents and
franchises.
c. COMPLIANCE WITH LAWS. Borrower will comply in all material
respects with all applicable laws, rules, regulations, and
orders of the United States of America and of all foreign
countries and of any state or municipality, and of any
instrumentality or agency of any thereof (including
applicable statutes, regulations, orders and restrictions
relating to equal employment opportunities and environmental
standards or controls) in respect of the conduct of business
and the ownership of property by Borrower.
d. INSURANCE. Borrower will maintain adequate insurance with
financially sound and reputable insurance companies in such
amounts and covering such risks as is customarily carried by
companies engaged in similar businesses and similarly
situated as Borrower. Borrower shall notify Lender of any
cancellations or material changes within five (5) Business
Days of notice of such cancellation or change to the
Borrower.
e. TAXES, ASSESSMENTS AND OTHER CHARGES. Borrower will pay
punctually and discharge when due and payable: (i) all
taxes, assessments and other governmental charges levied or
imposed upon it or upon its income, profits, or properties
and (ii) all claims (including, without limitation, claims
for labor, materials, supplies, or services) which might, if
unpaid, become a lien upon any property of Borrower, except
those which the Borrower is disputing in good faith and
which dispute is being prosecuted in good faith, so long as
such process does not endanger the ability of Borrower to
perform its obligations herein.
f. INDEBTEDNESS. Borrower will pay punctually and discharge
when due and payable any indebtedness heretofore or
hereafter incurred or assumed by it and discharge, perform
and observe the covenants, provisions and conditions to be
discharged, performed and observed on the part of Borrower
in connection therewith, or in connection with any agreement
or other instrument relating thereto.
g. BOOKS. Borrower will keep at all times proper books of
record and account in which full, true and correct entries
will be made of its transactions in accordance with
applicable generally accepted accounting principles.
h. STATEMENTS, REPORTS AND CERTIFICATES TO BE DELIVERED BY THE
BORROWER. From the date hereof and so long as the Lender
shall hold the Note, Borrower will deliver to Lender at the
address shown in the register maintained by Borrower the
following:
(i) QUARTERLY FINANCIAL STATEMENTS. As soon as reasonably
possible, and in any event within 45 days after the
close of each of the first three fiscal quarters of
Borrower in each fiscal year, (1) the unaudited
balance sheet of the Borrower as of the end of such
period, setting forth in comparative form the
corresponding figures for the corresponding quarter
of the preceding fiscal year, and (2) the unaudited
statements of income and retained earnings and cash
flows of the Borrower for each quarter and for the
portion of the fiscal year ended with such quarter
and setting forth in comparative form the
corresponding figures for the corresponding periods
of the preceding fiscal year, all in reasonable
detail and certified by a principal financial officer
of Borrower subject to year-end audit adjustments.
(ii) BOXER CASINO. Not later than the fifteenth (15) day
following the end of each calendar quarter , an
unaudited statement of income and expenses for the
prior month of the Boxer Casino shall be provided to
the Lender and for any other entity or enterprise
acquired or commenced pursuant to a Transaction.
(iii) OTHER REPORTS AND STATEMENTS. Promptly upon the
mailing to its equity holders of each annual report
or other report or communication, a copy of each such
report or communication; and promptly upon any filing
by Borrower with the Securities and Exchange
Commission, or any governmental agency or agencies
substituted therefor, or with any national securities
exchange, of any annual or periodic or special report
or registration statement, a copy of such report or
statement.
(iv) CERTIFICATE OF DEFAULT. Deliver to the Lender,
forthwith upon becoming aware of any default or
defaults in the performance of any covenant,
agreement or condition contained in the Loan
Documents (including notice of any event which with
the giving of notice, lapse of time or both would
become an Event of Default), an Officer's Certificate
specifying such default or Event of Default.
(v) ADDITIONAL INFORMATION. Such other data and
information as from time to time may be reasonably
requested by the Lender.
i. OTHER DOCUMENTS. Borrower will comply will all other
covenants, representations, warranties, terms and
obligations of the Loan Documents and all other documents
executed pursuant to the terms hereof or to the Loan
Documents.
16. NEGATIVE COVENANTS. Borrower covenants and agrees that so long as
the indebtedness under the Loan Documents shall be outstanding (without the
prior written consent of Lender):
a. GUARANTEES. Borrower will not guarantee, directly or
indirectly, any obligation or indebtedness of any other
Person, other than any guarantee made with respect to the
contemplated Czech Transaction or the Zaragoza Transaction,
which guarantee shall be on terms reasonably acceptable to
Holder. "Person" shall include any individual, a
corporation, a partnership, a business entity, or a
government, foreign or domestic, or any agency or political
subdivision thereof.
b. DISTRIBUTIONS. Borrower will not declare, pay, or set apart
any funds for the payment of any distribution to any
shareholder, make any distribution in respect of equity
interests, or redeem, repurchase or effect any other sale or
exchange upon any equity interest in Borrower. The exercise
of issued and outstanding warrants shall not be deemed to be
a redemption or repurchase.
c. MERGER AND CONSOLIDATION. Borrower will not consolidate
with or merge into any other entity.
d. DISPOSITION OF ASSETS. Borrower will not sell, assign,
lease, transfer or otherwise dispose of all or any material
portion of its properties or assets to any third party, in
any transaction or series of transactions.
e. SENIOR DEBT. Subsequent to the date hereof, Borrower will
not incur, create, assume or at any time become liable,
contingently or otherwise, for any borrowed or other
indebtedness that is senior in right of payment to the
obligations created herein, other than that expressly
consented to in writing by Lender. Nothing herein shall be
construed to permit the issuance of any indebtedness that
would be secured by any collateral granted to the Lender to
secure the terms hereof other than as expressly consented to
in writing by Holder.
17. EVENT OF DEFAULT. An Event of Default shall mean the occurrence
or existence of any one or more of the following events, whether such
occurrence is voluntary or involuntary or comes about or is effected by
operation of law or pursuant to or in compliance with any judgment, decree
or order of any court or any order, rule or regulation of any
administrative or governmental authority: Events of Default include the
following:
a. The Borrower shall fail to pay the principal of, or interest
due on the Note, as and when due and payable, which failure
shall continue for a period of ten (10) days;
b. The Borrower shall fail to perform or observe any term,
covenant, or agreement contained in the Loan Documents or
any document related thereto, which failure shall continue
for a period of ten (10) days after Lender gives Borrower
notice of such failure;
c. The occurrence of a default under any documents or
instruments guaranteeing, evidencing, securing or pertaining
to the indebtedness evidenced hereby or the failure of any
such documents to remain in full force and effect;
d. If any representation, warranty or other statement of fact,
in the Loan Documents or in any writing, certificate, report
or statement at any time furnished by Borrower or any other
party obligated in relation hereto to Lender pursuant to or
in connection thereto shall be false or misleading in any
material respect; or
e. The Borrower or any other parties obligated in relation
hereto admits in writing its inability to pay debts
generally as they become due; files a petition for relief
under the bankruptcy laws or a petition to take advantage of
any insolvency act; makes an assignment for the benefit of
creditors; commences a proceeding for the appointment of a
receiver, trustee, liquidator or conservator of itself or
the whole or any substantial part of its property; files a
petition or answer seeking reorganization or arrangement or
similar relief under the Federal Bankruptcy Law or any other
applicable law or statute of the United States of America or
any State or any foreign jurisdiction; is adjudged a
bankrupt or insolvent, or a court of competent jurisdiction
shall enter any order, judgment or decree appointing a
receiver, trustee, liquidator or conservator of Borrower or
such party or of the whole or any substantial part of the
property of Borrower or such party or approves a petition
filed against a Borrower or such party seeking
reorganization or similar relief under the Federal
Bankruptcy Laws or any other applicable law or statute of
the United States of America or any State or foreign
jurisdiction; or if, under the provisions of any other law
for the relief or aid of Borrower or such party, a court of
competent jurisdiction shall assume custody or control of
Borrower or such party or the whole or any substantial part
of its property; or if there is commenced against Borrower
or such party any proceeding for any of the foregoing
relief; or if Borrower or such party, by any act indicates
its consent to approval of, or acquiescence in any such
proceeding; Borrower or such party generally, does not pay
or shall be unable to pay, its debts as such debts become
due; or
f. If any creditor of Borrower for any reason whatsoever
hereafter shall accelerate payment in whole or in part of
any outstanding material obligation owed to it by Borrower
under any agreement or arrangement due to a default or an
event of default by the Borrower, or if any judgment against
Borrower or any execution against any property of Borrower
or any amount remains unpaid, unstayed or undismissed for a
period in excess of ten (10) days; or
g. If Borrower shall cease to exist.
It is understood and agreed that time is of the essence of the Note.
If an Event of Default exists, then all amounts under the Note at the time
outstanding shall immediately become due and payable, together with
interest accrued thereon without presentment, demand, protest or notice of
any kind, including notice of intent to accelerate the payment of the
unpaid balance of the Note or in any other Loan Document or of notice of
acceleration, all of which are hereby waived by the Borrower. Any Holder
of the Note and of rights under the Loan Documents may also proceed to
protect and enforce its rights either by suit in equity and/or by action at
law, or by other appropriate proceedings, whether for the specific
performance (to the extent permitted by law) of any covenant or agreement
contained in such Loan Documents, or in aid of the exercise of any power
granted in such Loan Documents, or may proceed to enforce the payment of
such Loan Documents or to enforce any other legal or equitable right of the
holder of such Loan Documents.
18. SECURITIES LAWS RESTRICTIONS. The Lender acknowledges the Note
and the Warrants will not be sold or assigned unless the Lender shall have
obtained (i) an opinion of counsel satisfactory to the Borrower that such
proposed disposition or transfer lawfully may be made without the
registration of such Note or Warrants pursuant to the Act and applicable
state securities laws, or (ii) such registration.
19. LEGEND ON NOTE. The Lender acknowledges that the Note and the
Warrants will each bear a legend conspicuously endorsed reading
substantially as follows:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR ANY STATE SECURITIES ACT, AND MAY NOT BE
TRANSFERRED WITHOUT REGISTRATION UNDER SUCH ACTS OR AN OPINION OF
COUNSEL SATISFACTORY TO THE ISSUER THAT SUCH REGISTRATION IS NOT
REQUIRED.
20. WAIVER OF CLAIMS. Borrower warrants and represents to Lender that
as of the date hereof the Note is subject to no credits, charges, claims,
or rights of offset or deduction of any kind or character whatsoever; and
the Borrower releases and discharges Lender from any and all claims and
causes of action, whether known or unknown and whether now existing or
hereafter arising, including, without limitation, any usury claims, that
have at any time been owned, or that are hereafter owned by Borrower and
that arise out of or are related to the execution, delivery and performance
of the Loan Documents.
21. FINAL MATURITY DATE. The entire unpaid principal balance of the
Note and all accrued unpaid interest therein is due and payable on the
Final Maturity Date.
22. COSTS AND EXPENSES. Borrower agrees to pay all costs and
expenses incurred by Lender in connection with the execution and
consummation of this Agreement, including, without limitation, the
documented fees and expenses of Lender's counsel.
23. CONTINUED EFFECT. Except to the extent amended hereby or in
connection herewith, all terms, provisions, and conditions of the Loan
Documents shall remain enforceable and binding in accordance with their
respective terms.
24. GOVERNING LAW. The terms and provisions hereof shall be governed
by and construed in accordance with the laws of the State of New York.
25. BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of the respective successors and assigns of the parties hereto,
and each of the parties hereto hereby represents, warrants, and covenants
to the other that the persons executing this Agreement on behalf of such
party have full authority, power, and authorization to execute such
document and to bind its principal.
26. ENTIRE AGREEMENT. This Agreement supersedes all prior oral and
written agreements and understandings of the parties hereto with respect to
the subject matter hereof.
27. HEADINGS. The headings of the sections and subsections hereof
are inserted as a matter of convenience and for reference only and in no
way define, limit or describe the scope of this Agreement or the meaning of
any provision hereof.
28. WAIVERS. The failure of any party to act to enforce rights
hereunder shall not be deemed a waiver and shall not preclude enforcement
of any rights hereunder. No waiver of any term or provision of this
Agreement on the part of a party shall be effective for any purpose
whatsoever unless such waiver is in writing and signed by such party.
29. INVALID PROVISIONS. If any provision of this Agreement is held
to be illegal, invalid or unenforceable under present or future laws
effective during the terms hereof, such provision shall be fully severable.
This Agreement shall be construed and enforced as if such illegal, invalid
or unenforceable provision had never comprised a part hereof, and the
remaining provisions hereof shall remain in full force and effect and shall
not be affected by the illegal, invalid or unenforceable provision or by
its severance herefrom. Furthermore, in lieu of such illegal, invalid or
unenforceable provision there shall be added automatically as a part of
this Agreement a provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and
enforceable, which provision shall be consistent with the intent of the
parties hereto.
30. NOTICES. Any request, demand, authorization, direction, notice,
consent, waiver, instruction, document or other communication provided or
permitted by this Agreement to be made upon, given or furnished to, or
filed shall be sufficient for every purpose hereunder if in writing and
mailed, registered or certified mail, postage prepaid or delivered by
facsimile or telecopier (if confirmed), as follows:
If to Borrower, to:
Trans World Gaming Corp.
One Penn Plaza, Suite 1503
New York, NY 10019
Attn: Dominick Valenzano
Telecopy No.: 212-563-3380
With copies to:
Elias, Matz, Tiernan & Herrick L.L.P.
734 15th Street, N.W.
Washington, D.C. 20005
12th Floor
Attn: Jeffrey A. Koeppel
Telecopy No.: 202-347-2172
If to Lender, to:
Value Partners, Ltd.
2200 Ross Avenue
Suite 4660 West
Dallas, Texas 75201
Attn: Timothy G. Ewing
Telecopy No.: 214-999-1901
With copies to:
Bergman, Yonks, Stein & Bird L.L.P.
4514 Travis Street
Travis Walk, Suite 300
Dallas, Texas 75205
Attn: Jack R. Bird
Telecopy No.: 214-528-7673
or to such other address as Lender may from time to time direct. Any
notice to a Holder, (other than Lender), shall be sufficiently given if in
writing and mailed, registered or certified mail, postage prepaid, to such
address as Holder shall from time to time direct in writing.
31. ATTORNEY'S FEES. In the event attorneys' fees or other costs are
incurred to secure performance of any of the obligations herein provided
for, or to establish damages for the breach thereof, or to obtain any other
appropriate relief, whether by way of prosecution or defense, the
prevailing party shall be entitled to recover reasonable attorneys' fees
and costs incurred therein.
32. FURTHER ASSURANCES. Each party hereto agrees to execute any and
all documents, and to perform such other acts, whether before or after
closing, that may be reasonably necessary or expedient to further the
purposes of this Agreement or to further assure the benefits intended to be
conferred hereby.
33. TITLE TO THE SHARES. Upon the exercise of the Warrants and the
consequent issuance of the shares of Common Stock to the Lender, the Lender
will receive the entire legal and beneficial interest in the shares of
Common Stock free and clear of all liens, claims and encumbrances.
34. NOTICE OF INVALIDITY OF ORAL AGREEMENTS. THIS WRITTEN AGREEMENT,
THE LOAN DOCUMENTS, AND ALL EXHIBITS HERETO REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
35. USURY. All agreements between Borrower and Lender, whether now
existing or hereafter arising and whether written or oral, are hereby
limited so that in no contingency, whether by reason of demand or
acceleration of the Final Maturity Date. or otherwise, shall the interest
contracted for, charged, received, paid or agreed to be paid to Lender
exceed the maximum amount permissible under the laws of the State of New
York (hereinafter the "Applicable Law"). If, from any circumstance
whatsoever, interest would otherwise be payable to Lender in excess of the
maximum amount permissible under the Applicable Law, the interest payable
to Lender shall be reduced to the maximum amount permissible under the
Applicable Law, and if from any circumstance Lender shall ever receive
anything of value deemed interest by the Applicable Law in excess of the
maximum amount permissible under the Applicable Law, an amount equal to the
excessive interest shall be applied to the reduction of the principal
hereof and not to the payment of interest, or if such excessive amount of
interest exceeds the unpaid balance of principal hereof, such excess shall
be refunded to Borrower. All interest paid or agreed to be paid to Lender
shall, to the extent permitted by the Applicable Law, be amortized,
prorated, allocated and spread throughout the full period (including any
renewal or extension) until payment in full of the principal so that the
interest hereon for such full period shall not exceed the maximum amount
permissible under the Applicable Law. Lender expressly disavows any intent
to contract for, charge or receive interest in an amount which exceeds the
maximum amount permissible under the Applicable Law. This paragraph shall
control all agreements between Borrower and Lender.
36. COUNTERPARTS. This Agreement may be executed in separate or
multiple counterparts by the parties, and all of such counterparts shall be
considered as one and the same instrument notwithstanding the fact that
various counterparts are signed by only one or more of the parties, and all
of such Agreements shall be deemed but one and the same Agreement.
37. PRIOR LOAN AGREEMENT. True and correct copies of the Prior Loan
Agreement and Prior Note are attached hereto as Exhibit I and J,
respectively.
EXECUTED as of the date first above written.
LENDER:
VALUE PARTNERS, LTD.
By: Fisher Ewing Partners,
Texas general partnership
General Partner
By:
-------------------------
Timothy G. Ewing
Its: General Partner
BORROWER:
TRANS WORLD GAMING CORP.,
A NEVADA CORPORATION
By:
-------------------------
Its:
-------------------------
EXHIBIT B
LENDER'S WAIVER AND OPTION AGREEMENT
Value Partners, Ltd., a Texas limited partnership (the "Lender"), the
lender in that First Amended Loan Agreement, dated December 19, 1997 ("Loan
Agreement") and Trans World Gaming, Corp., a Nevada corporation (the
"Borrower"), the borrower in the Loan Agreement, do hereby agree as
follows:
1. Borrower has requested an advance in the sum of $250,000 pursuant
to he Loan Agreement to fund the Bishkek casino acquisition (the "Bishkek
Transaction") as set forth in the Loan Agreement.
2. Lender acknowledges that the Borrower has disclosed the following
as to the referenced Sections in the Loan Agreement:
a. Section 9 -- The Zaragoza Transaction and the Florida
Transaction are not advancing as of the date hereof.
b. Section 10 - Due to governmental decree, the Borrower has
closed the Boxer Casino, believes that such closure could be temporary, but
cannot predict whether or when the Boxer Casino may reopen (if at all).
c. Section 13(d) -- The following litigation has been
commenced, involving the Borrower, since the date of the Loan Agreement:
i. Petition for Concursus regarding the sub-lease with
Prime Properties, Inc. ("Prime Properties") in the 15th Judicial District
Court, Lafayette Parish, Louisiana, Case No. 97-6174-D;
ii. PRIME PROPERTIES, INC. V. NATIONAL AUTO/TRUCK STOPS,
INC., U.S. District Court, Western District of Louisiana, Case No. CV98-
0076-L-O regarding Prime's claim of the breach of its franchise agreement
with the defendant therein; and,
iii. Voluntary Petition in Bankruptcy of Prime, U.S
Bankruptcy Court for the Western District of Louisiana, Case no. 98BK-
50087.
iv. Monarch Casinos, Inc. of Louisiana et al. v. Trans
World Gaming Corp., 15th Judicial District Court, Case No. 97-5037, Div. B,
Lafayette Parish, Louisiana.
d. Section 13(f) -- The Borrower is negotiating to sell the New
Issue, which will contain warrants for up to 40%, on a fully diluted basis,
of the Borrower's common stock.
e. Section 13(i)(ii) -- The Borrower intends to (i) pledge all
of the stock of a subsidiary which will hold the shares of 21st Century
Resorts and its affiliates to be acquired pursuant to the Stock Purchase
Agreement dated January 20, 1998 (the "SPA"), (ii) grant a first priority
leasehold mortgage on the casino to be acquired in Ceska Kubice, Czech
Republic, (iii) grant a first priority mortgage on the casino to be
acquired in Rozvadov, Czech Republic, (iv) grant a mortgage on the Snojmo
project to be acquired, and (v) grant a security interest in substantially
all of the other assets (excluding gaming licenses if not permissible) of
the casinos to be acquired, to the extent reasonably obtainable.
f. Section 13(i)(iv) -- If the SPA is consummated, the Borrower
will need to consummate the New Issue and obtain further financing to
complete the Snojmo project.
g. Section 15(h)(ii) -- Because the Boxer Casino was closed on
January 28, 1998, financial statements will not be prepared unless and
until the Boxer Casino is reopened for business.
h. Section 16 -- The Borrower will be the co-obligor on $17.0
million Senior Secured Notes in the New Issue.
i. Section 9 -- The terms of the Bishkek Transaction have been
modified, as set forth in Exhibit "A" hereto.
3. Pursuant to Sections 5 through 10 of the Loan Agreement, the
Lender hereby agrees to waive, for purposes of this $250,000 advance, any
violation of the Loan Agreement arising from those matters disclosed by
Borrower to Lender as set forth in paragraph 2 above.
This waiver is, as to the matters set forth in paragraph 2 above,
limited to Borrower's obligation to comply with Sections 6 through 10 of
the Agreement to receive the requested advance. This is not a waiver of
any right or remedy of Value Partners, Ltd., including that those items set
forth in paragraph 2 constitute the basis for the declaration of a default
and acceleration of the collection of all sums due, including the sums
advanced pursuant to the terms of this waiver.
4. Pursuant to Section 4 of the Loan Agreement, in the event of a
New Issue, as that term is defined in the Loan Agreement, Value Partners
intends to require the repayment of all sums advanced pursuant to the Note
from the proceeds of the New Issue (other than sums advanced pursuant to
the terms hereof). Borrower and Lender agree that in addition to the
rights granted in Section 4, at the election of Value Partners a new note
shall be executed as to sums advanced pursuant to this Lender's Waiver and
Option Agreement and, to the extent and at such time as is permissible
under the provisions of that certain Indenture issued in association with
the $4.8 million Secured Convertible Senior Bonds Due 1999, (the
"Indenture"), such advance shall be secured by all assets acquired with
such advance, including an assignment of all sums earned pursuant to that
certain Management Agreement by and between Jockey Club Casinos LLC and
Trans World Gaming Corp., dated January 30, 1998, as amended by that
certain letter dated February 24, 1998. Such grant of a security interest
shall not occur until such time as the Borrower amends that certain
Financing Statement dated January 28, 1998, executed in association with
the Indenture, to clarify the scope of the security interest granted U.S.
Trust Company, N.A. as Indenture Trustee for the Indenture. The Borrower
shall use its best efforts to amend this Financing Statement promptly,
provided that counsel for the Investors renders a letter concurring that
such amendment is consistent with the intent of the parties as of the date
of such Indenture. Such new Note shall be payable in twelve monthly
installments commencing May 1, 1998 of principal and interest and bear
interest at the same rate as the Loan Agreement. To the extent that a
second advance is requested to develop the Bishkek's "slot Room", Lender
shall have the right, at its election, to make such advance pursuant to the
Loan Agreement, as modified herein, provided that such advance, or the
right to make such advance, does not conflict with covenants of other loan
agreements of the Borrower. The warrants issued pursuant to such advance
shall, at Value Partners' option, be on the same terms (including strike
price and number of shares) as those issued pursuant to the Loan Agreement
or those issued pursuant to the Subscription Agreement dated March 17, 1998
in association with the New Issue.
5. The Borrower represents and warrants that all facts as set forth
above are correct.
Dated: March 20, 1998 VALUE PARTNERS, LTD.
BY: Ewing & Partners, a
Texas general partnership
By:
----------------------------
Timothy G. Ewing
Managing Partner
TRANS WORLD GAMING CORP.
By:
----------------------------
Its:
----------------------------
EXHIBIT C
===========================================================================
TRANS WORLD GAMING CORP.
TRANS WORLD GAMING OF LOUISIANA, INC.
Issuer
and
U.S. TRUST COMPANY OF TEXAS, N.A., as Trustee
FIRST AMENDED
INDENTURE
Dated as of March 31, 1998
--------------------
$4,800,000
12% Secured Senior Bonds Due 2005
===========================================================================
TABLE OF CONTENTS
PAGE
PREAMBLE
FORM OF FACE OF SECURITY
FORM OF REVERSE OF SECURITY
ARTICLE 1 DEFINITIONS
SECTION 1.1 Certain Terms Defined
ARTICLE 2 ISSUE, EXECUTION, FORM AND REGISTRATION OF SECURITIES
SECTION 2.1 Authentication and Delivery of Securities
SECTION 2.2 Execution of Securities
SECTION 2.3 Certificate of Authentication
SECTION 2.4 Form, Denomination and Date of Securities;
Payments of Interest in Cash and in
Additional Securities
SECTION 2.5 Registration, Transfer and Exchange
SECTION 2.6 Mutilated, Defaced, Destroyed, Lost and Stolen
Securities
SECTION 2.7 Cancellation of Securities; Destruction Thereof
SECTION 2.8 Temporary Securities
ARTICLE 3 COVENANTS OF THE ISSUER
SECTION 3.1 Payment of Principal and Interest
SECTION 3.2 Offices for Payments, Etc.
SECTION 3.3 Appointment To Fill a Vacancy in Office of Trustee
SECTION 3.4 Paying Agents
SECTION 3.5 Officers' Certificates as to Default and as to
Compliance
SECTION 3.6 Maintenance of Properties, Etc.
SECTION 3.7 Excess Cash Flow Payment
SECTION 3.8 Books
SECTION 3.9 Guarantees
SECTION 3.10 Senior Indebtedness
SECTION 3.11 Distributions
SECTION 3.12 Disposition of Assets
SECTION 3.13 Line of Business
SECTION 3.14 Payments for Consent
SECTION 3.15 Cost of Operations
SECTION 3.16 Reserved
SECTION 3.17 Waiver of Stay, Extension or Usury Laws
SECTION 3.18 Bishkek Note
SECTION 3.19 Security Interest
ARTICLE 4 SECURITYHOLDERS' LISTS AND REPORTS BY THE ISSUER AND
THE TRUSTEE
SECTION 4.1 Issuer To Furnish Trustee Information as to Names and
Addresses of Securityholders
SECTION 4.2 Preservation and Disclosure of Securityholders' Lists
SECTION 4.3 Reports by the Issuer
SECTION 4.4 Listing
ARTICLE 5 REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT
OF DEFAULT
SECTION 5.1 Event of Default Defined; Acceleration of Maturity;
Waiver of Default
SECTION 5.2 Collection of Indebtedness by Trustee; Trustee May Prove
Indebtedness
SECTION 5.3 Application of Proceeds
SECTION 5.4 Suits for Enforcement
SECTION 5.5 Restoration of Rights on Abandonment of Proceedings
SECTION 5.6 Limitations on Suits by Securityholders
SECTION 5.7 Unconditional Right of Securityholders To Institute
Certain Suits
SECTION 5.8 Powers and Remedies Cumulative; Delay or Omission Not
Waiver of Default
SECTION 5.9 Control by Securityholders
SECTION 5.10 Waiver of Past Defaults
SECTION 5.11 Trustee to Give Notice of Default, But May Withhold in
Certain Circumstances
SECTION 5.12 Right of Court To Require Filing of Undertaking To Pay
Costs
SECTION 5.13 Excess Cash Flow
ARTICLE 6 CONCERNING THE TRUSTEE
SECTION 6.1 Duties and Responsibilities of the Trustee; During
Default; Prior to Default
SECTION 6.2 Certain Rights of the Trustee
SECTION 6.3 Trustee Not Responsible for Recitals, Disposition of
Securities or Application of Proceeds Thereof
SECTION 6.4 Trustee and Agents May Hold Securities;
Collections, Etc.
SECTION 6.5 Moneys Held by Trustee
SECTION 6.6 Compensation and Indemnification of Trustee and Its Prior
Claim
SECTION 6.7 Right of Trustee to Rely on Officers' Certificate, Etc.
SECTION 6.8 [Reserved]
SECTION 6.9 Persons Eligible for Appointment as Trustee
SECTION 6.10 Resignation and Removal; Appointment of Successor
Trustee
SECTION 6.11 Acceptance of Appointment by Successor Trustee
SECTION 6.12 Merger, Conversion, Consolidation or Succession to
Business of Trustee
SECTION 6.13 [Reserved]
SECTION 6.14 Trust Estate May be Vested in Co-Trustee or in a
Sub-Trust
ARTICLE 7 CONCERNING THE SECURITYHOLDERS
SECTION 7.1 Evidence of Action Taken by Securityholders
SECTION 7.2 Proof of Execution of Instruments and of Holding of
Securities
SECTION 7.3 Holders To Be Treated as Owners
SECTION 7.4 Securities Owned by Issuer Deemed Not Outstanding
SECTION 7.5 Right of Revocation of Action Taken
ARTICLE 8 SUPPLEMENTAL INDENTURES
SECTION 8.1 Supplemental Indentures Without Consent of
Securityholders
SECTION 8.2 Supplemental Indentures with Consent of Securityholders
SECTION 8.3 Effect of Supplemental Indenture
SECTION 8.4 Documents To Be Given to Trustee
SECTION 8.5 Notation on Securities in Respect of Supplemental
Indentures
ARTICLE 9 NO CONSOLIDATION, MERGER, SALE OR CONVEYANCE
ARTICLE 10 SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS
SECTION 10.1 Satisfaction and Discharge of Indenture
SECTION 10.2 Defeasance and Discharge of Indenture
SECTION 10.3 Defeasance of Certain Obligations
SECTION 10.4 Application by Trustee of Funds Deposited for Payment of
Securities
SECTION 10.5 Repayment of Moneys Held by Paying Agent
SECTION 10.6 Return of Moneys Held by Trustee and Paying Agent
Unclaimed for One Year
SECTION 10.7 Reinstatement
ARTICLE 11 MISCELLANEOUS PROVISIONS
SECTION 11.1 Incorporators, Shareholders, Officers and Directors of
Issuer Exempt from Individual Liability
SECTION 11.2 Provisions of Indenture for the Sole Benefit of Parties
and Securityholders
SECTION 11.3 Successors and Assigns of Issuer Bound by Indenture
SECTION 11.4 Notices and Demands on Issuer, Trustee and
Securityholders
SECTION 11.5 Compliance Certificates and Opinions of Counsel;
Statements To Be Contained Therein
SECTION 11.6 Payments Due on Saturdays, Sundays and Holidays
SECTION 11.7 Conflict of Any Provision of Indenture with Trust
Indenture Act of 1939
SECTION 11.8 New York Law To Govern
SECTION 11.9 Counterparts
SECTION 11.10 Effect of Headings
SECTION 11.11 Board of Directors
SECTION 11.12 Waiver of Usury Laws
ARTICLE 12 REDEMPTION OF SECURITIES
SECTION 12.1 Right of Optional Redemption; Prices
SECTION 12.2 Notice of Redemption
SECTION 12.3 Payment of Securities Called for Redemption
SECTION 12.4 Exclusion of Certain Securities from Eligibility for
Selection for Redemption
SECTION 12.5 Selection of Securities to be Redeemed
SECTION 12.6 Partial Redemption of Securities
ARTICLE 13 WARRANT
ARTICLE 14 SECURITY
SECTION 14.1 Pledge and Security Interest
SECTION 14.2 Security for Obligation
SECTION 14.3 Perfection of Security Interest
SECTION 14.4 No Disposition of Collateral; Release of Lien of
Indenture
SECTION 14.5 Other Liens
SECTION 14.6 Trustee Appointed Attorney-in-Fact
SECTION 14.7 Return of Collateral
SECTION 14.8 Default Remedies
SECTION 14.9 Proceeds
SECTION 14.10 Deficiency
SECTION 14.11 Trustee's Duties
SECTION 14.12 Special Trustee Powers Due to Environmental Conditions
SIGNATURES
THIS FIRST AMENDED INDENTURE, dated as of March 31, 1998 between Trans
World Gaming Corp, a Nevada corporation ("TWG"), and its wholly-owned
subsidiary, Trans World Gaming of Louisiana, Inc., a Louisiana corporation
(TWG Louisiana, which together with TWG shall be collectively, the
"Issuer"), and U.S. Trust Company of Texas, N.A., a national banking
association, not in its individual capacity but solely as trustee (the
"Trustee"),
W I T N E S S E T H :
WHEREAS, the Issuer has duly authorized the issue of its 12% Secured
Senior Bonds Due 2005 (the "Securities"); and
WHEREAS, the Issuer authorized and issued its $4,800,000 12% Secured
Convertible Senior Bonds Due 1999 dated as of November 1, 1996 ("Original
Securities"), pursuant to an Indenture dated as of November 1, 1996
("Original Indenture"); and
WHEREAS, one hundred percent (100%) of the holders of the issued and
Outstanding Original Securities have agreed to the modification of the
Original Securities and Original Indenture on the terms and conditions set
forth herein; and
WHEREAS, the Securities and the Trustee's certificate of
authentication shall be in substantially the following form:
[FORM OF FACE OF SECURITY]
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR ANY STATE SECURITIES ACT, AND MAY NOT BE TRANSFERRED WITHOUT
REGISTRATION UNDER SUCH ACTS OR AN OPINION OF COUNSEL SATISFACTORY TO THE
ISSUER THAT SUCH REGISTRATION IS NOT REQUIRED.
No. $
TRANS WORLD GAMING CORP.
TRANS WORLD GAMING OF LOUISIANA, INC.
12% Secured Senior Bond Due 2005
Date: March 31, 1998
Trans World Gaming Corp., a Nevada corporation ("TWG"), and its wholly-
owned subsidiary, Trans World Gaming of Louisiana, Inc., a Louisiana
corporation (TWG Louisiana, which together with TWG shall be collectively,
the "Issuer"), for value received hereby promise to pay jointly and
severally to , or registered assigns, the principal sum
of _________ Dollars, with interest thereon as set forth herein. Interest
on the unpaid principal shall accrue the rate of 12% per annum. Interest
shall accrue on this Security from June 30, 1996, the date of the Original
Security for which this Security is being substituted and the date from
which interest began accruing on the Original Security. The unpaid
principal and accrued unpaid interest shall mature and be due and payable
on the Maturity Date or such earlier date as provided herein. All payments
of principal and interest shall be in 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. Should an Event of Default occur,
the unpaid principal (and unpaid interest, to the extent permitted by
applicable law) shall bear interest at the Default Rate. The Default Rate
is 17% per annum compounded semiannually, subject to the Maximum Rate (as
defined in the Indenture) and other limitations thereon as set forth in
this Indenture.
The sum of Excess Cash Flow allocable to this Security shall, except
as otherwise provided in the Indenture referred to on the Reverse hereof,
be paid to the Person in whose name this Security is registered on the
Record Date next preceding such Cash Flow Payment Date, whether or not such
is a Business Day;
In the event a Default occurs as to the payment of Excess Cash Flow,
interest shall accrue at the Default Rate from the preceding Record Date
for which there was no such Default.
Interest on this Security will be calculated on the basis of a 360-day
year, consisting of twelve 30-day months.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof which further provisions shall for all
purposes have the same effect as if set forth in this place.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed under its corporate seal.
[Seal] TRANS WORLD GAMING CORP.
By:
------------------------------------
By:
------------------------------------
[Seal] TRANS WORLD GAMING OF LOUISIANA, INC.
By:
------------------------------------
By:
------------------------------------
[FORM OF REVERSE OF SECURITY]
TRANS WORLD GAMING CORP.
TRANS WORLD GAMING OF LOUISIANA, INC.
12% Secured Senior Bond Due 2005
This Security is one of a duly authorized issue of debt of the Issuer,
with an aggregate principal amount of $4,800,000, issued pursuant to The
First Amended Indenture dated as of March 31, 1998, (the "Indenture"), duly
executed and delivered by the Issuer to U.S. Trust Company of Texas, N.A.,
as Trustee (herein called the "Trustee"). Reference is hereby made to the
Indenture and all indentures supplemental thereto for a description of the
rights, limitations of rights, obligations, duties and immunities
thereunder of the Trustee, the Issuer and the Holders (the words "Holders"
or "Holder" meaning the registered holders or registered holder) of the
Securities. The Securities are secured obligations of the Issuer.
Capitalized terms used in this Security and not defined herein shall have
the meaning set forth in the Indenture.
In case an Event of Default (as defined in the Indenture) shall have
occurred and be continuing, the debt in respect of all of the Securities
then Outstanding may be declared due and payable in the manner and with the
effect, and subject to the conditions, provided in the Indenture. The
Indenture provides that the Holders of a majority in aggregate principal
amount of the Securities then Outstanding, by notice to the Trustee, may on
behalf of the Holders of all of the Securities, waive any existing Default
or Event of Default and its consequences under the Indenture except a
continuing Default or Event of Default in the payment of interest on, or
the principal of, the Securities on the Maturity Date or in respect of a
covenant or provision that cannot be modified or amended without the
consent of all Holders of the Securities. Any such consent or waiver by
the Holder of this Security (unless revoked as provided in the Indenture)
shall be conclusive and binding upon such Holder and upon all future
Holders and owners of this Security and any Security which may be issued in
exchange or substitution therefore, whether or not any notation thereof is
made upon this Security or such other Securities.
The Indenture permits the Issuer and the Trustee, with the consent of
(i) the Holders of not less than a majority in aggregate principal amount
of the Securities at the time Outstanding, and (ii) the holders of 50% in
aggregate principal amount of the 12% Senior Secured Notes due March 2005
of TWG, TWG International U.S. Corporation, a Nevada corporation ("TWG
Finance") (the "Czech Notes"), issued pursuant to the terms of an Indenture
dated March 31, 1998, among TWG, TWG International and TWG Finance and the
Trustee, to execute supplemental indentures adding any provisions to or
changing in any manner or eliminating any of the provisions of this
Indenture or of any supplemental indenture or modifying in any manner the
rights of the Holders of the Securities; PROVIDED that no such supplemental
indenture shall, without the consent of each Holder affected thereby (and
the holders of 75% in aggregate principal amount of the Czech Notes with
respect to subsections (i) - (iii) and subsection (viii) as it relates to
subsections (i) - (iii)) (with respect to any Securities held by a non-
consenting Securityholder): (i) reduce the principal amount of Securities
whose Holders must consent to an amendment, supplement or waiver, (ii)
reduce the principal of or change the fixed maturity of any Security or
alter the provisions with respect to the redemption of the Securities,
(iii) reduce the rate of or change the time for payment of interest on any
Security, (iv) waive a Default or Event of Default in the payment of
principal of or premium, if any, or interest on the Securities (except a
rescission of acceleration of the Securities by the Holders of at least a
majority in aggregate principal amount of the then Outstanding Securities
and a waiver of the payment default that resulted from such acceleration),
(v) make any Security payable in money other than that stated in the
Securities, (vi) make any change in the provisions of the Indenture
relating to waivers of past Defaults or the rights of Holders of Securities
to receive payments of principal of or interest on the Securities, (vii)
waive a redemption payment with respect to any Security, or (viii) make any
change in the foregoing amendment and waiver provisions.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligations of the Issuer,
which are absolute and unconditional, to pay the principal of and the
interest on this Security at the place, times, and rate, and in the
currency, herein prescribed.
The Securities are issuable only as registered Securities without
coupons.
At the office or agency of the Issuer referred to on the face hereof
and in the manner and subject to the limitations provided in the Indenture,
Securities may be exchanged for a like aggregate principal amount of
Securities of other authorized denominations.
Upon due presentment for registration of transfer of this Security at
the above-mentioned office or agency of the Issuer, a new Security or
Securities of authorized denominations, for a like aggregate principal
amount, will be issued to the transferee as provided in the Indenture. No
service charge shall be made for any such transfer, but the Issuer may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto.
As provided in, and subject to the terms and conditions of, the
Indenture, the Issuer shall be required to make mandatory prepayments of
principal and interest equal to Excess Cash Flow until the Obligations (as
defined in the Indenture) are fully defeased pursuant to Section 10.2 or
until one hundred percent (100%) of the principal amount of the Securities,
together with accrued and unpaid interest, is paid. The Securities may also
be redeemed by the Issuer at any time or from time to time, in whole, or in
part, upon mailing a notice of such redemption not less than 30 nor more
than 60 days prior to the date fixed for redemption to the Holders of
Securities to be redeemed, at a redemption price equal to 100% of the
principal amount of the Securities redeemed, together with accrued and
unpaid interest to the date fixed for redemption.
Subject to payment by the Issuer of a sum sufficient to pay the
obligations upon redemption, interest on this Security shall cease to
accrue upon the date duly fixed for redemption of this Security.
The Securities shall not be secured by, and the Holders of the
Securities shall have no rights relating to, the Capital Stock or assets of
(including direct and indirect, partially or wholly owned Subsidiaries) of
either TWG International or TWG Finance, until the Czech Notes are fully
defeased, fully redeemed or paid in full.
The Issuer, the Trustee and any authorized agent of the Issuer or the
Trustee may deem and treat the registered Holder hereof as the absolute
owner of this Security (whether or not this Security shall be overdue and
notwithstanding any notation of ownership or other writing hereon made by
anyone other than the Issuer or the Trustee or any authorized agent of the
Issuer or the Trustee), for the purpose of receiving payment of, or on
account of, the principal hereof and premium, if any, and subject to the
provisions on the face hereof, interest hereon and for all other purposes,
and neither the Issuer nor the Trustee nor any authorized agent of the
Issuer or the Trustee shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of, premium,
if any, or the interest on this Security, for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the Indenture or
any indenture supplemental thereto, against any incorporator, shareholder,
officer, employee or director, as such, past, present or future, of the
Issuer or Trustee or of any successor corporation, either directly or through
the Issuer or any successor corporation, whether by virtue of any constitution,
statute or rule of law or by the enforcement of any assessment or penalty or
otherwise, all such liability being, by the acceptance hereof and as part
of the consideration for the issue hereof, expressly waived and released.
Customary abbreviations may be used in the name of a Securityholder 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).
This Security shall not be valid or obligatory until the certificate
of authentication hereon shall have been duly signed by an authorized
signatory of the Trustee acting under the Indenture.
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Securities described in the within-mentioned
Indenture.
Dated:
U.S. Trust Company of Texas, N.A. , as
Trustee
By:
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Authorized Signatory
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to:
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(Insert assignee's soc. sec. or tax I.D. no.)
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(Print or type assignee's name, address and zip code)
and irrevocably appoint agent to
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transfer this Security on the books of Issuer. The agent may substitute
another to act for him.
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(Print or type other person's name, address and zip code)
Date:
-------------------------- Your Signature
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Signature Guaranty
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Notice: Signature must be guaranteed by
an "Eligible Guarantor Institution" as
defined by Securities Exchange Act Rule
17Ad-15.
(Sign exactly as your name appears on the other side of this Security)
NOW, THEREFORE:
In consideration of the premises and the purchases of the Securities
by the Holders thereof, the Issuer and the Trustee mutually covenant and
agree for the equal and proportionate benefit of the respective Holders
from time to time of the Securities as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1 CERTAIN TERMS DEFINED. The following terms (except as
otherwise expressly provided or unless the context otherwise clearly
requires) for all purposes of this Indenture and of any indenture
supplemental hereto shall have the respective meanings specified in this
Section 1.1. The words "HEREIN," "HEREOF" and "HEREUNDER" and other words
of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision. The terms defined in
this Article include the plural as well as the singular.
"ACCELERATION DATE" has the meaning specified in Section 5.1.
"ACCELERATION NOTICE" has the meaning specified in Section 5.1.
"ASSET SALE" means the sale, lease, conveyance, disposition or other
transfer (including, without limitation, by eminent domain, condemnation or
similar governmental proceeding) of any property or assets of the Issuer or
any of its direct or indirect Subsidiaries, (other than TWG International
or TWG Finance, or any of their respective Subsidiaries until the Czech
Notes are paid in full) (including a sale and leaseback transaction or the
issuance, sale or transfer of Capital Stock of a direct or indirect
Subsidiary (except TWG International or TWG Finance or any of their
respective Subsidiaries until the Czech Notes are paid in full) except an
acquisition of such Capital Stock by TWG or its direct or indirect
Subsidiaries).
"BISHKEK NOTE" means the obligation of TWG to Value Partners, Ltd. or
its assignee evidencing the obligation to repay sums used to acquire,
commence and/or fund operations in the city of Bishkek, in the Republic of
Kryrgyz, including those related to table and slot machine operations (the
"Bishkek Facility")and such documents necessary to grant Value Partners,
Ltd. a security interest in such assets.
"BOARD OF DIRECTORS" means the Board of Directors of the Issuer or any
committee of such Board duly authorized to act hereunder.
"BUSINESS DAY" means a day which in the city (or in any of the cities,
if more than one) where amounts are payable in respect of the Securities,
as specified on the face of the form of Security recited above, or in the
city in which the Corporate Trust Office or the operations office of the
Trustee for payment and transfer of the Securities are located, is neither
a legal holiday nor a day on which banking institutions are required or
authorized by law or regulation to close.
"CAPITAL STOCK" means any and all shares, interests, participations,
rights or other equivalents (however designated) or corporate stock,
whether common or preferred, including, without limitation, partnership
interests.
"CASH FLOW PAYMENT DATE" mean(s) the date(s) Excess Cash Flow is paid
pursuant to Section 3.7.
"CZECH NOTES" means Trans World Gaming Corp., TWG International U.S.
Corporation, and TWG Finance Corp. (as co-obligors) 12% Senior Secured
Notes dated March 31, 1998 in the sum of $17,000,000 Due March 17, 2005.
"CZECH INDENTURE" means that certain Indenture dated as of March 31,
1998 entered into by TWG, TWG International and TWG Finance as co-obligors,
in relation to the Czech Notes.
"COLLATERAL AGREEMENTS" means any agreements executed by the Issuer
which are intended to create a Lien on any Collateral, including without
limitation, appropriate security agreements, multiple indebtedness
mortgages and financing statements.
"COMMISSION" means the Securities and Exchange Commission.
"CORPORATE TRUST OFFICE" means the office of the Trustee at which the
corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, at the date as of which this
Indenture is dated, located at 2001 Ross Avenue, Dallas, TX 75201-2936,
Attention: Corporate Trust Department.
"DEFAULT" means any event that is or with the passage of time or the
giving of notice or both would be an Event of Default.
"DEFAULT RATE" with respect to the Securities means 17% per annum
compounded semiannually, subject to the Maximum Rate and other limitations
thereon as set forth in this Indenture.
"EVENT OF DEFAULT" means any event or condition specified as such in
Section 5.1 which shall have continued for the period of time, if any,
therein designated.
"EXCESS CASH FLOW" means, for any period through December 31, 2005, or
in the event the Obligations are not satisfied in full by the Maturity
Date, such later date on which the Obligations are satisfied in full:
(a) until the Czech Notes are paid in full, Issuer's net income
solely from its U.S. operations and from the Bishkek Facility (as
determined by GAAP) adjusted as follows (in each case without duplication):
minus (i) all cash flow from the operation of Bishkek until the Bishkek
Note is paid in full, plus (ii) all cash flow from the operation of Bishkek
after the Bishkek Note is paid in full; plus (iii) non-cash items relating
to the Issuer's U.S. operation and from the Bishkek Facility which decrease
net income, including, without limitation depreciation expense and
amortization expense (including amortization of deferred financing costs
and original issue discounts), but only to the extent included in computing
such net income, plus (iv) Undistributed Excess Cash Flow, minus (iv) the
amount necessary to establish or maintain a working capital reserve of
$250,000 at all times, plus (v) Net Cash Proceeds; minus, the cost of
administration incurred by the Issuer pursuant to Section 3.16 and not
reimbursed by TWG International or TWG Finance, minus (vi) a one-time
reserve of sums disbursed to TWG from the proceeds of the sales of the
Czech Notes to pay post-closing costs of the Issuer associated with the
Czech Notes transaction and related events and to pay the cost of public
registration of Common Stock of TWG, and minus (vii) such sums that TWG
determines are reasonably necessary to meet its operating needs in excess
of its working capital reserves.
(b) subsequent to the date the Czech Notes are paid in full; (i) Issuer's
net income from its U.S. and non-U.S. operations, including the Bishkek
Facility and the Czech Casinos (as determined by GAAP) adjusted as follows
(in each case without duplication): minus (i) all cash flow from the
operations of Bishkek Facility until the Bishkek Note is paid in full, plus
(ii) all cash flow from the operation of Bishkek Facility after the Bishkek
Note is paid in full; plus (iii) non-cash items which decrease net income,
including, without limitation, depreciation expense and amortization
expense (including amortization of deferred financing costs and original
issue discounts), but only to the extent included in computing such net
income; plus (iv) Undistributed Excess Cash Flow; minus (v) the amount
necessary to establish or maintain a working capital reserve of $250,000 at
all times, plus (vi) Net Cash Proceeds; and minus (vii) the cost of
administration of TWG; minus (viii) a one-time reserve of sums disbursed to
TWG from the proceeds of the sale of the Czech Notes to pay post-closing
costs of the Issuer associated with the Czech Notes transactions and
related events and to pay the cost of public registration of Common Stock
of TWG, and minus (ix) such sums that TWG determines are reasonably
necessary to meet its operating needs in excess of its working capital
reserves.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"FUNDING COLLATERAL AGREEMENTS" has the meaning that the term
"Collateral Agreements" has in the Indenture issued pursuant to the Funding
Note.
"FUNDING NOTE" means TWG International 12% Senior Secured Notes in the
sum of $17,000,000 Due March 2005.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment
of the accounting profession, as the same are in effect on the Issue Date.
"GUARANTEE" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit
and reimbursement agreements in respect thereof), of all or any part of any
Indebtedness, and "Guaranteed" has a correlative meaning.
"HOLDER," "SECURITYHOLDER" or any other similar term means the
registered holder of any Security.
"INCUR" means to, directly or indirectly, create, incur, issue,
assume, guaranty or otherwise become liable with respect to.
"INDEBTEDNESS" means, with respect to any Person, without duplication,
any indebtedness of such Person, whether or not contingent, in respect of
borrowed money or evidenced by bonds, notes, debentures or similar
instruments or letters of credit (or reimbursement agreements in respect
thereof) or representing the balance deferred and unpaid of the purchase
price of any property (including pursuant to capital leases), except any
such balance that constitutes an accrued expense or trade payable, if and
to the extent any of the foregoing would appear as a liability upon a
balance sheet of such Person prepared in accordance with GAAP, and also
includes, to the extent not otherwise included, the Guarantee of items that
would be included within this definition and all Indebtedness of others
secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on any asset or
property (including, without limitation, leasehold interests and any other
tangible or intangible property) of such Person, whether or not such
Indebtedness is assumed by such Person or is not otherwise such Person's
legal liability, PROVIDED that if the obligations so secured have not been
assumed in full by such Person or are otherwise not such Person's legal
liability in full, the amount of such Indebtedness for the purposes of this
definition shall be limited to the lesser of the amount of such
Indebtedness secured by such Lien or the fair market value of the assets or
property securing such Lien. Notwithstanding the foregoing, the term
"Indebtedness" shall not include deferred compensation arrangements that
are not evidenced by bonds, notes, debentures or similar instruments.
"INDENTURE" means this instrument as originally executed and delivered
or, if amended or supplemented as herein provided, as so amended or
supplemented.
"ISSUE DATE" means the date on which the Securities are issued under
this amended Indenture.
"ISSUER" means Trans World Gaming Corp, a Nevada corporation, and its
wholly-owned subsidiary, Trans World Gaming of Louisiana, Inc., and,
subject to Article Nine, their successors and assigns, and any other
obligor on the Securities.
"KEY EMPLOYEE means persons such as production managers or sales
managers, who are not executive officers but who make or are expected to
make significant contributions to the business of the Issuer.
"LIEN" means, with respect to any asset, any mortgage; including
without limitation any multiple indebtedness mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such
asset, whether or not filed, recorded or otherwise perfected under
applicable law (including any conditional sale or other title retention
agreement, any lease in the nature thereof, any option or other agreement
to sell or give a security interest in and any filing of or agreement to
give any financing statement under the Uniform Commercial Code (or
equivalent statutes) of any jurisdiction).
"MAXIMUM RATE" has the meaning contained in Section 3.1.
"MATURITY DATE" means the earlier of the date which is six (6) months
following the date the Czech Notes are fully defeased or paid in full or
December 31, 2005 or such earlier date as provided herein, by acceleration
or otherwise.
"NET CASH PROCEEDS" means the aggregate cash proceeds received by TWG
or any of its Subsidiaries (other than TWG International and TWG Finance,
or any of their Subsidiaries, prior to the payment in full of the Czech
Notes) in respect of any Asset Sale, net of the direct costs relating to
such Asset Sale (including, without limitation, title insurance fees and
premiums, filing and recordation fees, permit fees, landlord consent
payments and other amounts required to be paid to transfer the assets that
are the subject of such Asset Sale, sales commissions and legal, accounting
and investment banking fees incurred in respect of such Asset Sale) and any
relocation expenses incurred as a result thereof, taxes paid or payable as
a result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements), and amounts required to be
applied to the repayment of Indebtedness secured by a Lien on the asset or
assets that are the subject of such Asset Sale; provided further, however,
that if the agreement or instrument governing such Asset Sale requires the
transferor to maintain a portion of the purchase price in escrow (whether
as reserve for adjustment in respect of the purchase price or otherwise) or
to indemnify the transferee for specified liabilities in a maximum stated
amount for a stated period of time, the portion of the cash consideration
that is actually placed in escrow or segregated and set aside by the
transferor for such indemnification obligation shall not be deemed to be
Net Cash Proceeds until the escrow terminates or the transferor ceases to
segregate and set aside such funds, in whole or in part, and then only to
the extent of the proceeds released from escrow to the transferor or that
are no longer segregated and set aside by the transferor.
"OBLIGATIONS" has the meaning specified in Section 14.2.
"OFFICERS' CERTIFICATE" means a certificate signed by the Chairman of
the Board of Directors or the President or any Vice President (whether or
not designated by a number or numbers or a word or words added before or
after the title "Vice President") and by the Treasurer or the Secretary or
any Assistant Treasurer or Secretary of the Issuer and delivered to the
Trustee. Each such certificate shall include the statements provided for
in Section 11.5.
"OPINION OF COUNSEL" means an opinion in writing signed by legal
counsel who may be an employee of or counsel to the Issuer or who may be
other counsel satisfactory to the Trustee. Each such opinion shall include
the statements provided for in Section 11.5, if and to the extent required
hereby.
"OUTSTANDING," when used with reference to Securities, means, subject
to the provisions of Sections 6.8 and 7.4, as of any particular time, all
Securities authenticated and delivered by the Trustee under this Indenture,
except:
(a) Securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(b) Securities, or portions thereof, for the payment or redemption
(i) of which moneys in the necessary amount shall have been deposited in
trust with the Trustee or with any paying agent (other than the Issuer) or
shall have been set aside, segregated and held in trust by the Issuer (if
the Issuer shall act as paying agent) or (ii) of which moneys and/or
Government Securities as contemplated by Section 10.2 in the necessary
amount have been theretofore deposited with the Trustee (or another trustee
satisfying the requirements of Section 6.9) in trust for the Holders of
such Securities in accordance with Section 10.2 and the conditions set
forth therein have been satisfied; PROVIDED that if such Securities are to
be redeemed prior to the maturity thereof, notice of such redemption shall
have been given as herein provided, or provision satisfactory to the
Trustee shall have been made for giving such notice; and
(c) Securities in substitution for which other Securities shall have
been authenticated and delivered, or which shall have been paid, pursuant
to the terms of Section 2.6 (unless proof satisfactory to the Trustee is
presented that any of such Securities is held by a Person in whose hands
such Security is a legal, valid and binding obligation of the Issuer).
"PAYMENT DEFAULT" has the meaning specified in Section 5.1.
"PERSON" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a
government or political subdivision or an agency or instrumentality
thereof.
"PRINCIPAL" wherever used with reference to the Securities or any
Security or any portion thereof, shall be deemed to include the amount of
the Security plus, when appropriate, the premium, if any.
"PROPERTY" of any Person means all types of real, personal, tangible,
intangible or mixed property owned by such Person whether or not included
on the most recent consolidated balance sheet of such Person in accordance
with GAAP.
"RECORD DATE" has the meaning specified in Section 3.7.
"RELATED BUSINESS" has the meaning specified in the Czech Indenture.
"RESPONSIBLE OFFICER" when used with respect to the Trustee means any
officer in its Corporate Trust Office, or any other assistant officer of
the Trustee in its Corporate Trust Office customarily performing functions
similar to those performed by the Persons who at the time shall be such
officers, respectively, or to whom any corporate trust matter is referred
because of his
or her knowledge of and familiarity with the particular subject.
"SECURITY" or "SECURITIES" means any of the 12% Secured Senior Bonds
Due 2005 authenticated and delivered under this Indenture.
"SUBSCRIPTION AGREEMENT" means the subscription agreement dated as of
July 1, 1996, by and among Trans World Gaming Corp., a Nevada corporation,
Trans World Gaming of Louisiana, Inc., a Louisiana corporation, and the
Securityholders.
"SUBSIDIARY" means any corporation, association or other business
entity of which more than 50% of the total voting power of shares of
Capital Stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by any
Person or one or more of the other Subsidiaries of that Person or a
combination thereof.
"TWG" means Trans World Gaming Corp.
"TWG INTERNATIONAL" means TWG International U.S. Corporation, and its
direct and indirect Subsidiaries.
"TWG FINANCE" means TWG Finance Corp.
"TWG LOUISIANA" means Trans World Gaming of Louisiana, Inc.
"TRUSTEE" means the entity identified as "Trustee" in the first
paragraph hereof and, subject to the provisions of Article Six, shall also
include any successor trustee.
"UNDISTRIBUTED EXCESS CASH FLOW" means, for any period, that portion
of the aggregate Excess Cash Flow from all prior periods which has not been
previously used to repay accrued unpaid interest or unpaid principal due on
the Securities.
ARTICLE 2
ISSUE, EXECUTION, FORM AND
REGISTRATION OF SECURITIES
SECTION 2.1 AUTHENTICATION AND DELIVERY OF SECURITIES. Securities in
an aggregate principal amount not in excess of $4,800,000 (except as
otherwise provided in Section 2.6) may be executed by the Issuer and
delivered to the Trustee for authentication. After such execution a
responsible officer of the Trustee shall authenticate and deliver said
Securities to the Holders, or as directed by the Issuer upon the written
order of the Issuer. Upon surrender of the certificates representing the
Original Securities by the Holders thereof, the Trustee shall cancel such
certificates, and the Issuer shall execute and the Trustee shall
authenticate new certificates in the form required hereby upon the written
instructions or order of the Issuer and the Holders. Notwithstanding
whether a Holder surrenders its Original Certificate, after the effective
of date of this Indenture, the Original Securities shall not be Outstanding
hereunder, and the Holder thereof shall be entitled only to receive a
certificate(s) representing a Security as provided herein upon surrender of
the Original Security and provided herein.
SECTION 2.2 EXECUTION OF SECURITIES. The Securities shall be signed
on behalf of the Issuer by both (a) its Chairman of the Board of Directors
or any Vice Chairman of the Board of Directors or its President or any Vice
President (whether or not designated by a number or numbers or a word or
words added before or after the title "Vice President") and (b) by its
Treasurer or any Assistant Treasurer or its Secretary or any Assistant
Secretary, under its
corporate seal which may, but need not, be attested. Such signatures may
be the manual or facsimile signatures of the present or any future such
officers. The seal of the Issuer may be in the form of a facsimile thereof
and may be impressed, affixed, imprinted or otherwise reproduced on the
Securities. Typographical and other minor errors or defects in any such
reproduction of the seal or any such signature shall not affect the
validity or enforceability of any Security which has been duly
authenticated and delivered by the Trustee.
In case any such officer of the Issuer who shall have signed any of
the Securities shall cease to be such officer before the Security so signed
shall be authenticated and delivered by the Trustee or disposed of by the
Issuer, such Security nevertheless may be authenticated and delivered or
disposed of as though the Person who signed such Security had not ceased to
be such officer of the Issuer; and any Security may be signed on behalf of
the Issuer by such Persons as, at the actual date of the execution of such
Security, shall be the proper officers of the Issuer, although at the date
of the execution and delivery of this Indenture any such Person was not
such officer.
SECTION 2.3 CERTIFICATE OF AUTHENTICATION. Only such Securities as
shall bear thereon a certificate of authentication substantially in the
form hereinabove recited, executed by the Trustee by manual signature of
one of its authorized signatories, shall be entitled to the benefits of
this Indenture or be valid or obligatory for any purpose. Such
certificate by the Trustee upon any Security executed by the Issuer shall
be conclusive evidence that the Security so authenticated has been duly
authenticated and delivered hereunder and that the Holder is entitled to
the benefits of this Indenture.
SECTION 2.4 FORM, DENOMINATION AND DATE OF SECURITIES; PAYMENTS OF
EXCESS CASH FLOW IN CASH. The Securities and the Trustee's certificates of
authentication shall be substantially in the form recited above. The
Securities shall be issuable as registered securities without coupons and
in denominations provided for in the form of Security above recited. The
Securities shall be numbered, lettered, or otherwise distinguished in such
manner or in accordance with such plans as the officers of the Issuer
executing the same may determine with the approval of the Trustee.
Any of the Securities may be issued with appropriate insertions,
omissions, substitutions and variations, and may have imprinted or
otherwise reproduced thereon such legend or legends, not inconsistent with
the provisions of this Indenture, as may be required to comply with any law
or with any rules or regulations pursuant thereto, or with the rules of any
securities market in which the Securities are admitted to trading, or to
conform to general usage.
Each Security shall be dated the date of its authentication, shall
bear interest from the issue date of the Original Securities (June 30,
1996), and Excess Cash Flow shall be payable on the dates established
pursuant to Section 3.7. Nothing herein shall be construed to require the
payment of interest which was heretofore paid under the Original
Securities.
The Person in whose name any Security is registered at the close of
business on any Record Date as provided herein shall be entitled to receive
such Holder's allocation of Excess Cash Flow as provided in Section 3.7, if
any, payable on such Cash Flow Payment Date notwithstanding any transfer or
exchange of such Security subsequent to the Record Date and prior to such
Cash Flow Payment Date, except if and to the extent the Issuer shall
default in the payment due on such Cash Flow Payment Date, in which case
such defaulted payment shall be paid to the Persons in whose names
Outstanding Securities are registered at the close of business on a
subsequent Record Date established after arrangements for payment
reasonably satisfactory to the Trustee have been made by the Issuer by
notice given by mail by or on behalf of the Issuer to the Holders of
Securities not less than 7 days preceding such subsequent Record Date.
SECTION 2.5 REGISTRATION, TRANSFER AND EXCHANGE. The Issuer will
keep at each office or agency to be maintained for the purpose as provided
in Section 3.2 a register or registers in which, subject to such reasonable
regulations as it may prescribe, it will register, and will register the
transfer of, Securities as in this Article provided. Such register shall
be in written form in the English language or in any other form capable of
being converted into such form within a reasonable time. At all reasonable
times such register or registers shall be open for inspection by the
Trustee.
Upon due presentation for registration of transfer of any Security at
each such office or agency, the Issuer shall execute and the Trustee shall
authenticate and deliver in the name of the transferee or transferees a new
Security or Securities in authorized denominations for a like aggregate
principal amount.
Any Security or Securities may be exchanged for a Security or
Securities in other authorized denominations, in an equal aggregate
principal amount. Securities to be exchanged shall be surrendered at each
office or agency to be maintained by the Issuer for the purpose as provided
in Section 3.2, and the Issuer shall execute and the Trustee shall
authenticate and deliver in exchange therefor the Security or Securities
which the Securityholder making the exchange shall be entitled to receive,
bearing numbers not contemporaneously Outstanding.
All Securities presented for registration of transfer, exchange,
redemption or payment shall (if so required by the Issuer or the Trustee)
be duly endorsed by, or be accompanied by a written instrument or
instruments of transfer in form satisfactory to the Issuer and the Trustee
duly executed by, the Holder or his attorney duly authorized in writing.
The Issuer may require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any
exchange or registration of transfer of Securities. No service charge
shall be made for any such transaction.
The Issuer shall not be required to exchange or register a transfer of
(a) any Securities for a period of 15 days next preceding the first mailing
of notice of redemption of Securities to be redeemed or (b) any Securities
selected, called or being called for redemption.
All Securities issued upon any transfer or exchange of Securities
shall be valid obligations of the Issuer, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Securities
surrendered upon such transfer or exchange.
SECTION 2.6 MUTILATED, DEFACED, DESTROYED, LOST AND STOLEN
SECURITIES. In case any temporary or definitive Security shall become
mutilated, defaced or be apparently destroyed, lost or stolen, the Issuer
in its discretion, which shall not be unreasonably withheld, may execute,
and upon the written request of an officer of the Issuer, the Trustee shall
authenticate and deliver, a new Security bearing a number not
contemporaneously Outstanding, in exchange and substitution for the
mutilated or defaced Security, or in lieu of or in substitution for the
Security so apparently destroyed, lost or stolen. In every case the
applicant for a substitute Security shall furnish to the Issuer and to the
Trustee and any agent of the Issuer or the Trustee such security or
indemnity agreement or bond as may be required by them to indemnify and
defend and to save each of them harmless and, in every case of destruction,
loss or theft, evidence to their satisfaction of the apparent destruction,
loss or theft of such Security and of the ownership thereof.
Upon the issuance of any substitute Security, the Issuer may require
the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses
(including the reasonable fees and expenses of the Trustee) connected
therewith. In case any Security which has matured or is about to mature
shall become mutilated or defaced or be apparently destroyed, lost or
stolen, the Issuer may, instead of issuing a substitute Security, pay or
authorize the payment of the same with written direction to the Trustee
(without surrender thereof except in the case of a mutilated or defaced
Security), if the applicant for such payment shall furnish to the Issuer
and to the Trustee and any agent of the Issuer or the Trustee such security
or indemnity (including a bond) as any of them may require to save each of
them harmless from all risks, however remote, and in every case of
apparent destruction, loss or theft the applicant shall also furnish to the
Issuer and the Trustee and any agent of the Issuer or the Trustee evidence
to their satisfaction of the apparent destruction, loss or theft of such
Security and of the ownership thereof.
Every substitute Security issued pursuant to the provisions of this
Section 2.6 by virtue of the fact that any Security is apparently
destroyed, lost or stolen shall constitute an additional contractual
obligation of the Issuer, whether or not the apparently destroyed, lost or
stolen Security shall be at any time enforceable by anyone and shall be
entitled to all the benefits of (but shall be subject to all the
limitations of rights set forth in) this Indenture equally and
proportionately with any and all other Securities duly authenticated and
delivered hereunder. All Securities shall be held and owned upon the
express condition that, to the extent permitted by law, the foregoing
provisions are exclusive with respect to the replacement or payment of
mutilated, defaced, or apparently destroyed, lost or stolen Securities and
shall preclude any and all other rights or remedies notwithstanding any law
or statute existing or hereafter enacted to the contrary with respect to
the replacement or payment of negotiable instruments or other securities
without their surrender.
SECTION 2.7 CANCELLATION OF SECURITIES; DISPOSITION THEREOF. All
Securities surrendered for payment, redemption, registration of transfer or
exchange, if surrendered to the Issuer or any agent of the Issuer or the
Trustee, shall be delivered to the Trustee for cancellation or, if
surrendered to the Trustee, shall be cancelled by it; and no Securities
shall be issued in lieu thereof except as expressly permitted by any of the
provisions of this Indenture. The Trustee shall destroy cancelled
Securities held by it and deliver a certificate of destruction to the
Issuer from time to time. If the Issuer shall acquire any of the
Securities, such acquisition shall not operate as a redemption or
satisfaction of the Indebtedness represented by such Securities unless and
until the same are delivered to the Trustee for cancellation. The
Securities issued herein shall be delivered to the respective Holder upon
surrender and cancellation of the securities issued pursuant to the
Original Indenture.
SECTION 2.8 TEMPORARY SECURITIES. Pending the preparation of
definitive Securities, the Issuer may execute and the Trustee shall
authenticate and deliver temporary Securities (printed, lithographed,
typewritten or otherwise reproduced, in each case in form satisfactory to
the Trustee). Temporary Securities shall be issuable as registered
securities without coupons, of any authorized denomination, and
substantially in the form of the definitive Securities but with such
omissions, insertions and variations as may be appropriate for temporary
Securities, all as may be determined by the Issuer with the concurrence of
the Trustee. Temporary Securities may contain such reference to any
provisions of this Indenture as may be appropriate. Every temporary
Security shall be executed by the Issuer and be authenticated by the
Trustee upon the same conditions and in substantially the same manner, and
with like effect, as the definitive Securities. Without unreasonable delay
the Issuer shall execute and shall furnish definitive Securities and
thereupon temporary Securities may be surrendered in exchange therefor
without charge at each office or agency to be maintained by the Issuer for
the purpose pursuant to Section 3.2, and the Trustee shall authenticate and
deliver in exchange for such temporary Securities a like aggregate
principal amount of definitive Securities of authorized denominations.
Until so exchanged, the temporary Securities shall be entitled to the same
benefits under this Indenture as definitive Securities. The Issuer shall
not be obligated to issue definitive Securities until it or the Trustee
shall have received such temporary Securities and until the securities
issued pursuant to the Original Indenture have been surrendered and
cancelled.
ARTICLE 3
COVENANTS OF THE ISSUER
SECTION 3.1 PAYMENT OF PRINCIPAL AND INTEREST. The Issuer covenants
and agrees that it will duly and punctually pay or cause to be paid the
principal of, and interest on, each of the Securities at the place or
places, at the Maturity Date or such earlier date as provided herein and in
the manner provided in the Securities. An installment of principal or
interest shall be considered paid on the Maturity Date or such earlier date
as provided herein if the Trustee or Paying Agent holds on that date sums
to pay the installment. Anything herein or in the Securities to the
contrary notwithstanding, the obligation of the Issuer hereunder shall be
subject to the limitation that payments of interest to the Holder shall not
be required to the extent that the receipt of any such payment by such
Holder would be contrary to the provisions of law applicable to the Issuer
which limit the maximum rate of interest which may be charged or collected
by the Issuer, including as set forth in Section 11.12 (the "Maximum
Rate").
SECTION 3.2 OFFICES FOR PAYMENTS, ETC. So long as any of the
Securities remain Outstanding, the Issuer will maintain at such place in
the City of New York and at such other place, if any, as may be designated
by the Issuer, the following: (a) an office or agency where the Securities
may be presented for registration of transfer, for exchange and for
conversion as in this Indenture provided and (b) an office or agency where
notices and demands to or upon the Issuer in respect of the Securities or
of this Indenture may be served. The Issuer will initially maintain such
offices or agencies with the corporate secretary at the Issuer's principal
place of business. The Issuer will give to the Trustee written notice of
the location of any such office or agency and of any change of location
thereof. In case the Issuer shall fail to maintain any such office or
agency or shall fail to give such notice of the location or of any change
in the location thereof, presentations and demands may be made and notices
may be served at the Corporate Trust Office.
SECTION 3.3 APPOINTMENT TO FILL A VACANCY IN OFFICE OF TRUSTEE. The
Issuer, whenever necessary to avoid or fill a vacancy in the office of
Trustee, will appoint, in the manner provided in Section 6.10, a Trustee,
so that there shall at all times be a Trustee hereunder.
SECTION 3.4 PAYING AGENTS. Whenever the Issuer shall appoint a
paying agent other than the Trustee or itself, it will cause such paying
agent to execute and deliver to the Trustee an instrument in which such
agent shall agree with the Trustee, subject to the provisions of this
Section 3.4:
(a) that it will hold all sums received by it as such agent for the
payment of the principal of or interest on the Securities (whether such
sums have been paid to it by the Issuer or by any other obligor on the
Securities) in trust for the benefit of the Holders of the Securities or of
the Trustee; and
(b) that it will give the Trustee notice of any failure by the Issuer
(or by any other obligor on the Securities) to make any payment of the
principal of or interest on the Securities when the same shall be due and
payable.
The Issuer will, at least one Business Day prior to each due date of
the principal of or interest on the Securities, deposit with the paying
agent a sum which is in immediately available funds on the due date
sufficient to pay such principal or interest and (unless such paying agent
is the Trustee) the Issuer will promptly notify the Trustee of any failure
to take such action.
If the Issuer shall act as its own paying agent, it will, on or before
each due date of the principal of or interest on the Securities, set aside,
segregate and hold in trust for the benefit of the Holders of the
Securities a sum sufficient to pay such principal or interest so becoming
due. The Issuer, or paying agent which is not the Trustee, will promptly
notify the Trustee in writing of any failure to take such action.
Notwithstanding anything in this Section 3.4 to the contrary, the
Issuer may at any time, for the purpose of obtaining a satisfaction and
discharge of this Indenture or for any other reason, pay or cause to be
paid to the Trustee all sums held in trust by the Issuer or any paying
agent hereunder, as required by this Section 3.4, such sums to be held by
the Trustee upon the trusts herein contained.
Notwithstanding anything in this Section 3.4 to the contrary, the
agreement to hold sums in trust as provided in this Section 3.4 is subject
to the provisions of Sections 10.4 and 10.5.
The Issuer initially appoints Trans World Gaming Corp. as paying
agent.
SECTION 3.5 OFFICERS' CERTIFICATES AS TO DEFAULT AND AS TO
COMPLIANCE. The Issuer will, so long as any of the Securities are
Outstanding:
(a) deliver to the Trustee, forthwith upon becoming aware of any
default or defaults in the performance of any covenant, agreement or
condition contained in this Indenture (including notice of any event
which with the giving of notice, lapse of time or both would become an
Event of Default under Section 5.1 hereof), an Officers' Certificate
specifying such default or defaults; and
(b) deliver to the Trustee within 90 days after the end of each
fiscal year of the Issuer beginning with the fiscal year ending
December 31, 1996, an Officers' Certificate, to the effect that:
(i) a diligent review of the activities of the Issuer and
its Subsidiaries during such year and of performance under this
Indenture has been made under such officers' supervision, and
(ii) to the best of such officers' knowledge, based on
such review, the Issuer has fulfilled all its obligations under
this Indenture throughout such year, or if there has been a
default in the fulfillment of any such obligation, specifying
each such default known to them and the nature and status
thereof.
SECTION 3.6 MAINTENANCE OF PROPERTIES, ETC. Subject to Section 3.12,
the Issuer shall, and TWG shall cause TWG Louisiana and each of the
Subsidiaries of TWG Louisiana to, maintain its material properties and
assets in working order and condition and make all necessary repairs,
renewals, replacements, additions, betterments and improvements thereto,
all as in the judgment of the Issuer may be necessary so that the business
carried on in connection therewith may be conducted at all usual and
ordinary times.
The Issuer shall, and TWG shall cause TWG Louisiana and each of TWG
Louisiana's Subsidiaries to, maintain with insurers that TWG believes in
good faith to be financially sound and reputable such insurance as may be
required by law and such other insurance, to such extent and against such
hazards and liabilities, as it in good faith determines is customarily
maintained by companies similarly situated with like properties.
Subject to Section 3.12 the Issuer shall, and TWG shall cause TWG
Louisiana and each of TWG Louisiana's Subsidiaries to do or cause to be
done all things necessary to preserve and keep in full force and effect its
existence, rights and franchises, except to the extent permitted by this
Indenture and except in such cases where the Board of Directors determines
in good faith that failure to do so would not have a material adverse
effect on the business, earnings, properties, assets, financial condition
or results of operation of TWG Louisiana and its Subsidiaries taken as a
whole.
The Issuer shall, and TWG shall cause TWG Louisiana and each of TWG
Louisiana's Subsidiaries to, comply in all material respects with all
statutes, laws, ordinances, or government rules and regulations to which it
is subject.
The Issuer shall, and TWG shall cause TWG Louisiana and each of TWG
Louisiana's Subsidiaries to, pay prior to delinquency all taxes,
assessments and governmental levies except as contested in good faith and
by appropriate proceedings.
SECTION 3.7 EXCESS CASH FLOW PAYMENT. Not less than twenty (20)
days following each two calendar month period, with the first such two
month period commencing April 1, 1998, the Issuer shall (a) deposit in
immediately available funds with the Trustee in a fund which the Trustee
may establish for the benefit of the Securityholders an aggregate amount
equal to Excess Cash Flow, if any, for the prior two month period, and (b)
regardless of whether any repayment of principal is required under this
Section, provide the Trustee and each Securityholder with a written notice
containing in reasonable detail the Issuer's calculation of Excess Cash
Flow. Excess Cash Flow shall be applied first to accrued, unpaid interest
on an equal and ratable basis among the Securityholders in proportion, as
nearly as practicable, to the respective unpaid principal amount due each
Securityholder, adjusted for any reduction in principal as to any
Securityholder pursuant to Section 13, so that the sum distributed
accurately reflects the interest accrued by such Securityholder as a
percentage of the total interest paid for in such two month period and the
balance thereof shall be applied to principal as set forth herein. Any
repayments of principal required by this Section shall be paid on an equal
and ratable basis among the Securityholders in proportion, as nearly as
practicable, to the respective unpaid principal amounts of the Securities
held by each Securityholder without taking into account any reduction in
principal pursuant to Section 13, except to the extent such failure to take
into account such principal reductions pursuant to Section 13 would result
in a payment of an amount in excess of the principal sum due to such
Securityholder. The reduction in the principal amount of the Securities
effected by repayments made under this Section may be made without
presentation of the Securities and shall be binding on all future
Securityholders. Securityholders shall make the appropriate notation on
the Securities to indicate the amount of any repayments under this Section.
If there is no Excess Cash Flow, nothing herein shall be construed to
create an obligation to make a payment for such period.
The Excess Cash Flow payment will be made in the following manner. At
least 5 days (or other period of time the Issuer and the Trustee may agree
upon) prior to the date on which the Issuer is required to make such the
payment required by this Section 3.7, the Issuer shall give the Trustee
written notice of such payment, which notice shall state the amount of the
payment, certify that such payment is equal to Excess Cash Flow for the
applicable period, and set forth the date the Issuer has selected that the
payment be made ("Cash Flow Payment Date"). The Record Date (herein so
called) to determine the Holders who shall be entitled to receive the
payment shall be 10 Business Days before the Cash Flow Payment Date
selected by the Issuer. The Trustee shall not be required to send a notice
of the prepayment to the Holders with respect to such payment. When the
money to effect the payment of the Securities is held by the Trustee for
the purpose of effecting such payment, interest on that portion of the
Securities to be prepaid shall cease to accrue on the Principal being
reduced by the payment. The Trustee and the Holders shall make notations
with respect to the reduction of principal on Securities made a result of
the payment, and such notations of the Trustee shall be binding on the
Securityholders and all future Securityholders, even if such holders do not
make such notations on the certificates representing such Securities. The
payments will be made by the Trustee in increments of $100.00. Any Excess
Cash Flow which does not meet this requirement will be returned to the
Issuer pursuant to its written instructions and will be Undistributed
Excess Cash Flow.
SECTION 3.8 BOOKS. Issuer will keep at all times proper books of
record and account in which full, true and correct entries will be made of
its transactions in accordance with Generally Accepted Accounting
Principles.
SECTION 3.9 GUARANTEES. Issuer will not guarantee on a basis senior
in right of payment to the Securities, directly or indirectly, any
obligation or indebtedness of any other Person. Nothing herein shall be
construed to (i) prohibit the issuance of the Bishkek Note, the Czech
Notes, or the Funding Note, or (ii) permit the issuance of any indebtedness
that would be secured by the Collateral granted to the Holders.
SECTION 3.10 SENIOR INDEBTEDNESS. Issuer will not incur, create,
assume or at any time become liable, contingently or otherwise for any
borrowed or other indebtedness that is senior in right of payment to the
Securities, other than the Bishkek Note. Nothing herein shall be construed
to (i) prohibit the issuance of the Bishkek Note, the Czech Notes, or the
Funding Note; or (ii) permit the issuance of any indebtedness that would
be secured by the Collateral granted to the Holders. Nothing herein shall
be construed to permit the issuance of any indebtedness secured by the
Collateral (this clause shall not be construed to prohibit the Bishkek Note
or the Czech Note).
SECTION 3.11 DISTRIBUTIONS. Issuer will not declare or pay, or set
apart any funds for the payment of, any dividend on any shares of Capital
Stock by reduction of capital surplus or otherwise, or make any
distribution in respect of shares of Capital Stock or redeem, repurchase,
or effect any other sale, or exchange, upon any of its Capital Stock.
SECTION 3.12 DISPOSITION OF ASSETS. Issuer will not sell, assign,
lease, transfer or otherwise dispose of, to any third party, in any
transaction or series of transactions, all or any portion of its properties
or assets, except for sales, assignments, leases, transfers, or
dispositions at fair market value, of properties or assets, where such net
proceeds are utilized by the Issuer to invest in its existing business,
except, in the event Issuer determines in good faith (or to the extent so
directed by the holders of 50% of the Securities) that it is no longer able
to operate a gambling facility (including as a result of a loss of its
license to operate such a facility or as a result of a loss of a premises
lease). Upon such determination, Issuer shall take all actions necessary
and appropriate to promptly liquidate such assets which comprise the
facility which has ceased operations in such manner as shall realize
proceeds which reasonably represent the fair market value thereof. This
Section shall not govern the Capital Stock or assets of TWG International,
TWG Finance, or Subsidiaries of either.
SECTION 3.13 LINE OF BUSINESS. TWG shall not permit to TWG
International to, and shall not permit any of TWG International's
Subsidiaries to, engage in any business other than acquiring, developing
and operating local casinos outside the United States of America. TWG
shall not, and shall not permit any of its Subsidiaries, (other than TWG
International and its Subsidiaries) to engage in any business other than
acquiring, developing and operating local casinos inside of the United
States and marketing activities relating thereto, other than the Bishkek
Facility, which may be operated by TWG. TWG Finance shall not engage in
any business other than performance of its obligations arising under the
Czech Note, Funding Note, and all documents related to those two
transactions (including indentures).
SECTION 3.14 PAYMENTS FOR CONSENT. None of the Issuers shall, nor
shall permit any Subsidiary to, directly or indirectly, pay or cause to be
paid any consideration, whether by way of interest, fee or otherwise, to
any Holder of the Securities for or as an inducement to any consent, waiver
or amendment of any terms or provisions of the Securities unless such
consideration is offered to be paid or agreed to be paid to all Holders of
the Securities which so consent, waive or agree in the time frame set forth
in solicitation documents relating to such consent, waiver or agreement.
SECTION 3.15 COST OF OPERATIONS. TWG International shall be solely
responsible for all costs of operating TWG Finance, TWG International and
TWG International's direct and indirect Subsidiaries. In addition, TWG
International shall be responsible for costs of administration of TWG in
the sum of $25,000 per month, through June 30, 1999, and for one hundred
percent of such costs of administration from the earlier of (a) the date
TWG no longer has adequate cash from its business operations in Louisiana
to pay such costs, or (b) after June 30, 1999. TWG shall be solely
responsible for (a) costs associated with its existing operations in the
United States, (b) costs of administration of TWG in excess of $25,000 per
month through the earlier of June 30, 1999 or the date TWG no longer has
adequate cash from its business operations in Louisiana to pay such costs.
Income generated from the Bishkek Facility, as well as cage cash in
Louisiana and Bishkek and assets located in Louisiana subject to the
security interest herein on the Collateral shall not be used to fund
administrative costs. Cost of administration refers to all costs
associated with the TWG corporate headquarters in New York and London,
including rent and salaries and expenses of all officers and employees at
such location (or any successor location). Nothing herein shall prohibit
TWG International from reimbursing TWG as to costs incurred in the
acquisition of the Czech Casinos, this Indenture, the Czech Indenture and
the Funding Indenture, up to the sum of $250,000 at the closing of the
Czech Indenture, or directly paying all unpaid costs related to those
transactions.
SECTION 3.16 [Reserved].
SECTION 3.17 WAIVER OF STAY, EXTENSION OR USURY LAWS. The Issuer
covenants (to the extent that it may lawfully do so) that it shall not at
any time insist upon, or plead, or in any manner whatsoever claim, and
shall resist any and all efforts to be compelled to take the benefit or
advantage of, any stay or extension law or any usury law or other law which
would prohibit or forgive the Issuer from paying all or any portion of the
principal of or interest on the Securities 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 it
may lawfully do so) the Issuer hereby expressly waives all benefit or
advantage of any such law and covenants that it shall not hinder, delay or
impede the execution of any power herein granted to the Trustee but shall
suffer and permit the execution of every such power as though no such law
had been enacted.
SECTION 3.18 BISHKEK NOTE. All sums earned by TWG's operations at
Bishkek (net of operating costs of such Bishkek Facility) shall be used to
repay the Bishkek Note, until the Bishkek Note is paid in full, and then
shall be used toward the repayment of the Securities.
SECTION 3.19 SECURITY INTEREST. The Issuer shall execute documents
necessary to renew, affirm, reinstate, restate, replace and amend the
Securities and the security interest granted in all real and personal
property of the Issuer in the State of Louisiana. Such documents shall be
prepared, executed, delivered and filed by no later than December 31, 1998,
unless extended in writing by a majority of the holders of the Securities.
The Issuer shall reimburse all reasonable costs, including attorneys fees
incurred by the Securityholders and Trustee in preparing and executing such
documents.
ARTICLE 4
SECURITYHOLDERS' LISTS AND REPORTS
BY THE ISSUER AND THE TRUSTEE
SECTION 4.1 ISSUER TO FURNISH TRUSTEE INFORMATION AS TO NAMES AND
ADDRESSES OF SECURITYHOLDERS. The Issuer covenants and agrees that it will
furnish or cause to be furnished to the Trustee a list in such form as the
Trustee may reasonably require of the names and addresses of the Holders of
the Securities:
(a) semi-annually and not more than 15 days after each record
date for the payment of interest on the Securities, as hereinabove
specified, as of such record date; and
(b) at such other times as the Trustee may request in writing,
within 30 days after receipt by the Issuer of any such request as of a
date not more than 15 days prior to the time such information is
furnished;
PROVIDED that if and so long as the Trustee shall be the Security
registrar, such list shall not be required to be furnished.
SECTION 4.2 PRESERVATION AND DISCLOSURE OF SECURITYHOLDERS' LISTS.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and addresses
of the Holders of Securities contained in the most recent list
furnished to it as provided in Section 4.1 or maintained by the
Trustee in its capacity as Security registrar, if so acting. The
Trustee may destroy any list furnished to it as provided in Section
4.1 upon receipt of a new list so furnished.
(b) The Security register maintained by the Trustee as registrar
will be available for inspection by any Holder or its attorney duly
authorized in writing during normal business hours of the Trustee upon
reasonable prior notice.
SECTION 4.3 REPORTS BY THE ISSUER. The Issuer covenants:
(a) to file with the Commission, and within 15 days after the
Issuer files the same with the Commission, file with the Trustee, and
mail or furnish copies to the Trustee and cause the Trustee to mail to
the Holders at their addresses as set forth in the register of the
Securities, copies of the annual reports and of the information,
documents, and other reports (or copies of such portions of any of the
foregoing as the Commission may from time to time by rules and
regulations prescribe) which the Issuer may be required to file with
the Commission pursuant to Section 13 or Section 15(d) of the Exchange
Act or which the Issuer would be required to file with the Commission
if the Issuer then had a class of securities registered under the
Exchange Act;
(b) to file with the Trustee and the Commission, in accordance
with rules and regulations prescribed from time to time by the
Commission, such additional information, documents, and reports with
respect to compliance by the Issuer with the conditions and covenants
provided for in this Indenture as may be required from time to time by
such rules and regulations;
(c) to cause its annual report to securityholders and any
quarterly or other financial reports furnished to its securityholders
generally to be filed with the Trustee and mailed, no later than the
date such materials are mailed or made available to the Issuer's
Securityholders to the Holders at their addresses as set forth in the
register of Securities; and
SECTION 4.4 Listing. The Issuer shall promptly notify the Trustee in
writing if the Securities become listed on any stock exchange and the
Trustee shall within thirty (30) days of receipt of such notice notify the
Holders.
ARTICLE 5
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
SECTION 5.1 EVENT OF DEFAULT DEFINED; ACCELERATION OF MATURITY;
WAIVER OF DEFAULT. In case one or more of the following Events of Default
(whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected 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) shall have occurred and be
continuing:
(a) default in the payment of interest on the Securities as and
when the same becomes due and payable, and the continuance of such
default for 15 days; or
(b) default in the payment of all or any part of the principal
on the Securities as and when the same shall become due and payable
either at maturity, upon acceleration or redemption or otherwise; or
(c) failure on the part of the Issuer duly to observe or perform
any covenants or agreements on the part of the Issuer contained in the
Securities, in this Indenture, or any of the Collateral Agreements and
the continuance of such failure for a period of 15 days after the date
on which written notice specifying such failure, stating that such
notice is a "Notice of Event of Default" hereunder and demanding that
the Issuer remedy the same, is given to the Issuer by the Trustee or
to the Issuer and the Trustee by the Holders of at least 25% in
aggregate principal amount of the Securities at the time Outstanding;
or
(d) failure on the part of the Issuer to appoint a Trustee
within 5 days of a written request of the holders of 25% in principal
amount of the securities to appoint a Trustee; or
(e) default under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by TWG, TWG Louisiana or
any Subsidiaries of TWG Louisiana (or the payment of which is
Guaranteed by TWG, TWG Louisiana or any Subsidiaries of TWG
Louisiana), which default is caused by a failure to pay due principal
or interest on such Indebtedness after any applicable grace period (a
"Payment Default"), and the principal amount of any such Indebtedness,
together with the principal amount of any other such Indebtedness
under which there has been and is continuing a Payment Default,
aggregates $150,000 or more; or
(f) default under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by TWG, TWG Louisiana or
any Subsidiaries of TWG Louisiana (or the payment of which is
Guaranteed by TWG, TWG Louisiana or any Subsidiaries TWG Louisiana),
which default results in the acceleration of such Indebtedness prior
to its express maturity and the principal amount of any such
Indebtedness, together with the principal amount of any other such
Indebtedness under which there has been and is continuing a Payment
Default or the maturity of which has been so accelerated and not
rescinded, aggregates $150,000 or more; or
(g) failure by TWG, TWG Louisiana or any Subsidiaries of TWG
Louisiana to pay final judgments (other than any judgment as to which
a reputable insurance company has accepted coverage without a
reservation of rights) aggregating in excess of $150,000, which
judgments are not stayed or discharged within 15 days after their
entry; or
(h) a court having jurisdiction in the premises shall enter a
decree or order for relief in respect of TWG, TWG Louisiana or any
Subsidiaries of TWG Louisiana in an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official) of TWG, TWG
Louisiana or any Subsidiaries of TWG Louisiana or for any substantial
part of the property of TWG, TWG Louisiana or any Subsidiaries of TWG
Louisiana or ordering the winding up or liquidation of the affairs of
TWG, TWG Louisiana or any Subsidiaries of TWG Louisiana and such
decree or order shall remain unstayed and in effect for a period of
15 consecutive days; or
(i) TWG, TWG Louisiana or any Subsidiaries of TWG Louisiana shall
commence a voluntary case under any applicable bankruptcy, insolvency
or other similar law now or hereafter in effect, or consent to the
entry of an order for relief in an involuntary case under any such
law, or consent to the appointment or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of TWG, TWG Louisiana or any Subsidiaries of TWG Louisiana
or for any substantial part of the property of TWG, TWG Louisiana or
any Subsidiaries of TWG Louisiana, or TWG, of TWG Louisiana or any
Subsidiaries of TWG Louisiana shall make any general assignment for
the benefit of creditors;
(j) indictment of any officer or Key Employee of TWG, TWG
Louisiana or any subsidiaries of TWG Louisiana by any governmental
authority;
(k) fraud by an officer or Key Employee of TWG, TWG Louisiana or
any subsidiaries of TWG Louisiana; or
(l) the Issuer does not pay, or shall be unable to pay, or shall
admit in writing its inability to pay its debts as such debts become
due.
then, and in each and every such case (other than an Event of Default
specified in clause (h) or (i) above relating to the Issuer), unless the
principal of all of the Securities shall have already become due and
payable, either the Trustee or the Holders of not less than 50% in
aggregate principal amount of the Securities then Outstanding hereunder, by
notice in writing to the Issuer (and to the Trustee if given by
Securityholders) (the "Acceleration Notice"), may declare all the debt
evidenced by the Securities to be due and payable immediately (the
"Acceleration Date"). If an Event of Default specified in clause (h) or
(i) above relating to the Issuer occurs, all the Securities and the accrued
interest thereon shall be immediately due and payable without any
declaration or other act on the part of the Trustee or any Securityholder.
SECTION 5.2 COLLECTION OF INDEBTEDNESS BY TRUSTEE; TRUSTEE MAY PROVE
INDEBTEDNESS. The Issuer covenants that (a) in case default shall be made
in the payment of interest on any of the Securities on the date due and
such default shall have continued for a period of 15 days, or (b) in case
default shall be made in the payment of all or any part of the principal of
any of the Securities when the same shall have become due and payable,
whether upon maturity or upon any redemption or by declaration or otherwise
- -- then upon demand by the Trustee the Issuer will pay to the Trustee for
the benefit of the Holders of the Securities the whole amount that then
shall have become due and payable on all such Securities for principal or
interest, as the case may be (with interest to the date of such payment
upon the overdue principal and, to the extent that payment of such interest
is enforceable under applicable law, on interest at the rate borne by the
Securities); and in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including such
amounts as shall be due the Trustee and each predecessor Trustee under
Section 6.6.
Until such demand is made by the Trustee, the Issuer may pay the
principal of and interest on the Securities to the registered Holders,
whether or not the Securities be overdue.
In case the Issuer shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust,
shall be entitled and empowered to institute any action or proceeding at
law or in equity for the collection of the sums so due and unpaid, and may
prosecute any such action or proceeding to judgment or final decree, and
may enforce any such judgment or final decree against the Issuer or other
obligor upon the Securities and collect in the manner provided by law out
of the Property of the Issuer or other obligor upon the Securities,
wherever situated, the moneys adjudged or decreed to be payable.
In case there shall be pending proceedings relative to the Issuer or
any other obligor upon the Securities under Title 11 of the United States
Code or any other applicable Federal or state bankruptcy, insolvency or
other similar law, or in case a receiver, assignee or trustee in bankruptcy
or reorganization, liquidator, sequestrator or similar official shall have
been appointed for or taken possession of the Issuer or the property of the
Issuer or such other obligor, or in case of any judicial proceedings
relative to the Issuer or other obligor upon the Securities, or to the
creditors or property of the Issuer or such other obligor, the Trustee,
irrespective of whether the principal of the Securities 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 pursuant to
the provisions of this Section 5.2, shall be entitled and empowered, by
intervention in such proceedings or otherwise:
(a) to file and prove a claim or claims for the whole amount of
principal and interest owing and unpaid in respect of the Securities,
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 reasonable compensation to the Trustee and each predecessor
Trustee, and their respective agents, attorneys and counsel, and for
reimbursement of all expenses and liabilities incurred, and all
advances made, by the Trustee and each predecessor Trustee, except as
a result of negligence or bad faith) and of the Securityholders
allowed in any judicial proceedings relative to the Issuer or other
obligor upon the Securities, or to the creditors or Property of the
Issuer or such other obligor;
(b) unless prohibited by applicable law and regulations, to vote
on behalf of the Holders of the Securities in any election of a
trustee or a standby trustee in arrangement, reorganization,
liquidation or other bankruptcy or insolvency proceedings or Person
performing similar functions in comparable proceedings; and
(c) to collect and receive any moneys or other Property payable
or deliverable on any such claims, and to distribute all amounts
received with respect to the claims of the Securityholders and of the
Trustee on their behalf; and any trustee, receiver, or liquidator,
custodian or other similar official is hereby authorized by each of
the Securityholders to make payments to the Trustee, and, in the event
that the Trustee shall consent to the making of payments directly to
the Securityholders, to pay to the Trustee such amounts as shall be
due the Trustee, and each predecessor Trustee under Section 6.6.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or vote for or accept or adopt on behalf of any
Securityholder any plan or reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof,
or to authorize the Trustee to vote in respect of the claim of any
Securityholder in any such proceeding except, as aforesaid, to vote for the
election of a trustee in bankruptcy or similar Person.
All rights of action and of asserting claims under this Indenture, or
under any of the Securities, may be enforced by the Trustee without the
possession of any of the Securities or the production thereof on any trial
or other proceedings relative thereto, and any such action or proceedings
instituted by the Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment, subject to the payment of the
expenses, disbursements and compensation of the Trustee, each predecessor
Trustee and their respective agents and attorneys, shall be for the ratable
benefit of the Holders of the Securities in respect of which such judgment
has been sought.
In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which
the Trustee shall be a party) the Trustee shall be held to represent all
the Holders of the Securities, and it shall not be necessary to make any
Holders of the Securities parties to any such proceedings.
SECTION 5.3 APPLICATION OF PROCEEDS. Any moneys collected by the
Trustee pursuant to this Article shall be applied in the following order at
the date or dates fixed by the Trustee and, in case of the distribution of
such moneys on account of principal or interest, upon presentation of the
several Securities and stamping (or otherwise noting) thereon the payment,
or issuing Securities in reduced principal amounts in exchange for the
presented Securities if only partially paid, or upon surrender thereof if
fully paid:
FIRST: To the payment of all amounts due the Trustee and each
predecessor Trustee under Section 6.6;
SECOND: In case the principal of the Securities shall not have become
and be then due and payable, to the payment of interest with interest (to
the extent that such interest has been collected by the Trustee) upon the
installments of interest at the Default Rate borne by the Securities, such
payments to be made ratably to the Persons entitled thereto, without
discrimination or preference;
THIRD: In case the principal of the Securities shall have become and
shall be then due and payable, to the payment of the whole amount then
owing and unpaid upon all the Securities for principal and interest, with
interest upon the overdue principal, and (to the extent that such interest
has been collected by the Trustee) upon installments of interest at the
Default Rate borne by the Securities; and in case such moneys shall be
insufficient to pay in full the whole amount so due and unpaid upon the
Securities, then to the payment of such principal and interest, without
preference or priority of principal over interest, or of interest over
principal, or of any installment of interest over any other installment of
interest, or of any Security over any other Security, ratably to the
aggregate of such principal and accrued and unpaid interest; and
FOURTH: To the payment of the remainder, if any, to the Issuer or any
other Person lawfully entitled thereto.
SECTION 5.4 SUITS FOR ENFORCEMENT. In case an Event of Default has
occurred, has not been waived and is continuing, the Trustee may in its
discretion proceed to protect and enforce the rights vested in it by this
Indenture or the Collateral Agreements by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect and enforce
any of such rights, either at law or in equity or in bankruptcy or
otherwise, whether for the specific enforcement of any covenant or
agreement contained in this Indenture or the Collateral Agreements or in
aid of the exercise of any power granted in this Indenture or the
Collateral Agreements or to enforce any other legal or equitable right
vested in the Trustee by this Indenture or the Collateral Agreements or by
law.
SECTION 5.5 RESTORATION OF RIGHTS ON ABANDONMENT OF PROCEEDINGS. In
case the Trustee shall have proceeded to enforce any right under this
Indenture and such proceedings shall have been discontinued or abandoned
for any reason, then and in every such case the Issuer and the Trustee
shall be restored respectively to their former positions and rights
hereunder, and all rights, remedies and powers of the Issuer, the Trustee
and the Securityholders shall continue as though no such proceedings had
been taken.
SECTION 5.6 LIMITATIONS ON SUITS BY SECURITYHOLDERS. No Holder shall
have any right by virtue or by availing of any provision of this Indenture
to institute any action or proceeding at law or in equity or in bankruptcy
or otherwise upon or under or with respect to this Indenture, or for the
appointment of a trustee, receiver, liquidator, custodian or other similar
official or for any other remedy hereunder, unless such Holder previously
shall have given to the Trustee written notice of an Event of Default and
of the continuance thereof, as hereinbefore provided, and unless also the
Holders of not less than 25% in aggregate principal amount of the
Securities then Outstanding shall have made written request upon the
Trustee to institute such action or proceeding in its own name as trustee
hereunder and shall have offered to the Trustee such reasonable indemnity
as it may require against the costs, expenses and liabilities to be
incurred therein or thereby and the Trustee for 30 days after its receipt
of such notice, request and offer of indemnity shall have failed to
institute any such action or proceedings and no direction inconsistent with
such written request shall have been given to the Trustee pursuant to
Section 5.9; it being understood and intended, and being expressly
covenanted by the taker and Holder of every Security with every other taker
and Holder and the Trustee, that no one or more Holders of Securities shall
have any right in any manner whatever by virtue or by availing of any
provision of this Indenture to affect, disturb or prejudice the rights of
any other Holder of Securities, or to obtain or seek to obtain priority
over or preference to any other such Holder or to enforce any right under
this Indenture, except in the manner herein provided and for the equal,
ratable and common benefit of all Holders of Securities. For the
protection and enforcement of the provisions of this Section 5.6, each and
every Securityholder and the Trustee shall be entitled to such relief as
can be given either at law or in equity.
SECTION 5.7 UNCONDITIONAL RIGHT OF SECURITYHOLDERS TO INSTITUTE
CERTAIN SUITS. Notwithstanding any other provision in this Indenture and
any provision of any Security, the right of any Holder to receive payment
of the principal of and interest on such Security on or after the
respective due dates expressed in such Security, or to institute suit for
the enforcement of any such payment on or after such respective dates,
shall not be impaired or affected without the consent of such Holder.
SECTION 5.8 POWERS AND REMEDIES CUMULATIVE; DELAY OR OMISSION NOT
WAIVER OF DEFAULT. No right or remedy herein conferred upon or reserved to
the Trustee or to the Securityholders 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 thereafter 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.
No delay or omission of the Trustee or of any Holder to exercise any
right or power accruing upon any Event of Default occurring and continuing
as aforesaid shall impair any such right or power or shall be construed to
be a waiver of any such Event of Default or an acquiescence therein; and
subject to Section 5.6, every power and remedy given by this Indenture or
by law to the Trustee or to the Securityholders may be exercised from time
to time, as often as shall be deemed expedient, by the Trustee or by the
Securityholders.
SECTION 5.9 CONTROL BY SECURITYHOLDERS. The Holders of a majority in
aggregate principal amount of the Securities at the time Outstanding shall
have the right to direct the time, method, and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust
or power conferred on the Trustee by this Indenture; PROVIDED that such
direction shall not be otherwise than in accordance with law and the
provisions of this Indenture; PROVIDED, FURTHER, that the Trustee is
provided with reasonable indemnification by the Holders prior to taking
such action; and PROVIDED, FURTHER, that (subject to the provisions of
Section 6.1) the Trustee shall have the right to decline to follow any such
direction if the Trustee, being advised by counsel, shall determine that
the action or proceeding so directed may not lawfully be taken or if the
Trustee in good faith by its board of directors, the executive committee or
a trust committee of directors or Responsible Officers of the Trustee shall
determine that the action or proceeding so directed would involve the
Trustee in any financial or other liability or if the Trustee in good faith
shall so determine that the actions or forbearances specified in or
pursuant to such direction shall be unduly prejudicial to the interests of
Holders of the Securities not joining in the giving of said direction, it
being understood that (subject to Section 6.1) the Trustee shall have no
duty to ascertain whether or not such actions or forbearances are unduly
prejudicial to such Holders.
Nothing in this Indenture shall impair the right of the Trustee in its
discretion to take any action deemed proper by the Trustee and which is not
inconsistent with such direction by Securityholders.
SECTION 5.10 WAIVER OF PAST DEFAULTS. The Holders of a majority in
aggregate principal amount of the Securities at the time Outstanding, by
notice to the Issuer and the Trustee, may on behalf of all Holders, upon
providing the Trustee with reasonable indemnity with respect to any action
that might be taken by the Holders not so consenting, provide forbearances,
waive any default or Event of Default hereunder and its consequences under
this Indenture including acceleration, except a default in the payment of
principal of or interest on any of the Securities at the Maturity Date. In
the case of any such waiver, the Issuer, the Trustee and the Holders of the
Securities shall be restored to their former positions and rights
hereunder, respectively; but no such waiver shall extend to any subsequent
or other default or impair any right consequent thereon.
Upon any such waiver, such default shall cease to exist and be deemed
to have been cured and not to have occurred, and any Event of Default
arising therefrom shall be deemed to have been cured, and not to have
occurred for every purpose of this Indenture; but no such waiver shall
extend to any subsequent or other default or Event of Default or impair any
right consequent thereon.
SECTION 5.11 TRUSTEE TO GIVE NOTICE OF DEFAULT, BUT MAY WITHHOLD IN
CERTAIN CIRCUMSTANCES. The Trustee shall transmit to the Securityholders,
as the names and addresses of such Holders appear on the registry books,
notice by mail of all defaults actually known to a Responsible Officer of
the Trustee, such notice to be transmitted within 90 days after the
occurrence thereof, unless such defaults shall have been cured before the
giving of such notice (the term "default" or "defaults" for the purposes of
this Section 5.11 being hereby defined to mean any event or condition which
is, or with notice or lapse of time or both would become, an Event of
Default); PROVIDED that, except in the case of default in the payment of
the principal of or interest on any of the Securities, the Trustee shall be
protected in withholding such notice if and so long as the board of
directors, the executive committee, or a trust committee of directors
and/or Responsible Officers of the Trustee in good faith determines that
the withholding of such notice is in the interests of the Securityholders.
SECTION 5.12 RIGHT OF COURT TO REQUIRE FILING OF UNDERTAKING TO PAY
COSTS. All parties to this Indenture agree, and each Holder by its
acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or
remedy under this Indenture or in any suit against the Trustee for any
action taken, suffered or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and
that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit, having
due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section 5.12 shall not
apply to any suit instituted by the Trustee, to any suit instituted by any
Securityholder or group of Securityholders holding in the aggregate more
than 10% in aggregate principal amount of the Securities Outstanding, or to
any suit instituted by any Securityholder for the enforcement of the
payment of the principal of or interest on any Security on or after the
Maturity Date expressed in such Security.
SECTION 5.13 EXCESS CASH FLOW. All references to payments of
principal and interest refer soley to the Excess Cash Flow payments
required by Section 3.17 of this Indenture.
ARTICLE 6
CONCERNING THE TRUSTEE
SECTION 6.1 DUTIES AND RESPONSIBILITIES OF THE TRUSTEE; DURING
DEFAULT; PRIOR TO DEFAULT. The Trustee, prior to the occurrence of an
Event of Default and after the curing or waiving of all Events of Default
which may have occurred, undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture. In case an Event
of Default has occurred (which has not been cured or waived) the Trustee
shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise as a
prudent man would exercise or use under the circumstances in the conduct of
his own affairs.
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct, except that:
(a) prior to the occurrence of an Event of Default and after the
curing or waiving of all such Events of Default which may have
occurred:
(i) the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Indenture,
and the Trustee shall not be liable except for the performance of
such duties and obligations as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be read
into this Indenture against the Trustee; and
(ii) in the absence of bad faith on the part of the
Trustee, the Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed
therein, upon any statements, certificates or opinions furnished
to the Trustee and conforming to the requirements of this
Indenture; but in the case of any such statements, certificates
or opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall be
under a duty to examine the same to determine whether or not they
conform to the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer or Responsible Officers of
the Trustee, unless it shall be proved that the Trustee was negligent
in ascertaining the pertinent facts;
(c) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of not less than a majority in principal
amount of the Securities at the time Outstanding relating to the time,
method and place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred upon the
Trustee, under this Indenture;
(d) the Trustee shall not be charged with knowledge of an Event
of Default unless a Responsible Officer of the Trustee obtains written
notice of such default; and
(e) whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the
liability of or affording protection to the Trustee shall be subject
to the provisions of this Section 6.1.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any financial or
other liability in the performance of any of its duties or in the exercise
of Any of its rights or powers, if repayment of such funds or adequate
indemnity against such liability is not assured to the reasonable
satisfaction of the Trustee.
SECTION 6.2 CERTAIN RIGHTS OF THE TRUSTEE. SUBJECT TO SECTION 6.1:
(a) the Trustee may conclusively rely and shall be fully
protected in acting or refraining from acting upon any resolution,
Officers' Certificate or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, bond, debenture,
note, coupon, security or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or
parties;
(b) any request, direction, order or demand of the Issuer
mentioned herein shall be sufficiently evidenced by an Officers'
Certificate (unless other evidence in respect thereof be herein
specifically prescribed), and any resolution of the Board of Directors
may be evidenced to the Trustee by a copy thereof certified by the
Secretary or an Assistant Secretary of the Issuer;
(c) the Trustee may consult with counsel and any advice or
Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted to be
taken by it hereunder in good faith and in accordance with such advice
or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of
the trusts or powers vested in it by this Indenture at the request,
order or direction of any of the Securityholders pursuant to the
provisions of this Indenture, unless such Securityholders shall have
offered to the Trustee reasonable security and/or indemnity against
the costs, expenses and liabilities which might be incurred therein or
thereby;
(e) the Trustee shall not be liable for any action taken or
omitted by it in good faith and believed by it to be authorized or
within the discretion, rights or powers conferred upon it by this
Indenture;
(f) prior to the occurrence of an Event of Default hereunder and
after the curing or waiving of all Events of Default which may have
occurred, the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent,
order, approval, appraisal, bond, debenture, note, coupon, security,
or other paper or document unless requested in writing so to do by the
Holders of not less than a majority in aggregate principal amount of
the Securities then Outstanding; PROVIDED that if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in
the opinion of the Trustee, not reasonably assured to the Trustee by
the security afforded to it by the terms of this Indenture, the
Trustee may require reasonable indemnity against such expenses or
liabilities as a condition to proceeding; the reasonable expenses of
every such examination shall be paid by the Issuer or, if paid by the
Trustee or any predecessor trustee, shall be repaid by the Issuer upon
demand; and
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys, custodians or nominees not regularly in
its employ and the Trustee shall not be responsible for any misconduct
or negligence on the part of any such agent, attorney, custodian or
nominee appointed with due care by it hereunder.
(h) the Trustee makes no representation as to the validity or
adequacy of this Indenture, the Collateral, or the Securities. It
shall not be accountable for the Issuers' use of the proceeds from the
sale of the Securities, and it shall not be responsible for any
statement in the Securities, other than its authentication. Except
required by Section 14.6 of this Indenture, the Trustee shall not be
responsible for any recording, re-recording, filing or refiling of
this Indenture or other document to perfect the security interest in
the Collateral. The Trustee shall not be bound to ascertain or
inquire as to the performance of the obligations of the Issuer under
this Indenture or the Collateral Agreements. The Trustee may
nevertheless require the Issuer to furnish information regarding
performance of its obligations hereunder and under the Collateral
Agreements, but is not obligated to do so.
SECTION 6.3 TRUSTEE NOT RESPONSIBLE FOR RECITALS, DISPOSITION OF
SECURITIES OR APPLICATION OF PROCEEDS THEREOF. The recitals contained
herein and in the Securities, except the Trustee's certificates of
authentication, shall be taken as the statements of the Issuer, and the
Trustee assumes no responsibility for the correctness of the same. The
Trustee makes no representation as to the validity or sufficiency of this
Indenture or of the Securities. The Trustee shall not be accountable for
the use or application by the Issuer of any of the Securities or of the
proceeds thereof. The Trustee shall not be accountable or responsible for
any information, statement or recital in any prospectus, private offering
memorandum or any other disclosure material prepared or distributed in
connection with the distribution of the Securities.
SECTION 6.4 TRUSTEE AND AGENTS MAY HOLD SECURITIES; COLLECTIONS, ETC.
The Trustee or any agent of the Issuer or the Trustee, in its individual or
any other capacity, may become the owner or pledgee of Securities with the
same rights it would have if it were not the Trustee or such agent and,
subject to Sections 6.8 and 6.13, if operative, may otherwise deal with the
Issuer and receive, collect, hold and retain collections from the Issuer
with the same rights it would have if it were not the Trustee or such
agent.
SECTION 6.5 MONEYS HELD BY TRUSTEE. Subject to the provisions of
Section 10.6 hereof, all moneys received by the Trustee shall, until used
or applied as herein provided, be held in trust for the purposes for which
they were received, but need not be segregated from other funds except to
the extent required by mandatory provisions of law. Neither the Trustee
nor any agent of the Issuer or the Trustee shall be under any liability for
interest on any moneys received by it hereunder.
SECTION 6.6 COMPENSATION AND INDEMNIFICATION OF TRUSTEE AND ITS PRIOR
CLAIM. The Issuer covenants and agrees to pay to the Trustee from time to
time, and the Trustee shall be entitled to, reasonable compensation (which
shall not be limited by any provision of law in regard to the compensation
of a trustee of an express trust) and the Issuer covenants and agrees to
pay or reimburse the Trustee and each predecessor Trustee upon its request
for all reasonable expenses, (including, without limitation, expenses
incurred in connection with notices and other communications to Holders)
disbursements and advances incurred or made by or on behalf of it in
accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel
and of all agents and other Persons not regularly in its employ) except any
such expense, disbursement or advance as may arise from its negligence or
bad faith. The Issuer also covenants to indemnify the Trustee, and each
predecessor trustee for, and to hold it harmless against, any loss,
liability or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of
this Indenture or the trusts hereunder and its duties hereunder, including
the costs and expenses of defending itself against or investigating any
claim of liability in the premises. The obligations of the Issuer under
this Section 6.6 to compensate and indemnify the Trustee and each
predecessor trustee and to pay or reimburse the Trustee and each
predecessor trustee for expenses, disbursements and advances shall
constitute additional indebtedness hereunder and shall survive the
satisfaction and discharge of this Indenture. Such additional indebtedness
shall be a senior claim to that of the Securities upon all Property and
funds held or collected by the Trustee as such, except funds held in trust
for the benefit of the Holders of particular Securities, and the Securities
are hereby subordinated to such senior claim. The Trustee and Issuer shall
enter into a Fee Agreement acceptable to the Trustee and Issuer.
SECTION 6.7 RIGHT OF TRUSTEE TO RELY ON OFFICERS' CERTIFICATE, ETC.
Subject to Section 6.1, whenever in the administration of the trusts of
this Indenture the Trustee shall deem it necessary or desirable that a
matter be proved or established prior to taking or suffering or omitting
any action hereunder, such matter (unless other evidence in respect thereof
be herein specifically prescribed) may, in the absence of bad faith on the
part of the Trustee, be deemed to be conclusively proved and established by
an Officers' Certificate delivered to the Trustee, and such certificate, in
the absence of bad faith on the part of the Trustee, shall be full warrant
and protection to the Trustee for any action taken, suffered or omitted by
it under the provisions of this Indenture upon the faith thereof.
SECTION 6.8 [Reserved].
SECTION 6.9 PERSONS ELIGIBLE FOR APPOINTMENT AS TRUSTEE. The Trustee
hereunder shall at all times be a corporation organized and doing business
under the laws of the United States of America or of any State or territory
or of the District of Columbia having a combined capital and surplus of at
least $50,000,000 (or being a member of a bank holding system with an
aggregate combined capital and surplus), and which is authorized under such
laws to exercise corporate trust powers and is subject to supervision or
examination by Federal, State, territorial or District of Columbia
authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section
6.9, the combined capital and surplus of such corporation shall be deemed
to be its combined capital and surplus as set forth in its most recent
report of condition so published. Neither the Issuer nor any Person
directly or indirectly controlling, controlled by or under common control
with the Issuer may serve as Trustee hereunder. In case at any time the
Trustee shall cease to be eligible in accordance with the provisions of
this Section 6.9, the Trustee shall resign immediately in the manner and
with the effect specified in Section 6.10.
SECTION 6.10 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR
TRUSTEE. The Trustee may resign at any time by so notifying the Issuer in
writing, such resignation to be effective upon the appointment of a
successor Trustee. The Holders of a majority in principal amount of the
Outstanding Securities may remove the Trustee by so notifying the Trustee
in writing and may appoint a successor Trustee with the Issuer's consent
which consent shall not be unreasonably withheld. The Issuer may remove
the Trustee if:
(a) the Trustee fails to comply with Section 6.8 or 6.9;
(b) the Trustee is adjudged a bankrupt or an insolvent;
(c) a receiver or other public officer takes charge of the
Trustee or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason (the Trustee in such event being referred
to herein as the retiring Trustee), the Issuer shall promptly appoint a
successor Trustee that is reasonably acceptable to the Holders of a
majority in principal amount of the Securities. Within one year after the
successor Trustee takes office, the Holders of a majority in principal
amount of the Securities may appoint a successor Trustee to replace the
successor Trustee appointed by the Issuer.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Issuer. Immediately after
that, the retiring Trustee shall transfer all property held by it as
Trustee to the successor Trustee (subject to the senior claim provided in
Section 6.6 and upon being paid the compensation due to it in Section 6.6),
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 Securityholder.
If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Issuer or
the Holders of at least 25% in principal amount of the Outstanding
Securities may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee fails to comply with Section 6.8, any Securityholder
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
6.10, the Issuer's obligations under Section 6.6 shall continue for the
benefit of the retiring Trustee.
SECTION 6.11 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR TRUSTEE. Any
successor trustee appointed as provided in Section 6.10 shall execute and
deliver to the Issuer and to its predecessor trustee an instrument
accepting such appointment hereunder, and thereupon the resignation or
removal of the predecessor trustee shall become effective and such
successor trustee, without any further act, deed or conveyance, shall
become vested with all rights, powers, duties and obligations of its
predecessor hereunder, with like effect as if originally named as trustee
herein; but, nevertheless, on the written request of the Issuer or of the
successor trustee, the trustee ceasing to act shall upon being paid the
amounts due it under Section 6.6 pay over to the successor trustee all
moneys at the time held by it hereunder and shall execute and deliver an
instrument transferring to such successor trustee all such rights, powers,
duties and obligations. Upon request of any such successor trustee, the
Issuer shall execute any and all instruments in writing for more fully and
certainly vesting in and confirming to such successor trustee all such
rights and powers. Any trustee ceasing to act shall, nevertheless, retain
a prior claim upon all Property or funds held or collected by such trustee
to secure any amounts then due it pursuant to the provisions of Section
6.6.
No successor trustee shall accept appointment as provided in this
Section 6.11 unless at the time of such acceptance such successor trustee
shall be qualified under the provisions of Section 6.8 and eligible under
the provisions of Section 6.9. No Trustee under this Indenture shall be
personally liable for any action or omission of any successor trustee.
SECTION 6.12 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS OF TRUSTEE. Any corporation into which the Trustee may be merged
or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Trustee
shall be a party, or any corporation succeeding to the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
PROVIDED that such corporation shall be qualified under the provisions of
Section 6.8 and eligible under the provisions of Section 6.9, without the
execution or filing of any paper or any further act on the part of any of
the parties hereto, anything herein to the contrary notwithstanding.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture any of the Securities shall have been
authenticated but not delivered, any such successor to the Trustee may
adopt the certificate of authentication of any predecessor Trustee and
deliver such Securities so authenticated; and, in case at that time any of
the Securities shall not have been authenticated, any successor to the
Trustee may authenticate such Securities either in the name of any
predecessor hereunder or in the name of the successor Trustee; and in all
such cases such certificate shall have the full force which it is anywhere
in the Securities or in this Indenture provided that the certificate of the
Trustee to authenticate Securities in the name of any predecessor Trustee
shall have; PROVIDED that the right to adopt the certificate of
authentication of any predecessor Trustee shall apply only to its successor
or successors by merger, conversion or consolidation.
SECTION 6.13 [Reserved].
SECTION 6.14 TRUST ESTATE MAY BE VESTED IN CO-TRUSTEE OR IN A SUB-
TRUST. It is the purpose of this Indenture that there shall be no
violation of any law of any jurisdiction denying or restricting of the
right of banking corporations or associations to transact business as
Trustee in such jurisdiction. Accordingly, at any time or times and for
the purpose of meeting any legal requirements of any jurisdiction, (i) a
sub-trust ("Sub-Trust") may be created as provided herein pursuant to the
terms of which the Settlers of the Sub-Trust may appoint an individual or
financial institution to serve as a trustee thereunder (Sub-Trustee"), and
(ii) the Trustee shall have the power to appoint, and the Issuer shall for
such purpose join with the Trustee in the execution, delivery and
performance of all instruments and agreements necessary or proper to
appoint, one or more persons or entities approved by the Trustee either to
act as co-trustee or co-trustees, jointly with the Trustee, of all or any
part of the property subject to the trust created by this Indenture.
If the appointment of a co-trustee is not sufficient to allow the
Trustee to avoid violating any law of the state jurisdiction denying or
restricting the Trustee's right to transact business as Trustee in such
jurisdiction or to exercise any of its remedies contained herein or any
Collateral Document, then the Trustee may execute, and the Issuer shall for
such purpose join with the Trustee, an instrument permitted by applicable
law creating a Sub-trust for all or a portion of the Trust Estate,
including collateral securing the Securities. Initially, the Issuer and
the Trustee shall enter into an Act of Revocable Donation and Trust in the
form attached hereto as Exhibit A. Pursuant to such instrument, the Issuer
and the Trustee shall be the Settlers and John C. Stohlmann shall serve as
the initial trustee ("sub-trustee") pursuant to the terms thereof.
The Sub-trustee shall be entitled to the same rights, privileges, and
immunities (but not the obligations) of the Trustee contained in Sections
6.1, 6.2, 6.3, 6.5 and 6.7 of this Indenture, in addition to the rights,
privileges and immunities contained in the Sub-trust. Further, the Issuer
shall indemnify the Sub-trustee to the same extent as provided in Section
6.6 of this Indenture.
The Trustee shall be accountable to the Securityholders for the acts
and omissions of the Sub-trustee in accordance with the standard of care
provided in Section 6.1 hereof, subject to limitations thereon set forth in
subsections (a) through (e) thereof, but only so long as the Sub-trustee is
an Affiliate of the Trustee.
The Sub-trust shall be governed by the terms thereof.
The following provisions relate only to the situation in which a co-
trustee is appointed pursuant to the terms hereof and not to the Sub-trust.
Every co-trustee or separate trustee shall, to the extent permitted by
law, be appointed subject to the following terms:
(a) The Bonds shall be authenticated and delivered, and all
rights, powers, trusts, duties and obligations hereby conferred upon
the Trustee in respect to the custody, control and management of
moneys, papers, securities and other personal property shall be
exercised, solely by the Trustee.
(b) All rights, powers, trusts, duties and obligations
conferred or imposed upon the trustees shall be conferred or imposed
upon and exercised or performed by the Trustee, or by the Trustee and
such co-trustee or co-trustees or separate trustee or separate
trustees jointly, as shall be provided in the instrument appointing
such co-trustee or co-trustees or separate trustee or separate
trustees, except to the extent that, under the law of any jurisdiction
in which any particular act or acts are to be performed, the Trustee
shall be incompetent or unqualified to perform such act or acts, in
which event such act or acts shall be performed by such co-trustee or
co-trustees or separate trustee or separate trustees.
(c) Any request in writing by the Trustee to any co-trustee or
separate trustee to take or to refrain from taking any action
hereunder shall be sufficient warrant for the taking, or the
refraining from taking, of such action by such co-trustee or separate
trustee.
(d) Any co-trustee or separate trustee may, to the extent
permitted by law, delegate to the Trustee the exercise of any right,
power, trust, duty or obligation, discretionary or otherwise.
(e) The Trustee at any time, by any instrument in writing,
with the concurrence of the Issuer, may accept the resignation of or
remove any co-trustee or separate trustee appointed under this
Section, and, in case an Event of Default shall have occurred and be
continuing, the Trustee shall have power to accept the resignation of,
or remove, any such co-trustees or separate trustee without the
concurrence of the Issuer. Upon the request of the Trustee, the
Issuer shall join with the Trustee in the execution, delivery and
performance of all instruments and agreements necessary or proper to
effectuate such resignation or removal.
(f) No trustee hereunder shall be personally liable by reason
of any act or omission of other trustee hereunder, nor will the act or
omission of any trustee hereunder be imputed to any other trustee.
(g) Any demand, request, direction, appointment, removal,
notice, consent, waiver or other action in writing delivered to the
Trustee shall be deemed to have been delivered to each such co-trustee
or separate trustee.
(h) Any moneys, papers, securities or other items of personal
property received by any such co-trustee or separate trustee hereunder
shall forthwith, so far as may be permitted by law, be turned over to
the Trustee.
Upon the acceptance in writing of such appointment by any such co-
trustee or separate trustee, it or he or she shall be vested jointly with
the Trustee (except insofar as local law makes it necessary for any such co-
trustee or separate trustee to act alone) with such title to the property
subject to the trust created by this Indenture or any part thereof, and
with such rights, powers, duties or obligations, as shall be specified in
the instrument of appointment subject to all the terms hereof. Every such
acceptance shall be filed with the Trustee. To the extent permitted by
law, any co-trustee or separate trustee may, at any time by an instrument
in writing, constitute the Trustee its or his or her attorney-in-fact and agent,
with full power and authority to do all acts and things and to exercise all
discretion on its or his or her behalf and in its or his or her own name.
In case any co-trustee or separate trustee shall die, become incapable
of acting, resign or be removed, the title to the pledged property, and all
rights, powers, trusts, duties and obligations of said co-trustee or
separate trustee shall, so far as permitted by law, vest in and be
exercised by the Trustee unless and until a successor co-trustee or
separate trustee shall be appointed in the manner herein provided.
ARTICLE 7
CONCERNING THE SECURITYHOLDERS
SECTION 7.1 EVIDENCE OF ACTION TAKEN BY SECURITYHOLDERS. Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by Securityholders
may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Securityholders in Person or by
agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee. Proof of execution of any
instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Indenture and (subject to Sections 6.1 and 6.2)
conclusive in favor of the Trustee and the Issuer if made in the manner
provided in this Article.
SECTION 7.2 PROOF OF EXECUTION OF INSTRUMENTS AND OF HOLDING OF
SECURITIES. Subject to Sections 6.1 and 6.2, the execution of any
instrument by a Securityholder or his agent or proxy may be proved in
accordance with such reasonable rules and regulations as may be prescribed
by the Trustee or in such manner as shall be satisfactory to the Trustee.
The holdings of Securities shall be proved by the Security register or by a
certificate of the registrar thereof.
SECTION 7.3 HOLDERS TO BE TREATED AS OWNERS. The Issuer, the Trustee
and any agent of the Issuer or the Trustee may deem and treat the Person in
whose name any Security shall be registered upon the Security register as
the absolute owner of such Security (whether or not such Security shall be
overdue and notwithstanding any notation of ownership or other writing
thereon) for the purpose of receiving payment of or on account of the
principal of and, subject to the provisions of this Indenture, interest on
such Security and for all other purposes; and neither the Issuer nor the
Trustee nor any agent of the Issuer or the Trustee shall be affected by
any notice to the contrary. All such payments so made to any such Person,
or upon his order, shall be valid, and, to the extent of the sum or sums so
paid, effectual to satisfy and discharge the liability for moneys payable
upon any such Security.
SECTION 7.4 SECURITIES OWNED BY ISSUER DEEMED NOT OUTSTANDING. In
determining whether the Holders of the requisite aggregate principal amount
of Securities have concurred in any direction, consent or waiver under this
Indenture, Securities which are directly owned by the Issuer (which shall
not include the Securityholders as of the date of Issue), except that for
the purpose of determining whether the Trustee shall be protected in
relying on any such direction, consent or waiver only Securities which the
Responsible Officer actually knows are so owned shall be so disregarded.
Securities so owned which have been pledged in good faith may be regarded
as Outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Securities and
that the pledgee is not the Issuer or any other obligor upon the Securities
or any Person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Issuer or any other obligor of
the Securities. In case of a dispute as to such right, the advice of
counsel shall be full protection in respect of any decision made by the
Trustee in accordance with such advice. Upon request of the Trustee, the
Issuer shall furnish to the Trustee promptly an Officers' Certificate
listing and identifying all Securities, if any, known by the Issuer to be
owned or held by or for the account of any of the above described Persons;
and, subject to Section 6.1, the Trustee shall be entitled to accept such
Officers' Certificate as conclusive evidence of the facts therein set
forth.
SECTION 7.5 RIGHT OF REVOCATION OF ACTION TAKEN. At any time prior
to (but not after) the evidencing to the Trustee, as provided in Section
7.1, of the taking of any action by the Holders of the percentage in
aggregate principal amount of the Securities specified in this Indenture in
connection with such action, any Holder of a Security the serial number of
which is shown by the evidence to be included among the serial numbers of
the Securities the Holders of which have consented to such action may, by
filing written notice at the Corporate Trust Office and upon proof of
holding as provided in this Article, revoke such action so far as concerns
such Security. Except as aforesaid, any such action taken by the Holder of
any Security shall be conclusive and binding upon such Holder and upon all
future Holders and owners of such Security and of any Securities issued in
exchange or substitution therefor, irrespective of whether or not any
notation in regard thereto is made upon any such Security. Any action
taken by the Holders of the percentage in aggregate principal amount of the
Securities specified in this Indenture in connection with such action shall
be conclusively binding upon the Issuer, the Trustee and the Holders of all
the Securities.
ARTICLE 8
SUPPLEMENTAL INDENTURES
SECTION 8.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF
SECURITYHOLDERS. The Issuer, when authorized by a resolution of its Board
of Directors, and the Trustee may from time to time and at any time enter
into an indenture or indentures supplemental hereto for one or more of the
following purposes:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Securities in addition to or
in place of certificated Securities;
(c) to provide for the assumption of the Issuer's obligations
hereunder to the Holders in the case of a merger or consolidation
pursuant to Article Nine hereof; or,
(d) With the consent of the holders of 50% of the Czech Notes,
to make any change that would provide any additional rights or
benefits to the Holders or that does not adversely affect the legal
rights hereunder of any Holder.
The Trustee is hereby authorized to join in the execution of any such
supplemental indenture, to make any further appropriate agreements and
stipulations which may be therein contained and to accept the conveyance,
transfer, assignment, mortgage or pledge of any property thereunder, but
the Trustee shall not be obligated to enter into any such supplemental
indenture which affects the Trustee's own rights, duties or immunities
under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this
Section 8.1 may be executed without the consent of the Holders of any of
the Securities at the time Outstanding, notwithstanding any of the
provisions of Section 8.2.
SECTION 8.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF SECURITYHOLDERS.
With the consent (evidenced as provided in Article Seven) of the Holders of
(i) not less than 50% in aggregate principal amount of the Securities at
the time Outstanding, and (ii) the holders of 50% in aggregate principal
amount of the Czech Notes at the time Outstanding, (including consents
obtained in connection with a tender offer or exchange offer for the
Securities), the Issuer, when authorized by a resolution of the Board of
Directors, and the Trustee may, from time to time and at any time, enter
into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of
the provisions of this Indenture or of any supplemental indenture or of
modifying in any manner the rights of the Holders of the Securities;
PROVIDED that no such supplemental indenture shall, without the consent of
each Holder affected thereby and the holders of 75% in aggregate principal
amount of the Czech Notes with respect to subsections (i)-(iii) and
subsection (viii) as it relates to subsections (i)-(iii)) (with respect to
any Securities held by a non-consenting Securityholder), (i) reduce the
principal amount of Securities whose Holders must consent to an amendment,
supplement or waiver, (ii) reduce the principal of or change the fixed
maturity of any Security or alter the provisions with respect to the
redemption of the Securities, (iii) reduce the rate of or change the time
for payment of interest on any Security, (iv) waive a Default or Event of
Default in the payment of principal of or premium, if any, or interest on
the Securities (except a rescission of acceleration of the Securities by
the Holders of at least a majority in aggregate principal amount of the
then Outstanding Securities and a waiver of the payment default that
resulted from such acceleration), (v) make any Security payable in money
other than that stated in the Securities, (vi) make any change in the
provisions of the Indenture relating to waivers of past Defaults or the
rights of Holders of Securities to receive payments of principal of or
interest on the Securities, (vii) waive a redemption payment with respect
to any Security, or (viii) make any change in the foregoing amendment and
waiver provisions.
The Issuer may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any
indenture supplemental hereto. If a record date is fixed, then those
Persons who were Holders at such record date (or their duly designated
proxies), and only those Persons, shall be entitled to consent to such
supplemental indenture or to revoke any consent previously given, whether or not
such Persons continue to be Holders after such record date. No such consent
shall be valid or effective for more than 90 days after such record date.
Upon the request of the Issuer accompanied by a copy of a resolution
of the Board of Directors certified by the Secretary or an Assistant
Secretary of the Issuer authorizing the execution of any such supplemental
indenture, and upon the filing with the Trustee of evidence of the consent
of the required Securityholders and other documents, if any, required by
Section 7.1, the Trustee shall join with the Issuer in the execution of
such supplemental indenture unless such supplemental indenture affects the
Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not
be obligated to, enter into such supplemental indenture.
It shall not be necessary for the consent of the Securityholders under
this Section 8.2 to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such consent shall
approve the substance thereof.
Promptly after the execution by the Issuer and the Trustee of any
supplemental indenture pursuant to the provisions of this Section 8.2, the
Issuer shall mail a notice thereof by first-class mail to the Holders of
Securities provided, however, this section shall not prohibit the pledge or
granting of a security interest to the holders of the Czech Notes in the
stock and assets of TWG International and TWG Finance, and any of their
respective subsidiaries, or the foreclosure on such collateral by the
holders of the Czech Notes, at their addresses as they shall appear on the
registry books of the Issuer, setting forth in general terms the substance
of such supplemental indenture. Any failure of the Issuer to mail such
notice, or any defect therein, shall not, however, in any way impair or
affect the validity of any such supplemental indenture.
SECTION 8.3 EFFECT OF SUPPLEMENTAL INDENTURE. Upon the execution of
any supplemental indenture pursuant to the provisions hereof, this
Indenture shall be and be deemed to be modified and amended in accordance
therewith and the respective rights, limitations of rights, obligations,
duties and immunities under this Indenture of the Trustee, the Issuer and
the Holders of Securities shall thereafter be determined, exercised and
enforced hereunder subject in all respects to such modifications and
amendments, and all the terms and conditions of any such supplemental
indenture shall be and be deemed to be part of the terms and conditions of
this Indenture for any and all purposes.
SECTION 8.4 DOCUMENTS TO BE GIVEN TO TRUSTEE. In connection with the
execution and delivery of any supplemental indenture pursuant to this
Article Eight, the Trustee shall receive an Officers' Certificate and an
Opinion of Counsel and, subject to the provisions of Sections 6.1 and 6.2,
may rely thereon as conclusive evidence that any such supplemental
indenture complies with the applicable provisions of this Indenture. The
Opinion of Counsel delivered pursuant to this Section 8.4 shall include a
statement that the execution, delivery and performance of such supplemental
indenture by the Issuer shall not result in a breach or violation of, or
constitute a default under, this Indenture. Subject to Section 6.1, the
Trustee may conclusively rely on an Opinion of Counsel with respect to the
effect a supplemental indenture will have on a Holder under Section 8.1(d).
SECTION 8.5 NOTATION ON SECURITIES IN RESPECT OF SUPPLEMENTAL
INDENTURES. Securities authenticated and delivered after the execution of
any supplemental indenture pursuant to the provisions of this Article may
bear a notation in form approved by the Trustee as to any matter provided
for by such supplemental indenture or as to any action taken at any such
meeting. If the Issuer or the Trustee shall so determine, new Securities
so modified as to conform, in the opinion of the Trustee and the Board of
Directors, to any modification of this Indenture contained in any such
supplemental indenture may be prepared and executed by the Issuer,
authenticated by the Trustee and delivered in exchange for the Securities
then Outstanding.
ARTICLE 9
NO CONSOLIDATION, MERGER, SALE OR CONVEYANCE
Except with the prior written consent of each Holder, the Issuer shall
not consolidate with, or merge with or into (whether or not the Issuer is
the surviving corporation), or sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of its properties or assets
as an entirety in one or more related transactions to, another corporation,
person or entity, except as permitted in Article 3. For purposes of this
Article 9, the transfer (by lease, assignment, sale or otherwise), in a
single transaction or series of transactions), of all or substantially all
of the properties or assets of one or more Subsidiaries of the Issuer, the
Capital Stock of which constitutes all or substantially all of the
properties and assets of the Issuer, shall be deemed to be the transfer of
all or substantially all of the properties and assets of the Issuer,
provided however, this section shall not prohibit the pledge or granting of
a security interest to the holders of the Czech Notes in the stock and
assets of TWG International and TWG Finance, and of any of their respective
subsidiaries, or the foreclosure on such collateral by the holders of the
Czech Notes.
ARTICLE 10
SATISFACTION AND DISCHARGE
OF INDENTURE; UNCLAIMED MONEYS
SECTION 10.1 SATISFACTION AND DISCHARGE OF INDENTURE. This Indenture
shall cease to be of further effect as to all Outstanding Securities
(except as to (A) rights of registration of transfer and exchange, and the
Issuer's right of optional redemption, (B) substitution of apparently
mutilated, defaced, destroyed, lost or stolen Securities, (C) rights of
Holders to receive payments of principal thereof and interest thereon, (D)
the rights, obligations and immunities of the Trustee hereunder and (E) the
rights of the Securityholders as beneficiaries hereof with respect to the
property so deposited with the Trustee under the provisions of this Section
10.1) when (a) all Outstanding Securities, except lost, stolen or destroyed
Securities which shall have been replaced or paid, as provided in Section
2.6, have been delivered to the Trustee for cancellation or (b) the Issuer
shall have paid or caused to be paid the principal of and interest on the
Securities Outstanding hereunder, as and when the same shall have become
due and payable, or (c) (i) the Securities not theretofore delivered to the
Trustee for cancellation shall have become due and payable, or are by their
terms to become due and payable within one year or are to be called for
redemption under arrangements satisfactory to the Trustee upon the giving
of notice of redemption, and (ii) the Issuer shall have irrevocably
deposited or caused to be deposited with the Trustee, as trust funds, (A)
money in an amount or (B) Government Securities which through the payment
of interest and principal will provide, no later than one day before the
due date of payments in respect of the Securities, money in an amount or
(C) a combination thereof, any one of options (A), (B) or (C) being
sufficient in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered
to the Trustee, to pay the principal of and interest on the Outstanding
Securities to the date of maturity or redemption, as the case may be. The
Trustee, on demand of the Issuer accompanied by an Officers' Certificate
and an Opinion of Counsel and at the cost and expense of the Issuer, shall
execute proper instruments acknowledging such satisfaction of and
discharging this Indenture. The Issuer agrees to reimburse the Trustee for
any costs or expenses (including the reasonable fees of its counsel)
thereafter reasonably and properly incurred, to compensate the Trustee for
any services thereafter reasonably and properly rendered by the Trustee in
connection with this Indenture or the Securities and to indemnify the trust
referred to in Section 10.2(a) for any tax liability and pay any expenses
of such trust not otherwise provided for pursuant to such Section.
SECTION 10.2 DEFEASANCE AND DISCHARGE OF INDENTURE. The Issuer shall
be deemed to have paid and discharged the entire Indebtedness on all the
Outstanding Securities on the date of the deposit referred to in
subparagraph (a) hereof, and the provisions of this Indenture, as it
relates to such Outstanding Securities, shall no longer be in effect (and
the Trustee, at the expense of the Issuer, shall execute proper instruments
acknowledging the same), except as to: (1) rights of registration of
transfer and exchange, and the Issuer's right of optional redemption, (2)
substitution of apparently mutilated, defaced, destroyed, lost or stolen
Securities, (3) rights of Holders to receive payments of principal thereof
and interest thereon, (4) the rights, obligations and immunities of the
Trustee hereunder and (5) the rights of the Securityholders as
beneficiaries hereof with respect to the property so deposited with the
Trustee payable to all or any of them; PROVIDED that all of the following
conditions shall have been satisfied:
(a) the Issuer has deposited or caused to be irrevocably
deposited with the Trustee (or another trustee satisfying the
requirements of Section 6.9) as trust funds in trust, specifically
pledged as security for, and dedicated solely to, the benefit of the
Holders of the Securities, (i) money in an amount or (ii) Government
Securities which through the payment of interest and principal in
respect thereof in accordance with their terms will provide not later
than one day before the due date of any payment referred to below
money in an amount, or (iii) a combination thereof, any one of options
(i), (ii) or (iii) being sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and
discharge without consideration of the reinvestment of such interest
and after payment of all federal, state and local taxes or other
charges and assessments in respect thereof payable by the Trustee, the
principal of and each installment of principal and interest on the
Outstanding Securities as of the maturity date of such principal or
installment of interest;
(b) such deposit shall not result in a breach or violation of,
or constitute a default under, this Indenture or any other agreement
or instrument to which the Issuer is a party or by which it is bound;
(c) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit;
(d) the Issuer has delivered to the Trustee an Opinion of
Counsel to the effect that (i) the Holders of the Securities shall not
recognize income, gain or loss for Federal income tax purposes as a
result of such deposits, defeasance and discharge and will be subject
to Federal income tax on the same amount and in the same manner and at
the same times as would have been the case if such deposit, defeasance
and discharge had not occurred, (ii) the creation of the trust will
not violate the Investment Company Act of 1940, as amended, and (iii)
Holders of the Securities will have a valid, first priority lien on
the trust funds; and
(e) the Issuer has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for relating to the defeasance
contemplated by this provision have been complied with.
SECTION 10.3 DEFEASANCE OF CERTAIN OBLIGATIONS. The Issuer may omit
to comply with any term, provision or condition set forth in Sections 3.5
to3.19 inclusive, and will not be subject to the Events of Default
described under clauses (d), (e) and (f) of Section 5.1 hereof, with
respect to the Securities, if all of the following conditions have been
satisfied:
(a) the Issuer has deposited or caused to be irrevocably
deposited with the Trustee (or another trustee satisfying the
requirements of Section 6.9) as trust funds in trust, specifically
pledged as security for, and dedicated solely to, the benefit of the
Holders of the Securities, (i) money in an amount, or (ii) Government
Securities which through the payment of interest and principal in
respect thereof in accordance with their terms will provide not later
than one day before the due date of any payment referred to below
money in an amount, or (iii) a combination thereof, any one of options
(i), (ii) or (iii) being sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and
discharge without consideration of the reinvestment of such interest
and after payment of all federal, state and local taxes or other
charges and assessments in respect thereof payable by the Trustee, the
principal of and each installment of principal and interest on the
Outstanding Securities on the maturity date of such principal or
installment of principal or interest;
(b) such deposit shall not result in a breach or violation of,
or constitute a default under, this Indenture or any other agreement
or instrument to which the Issuer is a party or by which it is bound;
(c) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit;
(d) the Issuer has delivered to the Trustee an Opinion of
Counsel to the effect that (i) the Holders of the Securities shall not
recognize income, gain or loss for Federal income tax purposes as a
result of such deposit and defeasance of certain obligations and will
be subject to Federal income tax on the same amount and in the same
manner and at the same times as would have been the case if such
deposit and defeasance had not occurred, (ii) the creation of the
trust will not violate the Investment Company Act of 1940, as amended,
and (iii) Holders of the Securities will have a valid, first-priority
lien on the trust funds; and
(e) the Issuer has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein provided for relating to the defeasance
contemplated by this Section 10.3 have been complied with.
SECTION 10.4 APPLICATION BY TRUSTEE OF FUNDS DEPOSITED FOR PAYMENT OF
SECURITIES. Subject to Section 10.6, all moneys and Governmental
Securities deposited with the Trustee pursuant to Sections 10.1, 10.2 and
10.3 shall be held in trust and applied by it to the payment, either
directly or through any paying agent (including the Issuer acting as paying
agent), to the Holders of the particular Securities for the payment or
redemption of which such moneys have been deposited with the Trustee, of
all sums due and to become due thereon for principal and interest; but such
money and Government Securities need not be segregated from other funds
except to the extent required by law.
SECTION 10.5 REPAYMENT OF MONEYS HELD BY PAYING AGENT. In connection
with the satisfaction and discharge of this Indenture all moneys and
Government Securities then held by any paying agent under the provisions of
this Indenture shall, upon demand of the Issuer, be repaid to the Issuer or
paid to the Trustee and thereupon such paying agent shall be released from
all further liability with respect to such moneys and Government
Securities.
SECTION 10.6 RETURN OF MONEYS HELD BY TRUSTEE AND PAYING AGENT
UNCLAIMED FOR ONE YEAR. Any moneys and Government Securities deposited
with or paid to the Trustee or any paying agent for the payment of the
principal of or interest on any Security and not applied but remaining
unclaimed for one year after the date upon which such principal or interest
shall have become due and payable shall, upon the written request of the
Issuer and unless otherwise required by mandatory provisions of applicable
escheat or abandoned or unclaimed property law, be repaid to the Issuer by
the Trustee or such paying agent, and the Holder of such Security shall,
unless otherwise required by mandatory provisions of applicable escheat or
abandoned or unclaimed property laws, thereafter look only to the Issuer
for any payment which such Holder may be entitled to collect, and all
liability of the Trustee or any paying agent with respect to such moneys
and Government Securities shall thereupon cease; PROVIDED, HOWEVER, that
the Trustee or such paying agent before being required to make any such
repayments may, at the expense of the Issuer, cause to be published once,
in a newspaper published in the English language, customarily published on
each Business Day and of general circulation in the Borough of Manhattan,
the City of New York, notice that such money remains unclaimed and that
after a date specified therein, which shall not be less than 30 days from
the date of such publication, any unclaimed balance of such money then
remaining will be repaid to the Issuer. In the event any Securities are
not presented for payment when due, either at maturity or at the date fixed
for redemption thereof or otherwise, if funds sufficient to pay such
Securities shall have been made available to the Trustee or Paying Agent
for the benefit of the Holders thereof, all liability of the Issuer to the
Holders for payment of such Securities shall terminate and be completely
discharged. The Trustee shall hold such segregated funds, without
liability for interest thereon, for the benefit of the Holders, who shall
thereafter be restricted exclusively to such funds for the satisfaction of
any claim of whatever nature on their part under this Indenture or relating
to such Securities.
SECTION 10.7 REINSTATEMENT. If the Trustee or paying agent is unable
to apply any moneys or Government Securities in accordance with this
Article Ten 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 Issuer's obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to this Article Ten until such time as the
Trustee or paying agent is permitted to apply all such moneys or Government
Securities in accordance with this Article; PROVIDED, HOWEVER, that if the
Issuer has made any payment of principal of or interest on any Securities
because of the reinstatement of its obligations, the Issuer shall be
subrogated to the rights of the Holders of such Securities to receive such
payment from the moneys or Government Securities held by the Trustee or
paying agent.
ARTICLE 11
MISCELLANEOUS PROVISIONS
SECTION 11.1 INCORPORATORS, SHAREHOLDERS, OFFICERS AND DIRECTORS OF
ISSUER EXEMPT FROM INDIVIDUAL LIABILITY. No recourse under or upon any
obligation, covenant or agreement contained in this Indenture, or in any
Security, or because of any indebtedness evidenced thereby, shall be had
against any incorporator, as such, or against any past, present or future
stockholder, officer, employee, director, or creditor, as such, of the
Issuer or the Trustee or any subsidiary of the Issuer or any successor of
the Issuer or the Trustee or any such subsidiary, whether directly or
through the Issuer or any subsidiary of the Issuer or any successor of the
Issuer or any such subsidiary, under any rule of law, statute or
constitutional provision or by the enforcement of any assessment or by any
legal or equitable proceeding or otherwise, all such liability being
expressly waived and released by the acceptance of the Securities by the
Holders thereof and as part of the consideration for the issue of the
Securities.
SECTION 11.2 PROVISIONS OF INDENTURE FOR THE SOLE BENEFIT OF PARTIES
AND SECURITYHOLDERS. Nothing in this Indenture or in the Securities,
express or implied, shall give or be construed to give to any Person, firm
or corporation, other than the parties hereto and their successors and the
Holders of the Securities, any legal or equitable right, remedy or claim
under this Indenture or under any covenant or provision herein contained,
other than the rights expressly granted to the holders of the Czech Notes.
SECTION 11.3 SUCCESSORS AND ASSIGNS OF ISSUER BOUND BY INDENTURE.
All the covenants, stipulations, promises and agreements in this Indenture
contained by or on behalf of the Issuer shall bind its successors and
assigns, whether so expressed or not.
SECTION 11.4 NOTICES AND DEMANDS ON ISSUER, TRUSTEE AND
SECURITYHOLDERS. Any notice or demand which by any provision of this
Indenture is required or permitted to be given or served by the Trustee or
by the Holders of Securities to or on the Issuer shall be given or served
by (i) delivery in Person, (ii) telecopy (confirmed by copy sent by first-
class mail) or (iii) certified or registered mail, return receipt requested
(except as otherwise specifically provided herein), in each case addressed
(until another address of the Issuer is filed by the Issuer with the
Trustee) to Trans World Gaming Corp., One Penn Plaza, Suite 1503, New York,
NY 10119, Attention: President (Telecopy No.: (212) 563-3380). Any
notice, direction, request or demand by the Issuer or any Securityholder to
or upon the Trustee shall be deemed to have been sufficiently given or
made, for all purposes, if given or served by one of the methods described
in the first sentence of this Section 11.4, addressed to the Corporate
Trust Office (Telecopy No.: 212-754-1303).
Where this Indenture provides for notice to Holders, such notice shall
be sufficiently given (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid, to each Holder entitled
thereto, at his last address as it appears in the Security register. Any
notice which is delivered, telecopied (and confirmed by mail) or mailed in
the manner herein provided shall be conclusively presumed to have been
given, whether or not the addressee receives such notice. In any case
where notice to Holders is given by mail, neither the failure to mail such
notice, nor any defect in any notice so mailed to any particular Holder
shall affect the sufficiency of such notice with respect to other Holders.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any
action taken in reliance upon such waiver.
In case, by reason of the suspension of or irregularities in regular
mail service, it shall be impracticable to mail notice or confirm by mail
telecopy notice to the Issuer and Securityholders when such notice is
required to be given pursuant to any provision of this Indenture, then any
manner of giving such notice as shall be satisfactory to the Trustee shall
be deemed to be a sufficient giving of such notice.
SECTION 11.5 COMPLIANCE CERTIFICATES AND OPINIONS OF COUNSEL;
STATEMENTS TO BE CONTAINED THEREIN. Upon an application or demand by the
Issuer to the Trustee to take any action under any of the provisions of
this Indenture, the Issuer shall furnish to the Trustee (i) an Officers'
Certificate stating that all conditions precedent provided for in this
Indenture relating to the proposed action have been complied with and (ii)
an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent have been complied with and (iii) if appropriate, an
Accountants' Certificate stating that in the opinion of such accountants
all such conditions precedent have been complied with, except that in the
case of any such application or demand as to which the furnishing of such
documents is specifically required by any provision of this Indenture
relating to such particular application or demand, no additional
certificate or opinion need be furnished.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or
covenant provided for in this Indenture shall include (a) a statement that
the Person making such certificate or opinion has read such covenant or
condition, (b) 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, (c) 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
(d) a statement as to whether or not, in the opinion of such Person, such
condition or covenant has been complied with.
Any certificate, statement or opinion of an officer of the Issuer may
be based, insofar as it relates to legal matters, upon a certificate or
opinion of or representations by counsel, unless such officer knows that
the certificate or opinion or representations with respect to the matters
upon which his certificate, statement or opinion may be based as aforesaid
are erroneous, or in the exercise of reasonable care should know that the
same are erroneous. Any certificate, statement or opinion of counsel may
be based, insofar as it relates to factual matters and information which is
in the possession of the Issuer, upon the certificate, statement or opinion
of or representations by an officer or officers of the Issuer, unless such
counsel knows that the certificate, statement or opinion or representations
with respect to the matters upon which his certificate, statement or
opinion may be based as aforesaid are erroneous, or in the exercise of
reasonable care should know that the same are erroneous.
Any certificate, statement or opinion of an officer of the Issuer or
of counsel may be based, insofar as it relates to accounting matters, upon
a certificate or opinion of or representations by an accountant or firm of
accountants in the employ of the Issuer unless such officer or counsel, as
the case may be, knows that the certificate or opinion or representations
with respect to the accounting matters upon which his certificate,
statement or opinion may be based as aforesaid are erroneous, or in the
exercise of reasonable care should know that the same are erroneous.
Any certificate or opinion of any independent firm of public
accountants filed with the Trustee shall contain a statement that such firm
is independent.
SECTION 11.6 PAYMENTS DUE ON SATURDAYS, SUNDAYS AND HOLIDAYS. If the
date of maturity of interest on or principal of the Securities or the date
fixed for redemption of any Security shall not be a Business Day, then
payment of interest or principal need not be made on such date, but may be
made on the next succeeding Business Day with the same force and effect as
if made on the date of maturity or the date fixed for redemption, and no
interest shall accrue for the period after such date.
SECTION 11.7 [Reserved]
SECTION 11.8 NEW YORK LAW TO GOVERN. THIS INDENTURE AND EACH
SECURITY SHALL BE DEEMED TO BE A CONTRACT UNDER THE LAWS OF THE STATE OF
NEW YORK, AND FOR ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH THE
LAWS (OTHER THAN CHOICE OF LAW RULES) OF SAID STATE. THE ISSUER HEREBY
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES
FEDERAL OR NEW YORK STATE COURT SITTING IN NEW YORK CITY IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE OR THE SECURITIES
AND THE ISSUER HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH UNITED STATES
FEDERAL OR NEW YORK STATE COURT. THE ISSUER IRREVOCABLY WAIVES ANY
OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF
VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDINGS IN SUCH
RESPECTIVE JURISDICTIONS. THE ISSUER IRREVOCABLY CONSENTS TO THE SERVICE
OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY
COURT IN OR OF THE STATE OF NEW YORK BY THE DELIVERY OF COPIES OF SUCH
PROCESS TO THE ISSUER, AT ITS ADDRESS SPECIFIED IN SECTION 11.4 HEREOF OR
BY CERTIFIED MAIL DIRECT TO SUCH ADDRESS.
WHENEVER POSSIBLE EACH PROVISION OF THIS INDENTURE SHALL BE
INTERPRETED IN SUCH MANNER AS TO BE EFFECTIVE AND VALID UNDER APPLICABLE
LAW, BUT IF ANY PROVISION OF THIS INDENTURE SHALL BE PROHIBITED BY OR
INVALID UNDER APPLICABLE LAW, SUCH PROVISION SHALL BE INEFFECTIVE TO THE
EXTENT OF SUCH PROHIBITION OR INVALIDITY, WITHOUT INVALIDATING THE
REMAINDER OF SUCH PROVISION OR THE REMAINING PROVISIONS OF THIS INDENTURE.
WHENEVER IN THIS INDENTURE REFERENCE IS MADE TO THE ISSUER OR A HOLDER,
SUCH REFERENCE SHALL BE DEEMED TO INCLUDE, AS APPLICABLE, A REFERENCE TO
THEIR RESPECTIVE SUCCESSORS AND ASSIGNS. THE PROVISIONS OF THIS INDENTURE
SHALL BE BINDING UPON AND SHALL INURE TO THE BENEFIT OF SUCH SUCCESSOR AND
ASSIGNS. THE ISSUER'S SUCCESSORS AND ASSIGNS SHALL INCLUDE, WITHOUT
LIMITATION, A RECEIVER, TRUSTEE OR DEBTOR IN POSSESSION FOR THE ISSUER.
SECTION 11.9 COUNTERPARTS. This Indenture may be executed in any
number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.
SECTION 11.10 EFFECT OF HEADINGS. The Article and Section headings
herein and the Table of Contents are for convenience only and shall not
affect the construction hereof.
SECTION 11.11 DIRECTORS. Subject to the laws of the State of Nevada
and the Articles of Incorporation and By-Laws of TWG (which TWG shall use
its best efforts to amend to comply with this section), the Holder or
Holders of 50 percent of the Outstanding Securities shall have the right to
name, at any time, and from time to time, two of seven members of the Board
of Directors of TWG until such time as the Securities are paid in full or
fully defeased pursuant to Article 10. Such named persons shall, upon
direction by the required Holder(s), be placed upon the Board of Directors
and, TWG, at such time as such Board seat of such appointee is subject to
a shareholder vote, shall support and nominate such named individuals for
election to the Board. Such right to name such two directors shall
include, upon a one day written notice, the right to remove and replace
either or both such named directors. During such time period as this right
exists, TWG will not permit its Board of Directors to exceeds a total of
seven (7) directors.
SECTION 11.12 WAIVER OF USURIOUS INTEREST. All agreements between
Issuer and Holders, whether now existing or hereafter arising and whether
written or oral, are hereby limited so that in no contingency, whether by
reason of demand or acceleration of the final maturity date of the
Securities or otherwise, shall the interest contracted for, charged,
received, paid or agreed to be paid to Holders exceed the maximum amount
permissible under the laws of the State of New York (hereinafter the
"Applicable Law"). If, from any circumstance whatsoever, interest would
otherwise be payable to the Holders in excess of the maximum amount
permissible under Applicable Law, the interest payable to the Holders shall
be reduced to the maximum amount permissible under Applicable Law, and if
from any circumstance the Holders shall ever receive anything of value
deemed interest by the Applicable Law in excess of the maximum amount
permissible under the Applicable Law, an amount equal to the excessive
interest shall be applied to the reduction of the principal hereof and not
to the payment of interest, or if such excessive amount of interest exceeds
the unpaid principal balance of principal hereof, such excess shall be
refunded to Issuer. All interest paid or agreed to be paid to the Holders
shall, to the extent permitted by the Applicable Law, be amortized,
prorated, allocated and spread throughout the full period (including any
renewal or extension) until payment in full of the principal so that the
interest hereon for such full period shall not exceed the maximum amount
permissible under the Applicable Law. The Holders expressly disavow any
intent to contract for, charge or receive interest in an amount which
exceeds the maximum amount permissible under the Applicable Law. This
paragraph shall control agreements between the Issuer and the Holders.
ARTICLE 12
REDEMPTION OF SECURITIES
SECTION 12.1 RIGHT OF OPTIONAL REDEMPTION; PRICES. Subject to the
terms and conditions of this Indenture, the Securities shall be subject to
redemption prior the Maturity Date in whole or in part, at the election of
the Issuer on any date for which notice of redemption can be given, at the
redemption price of the principal amount of the Securities to be redeemed
together with accrued interest to the redemption date. To make this
election the Issuer shall give the Trustee at least 60 notice of such
election, which notice shall specify the principal amount of Securities to
be redeemed and the date it has fixed for redemption.
SECTION 12.2 NOTICE OF REDEMPTION. Notice of redemption to the
Holders of Securities to be redeemed as a whole shall be given by mailing
notice of such redemption by first-class mail, postage prepaid, at least 30
and not more than 60 days prior to the date fixed for redemption to such
Holders of Securities at their last addresses as they shall appear upon the
registry books. Any notice which is mailed in the manner herein provided
shall be conclusively
presumed to have been duly given, whether or not the Holder receives the
notice. Failure to give notice by mail, or any defect in the notice to the
Holder of any Security designated for redemption as a whole or in part,
shall not affect the validity of the proceedings for the redemption of any
other Security.
The notice of redemption to each such Holder shall specify the
principal amount of each Security held by such Holder to be redeemed, the
date fixed for redemption, the redemption price, the place or places of
payment, that payment will be made upon presentation and surrender of such
Securities, that interest accrued to the date fixed for redemption to the
extent provided in Section 12.1 will be paid as specified in said notice, that
on and after said date interest thereon will cease to accrue.
The notice of redemption of Securities to be redeemed shall be given
by the Issuer or, at the Issuer's request, by the Trustee in the name and
at the expense of the Issuer.
At least one Business Day prior to the redemption date specified in
the notice of redemption given as provided in this Section 12.2, the Issuer
will deposit with the Trustee or with one or more paying agents (or, if the
Issuer is acting as paying agent, set aside, segregate and hold in trust as
provided in Section 3.4) in immediately available funds an amount of money
sufficient to redeem in immediately available funds on the redemption date
all the Securities so called for redemption at the appropriate redemption
price, together with accrued interest to the date fixed for redemption to
the extent provided in Section 12.1.
SECTION 12.3 PAYMENT OF SECURITIES CALLED FOR REDEMPTION. If notice of
redemption has been given as above provided, the Securities shall become
due and payable on the date and at the place stated in such notice at the
applicable redemption price, together with interest accrued to the date
fixed for redemption, and on and after said date (unless the Issuer shall
default in the payment of such Securities at the redemption price, together
with interest accrued to said date to the extent provided in Section 12.1)
interest on the Securities or portions of Securities so called for
redemption shall cease to accrue and, except as provided in Sections 6.5
and 10.6, such Securities shall cease from and after the date fixed for
redemption to be entitled to any benefit or security under this Indenture,
and the Holders thereof shall have no right in respect of such Securities
except the right to receive the redemption price thereof and unpaid
interest to the date fixed for redemption to the extent provided in Section
12.1. On presentation and surrender of such Securities at a place of
payment specified in said notice, said Securities shall be paid and
redeemed by the Issuer at the applicable redemption price, together with
interest accrued thereon to the date fixed for redemption. If any Security
called for redemption shall not be so paid upon surrender thereof for
redemption, the principal shall, until paid or duly provided for, bear
interest from the date fixed for redemption at the Default Rate.
SECTION 12.4 EXCLUSION OF CERTAIN SECURITIES FROM ELIGIBILITY FOR
SELECTION FOR REDEMPTION. Securities shall be excluded from eligibility
for selection for redemption if they are identified by registration and
certificate number in an Officer's Certificate and delivered to the Trustee
at least 40 days prior to the last date on which notice of redemption may
be given as being owned of record and beneficially by, and not pledged or
hypothecated by, (a) the Issuer or (b) an entity specifically identified in
such written statement as directly or indirectly controlling or controlled
by or under direct or indirect common control with the Issuer (other than a
holder of the Securities on the Issue Date.
SECTION 12.5 SELECTION OF SECURITIES TO BE REDEEMED. If less than
all the Securities are to be redeemed, the particular Securities or
portions of Securities to be redeemed in minimum amounts $ 100.00 shall be
selected in such manner as the Trustee in its discretion may deem fair and
appropriate so that Securities are redeemed, as nearly as practicable, from
each Holder on a reasonably pro rata basis according to the principal
amount of Securities represented by each Security Outstanding.
SECTION 12.6 PARTIAL REDEMPTION OF SECURITIES. In case part but not
all of an Outstanding Security shall be selected for redemption, upon
presentation and surrender of such Security by the Holder thereof or his
attorney duly authorized in writing (with due endorsement by, or a written
instrument of transfer in form satisfactory to the Trustee) the Trustee
shall authenticate and deliver to or upon the order of such Holder, without
charge therefor, for the unredeemed portion of the principal amount of the
Security so surrendered, a Security or Securities, at the option of such
Holder of like tenor. Fully registered Securities so presented and
surrendered shall be canceled in accordance with this Indenture.
ARTICLE 13
WARRANT
The conversion feature of the Original Indenture is deleted as a
provision of this Indenture. Each Securityholder shall receive a Warrant
to purchase Common Stock of TWG in the form attached to that certain
Consent to Amend Indenture, Bonds and Warrants, by and between the Issuer,
the Trustee and the Holders as of the date hereof. Such Warrants shall
permit the holder thereof to purchase one share of common stock for each
$1.50 of principal owed to such Securityholder by the Issuer as of the date
of this Indenture on the terms and conditions set forth herein and in such
Warrant. The number of shares purchasable by the Warrant issued shall not
be reduced by any subsequent reduction in principal amount of such holder's
Security. Subject to applicable law, the Warrant is transferable and need
not be exercised by a Securityholder. Should a Securityholder desire to
exercise the Warrant in whole or in part, such Securityholder shall be
permitted to, but shall not be required to, pay the purchase price of the
Common Stock acquired by such exercise by a corresponding reduction in
principal and interest owed such Securityholder pursuant to such
Securityholder's Security. The Warrants shall expire December 31, 2005. No
amendment to this Article 13 shall be binding upon a Holder absent that,
Holder's written consent, not withstanding any other provision of this
Indenture.
ARTICLE 14
SECURITY
SECTION 14.1 PLEDGE AND SECURITY INTEREST. "Collateral" means all
Property, including, without limitation, fee and leasehold interests in
real property and all personal property of the Issuer in the State of
Louisiana, provided, however, the Securities shall not be secured by, and
the holders of the Securities have no rights relating to, the Capital Stock
(including direct and indirect, partially and wholly-owned Subsidiaries) or
assets of either TWG International or TWG Finance, or of any of their
respective Subsidiaries until the Czech Notes are fully defeased, fully
redeemed or paid in full. Pursuant to the terms of the collateral
agreements as executed pursuant to the Original Indenture, the Issuer has
granted to the Trustee Liens on the Collateral for the benefit of holders
of the Securities. This Indenture and the Securities issued pursuant to
this Indenture affirm, reinstate, restate, renew, replace and amend the
Original Indenture and the Securities issued thereunder and continues the
Security Interest of the Trustee for the benefit of the Holders of the
Securities as granted in the Original Indenture and related documents as to
such real and personal Property in the state of Louisiana, and any Security
Interest beyond the scope granted herein shall be deemed terminated. All
references herein to the "Security Interest" and to the "Lien of this
Indenture" shall be deemed to mean and refer to the Liens granted to the
Trustee in the Original Indenture and Collateral Agreements executed
pursuant to the Original Indenture, as affirmed, reinstated, restated,
renewed, replaced and amended herein and pursuant to the terms of the
Collateral Agreements.
SECTION 14.2 SECURITY FOR OBLIGATION. The Security Interest secures
among other things the payment and performance of all obligations of the
Issuer now or hereafter existing under the Securities, the Collateral
Agreements or this Indenture, including without limitation the prompt
payment when due (whether by acceleration or otherwise) of the principal of
or interest on the Securities as such documents renew, affirm, reinstate,
restate, replace and amend the security interest granted the
Securityholders in the Security arising pursuant to the Original Indenture,
and the collateral documents associated with such Original Indenture (all
such obligations of the Issuer being herein called the "Obligations").
SECTION 14.3 PERFECTION OF SECURITY INTEREST.
The Issuer shall cause this Indenture, the Collateral Agreements,
financing statements, continuation statements, notifications of
secured transactions and other instruments with respect to the
Collateral to be promptly executed, recorded, registered and filed and
to be kept recorded, registered and filed in such manner and in such
places as may be required by law, and take all such other actions as
may be required, in order to make effective the Security Interest in
all personal property constituting part of the Collateral as a
perfected security interest and in all real property constituting part
of the Collateral as a mortgage lien effective as to third parties, and
shall pay all taxes and fees incidental thereto.
SECTION 14.4 NO DISPOSITION OF COLLATERAL; RELEASE OF LIEN OF
INDENTURE. The Issuer may not sell or otherwise dispose of Collateral,
except as provided in Section 3.13.
SECTION 14.5 OTHER LIENS. The Issuer will not create or permit to
exist any Lien upon or with respect to any of the Collateral, except for
any Liens permitted by the terms hereof or of the Collateral Agreements.
SECTION 14.6 TRUSTEE APPOINTED ATTORNEY-IN-FACT. Subject to its
right of indemnification, the Trustee shall take any action required or
permitted to be taken by the Trustee under the Collateral Agreements if
directed in writing to do so by the Holders of at least 50% in aggregate
principal amount of the Securities then Outstanding; provided, however,
that no action shall be taken which, in the Opinion of Counsel, impairs the
enforceability, priority or perfection of the Lien of this Indenture as to
the Collateral then subject thereto, unless directed by all Holders, except
as provided in Section 3.13.
SECTION 14.7 RETURN OF COLLATERAL. Upon the payment in full of the
obligations or upon satisfaction and discharge of this Indenture in
accordance with Article 10 (and the Trustee receiving written confirmation
thereof satisfactory to the Trustee), the Trustee, subject to the terms of
the Collateral Agreements, shall forthwith take all necessary action to
return any Collateral in the Trustee's possession to the Issuer or its
Subsidiaries, as the case may be, and release the Liens thereon and
Security Interests therein.
SECTION 14.8 DEFAULT REMEDIES. The Trustee shall have the rights set
forth in the Collateral Agreements to exercise the remedies to realize upon
the collateral set forth in the Collateral Agreements.
SECTION 14.9 PROCEEDS. The proceeds of any sale or other disposition
of the Collateral received by the Trustee pursuant to the terms of the
Collateral Agreements shall be applied by the Trustee:
First: to the payment of the costs and expenses of such sale,
including a reasonable compensation to the Trustee, and its agents,
attorneys and counsel, and of all charges, expenses, liabilities and
advances incurred or made by the Trustee under this Indenture;
Second: to the reimbursement of the Trustee for any sum advanced
by the Trustee to the Issuer in order to preserve the Collateral
together with interest at the rate charged publicly announced by
Citibank, N.A. from time to time in New York, New York as its
reference rate; and
Third: as provided in Section 5.3.
SECTION 14.10 DEFICIENCY. The Issuer shall remain liable for any
unfulfilled obligations, together with interest thereon, in accordance with
and subject to the provisions of the Securities and this Indenture.
SECTION 14.11 TRUSTEE'S DUTIES. The powers conferred upon the
Trustee by this Article 14 are solely to protect its interest and the
interest of the Holders in the Collateral and shall not impose any duty
upon the Trustee to exercise any such powers except as expressly provided
in this Indenture or in the Collateral Agreements. The Trustee shall be
under no duty to the Issuer 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 the Obligations, or to take any steps necessary to
preserve any rights against prior parties except as expressly provided in
this Indenture or in the Collateral Agreements. The Trustee shall not be
liable to the Issuer for failure to collect or realize upon any or all of
the obligations or Collateral, or for any delay in so doing, nor shall the
Trustee be under any duty to the Issuer to take any action whatsoever with
regard thereto. The Trustee shall have no duty to the Issuer to comply
with any recording, filing, or other legal requirements necessary to
establish or maintain the validity, priority or enforceability of, or the
Trustee's rights in or to, any of the Collateral.
SECTION 14.12 SPECIAL TRUSTEE POWERS DUE TO ENVIRONMENTAL CONDITIONS.
The Trustee shall have the power to settle or compromise at any time any
and all claims against the Trust Estate or the Trustee (either in its
corporate capacity, or in the personal capacity of the individuals serving
as trust officers on behalf of the Trustee), which may be asserted by any
governmental body or private party involving the alleged violation of any
applicable Environmental Laws affecting the Collateral or any other
property held in trust with respect to or in connection with the
Collateral. Notwithstanding any provision in this subparagraph to the
contrary, the Trustee may not settle or compromise any claim against the
Trust Estate or the Trustee which may result in any liability being
asserted against Issuer without Issuer having had a reasonable opportunity
to resolve the alleged violation, which reasonable opportunity shall not
exceed 60 days from the date on which Issuer shall have been notified of
such alleged violation by a governmental body or a private party; provided,
however, in the event that Issuer shall be in default under the Indenture
or under the Collateral Agreements, then it shall have none of the rights
afforded to it in this paragraph.
The Trustee shall not be personally liable to the Holders or any other
Person for any decrease in value of the Collateral by reason of the
Trustee's compliance with any Applicable Environmental Laws (as defined in
the Collateral Agreements), specifically including any reporting
requirement under such law. Neither the acceptance by the Trustee of
property nor failure by the Trustee to inspect property shall be deemed to
create any interference as to whether or not there is or may be any
liability under any applicable Environmental Laws with respect to such
property.
Notwithstanding anything in this Indenture or the Collateral
Agreements to the contrary, the Trustee shall not be required to initiate
foreclosure proceedings with respect to the Collateral, and shall not
otherwise be required to acquire possession of, or take other action with
respect to the Collateral which could cause the Trustee to be considered an
"owner" or "operator" within the meaning of the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended from time to
time, or any other law dealing with the environmental matters or hazardous
substances, unless the Trustee has sufficient comfort, based on previous
determinations by experts on which it can rely, including environmental
report, that:
(a) there are no circumstances present at the Collateral
relating to the use, management or disposal of any hazardous
substances, hazardous materials, hazardous wastes or petroleum-based
materials for which investigation, testing, monitoring, contaminant,
clean up or remedial action could be required under any environmental
laws, or that if any such materials are present for which such action
could be required, that it would be nevertheless in the best economic
interest of the Trustee and the Holders to take such actions with
respect to the Collateral;
(b) if the Trustee has determined that it would be in the best
economic interest of the Trustee and the Holders, the Trustee must be
satisfied that they will suffer no unreimbursed liabilities and will
be adequately reimbursed for all liabilities, expenses and costs from
available funds in Trustee's possession and control; and
(c) if the Trustee has determined that it would be in the best
economic interest of the Trustee and the Holders to take any such
action and its aforementioned liabilities, expenses and costs are
adequately reimbursed, the Trustee has so notified the Holders and has
not received, within 30 days of such notification, instructions from
owners of fifty percent (50%) or more in principal amount of the then
Outstanding Securities directing it not to take such action.
If the foregoing conditions are not satisfied and the Trustee is not
willing to waive such conditions and initiate foreclosure proceedings, then
the Trustee shall take such actions as are reasonably necessary or
appropriate in order to facilitate the appointment of a co-trustee, being a
person or entity designated by the Holders of a majority in principal
amount of the Securities then Outstanding and to assign to such person or
entity (subject, however, to the trusts created pursuant to the Indenture)
the beneficial interest under the Collateral Agreements which secures the
obligations under the Indenture, for the limited purpose of conducting a
foreclosure of such Collateral Agreements and receiving and holding any
title to real property obtained as a result of such foreclosure. Persons
or entities appointed as co-trustees or agents of the Trustee pursuant to
this Section shall not be required to meet the criteria of Section 6.9 of
this Indenture, or any other criteria, in order to serve as such.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and, where appropriate, their respective corporate seals
to be hereunto affixed and attested, all as of March 31, 1996.
[CORPORATE SEAL] TRANS WORLD GAMING CORP.
Attest: By:
-------------------------------------
By: By:
------------------------ -------------------------------------
[CORPORATE SEAL] TRANS WORLD GAMING OF LOUISIANA, INC.
Attest: By:
-------------------------------------
By: By:
------------------------ -------------------------------------
U.S. TRUST COMPANY OF TEXAS, N.A. , as Trustee
By:
--------------------------------
--------------------------------
(Name and Title)
EXHIBIT D
===========================================================================
TRANS WORLD GAMING CORP.
TWG INTERNATIONAL U.S. CORPORATION
TWG FINANCE CORP.
Issuers
and
U.S. TRUST COMPANY OF TEXAS, N.A., as Trustee
INDENTURE
Dated as of March 31, 1998
--------------------
$17,000,000
12% Senior Secured Notes Due March 17, 2005
===========================================================================
TABLE OF CONTENTS
PAGE
ARTICLE 1 DEFINITIONS
SECTION 1.1 Certain Terms Defined
ARTICLE 2 ISSUE, EXECUTION, FORM AND REGISTRATION OF SECURITIES
SECTION 2.1 Authentication and Delivery of Securities
SECTION 2.2 Execution of Securities
SECTION 2.3 Certificate of Authentication
SECTION 2.4 Form, Denomination and Date of Securities; Payments of
Interest in Cash
SECTION 2.5 Registration, Transfer and Exchange
SECTION 2.6 Mutilated, Defaced, Destroyed, Lost and Stolen
Securities
SECTION 2.7 Cancellation of Securities; Disposition Thereof
SECTION 2.8 Temporary Securities
ARTICLE 3 COVENANTS OF THE ISSUER
SECTION 3.1 Payment of Principal and Interest
SECTION 3.2 Offices for Payments, Etc.
SECTION 3.3 Appointment To Fill a Vacancy in Office of Trustee
SECTION 3.4 Paying Agents
SECTION 3.5 Officers' Certificates as to Default and as to
Compliance
SECTION 3.6 Mandatory Prepayment
SECTION 3.7 Maintenance of Properties, Etc.
SECTION 3.8 Indebtedness
SECTION 3.9 Books
SECTION 3.10 Limitation on Incurrence of Additional Indebtedness
SECTION 3.11 Restrictions on Issuance of Stock
SECTION 3.12 Restrictions on Asset Sales
SECTION 3.13 Distributions
SECTION 3.14 Limitation on Dividends and Other Payment Restrictions
Effecting Subsidiaries
SECTION 3.15 Limitation on Investments
SECTION 3.16 Limitation on Liens
SECTION 3.17 Transactions with Affiliates
SECTION 3.18 Change of Control
SECTION 3.19 Line of Business
SECTION 3.20 Payments for Consent
SECTION 3.21 Limitations on Sale and Leaseback Transactions
SECTION 3.22 Waiver of Stay, Extension or Usury Laws
SECTION 3.23 Non USA Operations
SECTION 3.24 Cost of Operations
SECTION 3.25 Funding Documents
SECTION 3.26 Payments
SECTION 3.27 No Modification of Funding Note
SECTION 3.28 Use of Proceeds
SECTION 3.29 Post Closing Cooperation
ARTICLE 4 SECURITYHOLDERS' LISTS AND REPORTS BY THE ISSUER AND
THE TRUSTEE
SECTION 4.1 Issuer To Furnish Trustee Information as to Names and
Addresses of Securityholders
SECTION 4.2 Preservation and Disclosure of Securityholders' Lists
SECTION 4.3 Reports by the Issuer
SECTION 4.4 [Reserved]
ARTICLE 5 REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT
OF DEFAULT
SECTION 5.1 Event of Default Defined; Acceleration of Maturity;
Waiver of Default
SECTION 5.2 Collection of Indebtedness by Trustee; Trustee May Prove
Indebtedness
SECTION 5.3 Application of Proceeds
SECTION 5.4 Suits for Enforcement
SECTION 5.5 Restoration of Rights on Abandonment of Proceedings
SECTION 5.6 Limitations on Suits by Securityholders
SECTION 5.7 Unconditional Right of Securityholders To Institute
Certain Suits
SECTION 5.8 Powers and Remedies Cumulative; Delay or Omission Not
Waiver of Default
SECTION 5.9 Control by Securityholders
SECTION 5.10 Waiver of Past Defaults
SECTION 5.11 Trustee to Give Notice of Default, But May Withhold in
Certain Circumstances
SECTION 5.12 Right of Court To Require Filing of Undertaking To Pay
Costs
SECTION 5.13 Excess Cash Flow
ARTICLE 6 CONCERNING THE TRUSTEE
SECTION 6.1 Duties and Responsibilities of the Trustee; During
Default; Prior to Default
SECTION 6.2 Certain Rights of the Trustee
SECTION 6.3 Trustee Not Responsible for Recitals, Disposition of
Securities or Application of Proceeds Thereof
SECTION 6.4 Trustee and Agents May Hold Securities;
Collections, Etc.
SECTION 6.5 Moneys Held by Trustee
SECTION 6.6 Compensation and Indemnification of Trustee and Its Prior
Claim
SECTION 6.7 Right of Trustee to Rely on Officers' Certificate, Etc.
SECTION 6.8 [Reserved]
SECTION 6.9 Persons Eligible for Appointment as Trustee
SECTION 6.10 Resignation and Removal; Appointment of Successor
Trustee
SECTION 6.11 Acceptance of Appointment by Successor Trustee
SECTION 6.12 Merger, Conversion, Consolidation or Succession to
Business of Trustee
SECTION 6.13 Preferential Collection of Claims Against the Issuer
SECTION 6.14 Intervention in Litigation
SECTION 6.15 Appointment of Co- Trustees
SECTION 6.16 Effect of Death, Incapacity, resignation or Removal of
Co-Trustee or Separate Trustee
ARTICLE 7 CONCERNING THE SECURITYHOLDERS
SECTION 7.1 Evidence of Action Taken by Securityholders
SECTION 7.2 Proof of Execution of Instruments and of Holding of
Securities
SECTION 7.3 Holders To Be Treated as Owners
SECTION 7.4 Securities Owned by Issuer Deemed Not Outstanding
SECTION 7.5 Right of Revocation of Action Taken
ARTICLE 8 SUPPLEMENTAL INDENTURES
SECTION 8.1 Supplemental Indentures Without Consent of
Securityholders
SECTION 8.2 Supplemental Indentures with Consent of Securityholders
SECTION 8.3 Effect of Supplemental Indenture
SECTION 8.4 Documents To Be Given to Trustee
SECTION 8.5 Notation on Securities in Respect of Supplemental
Indentures
ARTICLE 9 NO CONSOLIDATION, MERGER, SALE OR CONVEYANCE
ARTICLE 10 SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS
SECTION 10.1 Satisfaction and Discharge of Indenture
SECTION 10.2 Defeasance and Discharge of Indenture
SECTION 10.3 Defeasance of Certain Obligations
SECTION 10.4 Application by Trustee of Funds Deposited for Payment of
Securities
SECTION 10.5 Repayment of Moneys Held by Paying Agent
SECTION 10.6 Return of Moneys Held by Trustee and Paying Agent
Unclaimed for One Year
SECTION 10.7 Reinstatement
ARTICLE 11 MISCELLANEOUS PROVISIONS
SECTION 11.1 Incorporators, Shareholders, Officers and Directors of
Issuer Exempt from Individual Liability
SECTION 11.2 Provisions of Indenture for the Sole Benefit of Parties
and Securityholders
SECTION 11.3 Successors and Assigns of Issuer Bound by Indenture
SECTION 11.4 Notices and Demands on Issuer, Trustee and
Securityholders
SECTION 11.5 Compliance Certificates and Opinions of Counsel;
Statements To Be Contained Therein
SECTION 11.6 Payments Due on Saturdays, Sundays and Holidays
SECTION 11.7 [Reserved]
SECTION 11.8 Applicable Law; New York Law To Govern
SECTION 11.9 Counterparts
SECTION 11.10 Effect of Headings
SECTION 11.11 Waiver of Usury Laws
SECTION 11.12 Value of Securities
ARTICLE 12 REDEMPTION OF SECURITIES
SECTION 12.1 Right of Optional Redemption; Prices
SECTION 12.2 Notice of Redemption
SECTION 12.3 Payment of Securities Called for Redemption
SECTION 12.4 Exclusion of Certain Securities from Eligibility for
Selection for Redemption
ARTICLE 13 RIGHT OF FIRST REFUSAL
SECTION 13.1 Option
SECTION 13.2 Terms
SECTION 13.3 Expiration of Right of First Refusal
SECTION 13.4 Enforcement of Rights
ARTICLE 14 SECURITY
SECTION 14.1 Pledge and Security Interest
SECTION 14.2 Security for Obligation
SECTION 14.3 Perfection of Security Interest
SECTION 14.4 No Disposition of Collateral; Release of Lien of
Indenture
SECTION 14.5 Other Liens
SECTION 14.6 Trustee Appointed Attorney-in-Fact
SECTION 14.7 Return of Collateral
SECTION 14.8 Default Remedies
SECTION 14.9 Proceeds
SECTION 14.10 Deficiency
SECTION 14.11 Trustee's Duties
SECTION 14.12 Special Trustee Powers Due to Environmental Conditions
SIGNATURES
THIS INDENTURE, dated as of March 31, 1998 by and among Trans World
Gaming Corp. ("TWG"), a Nevada corporation, and its wholly-owned
subsidiary, TWG International U.S. Corporation ("TWG International"), a
Nevada corporation and TWG Finance Corp., a Delaware corporation ("TWG
Finance", which together with TWG International and TWG are referred to
collectively herein as the "Issuer"), and U.S. Trust Company of Texas,
N.A., a national banking association, not in its individual capacity but
solely as trustee (the "Trustee"),
W I T N E S S E T H :
WHEREAS, the Issuer has duly authorized the issue of its 12% Senior
Secured Notes Due March 17, 2005 (the "Securities"); and
WHEREAS, the Securities and the Trustee's certificate of
authentication shall be in substantially the following form:
[FORM OF FACE OF SECURITY]
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR ANY STATE SECURITIES ACT, AND MAY NOT BE TRANSFERRED WITHOUT
REGISTRATION UNDER SUCH ACTS OR AN OPINION OF COUNSEL SATISFACTORY TO THE
ISSUER THAT SUCH REGISTRATION IS NOT REQUIRED.
No. $
TRANS WORLD GAMING CORP.
TWG INTERNATIONAL U.S. CORPORATION
TWG FINANCE CORP.
12% Senior Secured Notes Due March 17, 2005
Date: March 1998
New York, New York
Trans World Gaming Corp. ("TWG"), a Nevada corporation, and its wholly-
owned subsidiaries, TWG International U.S. Corporation ("TWG
International"), a Nevada corporation and TWG Finance Corp., a Delaware
corporation ("TWG Finance", which together with TWG International and TWG
are referred to collectively herein as the "Issuer"), for value received
hereby promise to pay jointly and severally to , or
registered assigns, the principal sum of Dollars at the Issuer's
office or agency for said purpose, on March 17, 2005, in 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, and to pay
interest semi-annually on March 17 and September 17 (each an "Interest
Payment Date") of each year, commencing with September 17, 1998, on said
principal sum in like coin or currency at 12% simple interest per annum at
said office or agency from the most recent Interest Payment Date to which
interest on the Securities has been paid or duly provided for unless the
date hereof is a date to which interest on the Securities is paid or duly
provided for, in which case from the date of this Security, or unless no
interest has been paid or duly provided for on the Securities, in which
case from the date of issuance. To the extent lawful, the Issuer promises
to pay interest on any interest payment due but unpaid on such unpaid
principal amount at a rate of 17% per annum compounded semi-annually.
The interest so payable on any Interest Payment Date will, except as
otherwise provided in the Indenture referred to on the reverse hereof, be
paid to the Person in whose name this Security is registered at the close
of business on March 17 or September 17 whether or not a Business Day (each
an "Interest Record Date") next preceding such Interest Payment Date,
whether or not such day is a Business Day; PROVIDED that interest may be
paid, at the option of the Issuer, by mailing a check therefor payable on
the Interest Payment Date to the registered Holder entitled thereto at his
last address as it appears on the Security register.
If interest on the Securities is in default, the Trustee shall, prior
to the payment of interest, establish a special record date (the "Special
Record Date") for such payment, which Special Record Date shall be not more
than fifteen (15) nor less than ten (10) days prior to the date of the
proposed payment. Payment of such defaulted interest shall then be made by
check, as provided herein and in the Indenture, mailed or remitted to the
persons in whose names the Securities are registered on the Special Record
Date at the addresses or accounts of such persons shown on the security
register.
Interest on this Security will be calculated on the basis of a 360-day
year, consisting of twelve 30-day months.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof which further provisions shall for all
purposes have the same effect as if set forth in this place.
IN WITNESS WHEREOF, each Issuer has caused this instrument to be duly
executed under its corporate seal.
[Seal] TRANS WORLD GAMING CORP.
By:
------------------------------------
Its:
------------------------------------
[Seal] TWG INTERNATIONAL U.S. CORPORATION
By:
------------------------------------
Its:
------------------------------------
[Seal] TWG FINANCE CORP.
By:
------------------------------------
Its:
------------------------------------
[FORM OF REVERSE OF SECURITY]
TRANS WORLD GAMING CORP.
TWG INTERNATIONAL U.S. CORPORATION
TWG FINANCE CORP.
12% Senior Secured Notes Due March 17, 2005
This Security is one of a duly authorized issue of debt securities of
the Issuer, with an aggregate principal amount of $17,000,000, issued
pursuant to an indenture dated as of March 31, 1998, (the "Indenture"),
duly executed and delivered by the Issuer to U.S. Trust Company of Texas,
N.A., as Trustee (herein called the "Trustee"). Reference is hereby made to
the Indenture and all indentures supplemental thereto for a description of
the rights, limitations of rights, obligations, duties and immunities
thereunder of the Trustee, the Issuer and the Holders (the words "Holders"
or "Holder" meaning the registered holders or registered holder) of the
Securities. The Securities are secured obligations of the Issuer.
Capitalized terms used in this Security and not defined herein shall have
the meaning set forth in the Indenture.
In case an Event of Default (as defined in the Indenture) shall have
occurred and be continuing, the principal and interest in respect of all of
the Securities then outstanding may be declared due and payable in the
manner and with the effect, and subject to the conditions, provided in the
Indenture. The Indenture provides that the Holders of 50% in aggregate
principal amount of the Securities then outstanding, by notice to the
Trustee, may on behalf of the Holders of all of the Securities, waive any
existing Default or Event of Default and its consequences under the
Indenture except a continuing Default or Event of Default in the payment of
interest or premium on, or the principal of, the Securities or in respect
of a covenant or provision that cannot be modified or amended without the
consent of all Holders of the Securities. Any such consent or waiver by
the Holder of this Security (unless revoked as provided in the Indenture)
shall be conclusive and binding upon such Holder and upon all future
Holders and owners of this Security and any Security which may be issued in
exchange or substitution therefor, whether or not any notation thereof is
made upon this Security or such other Securities.
The Indenture permits the Issuer and the Trustee, with the consent of
the Holders of not less than 50% in aggregate principal amount of the
Securities at the time outstanding, evidenced as in the Indenture provided,
to execute supplemental indentures adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of any
supplemental indenture or modifying in any manner the rights of the Holders
of the Securities; PROVIDED that no such supplemental indenture shall,
without the consent of each Holder affected thereby (with respect to any
Securities held by a non-consenting Securityholder) (i) reduce the
principal amount of Securities whose Holders must consent to an amendment,
supplement or waiver, (ii) reduce the principal of or change the fixed
maturity of any Security or alter the provisions with respect to the
redemption of the Securities, (iii) reduce the rate of or change the time
for payment of interest on any Security, (iv) waive a Default or Event of
Default in the payment of principal of or premium, if any, or interest on
the Securities (except a rescission of acceleration of the Securities by
the Holders of at least 50% in aggregate principal amount of the then
outstanding Securities and a waiver of the payment default that resulted
from such acceleration), (v) make any Security payable in money other than
that stated in the Securities, (vi) make any change in the provisions of
the Indenture relating to waivers of past Defaults or the rights of Holders
of Securities to receive payments of principal of or interest on the
Securities, (vii) waive a redemption payment with respect to any Security
or (viii) make any change in the foregoing amendment and waiver provisions.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligations of the Issuer,
which are absolute and unconditional, to pay the principal of and the
interest on this Security at the place, times, and rate, and in the
currency, herein prescribed.
The Securities are issuable only as registered Securities without
coupons.
At the office or agency of the Issuer referred to on the face hereof
and in the manner and subject to the limitations provided in the Indenture,
Securities may be exchanged for a like aggregate principal amount of
Securities of other authorized denominations.
Upon due presentment for registration of transfer of this Security at
the above-mentioned office or agency of the Issuer, a new Security or
Securities of authorized denominations, for a like aggregate principal
amount, will be issued to the transferee as provided in the Indenture. No
service charge shall be made for any such transfer, but the Issuer may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto.
As provided in the Indenture, TWG International shall be required to
make mandatory prepayments equal to Excess Cash Flow until Obligations are
fully defeased pursuant to Section 10.2 or until one hundred percent (100%)
of the principal amount of the Securities, together with accrued and unpaid
interest, is paid. The Securities may also be redeemed by the Issuer, in
whole, or in part, upon mailing a notice of such redemption not less than
30 nor more than 60 days prior to the date fixed for redemption to the
Holders of Securities to be redeemed, at a redemption price equal to 100%
of the principal amount of the Securities redeemed, together with accrued
and unpaid interest to the date fixed for redemption. If there is a Change
of Control (as defined in the Indenture), the Issuer shall be required to
offer to purchase all outstanding Securities at a purchase price equal to
100 % of the principal amount thereof, plus accrued unpaid interest, if
any, through the date of such purchase.
Subject to payment by the Issuer of a sum sufficient to pay the amount
due upon redemption, interest on this Security shall cease to accrue upon
the date duly fixed for redemption of this Security.
The Issuer, the Trustee and any authorized agent of the Issuer or the
Trustee may deem and treat the registered Holder hereof as the absolute
owner of this Security (whether or not this Security shall be overdue and
notwithstanding any notation of ownership or other writing hereon made by
anyone other than the Issuer or the Trustee or any authorized agent of the
Issuer or the Trustee), for the purpose of receiving payment of, or on
account of, the principal hereof and premium, if any, and subject to the
provisions on the face hereof, interest hereon and for all other purposes,
and neither the Issuer nor the Trustee nor any authorized agent of the
Issuer or the Trustee shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of, premium,
if any, or the interest on this Security, for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the Indenture or
any indenture supplemental thereto, against any incorporator, shareholder,
officer, employee or director, as such, past, present or future, of the
Issuer or Trustee or of any successor corporation, either directly or
through the Issuer or any successor corporation, whether by virtue of any
constitution, statute or rule of law or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the
acceptance hereof and as part of the consideration for the issue hereof,
expressly waived and released.
Customary abbreviations may be used in the name of a Securityholder 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).
This Security shall not be valid or obligatory until the certificate
of authentication hereon shall have been duly signed by an authorized
signatory of the Trustee acting under the Indenture.
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Securities described in the within-mentioned
Indenture.
Dated:
U.S. Trust Company of Texas, N.A. , as
Trustee
By:
-----------------------------------
Authorized Signatory
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to:
- ---------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint agent to
----------------------------------------
transfer this Security on the books of Issuer. The agent may substitute
another to act for him.
If you want the Note certificate made out in another person's name, fill in
the form below:
- ---------------------------------------------------------------------------
(insert other person's soc. sec. or tax I.D. no.)
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
(Print or type other person's name, address and zip code)
Date:
-------------------------- Your Signature
--------------------------------------
Signature Guaranty
--------------------------------------
Notice: Signature must be guaranteed by
an "Eligible Guarantor Institution" as
defined by Securities Exchange Act Rule
17Ad-15.
(Sign exactly as your name appears on the other side of this Security)
NOW, THEREFORE:
In consideration of the premises and the purchases of the Securities
by the Holders thereof, the Issuer and the Trustee mutually covenant and
agree for the equal and proportionate benefit of the respective Holders
from time to time of the Securities as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1 CERTAIN TERMS DEFINED. The following terms (except as
otherwise expressly provided or unless the context otherwise clearly
requires) for all purposes of this Indenture and of any indenture
supplemental hereto shall have the respective meanings specified in this
Section 1.1. All other terms used in this Indenture which are defined in
the Trust Indenture Act of 1939, as amended, or the definitions of which in
the Securities Act of 1933, as amended, are referred to in the Trust
Indenture Act of 1939 (except as herein otherwise expressly provided or
unless the context otherwise requires) have the meanings assigned to such
terms in said Trust Indenture Act and in said Securities Act as in force at
the date of this Indenture. The words "HEREIN," "HEREOF" and "HEREUNDER"
and other words of similar import refer to this Indenture as a whole and
not to any particular Article, Section or other subdivision. The terms
defined in this Article include the plural as well as the singular.
"ACCELERATION DATE" has the meaning specified in Section 5.1.
"ACCELERATION NOTICE" has the meaning specified in Section 5.1.
"ACQUIRED INDEBTEDNESS" means, Indebtedness of an entity, which entity
is acquired by TWG International or any of its Subsidiaries after the
initial issuance of the Securities.
"AFFILIATE" means any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with any of the
Issuers, including, without limitation, any senior officer, directors or
Key Employees of any of the Issuers. For purposes of this definition, the
term ''control'' means 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, PROVIDED, that,
with respect to ownership interests in the Issuer and its Subsidiaries a
beneficial owner of 5% or more of the total voting power normally entitled
to vote in the election of directors, managers or trustees, as applicable,
shall for such purposes be deemed to constitute control. Affiliate shall
not include the initial Securityholders.
"AFFILIATE TRANSACTION" has the meaning specified in Section 3.17.
"APPLICANTS" has the meaning specified in Section 4.2.
"ASSET SALE" means the sale, lease, conveyance, disposition or other
transfer (including, without limitation, by eminent domain, condemnation or
similar governmental proceeding) of any property or assets of TWG
International or any of its direct or indirect Subsidiaries (including a
sale and leaseback transaction or the issuance, sale or transfer of Capital
Stock of a direct or indirect Subsidiary except an acquisition of such
Capital Stock by TWG International or its direct or indirect
Subsidiaries)).
"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 obtained by multiplying (x) the amount of each then
remaining installment, sinking fund, serial maturity or other required
payments of principal, including payment at final maturity in respect
thereof, by (y) the number of years (calculated to the nearest one-twelfth)
that will elapse between such date and the making of such payment, by (ii)
the then outstanding principal amount or liquidation preference, as
applicable, of such security or instrument, as the case may be.
"BOARD OF DIRECTORS" means the Board of Directors of any Issuer, as
the case may be, or any committee of such Board duly authorized to act
hereunder.
"BUSINESS DAY" means a day which in the city (or in any of the cities,
if more than one) where amounts are payable in respect of the Securities,
as specified on the face of the form of Security recited above, or in the
city in which either the Corporate Trust Office of the Trustee or
Operations office is located, is neither a legal holiday nor a day on which
banking institutions are required or authorized by law or regulation to
close.
''CAPITALIZED LEASE OBLIGATION'' means rental obligations under a
lease that are required to be capitalized for financial reporting purposes
in accordance with GAAP, and the amount of Indebtedness represented by such
obligations shall be the capitalized amount of such obligations, as
determined in accordance with GAAP.
"CAPITAL EXPENDITURES" shall mean, for any period, expenditures
(including the aggregate amount of capital lease obligations incurred
during such period) made by TWG International or any of its direct or
indirect Subsidiaries to acquire or to construct fixed assets and equipment
(including, renewals, improvements and replacements, but excluding repairs
in the ordinary course) during such period computed in accordance with
GAAP.
"CAPITAL STOCK" means any and all shares, interests (including
ownership interests arising pursuant to association agreements under the
laws of the Czech Republic), participations, rights or other equivalents
(however designated) or corporate stock, whether common or preferred,
including, without limitation, partnership interests, membership interests
in limited liability companies and an ownership interest in joint stock
companies
''CASH EQUIVALENT'' means (i) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the
United States of America is pledged in support thereof) or (ii) time
deposits and certificates of deposit and commercial paper issued by the
parent corporation of any domestic commercial bank of recognized standing
having capital and surplus in excess of $350 million 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.
"CHANGE OF CONTROL" means the occurrence of any of the following
(unless consented to by not less than the holders of 50% of the aggregate
principal amount of the Securities then Outstanding) (i) any sale,
transfer, conveyance or other disposition in one or a series of related
transactions, of all or substantially all of the assets of TWG
International and its Subsidiaries taken as a whole or of TWG or TWG
Finance to any "person" (as defined in Section 13(d)(3) of the Exchange
Act) or "group" (as defined in Section 13(d)(3)) of the Exchange Act); (ii)
the acquisition of beneficial ownership, or the right to acquire beneficial
ownership pursuant to warrants, options or other rights to acquire, by any
"person" or "group" (each as defined above) of more than 35% of the Capital
Stock of TWG (other than Value Partners, Ltd. or Andrew Tottenham and/or an
entity controlled by him); (iii) the adoption of a plan for the liquidation
or dissolution of TWG, TWG Finance or TWG International; or (iv) TWG, TWG
Finance or TWG International consolidates with, or merges with or into,
another "person" (as defined above).
"CHANGE OF CONTROL OFFER" has the meaning specified in Section 3.18.
"CHANGE OF CONTROL PAYMENT" has the meaning specified in Section 3.18.
"CHANGE OF CONTROL PAYMENT DATE" has the meaning specified in Section
3.18.
"COLLATERAL" has the meaning specified in Section 14.1.
"COLLATERAL AGREEMENTS" means any agreements including those executed
by TWG and/or such other Persons necessary to create a Security Interest in
favor of the Trustee and the Security holders in the Collateral.
"COMMISSION" means the U.S. Securities and Exchange Commission.
"CONSOLIDATED" means the consolidated results of TWG International and
its Subsidiaries as determined in accordance with GAAP.
''CONSOLIDATED COVERAGE RATIO'' of TWG International on any date of
determination (the ''Transaction Date'') means the ratio, on a PRO FORMA
basis, of (a) the aggregate amount of Consolidated EBITDA of TWG
International attributable to continuing operations and businesses
(exclusive of amounts attributable to operations and businesses permanently
discontinued or disposed of) for the Reference Period to (b) the aggregate
Consolidated Fixed Charges of TWG International (exclusive of amounts
attributable to operations and businesses permanently discontinued or
disposed of, but only to the extent that the obligations giving rise to
such Consolidated Fixed Charges would no longer be obligations contributing
to TWG International's Consolidated Fixed Charges subsequent to the
Transaction Date) during the Reference Period; PROVIDED that for purposes
of such calculation, (i) acquisitions which occurred during the Reference
Period or subsequent to the Reference Period and on or prior to the
Transaction Date shall be assumed to have occurred on the first day of the
Reference Period, (ii) transactions giving rise to the need to calculate
the Consolidated Coverage Ratio shall be assumed to have occurred on the
first day of the Reference Period, (iii) the incurrence of any Indebtedness
during the Reference Period or subsequent to the Reference Period and on or
prior to the Transaction Date (and the application of the proceeds
therefrom to the extent used to refinance or retire other Indebtedness)
shall be assumed to have occurred on the first day of such Reference
Period, and (iv) the Consolidated Fixed Charges of TWG International
attributable to interest on any Indebtedness bearing a floating interest
rate shall be computed on a PRO FORMA basis as if the average rate in
effect from the beginning of the Reference Period to the Transaction Date
had been the applicable rate for the entire period.
''CONSOLIDATED EBITDA'' means, with respect to TWG International, for
any period, the Consolidated Net Income of TWG International for such
period adjusted to add thereto (to the extent deducted from net revenues in
determining Consolidated Net Income), without duplication, the sum of (i)
Consolidated income tax expense (other than corporate income taxes paid in
the Czech Republic), (ii) Consolidated depreciation and amortization
expense [and provided further that amortization of pre-opening expenses for
the Czech Casinos may only be added thereto in an aggregate amount up to
$2,000,000 (including all such amounts added in all previous periods) and
(iii) Consolidated Fixed Charges.
''CONSOLIDATED FIXED CHARGES'' of TWG International means, for any
period, the aggregate amount (without duplication and determined in each
case in accordance with GAAP) of interest (whether fixed or contingent)
expensed or capitalized, paid, accrued or scheduled to be paid or accrued
(including, in accordance with the following sentence, interest
attributable to Capitalized Lease Obligations) of TWG International and its
Subsidiaries during such period, including (i) original issue discount and
non-cash interest payments or accruals on any Indebtedness, (ii) the
interest portion of all deferred payment obligations, and (iii) all
commissions, discounts and other fees and charges owed with respect to
bankers' acceptances and letters of credit, in each case to the extent
attributable to such period. For purposes of this definition, (x) interest
on a Capitalized Lease Obligation shall be deemed to accrue at an interest
rate reasonably determined by TWG International 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 of TWG International or a Subsidiary of TWG International of an
obligation of another Person shall be deemed to be the interest expense
attributable to the Indebtedness guaranteed.
''CONSOLIDATED NET INCOME'' means, with respect to TWG International
for any period, the net income (or loss) of TWG International and its
Subsidiaries (determined on a consolidated basis in accordance with GAAP)
for such period, adjusted to exclude (only to the extent included in
computing such net income (or loss) and without duplication): (a) all gains
(but not losses) which are either extraordinary (as determined in
accordance with GAAP) or are nonrecurring (including any gain from the sale
or other disposition of assets outside the ordinary course of business),
(b) the net income or loss of any Person acquired in a pooling of interests
transaction for any period prior to the date of such acquisition, and (c)
the net income, if positive, of any of TWG International's Subsidiaries to
the extent that the declaration or payment of dividends or similar
distributions is not at the time permitted by operation of the terms of its
charter or bylaws or any other agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to such
Subsidiary.
"CORPORATE TRUST OFFICE" means the office of the Trustee at which the
corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, at the date as of which this
Indenture is dated, located at 2001 Ross Avenue, Dallas, TX 75201-2936,
Attention: Corporate Trust Department.
"CYPRUS ENTITY" means an entity to be formed in Cyprus by TWG
International as a direct Subsidiary.
"DEFAULT" means any event that is or with the passage of time or the
giving of notice or both would be an Event of Default.
"DEFAULT RATE" means 17% per annum compounded semiannually, subject to
the Maximum Rate.
"EVENT OF DEFAULT" means any event or condition specified as such in
Section 5.1 which shall have continued for the period of time, if any,
therein designated.
"EXCESS CASH FLOW" means, for any period, TWG International's
consolidated net income for such period (as determined by GAAP) adjusted as
follows (in each case without duplication): plus (i) non-cash items which
decrease consolidated net income, including, without limitation,
depreciation expense and amortization expense (including amortization of
deferred financing costs and original issue discounts), but only to the
extent included in computing such consolidated net income, plus (ii)
Undistributed Excess Cash Flow, minus (iii) the amount of Capital
Expenditures actually paid during such period, not to exceed $100,000 in
any Fiscal Year (provided that the amount of Capital Expenditures permitted
for the Fiscal Year in which the issuance of the Securities occurs shall be
pro rated based on the number of days remaining in such Fiscal Year from
and after the Issue Date), minus (iv) the amount necessary to establish or
maintain a working capital reserve, provided that such amount to be
subtracted from consolidated net income from operations shall not exceed
$100,000 in any Fiscal Year (provided further that such amount retained for
working capital purposes for the Fiscal Year in which the issuance of the
Securities occurs shall be pro rated based on the number of days remaining
in such Fiscal Year from and after the Issue Date), minus (v) the amount
necessary to establish or maintain a reserve for acquisitions of assets or
capital stock (or other similar ownership interest) of local casinos
located outside the United States and operations relating thereto, provided
that such amount to be subtracted from consolidated net income from
operations shall not exceed $1,500,000 (less the amount by which the Notes
sold in the offer hereby exceeds $16,000,000) during the period from the
Issue Date through the date all principal, together with all accrued and
unpaid interest, is paid in full or is defeased pursuant to Section 10.2.
"EXCESS PROCEEDS" shall have the meaning specified in Section 3.12.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"FISCAL YEAR" means the annual accounting period adopted by each
Issuer, which shall initially be the annual accounting period ending
December 31 of each year.
"FUNDING COLLATERAL AGREEMENTS" means Collateral Agreements, as
defined in the Funding Note.
"FUNDING NOTE" means that certain $17,000,000 12% Senior Secured Note
Due March 17, 2005 and Indenture by and between TWG International, as
issuer and U.S. Trust Company of Texas, N.A., a Trustee, in the form set
forth in the Funding Note Indenture.
"FUNDING NOTE INDENTURE" means that Indenture dated as of the date
hereof by and between TWG International, as issuer, and U.S. Trust Company
of Texas, N.A.,as trustee.
"GAAP" means United States of America generally accepted accounting
principles set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants
and statements and pronouncements of the Financial Accounting Standards
Board or in such other statements by such other entity as may be approved
by a significant segment of the accounting profession, as the same are in
effect on the Issue Date.
"GUARANTEE" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit
and reimbursement agreements in respect thereof), of all or any part of any
Indebtedness, and "Guaranteed" has a correlative meaning.
"HOLDER," "SECURITYHOLDER" or any other similar term means the
registered holder of any Security.
"INCUR" OR "INCURRED" means to, directly or indirectly, create, incur,
issue, assume, guaranty or otherwise become liable with respect to.
"INCURRENCE DATE" has the meaning specified in Section 3.10.
"INDEBTEDNESS" means, with respect to any Person, without duplication,
any indebtedness of such Person, whether or not contingent, in respect of
borrowed money or evidenced by bonds, notes, debentures or similar
instruments or letters of credit (or reimbursement agreements in respect
thereof) or representing the balance deferred and unpaid of the purchase
price of any property (including pursuant to capital leases), except any
such balance that constitutes an accrued expense, trade payable or winnings
payable, if and to the extent any of the foregoing would appear as a
liability upon a balance sheet of such Person prepared in accordance with
GAAP, and also includes, to the extent not otherwise included, the
Guarantee of items that would be included within this definition and all
Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured
by) any Lien on any asset or property (including, without limitation,
leasehold interests and any other tangible or intangible property) of such
Person, whether or not such Indebtedness is assumed by such Person or is
not otherwise such Person's legal liability, PROVIDED that if the
obligations so secured have not been assumed in full by such Person or are
otherwise not such Person's legal liability in full, the amount of such
Indebtedness for the purposes of this definition shall be limited to the
lesser of the amount of such Indebtedness secured by such Lien or the fair
market value of the assets or property securing such Lien. Notwithstanding
the foregoing, the term "Indebtedness" shall not include deferred
compensation arrangements that are not evidenced by bonds, notes,
debentures or similar instruments.
"INDENTURE" means this instrument as originally executed and delivered
or, if amended or supplemented as herein provided, as so amended or
supplemented.
"INTEREST PAYMENT DATE" has the meaning specified in first paragraph
of Form of Security herein.
"INTEREST RECORD DATE" has the meaning specified in Section 2.4.
''INVESTMENT'' by any Person in any other Person means (without
duplication) (a) the acquisition (whether by purchase, merger,
consolidation or otherwise) 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, gaming credits or
deposits arising in the ordinary course of business); (c) 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; and (d) the making of any capital contribution by such Person to
such other Person.
"ISSUE DATE" means the date on which the Securities are originally
issued under this Indenture.
"ISSUER" means Trans World Gaming Corp., a Nevada corporation, and its
wholly-owned subsidiaries, TWG International U.S. Corporation, a Nevada
corporation and TWG Finance Corp., a Delaware corporation, and, subject to
Article Nine, their successors and assigns, and to the extent required by
Sections 310 to 317 of the Trust Indenture Act of 1939, any other obligor
on the Securities.
"JUNIOR INDEBTEDNESS" means any Indebtedness of the Issuer, whether
outstanding at the date hereof or incurred thereafter, that is subordinate
in right of payment, either pursuant to its terms or by operation of law,
to the Securities, which Indebtedness provides for a fixed date when the
principal thereof (disregarding any mandatory redemptions or pre-payments
required in
respect thereof) is due and payable.
"KEY EMPLOYEE" means persons such as casino managers or sales and
marketing managers, who are not executive officers but who make or are
expected to make significant contributions to the business of the Issuer.
"LIEN" means, with respect to any asset, any mortgage, including
without limitation any multiple indebtedness mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such
asset, whether or not filed, recorded or otherwise perfected under
applicable law (including any conditional sale or other title retention
agreement, any lease in the nature thereof, any option or other agreement
to sell or give a security interest in and any filing of or agreement to
give any financing statement under the Uniform Commercial Code (or
equivalent statutes) of any jurisdiction).
"MAXIMUM RATE" has the meanings specified in Section 3.1
"NET CASH PROCEEDS" means the aggregate cash proceeds received by TWG
International or any of its Subsidiaries in respect of any Asset Sale, net
of the direct costs relating to such Asset Sale (including, without
limitation, title insurance fees and premiums, filing and recordation fees,
permit fees, landlord consent payments and other amounts required to be
paid to transfer the assets that are the subject of such Asset Sale, sales
commissions and legal, accounting and investment banking fees incurred in
respect of such Asset Sale) and any relocation expenses incurred as a
result thereof, taxes paid or payable as a result thereof (after taking
into account any available tax credits or deductions and any tax sharing
arrangements), and amounts required to be applied to the repayment of
Indebtedness secured by a Lien on the asset or assets that are the subject
of such Asset Sale; provided further, however, that if the agreement or
instrument governing such Asset Sale requires the transferor to maintain a
portion of the purchase price in escrow (whether as reserve for adjustment
in respect of the purchase price or otherwise) or to indemnify the
transferee for specified liabilities in a maximum stated amount for a
stated period of time, the portion of the cash consideration that is
actually placed in escrow or segregated and set aside by the transferor for
such indemnification obligation shall not be deemed to be Net Cash Proceeds
until the escrow terminates or the transferor ceases to segregate and set
aside such funds, in whole or in part, and then only to the extent of the
proceeds released from escrow to the transferor or that are no longer
segregated and set aside by the transferor.
"OBLIGATIONS" has the meaning specified in Section 14.2.
"OFFICERS' CERTIFICATE" means a certificate signed by the Chairman of
the Board of Directors or the President or any Vice President (whether or
not designated by a number or numbers or a word or words added before or
after the title "Vice President") and by the Treasurer or the Secretary or
any Assistant Treasurer or Secretary of the Issuer and delivered to the
Trustee. Each such certificate shall include the statements provided for
in Section 11.5.
"OPERATIONS OFFICE" means with respect to the Trustee the office
maintained by the Trustee or an affiliate thereof for the payment of
interest and principal on the Securities.
"OPINION OF COUNSEL" means an opinion in writing signed by legal
counsel who may be an employee of or counsel to the Issuer or who may be
other counsel satisfactory to the Trustee. Each such opinion shall include
the statements provided for in Section 11.5, if and to the extent required
hereby.
"OUTSTANDING," when used with reference to Securities, means, subject
to the provisions of Sections 6.8 and 7.4, as of any particular time, all
Securities authenticated and delivered by the Trustee under this Indenture,
except:
(a) Securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(b) Securities, or portions thereof, for the payment or redemption
(i) of which moneys in the necessary amount shall have been deposited in
trust with the Trustee or with any paying agent (other than the Issuer) or
shall have been set aside, segregated and held in trust by the Issuer (if
the Issuer shall act as paying agent) or (ii) of which moneys and/or
Government Securities as contemplated by Section 10.2 in the necessary
amount have been theretofore deposited with the Trustee (or another trustee
satisfying the requirements of Section 6.9) in trust for the Holders of
such Securities in accordance with Section 10.2 and the conditions set
forth therein have been satisfied; PROVIDED that if such Securities are to
be redeemed prior to the maturity thereof, notice of such redemption shall
have been given as herein provided, or provision satisfactory to the
Trustee shall have been made for giving such notice; and
(c) Securities in substitution for which other Securities shall have
been authenticated and delivered, or which shall have been paid, pursuant
to the terms of Section 2.6 (unless proof satisfactory to the Trustee is
presented that any of such Securities is held by a Person in whose hands
such Security is a legal, valid and binding obligation of the Issuer).
"PAYMENT DEFAULT" has the meaning specified in Section 5.1.
"PERMITTED INVESTMENT" means (a) any Investment in a Cash Equivalent,
and (b) an aggregate amount not to exceed $1,500,000 for the period
commencing on the Issue Date and concluding on the date one hundred percent
(100%) of all the principal amount of the Securities, together with accrued
and unpaid interest thereon, is paid in full or is defeased pursuant to
Section 10.2, to be used solely for the acquisition of casinos located
outside of the United States and operations related thereto; provided, that
(i) no Default or Event of Default shall have occurred and be continuing at
the time of, or would occur after giving effect on a PRO FORMA basis to,
such acquisition and (ii) such acquired assets will be subject to a first
priority Lien for the benefit of the holders of the Securities pursuant to
a security agreement in form and substance satisfactory to the holders of a
majority of the aggregate outstanding principal amount of the Securities.
"PERMITTED REFINANCING" has the meaning specified in the definition of
Refinancing Indebtedness.
"PERSON" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a
government or political subdivision or an agency or instrumentality
thereof.
"PRINCIPAL" wherever used with reference to the Securities or any
Security or any portion thereof, shall be deemed to include the face amount
of the Security plus, when appropriate, the premium, if any.
"PROPERTY" of any Person means all types of real, personal, tangible,
intangible or mixed property owned by such Person whether or not included
on the most recent consolidated balance sheet of such Person in accordance
with GAAP.
''REFERENCE PERIOD'' with regard to any Person means the four full
fiscal quarters (or such lesser period during which such Person has been in
existence) ended immediately preceding any date upon which any
determination is to be made pursuant to the terms of the Securities.
"REFINANCED INDEBTEDNESS" has the meaning specified in the definition
of Refinancing Indebtedness.
"REFINANCING INDEBTEDNESS" means Indebtedness issued in exchange for,
or the proceeds of which are used to extend, refinance, renew, replace or
refund any Indebtedness permitted to be incurred under the Indenture (the
"Refinancing Indebtedness"); provided, however, that (i) the principal
amount of such Refinancing Indebtedness shall not exceed the principal or
accreted amount (in the case of any Indebtedness issued with original issue
discount, as such) of Indebtedness so extended, refinanced, renewed,
replaced, substituted or refunded (the "Refinanced Indebtedness"), (ii) the
Refinancing Indebtedness shall rank in right of payment relative to the
Securities on terms at least as favorable to the Holders of Securities as
those contained in the documentation governing the Refinanced Indebtedness
("Permitted Refinancing"), and (iii) the Refinancing Indebtedness shall
have a Average Life to Stated Maturity and a Stated Maturity equal to or
greater than the Average Life to Stated Maturity and Stated Maturity of the
Refinanced Indebtedness
''RELATED BUSINESS'' means the local casino gaming business outside
the United States of America and other businesses necessary for, incident
to, connected with, arising out of, in support of or developed or operated
to permit or facilitate the conduct or pursuing of the local casino gaming
business outside the United States all as then customarily conducted in the
local casino gaming operations outside the United States.
"RESPONSIBLE OFFICER" when used with respect to the Trustee means any
officer in its Corporate Trust Office, or any other assistant officer of
the Trustee in its Corporate Trust Office customarily performing functions
similar to those performed by the Persons who at the time shall be such
officers, respectively, or to whom any corporate trust matter is referred
because of his or her knowledge of and familiarity with the particular
subject.
"RESTRICTED PAYMENT" means, (i) as to TWG International, (a) any
dividend declared or paid to, or any distribution made for the benefit of,
any holders of TWG International's Capital Stock, including TWG, (b) the
purchase, redemption or other acquisition or retirement for value of any
Capital Stock of TWG International from any holders thereof, including TWG,
(c) any purchase, redemption or other acquisition or retirement for value
by TWG International or any of its Subsidiaries of any Indebtedness of any
Issuer or its Subsidiaries (other than TWG International) or, prior to a
scheduled mandatory sinking fund payment date or maturity date, of any
Indebtedness of TWG International or its Subsidiaries, (ii) as to TWG, (a)
any dividend declared or paid to, or any distribution made for the benefit
of, any holders of TWG's Capital Stock as holders of such Capital Stock and
(b) the purchase, redemption or other acquisition or retirement for value
of any Capital Stock of TWG from any holders thereof as holders of such
Capital Stock; and (iii) as to TWG Finance (a) any dividend declared or
paid to, or any distribution made for the benefit of, any holders of TWG
Finance's Capital Stock as holders of such Capital Stock and (b) the
purchase, redemption or other acquisition or retirement for value of any
Capital Stock of TWG Finance from any holders thereof as holders of such
Capital Stock
"RIGHT OF FIRST REFUSAL" has the meaning specified in Section 13.1
"SECURITY" or "SECURITIES" (except as otherwise provided in Section
6.8) means any of the 12% Senior Secured Notes Due March 17, 2005
authenticated and delivered under this Indenture.
"SECURITY INTEREST" has the meaning specified in Section 14.1.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SUBSCRIPTION AGREEMENT" means the subscription agreement dated as of
March 16, 1998, by and among TWG, TWG International, TWG Finance and the
Securityholders.
"SPECIAL RECORD DATE" has the meaning specified in paragraph 3 of the
Form of Securities herein.
"STATED MATURITY" means the date which all remaining unpaid principal
and interest of Indebtedness is due and payable pursuant to the terms of
document(s) evidencing such Indebtedness.
"SUBSIDIARY" means any corporation, association or other business
entity of which more than 50% of the total voting power of shares of
Capital Stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by any
Person or one or more of the other Subsidiaries of that Person or a
combination thereof.
"TWG" has the meaning specified in the first paragraph hereof.
"TWG FINANCE" has the meaning specified in the first paragraph hereof.
"TWG INTERNATIONAL" has the meaning specified in the first paragraph
hereof.
"TRUSTEE" means the entity identified as "Trustee" in the first
paragraph hereof and, subject to the provisions of Article Six, shall also
include any successor trustee.
"UNDISTRIBUTED EXCESS CASH FLOW" means, for any period, that portion
of the aggregate Excess Cash Flow from all prior periods which has not been
previously used to repay principal amounts of the Securities.
"WHOLLY OWNED SUBSIDIARY" means, with respect to any Person, a
Subsidiary of such Person, all of the outstanding shares of Capital Stock
of which (other than directors' qualifying shares) are at the time directly
or indirectly owned by such Person or by one or more Wholly-Owned
Subsidiaries of such Person or by such Person and one or more if its Wholly-
Owned Subsidiaries.
"ZNOJMO PROPERTY" means the property by Atlantic Properties s.r.o, an
indirect Subsidiary of TWG International, upon which may be constructed a
casino in Znojmo, Czech Republic.
ARTICLE 2
ISSUE, EXECUTION, FORM AND
REGISTRATION OF SECURITIES
SECTION 2.1 AUTHENTICATION AND DELIVERY OF SECURITIES. Securities in
an aggregate principal amount not in excess of $17,000,000 (except as
otherwise provided in Section 2.6) may be executed by the Issuer and
delivered to the Trustee for authentication, and a responsible officer of
the Trustee shall thereupon authenticate and deliver said Securities to the
Issuer or upon the written order of the Issuer, signed by both (a) the
Chairman of the Board of Directors or any Vice Chairman of the Board of
Directors, or its President or any Vice President (whether or not
designated by a number or numbers or a word or words added before or after
the title "Vice President") and (b) by its Treasurer or Secretary or any
Assistant Treasurer or Secretary without any further action by the Issuer.
SECTION 2.2 EXECUTION OF SECURITIES. The Securities shall be signed
on behalf of the Issuer by both (a) its Chairman of the Board of Directors
or any Vice Chairman of the Board of Directors or its President or any Vice
President (whether or not designated by a number or numbers or a word or
words added before or after the title "Vice President") and (b) by its
Treasurer or any Assistant Treasurer or its Secretary or any Assistant
Secretary, under its
corporate seal which may, but need not, be attested. Such signatures may
be the manual or facsimile signatures of the present or any future such
officers. The seal of the Issuer may be in the form of a facsimile thereof
and may be impressed, affixed, imprinted or otherwise reproduced on the
Securities. Typographical and other minor errors or defects in any such
reproduction of the seal or any such signature shall not affect the
validity or enforceability of any Security which has been duly
authenticated and delivered by the Trustee.
In case any such officer of the Issuer who shall have signed any of
the Securities shall cease to be such officer before the Security so signed
shall be authenticated and delivered by the Trustee or disposed of by the
Issuer, such Security nevertheless may be authenticated and delivered or
disposed of as though the Person who signed such Security had not ceased to
be such officer of the Issuer; and any Security may be signed on behalf of
the Issuer by such Persons as, at the actual date of the execution of such
Security, shall be the proper officers of the Issuer, although at the date
of the execution and delivery of this Indenture any such Person was not
such officer.
SECTION 2.3 CERTIFICATE OF AUTHENTICATION. Only such Securities as
shall bear thereon a certificate of authentication substantially in the
form hereinabove recited, executed by the Trustee by manual signature of
one of its authorized signatories, shall be entitled to the benefits of
this Indenture or be valid or obligatory for any purpose. Such
certificate by the Trustee upon any Security executed by the Issuer shall
be conclusive evidence that the Security so authenticated has been duly
authenticated and delivered hereunder and that the Holder is entitled to
the benefits of this Indenture.
SECTION 2.4 FORM, DENOMINATION AND DATE OF SECURITIES; PAYMENTS OF
INTEREST IN CASH. The Securities and the Trustee's certificates of
authentication shall be substantially in the form recited above. The
Securities shall be issuable as registered securities without coupons and
in denominations provided for in the form of Security above recited. The
Securities shall be numbered, lettered, or otherwise distinguished in such
manner or in accordance with such plans as the officers of the Issuer
executing the same may determine with the approval of the Trustee.
Any of the Securities may be issued with appropriate insertions,
omissions, substitutions and variations, and may have imprinted or
otherwise reproduced thereon such legend or legends, not inconsistent with
the provisions of this Indenture, as may be required to comply with any law
or with any rules or regulations pursuant thereto, or with the rules of any
securities market in which the Securities are admitted to trading, or to
conform to general usage.
Each Security shall be dated the date of its authentication, shall
bear interest from the applicable date and shall be payable on the dates
specified on the face of the form of Security recited above.
The Person in whose name any Security is registered at the close of
business on any Interest Record Date with respect to any Interest Payment
Date shall be entitled to receive the interest, if any, payable on such
Interest Payment Date notwithstanding any transfer or exchange of such
Security subsequent to the Interest Record Date and prior to such Interest
Payment Date, except if and to the extent the Issuer shall default in the
payment of the interest due on such Interest Payment Date, in which case such
defaulted interest shall be paid to the Persons in whose names outstanding
Securities are registered at the close of business on a subsequent record date
(which shall be not less than five Business Days prior to the date of payment
of such defaulted interest) established after arrangements for payment
reasonably satisfactory to the Trustee have been made by the Issuer by
notice given by mail by or on behalf of the Issuer to the
Holders of Securities not less than 15 days preceding such subsequent
record date. The term "Interest Record Date" as used with respect to any
Interest Payment Date (except a date for payment of defaulted interest)
shall mean the 15th day of the month next preceding the month in which such
interest payment date falls, whether or not such Interest Record Date is a
Business Day.
SECTION 2.5 REGISTRATION, TRANSFER AND EXCHANGE. The Issuer will
keep at each office or agency to be maintained for the purpose as provided
in Section 3.2 a register or registers in which, subject to such reasonable
regulations as it may prescribe, it will register, and will register the
transfer of, Securities as in this Article provided. Such register shall
be in written form in the English language or in any other form capable of
being converted into such form within a reasonable time. At all reasonable
times such register or registers shall be open for inspection by the
Trustee.
Upon due presentation for registration of transfer of any Security at
each such office or agency, the Issuer shall execute and the Trustee shall
authenticate and deliver in the name of the transferee or transferees a new
Security or Securities in authorized denominations for a like aggregate
principal amount.
Any Security or Securities may be exchanged for a Security or
Securities in other authorized denominations, in an equal aggregate
principal amount. Securities to be exchanged shall be surrendered at each
office or agency to be maintained by the Issuer for the purpose as provided
in Section 3.2, and the Issuer shall execute and the Trustee shall
authenticate and deliver in exchange therefor the Security or Securities
which the Securityholder making the exchange shall be entitled to receive,
bearing numbers not contemporaneously outstanding.
All Securities presented for registration of transfer, exchange,
redemption or payment shall (if so required by the Issuer or the Trustee)
be duly endorsed by, or be accompanied by a written instrument or
instruments of transfer in form satisfactory to the Issuer and the Trustee
duly executed by, the Holder or his attorney duly authorized in writing.
The Issuer may require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any
exchange or registration of transfer of Securities, provided however, the
Issuer shall be responsible for all costs associated with perfection of the
Security Interest in Collateral as to the transferee and obtaining a search
of title prior thereto. No service charge shall be made for any such
exchange or registration transaction.
The Issuer shall not be required to exchange or register a transfer of
(a) any Securities for a period of 15 days next preceding the first mailing
of notice of redemption of Securities to be redeemed or (b) any Securities
selected, called or being called for redemption.
All Securities issued upon any transfer or exchange of Securities
shall be valid obligations of the Issuer, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Securities
surrendered upon such transfer or exchange.
SECTION 2.6 MUTILATED, DEFACED, DESTROYED, LOST AND STOLEN
SECURITIES. In case any temporary or definitive Security shall become
mutilated, defaced or be apparently destroyed, lost or stolen, the Issuer
in its discretion may execute, and the Trustee shall authenticate and
deliver, a new Security bearing a number not contemporaneously outstanding,
in exchange and substitution for the mutilated or defaced Security, or in
lieu of or in substitution for the Security so apparently destroyed, lost
or stolen. In every case the applicant for a substitute Security shall
furnish to the Issuer and to the Trustee and any agent of the Issuer or the
Trustee such security or indemnity agreement or bond as may be reasonably
required by them to indemnify and defend and to save each of them harmless
and, in every case of destruction, loss or theft, evidence to their
satisfaction of the apparent destruction, loss or theft of such Security
and of the ownership thereof.
Upon the issuance of any substitute Security, the Issuer and the
Trustee may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any
other expenses (including the reasonable fees and expenses of the Trustee)
connected therewith. In case any Security which has matured or is about to
mature shall become mutilated or defaced or be apparently destroyed, lost
or stolen, the Issuer may, instead of issuing a substitute Security, pay or
authorize the payment of the same with written direction to the Trustee
(without surrender thereof except in the case of a mutilated or defaced
Security), if the applicant for such payment shall furnish to the Issuer
and to the Trustee and any agent of the Issuer or the Trustee such security
or indemnity (including a bond) as any of them may reasonably require to
save each of them harmless and in every case of apparent destruction, loss
or theft the applicant shall also furnish to the Issuer and the Trustee and
any agent of the Issuer or the Trustee evidence to their reasonable
satisfaction of the apparent destruction, loss or theft of such Security
and of the ownership thereof.
Every substitute Security issued pursuant to the provisions of this
Section 2.6 by virtue of the fact that any Security is apparently
destroyed, lost or stolen shall constitute an additional contractual
obligation of the Issuer, whether or not the apparently destroyed, lost or
stolen Security shall be at any time enforceable by anyone and shall be
entitled to all the benefits of (but shall be subject to all the
limitations of rights set forth in) this Indenture equally and
proportionately with any and all other Securities duly authenticated and
delivered hereunder.
SECTION 2.7 CANCELLATION OF SECURITIES; DISPOSITION THEREOF. All
Securities surrendered for payment, redemption, registration of transfer or
exchange, if surrendered to the Issuer or any agent of the Issuer or the
Trustee, shall be delivered to the Trustee for cancellation or, if
surrendered to the Trustee, shall be cancelled by it; and no Securities
shall be issued in lieu thereof except as expressly permitted by any of the
provisions of this Indenture. The Trustee shall dispose of cancelled
Securities held by it in accordance with its regulations and deliver a
certificate to the Issuer with respect to such disposition from time to
time upon written request. If the Issuer shall acquire any of the
Securities, such acquisition shall not operate as a redemption or
satisfaction of the Indebtedness represented by such Securities unless and
until the same are delivered to the Trustee for cancellation.
SECTION 2.8 TEMPORARY SECURITIES. Pending the preparation of
definitive Securities, the Issuer may execute and the Trustee shall
authenticate and deliver temporary Securities (printed, lithographed,
typewritten or otherwise reproduced, in each case in form satisfactory to
the Trustee). Temporary Securities shall be issuable as registered
securities without coupons, of any authorized denomination, and
substantially in the form of the definitive Securities but with such
omissions, insertions and variations as may be appropriate for temporary
Securities, all as may be determined by the Issuer with the concurrence of
the Trustee. Temporary Securities may contain such reference to any
provisions of this Indenture as may be appropriate. Every temporary
Security shall be executed by the Issuer and be authenticated by the
Trustee upon the same conditions and in substantially the same manner, and
with like effect, as the definitive Securities. Without unreasonable delay
the Issuer shall execute and shall furnish, at its expenses, definitive
Securities and thereupon temporary Securities may be surrendered in
exchange therefor without charge at each office or agency to be maintained
by the Issuer for the purpose pursuant to Section 3.2, and the Trustee
shall authenticate and deliver in exchange for such temporary Securities a
like aggregate principal amount of definitive Securities of authorized
denominations. Until so exchanged, the temporary Securities shall be
entitled to the same benefits under this Indenture as definitive
Securities. The Issuer shall not be obligated to issue definitive
Securities until it or the Trustee shall have received such temporary
Securities.
ARTICLE 3
COVENANTS OF THE ISSUER
SECTION 3.1 PAYMENT OF PRINCIPAL AND INTEREST. Each Issuer covenants
and agrees as joint and several obligors that it will duly and punctually
pay or cause to be paid the principal of, and interest on, each of the
Securities at the place or places, at the respective times as required by
and in the manner provided in the Securities. An installment of principal
or interest shall be considered paid on the date it is due if the Trustee
or Paying Agent holds on that date sums sufficient to pay the installment.
Anything herein or in the Securities to the contrary notwithstanding, the
obligation of the Issuer hereunder shall be subject to the limitation that
payments of interest to the Holder shall not be required to the extent that
the receipt of any such payment by such Holder would be contrary to the
provisions of law applicable to the Issuer which limit the maximum rate of
interest which may be charged or collected by the Holder, including as set
forth in Section 11.11 (the "Maximum Rate").
SECTION 3.2 OFFICES FOR PAYMENTS, ETC. So long as any of the
Securities remain outstanding, the Issuer will maintain at such place in
the City of New York and at such other place, if any, as may be designated
by the Issuer, the following: (a) an office or agency where the Securities
may be presented for registration of transfer or for exchange as provided
in this Indenture and (b) an office or agency where notices and demands to
or upon the Issuer in respect of the Securities or of this Indenture may be
served. The Issuer will initially maintain such offices or agencies with
the corporate secretary at the Issuer's principal place of business and the
Operations office of the Trustee in New York, New York. The Issuer will
give to the Trustee written notice of the location of any such office or
agency and of any change of location thereof. In case the Issuer shall
fail to maintain any such office or agency or shall fail to give such
notice of the location or of any change in the location thereof,
presentations and demands may be made and notices may be served at the
Corporate Trust Office.
SECTION 3.3 APPOINTMENT TO FILL A VACANCY IN OFFICE OF TRUSTEE. The
Issuer, whenever necessary to avoid or fill a vacancy in the office of the
Trustee, will appoint, in the manner provided in Section 6.10, a Trustee,
so that there shall at all times be a Trustee hereunder.
SECTION 3.4 PAYING AGENTS. Whenever the Issuer shall appoint a
paying agent other than the Trustee or itself, it will cause such paying
agent to execute and deliver to the Trustee an instrument in which such
agent shall agree with the Trustee, subject to the provisions of this
Section 3.4:
(a) that it will hold all sums received by it as such agent for
the payment of the principal of or interest on the Securities (whether
such sums have been paid to it by the Issuer or by any other obligor
on the Securities) in trust for the benefit of the Holders of the
Securities or of the Trustee; and
(b) that it will give the Trustee notice of any failure by the
Issuer (or by any other obligor on the Securities) to make any payment
of the principal of or interest on the Securities when the same shall
be due and payable.
The Issuer will, at least one Business Day prior to each due date of
the principal of or interest on the Securities, deposit with the paying
agent a sum which is in immediately available funds on the due date
sufficient to pay such principal or interest and (unless such paying agent
is the Trustee) the Issuer will promptly notify the Trustee of any failure
to take such action.
If the Issuer shall act as its own paying agent, it will, on or before
each due date of the principal of or interest on the Securities, set aside,
segregate and hold in trust for the benefit of the Holders of the
Securities a sum sufficient to pay such principal or interest so becoming
due. The Issuer, or paying agent which is not the Trustee, will promptly
notify the Trustee in
writing of any failure to take such action.
Notwithstanding anything in this Section 3.4 to the contrary, the
Issuer may at any time, for the purpose of obtaining a satisfaction and
discharge of this Indenture or for any other reason, pay or cause to be
paid to the Trustee all sums held in trust by the Issuer or any paying
agent hereunder, as required by this Section 3.4, such sums to be held by
the Trustee upon the trusts herein contained.
Notwithstanding anything in this Section 3.4 to the contrary, the
agreement to hold sums in trust as provided in this Section 3.4 is subject
to the provisions of Sections 10.4 and 10.5.
The Issuer initially appoints the Trustee as paying agent.
SECTION 3.5 OFFICERS' CERTIFICATES AS TO DEFAULT AND AS TO
COMPLIANCE. Each Issuer will, so long as any of the Securities are
outstanding:
(a) deliver to the Trustee, forthwith upon becoming aware of any
default or defaults in the performance of any covenant, agreement or
condition contained in this Indenture (including notice of any event
which with the giving of notice, lapse of time or both would become an
Event of Default under Section 5.1 hereof), an Officers' Certificate
specifying such default or defaults; and
(b) deliver to the Trustee within 90 days after the end of each
Fiscal Year of the Issuer beginning with the Fiscal Year ending
December 31, 1998, an Officers' Certificate, to the effect that:
(i) a diligent review of the activities of the Issuer and
its Subsidiaries during such year and of performance under this
Indenture has been made under such officers' supervision, and
(ii) to the best of such officers' knowledge, based on
such review, the Issuer has fulfilled all its obligations under
this Indenture throughout such year, or if there has been a
default in the fulfillment of any such obligation, specifying
each such default known to them and the nature and status
thereof.
SECTION 3.6 MANDATORY PREPAYMENT.
(a) Within forty-five (45) days of the end of the second and
fourth quarter of each Fiscal Year, the Issuer shall (a) repay an
aggregate principal amount of the Securities equal to the Excess Cash
Flow for the 6-month period ending on the last day of such quarter,
together with accrued and unpaid interest on such principal amount to
the date of repayment, and (b) regardless of whether any repayment of
principal is required under this Section, provide each Securityholder
with a written notice containing in reasonable detail TWG
International's calculation of Excess Cash Flow. Notwithstanding the
preceding sentence, TWG International shall not be required to repay
any principal under this Section unless Excess Cash Flow equals or
exceeds the lesser of $250,000 or the aggregate principal amount of
the Securities then outstanding, in which case all Excess Cash Flow
then outstanding shall be used to repay principal in accordance with
this Section. Any repayments of principal required by this Section
shall be paid on an equal and ratable basis among the Securityholders
in proportion, as nearly as practicable, to the respective unpaid
principal amounts of the Securities held by each Securityholder. The
reduction in the principal amount of the Securities effected by
repayments made under this Section may be made without presentation of
the Securities and shall be binding on all future Securityholders.
Securityholders shall make the appropriate notation on the Securities
to indicate the amount of any repayments under this Section.
(b) The prepayment will be made in the following manner. At
least 15 days prior to the date on which the Issuer proposes to make
the prepayment required by this Section 3.6, the Issuer shall give the
Trustee written notice of such prepayment, which notice shall state
the amount of the prepayment and the date the Issuer has selected that
the prepayment be made, which date may not be later than 45 days from
the end of the second and fourth quarters, as the case may be. The
Trustee shall not be required to send a notice of mandatory redemption
to the Holders with respect to such prepayment. At least one Business
Day before the mandatory prepayment, the Issuer will deposit with the
Trustee (or other paying agent) in immediately available funds the
money to be used to prepay the Securities. When the money to effect
the mandatory prepayment of the Securities is held by the Trustee for
the purpose of effecting such prepayment, interest on that portion of
the Securities to be prepaid shall cease to accrue on the reduction of
principal on Securities made a result of the prepayment, and such
notations shall be binding on the Securityholders and all future
Securityholders, even if such holders do not make such notations on
the certificates representing such Securities. The prepayments will
be made by the Trustee in increments of $100.00. Any Excess Cash Flow
which does not meet this requirement will be returned to the Issuer
pursuant to its written instructions.
SECTION 3.7 MAINTENANCE OF PROPERTIES, ETC. Each Issuer shall, and
shall cause each of its Subsidiaries to, maintain its material properties
and assets in working order and condition and make all necessary repairs,
renewals, replacements, additions, betterments and improvements thereto as
permitted by this Indenture, all as in the judgment of the Issuer may be
necessary so that the business carried on in connection therewith may be
conducted in the usual and customary manner.
Each Issuer shall, and shall cause each of its Subsidiaries to,
maintain with insurers that the Issuer believes in good faith to be
financially sound and reputable such insurance as may be required by law
and such other insurance, to such extent and against such hazards and
liabilities, as it in good faith determines is customarily maintained by
companies similarly situated with like properties.
Each Issuer shall, and shall cause each of its Subsidiaries to, do or
cause to be done all things necessary to preserve and keep in full force
and effect its existence, rights and franchises, except to the extent
permitted by this Indenture and except in such cases where the Board of
Directors determines in good faith that failure to do so would not have a
material adverse effect on the business, earnings, properties, assets,
financial condition or results of operation of each such Issuer and its
Subsidiaries. Nothing in this provision shall prohibit TWG from
terminating its or its Subsidiaries' operations in the State of Louisiana,
USA.
Each Issuer shall, and shall cause each of its Subsidiaries to, comply
in all material respects with all statutes, laws, ordinances, or government
rules and regulations to which it is subject.
Each Issuer shall, and shall cause each of its Subsidiaries to, pay
prior to delinquency all taxes, assessments and governmental levies except
as contested in good faith and by appropriate proceedings.
For purposes of this Section, the obligations of this Section shall,
as to TWG, be the obligations of TWG and its non TWG International
Subsidiaries, and as to TWG International, be the obligations of TWG
International and its Subsidiaries.
SECTION 3.8 INDEBTEDNESS. Each Issuer will pay punctually and
discharge when due and payable any Indebtedness heretofore or hereafter
incurred or assumed by it and discharge, perform and observe the covenants,
provisions and conditions to be discharged, performed and observed on the
part of the Issuer in connection therewith, or in connection with any
agreement or other instrument relating thereto.
SECTION 3.9 BOOKS. Issuer will keep at all times proper books of
record and account in which full, true and correct entries will be made of
its transactions in accordance with Generally Accepted Accounting
Principles.
SECTION 3.10 LIMITATION ON INCURRENCE OF ADDITIONAL INDEBTEDNESS.
Except as may be consented in writing by not less than 50% in
aggregate principal amount of the Securities at the time outstanding;
(a) TWG INTERNATIONAL. Except as set forth below, TWG
International will not, and will not permit any of its Subsidiaries
to, Incur any Indebtedness (including Acquired Indebtedness);
provided, however, that TWG International may Incur Indebtedness if,
(i) no Default of this Indenture or Event of Default shall have
occurred and be continuing at the time of, or would occur after giving
effect on a PRO FORMA basis to, such Incurrence of Indebtedness; (ii)
on the date of such Incurrence (the "Incurrence Date"), the
Consolidated Coverage Ratio of TWG International for the Reference
Period immediately preceding the Incurrence Date, after giving effect
on a PRO FORMA basis to such incurrence of such Indebtedness and, to
the extent set forth in the definition of Consolidated Coverage Ratio,
the use of proceeds thereof, would be at least 2.30 to 1; and (iii)
such Indebtedness has an Average Life to Stated Maturity that exceeds
the remaining Average Life to Stated Maturity of the Securities and
has a Stated Maturity for its final scheduled principal payment later
than the Stated Maturity for the final scheduled principal payment of
the Securities; (iv) such Indebtedness is subordinated in right of
payment to the prior payment in full of the Securities pursuant to a
subordination agreement in form and substance satisfactory to the
holders of a majority of the aggregate outstanding principal amount of
the Securities; and (v) such Indebtedness is not secured by the
Collateral granted to the holders of the Securities.
Notwithstanding the foregoing:
(i) TWG International may incur Indebtedness evidenced by the
Securities up to the amounts specified therein as of the date
thereof;
(ii) TWG International may incur at or after the Issue Date additional
indebtedness consisting of:
(A) Indebtedness incurred to fund the construction of
Znojmo Casino, PROVIDED that such Indebtedness is non recourse to
TWG International or any of its Subsidiaries and no Lien securing
such Indebtedness shall extend to or convert any assets or
properties of TWG International or its Subsidiaries other than
the Znojmo Property and the improvements, building equipment and
fixtures located in or on the Znojmo Property;
(B) other purchase money Indebtedness incurred to purchase
personal property for the purpose of engaging in or developing a
Related Business, PROVIDED that the principal amount of such
Indebtedness in the aggregate outstanding at any time (including
any Indebtedness issued to refinance, replace or refund such
Indebtedness) shall not exceed $500,000 and no Lien securing such
Indebtedness shall extend to or cover any assets or properties
other than the assets or property acquired with such purchase
money Indebtedness and improvements thereon; and
(C) Indebtedness for working capital purposes, PROVIDED
that the principal amount of such Indebtedness in the aggregate
outstanding at any time (including any Indebtedness, issued to
refinance, replace or refund such Indebtedness) shall be
unsecured and may not exceed $100,000.
(iii) TWG International may incur Refinancing Indebtedness with
respect to any Indebtedness described in clauses (i) through
(iii), inclusive, of this covenant so long as, in the case of
secured Indebtedness used to refinance, refund or replace secured
Indebtedness, such Refinancing Indebtedness is secured only by
the assets that secured the Indebtedness so refinanced and if
such Indebtedness being Refinanced was unsecured, the related
Refinancing Indebtedness shall be unsecured; and
(iv) TWG International may incur Indebtedness to any of its Wholly
Owned Subsidiaries; PROVIDED, that such obligations shall be
unsecured and subordinated in all respects to TWG International's
obligations pursuant to the Securities.
(v) TWG International shall Incur the Indebtedness pursuant to the
Funding Note.
Indebtedness of any Person which is outstanding at the time such Person
becomes a Subsidiary of TWG International (including by designation) or is
merged with or into or consolidated with TWG International or a Subsidiary
of TWG International shall be deemed to have been Incurred at the time such
Person becomes such a Subsidiary of TWG International or is merged with or
into or consolidated with TWG International or a Subsidiary of TWG
International, as applicable.
(b) TWG FINANCE. TWG Finance shall Incur no Indebtedness other than
that evidenced by the Securities.
SECTION 3.11 RESTRICTIONS ON ISSUANCE OF STOCK .
(a) TWG International will not issue any additional Capital
Stock and agrees that the Capital Stock of TWG International shall at
all times constitute 100% of the total number of shares of each class
of Capital Stock of TWG International. Furthermore, TWG International
will not, and will not permit any of its direct Subsidiaries to,
conduct any business through or otherwise own any outstanding shares
or interests of any class of Capital Stock of, any other corporation,
partnership, limited liability company or other Person, other than a
Wholly Owned Subsidiary.
(b) TWG International will not permit any of its Subsidiaries to
issue any additional Capital Stock and agrees that the Capital Stock
of its Subsidiaries pledged to TWG Finance in the Finance Indenture
shall at all times constitute 100% of its U.S. Subsidiaries, Trans
World Leasing Limited, a Gibraltar Company, and the Cyprus Entity,
66%of 21st Century Resorts a.s. and 100% of the Capital Stock of any
U.S. Subsidiary and of any foreign Subsidiary, where such pledge shall
not create a "deemed dividend" and 66% Of the Capital Stock of any
foreign Subsidiary where a pledge of more than that percentage would
create a "deemed dividend". Furthermore, TWG International will not
permit any of its Subsidiaries to conduct any business through or
otherwise own any outstanding shares or interests of any class of
Capital Stock of, any other corporation, partnership, limited
liability company or other Person, other than a Wholly-Owned
Subsidiary.
(c) TWG FINANCE. TWG Finance will not issue any additional
Capital Stock and agrees that the Capital Stock of TWG Finance which
is pledged to the holders of the Securities pursuant to the Collateral
Agreements shall at all times constitute 100% of the total number of
shares of each class of Capital Stock of TWG Finance. Furthermore, TWG
Finance will not conduct any business through or otherwise own any
outstanding shares or interests of any class of Capital Stock of, any
other corporation, partnership, limited liability company or other
Person, including a partially owned Subsidiary or a Wholly Owned
Subsidiary.
SECTION 3.12 RESTRICTIONS ON ASSET SALES.
(a) TWG International shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, make any Asset Sale, unless
(i) TWG International (or such Subsidiary, as the case may be)
receives consideration at the time of such Asset Sale at least equal
to the fair market value of the shares or assets sold or otherwise
disposed of (such determination of fair market value, in the case of
an Asset Sale or a series of related Asset Sales involving assets with
an aggregate fair market value in excess of $ 1,000,000, being
evidenced by a resolution of the Board of Directors set forth in an
Officers' Certificate and an independent appraisal by an appraiser
reasonably acceptable to the holders of 50% of the outstanding
principal amount of Securities delivered to the Trustee), (ii) at
least 85% of the consideration therefor received by the Issuer or such
Subsidiary is in the form of cash; provided, however, that the amount
of (x) any liabilities (as shown on TWG International's or such
Subsidiary's most recent balance sheet or in the notes thereto) of TWG
International or any Subsidiary that are assumed by the transferee of
any such assets without any further recourse to TWG International or
any Subsidiary, including any Indebtedness of a Subsidiary whose stock
is purchased by the transferee, and (y) any notes or other securities
received by TWG International or any such Subsidiary from such
transferee that are immediately converted by TWG International or such
Subsidiary into cash (to the extent of the cash received) shall be
deemed to be cash for purposes of this provision, and (iii) in the
case of an Asset Sale consisting of a sale by TWG International or any
Subsidiary of Capital Stock of any Subsidiary of TWG International,
all of the Capital Stock of such Subsidiary that is owned by TWG
International or such Subsidiary must be sold. This Section shall not
apply to those assets pledged to secure repayment of the 12% Secured
Convertible Senior Bonds Due 1999, issued by TWG and Trans World
Gaming of Louisiana, Inc.
(b) No later than sixty (60) days after the receipt of Net
Cash Proceeds from any such Asset Sale, TWG International may apply
such Net Cash Proceeds to invest (including through Capital
Expenditures) in properties and assets related to the gambling
industry, consistent with other current business activities of TWG
International, so long as the Security holders are granted a first
lien and security interest in such assets and provided that such
properties and assets are held by TWG International or one or more of
its Subsidiaries. Any Net Cash Proceeds that are not applied as
permitted by the preceding sentence shall constitute "Excess
Proceeds." Excess Proceeds shall be paid to the Securityholders
within fifteen (15) days of becoming Excess Proceeds in the same
manner as Excess Cash Flow is paid in Section 3.6.
(c) TWG Finance shall not make any Asset Sales other than
pursuant to the Funding Note and Funding Collateral Agreements.
(d) Nothing herein shall be construed to permit a sale of the
Capital Stock of TWG Finance or TWG International.
SECTION 3.13 DISTRIBUTIONS. The Issuers shall not declare or pay, or
set apart any funds for the payment of any Restricted Payment.
SECTION 3.14 LIMITATION ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS
AFFECTING SUBSIDIARIES. Except as set forth herein, neither TWG
International nor its Subsidiaries shall permit any Subsidiary thereof to,
directly or indirectly, create or otherwise cause or suffer to exist or
become effective any consensual encumbrance or restriction of any kind on
the ability of any such Subsidiary to (a) pay dividends or make any other
distributions to TWG International or any Subsidiary thereof on its Capital
Stock, (b) pay any Indebtedness owed to TWG International or any Subsidiary
thereof, (c) make loans or advances to TWG International or any Subsidiary
thereof, (d) transfer any of its properties or assets to TWG International
or any Subsidiary thereof, (e) grant liens or security interests on the
assets of TWG International or its Subsidiaries in favor of the holders of
the Securities or (f) Guarantee the Securities or any renewals or
refinancings thereof.
SECTION 3.15 LIMITATION ON INVESTMENTS. TWG International shall not,
and shall not permit any of its Subsidiaries to, directly or indirectly,
make any Investments other than Permitted Investments and except as
provided in Section 3.12. TWG Finance shall not, directly or indirectly,
make any Investments.
SECTION 3.16 LIMITATIONS ON LIENS. TWG International shall not, and
shall not permit any Subsidiary to, directly or indirectly create, incur,
assume or suffer to exist any Lien on any of their respective assets now
owned or hereafter acquired, or any income or profits therefrom or assign
or convey any right to receive income therefrom, except as provided in
Section 3.10, Section 3.11 and Section 3.12. TWG shall not directly or
indirectly create, incur, assume or suffer to exist any Lien on the Capital
Stock of TWG International and of TWG Finance other than as required in
Article 14. TWG Finance shall not, directly or indirectly create, incur,
assume or suffer to exist any Lien on any of its assets other than as
required in Article 14.
SECTION 3.17 TRANSACTIONS WITH AFFILIATES.
(a) Except for transactions with Trans World Leasing Limited and
the Cyprus Entity, neither TWG International nor any of its
Subsidiaries shall directly or indirectly, sell, lease, license,
transfer, exchange, or otherwise dispose of any of its properties,
assets or services to, or purchase, lease, or license the use of any
property, assets or services from, or transfer funds to, or enter into
any contract, agreement, understanding, loan, advance or Guarantee
with, to, or for the benefit of, any Affiliate (each of the foregoing,
an "Affiliate Transaction," whether constituting one transaction or a
series of related transactions), unless (a) such Affiliate Transaction
is on terms that are no less favorable to TWG International or the
relevant Subsidiary than those that would have been obtained in a
comparable transaction by TWG International or such Subsidiary with an
unrelated person and (b) TWG International delivers to the Trustee (i)
with respect to any Affiliate Transaction involving aggregate payments
in excess of $100,000, a resolution of the Board of Directors of TWG
International approved by a majority of the disinterested members of
the Board of Directors, certifying that such Affiliate Transaction
complies with clause (a) above, and (ii) with respect to any Affiliate
Transaction involving aggregate payments in excess of $250,000.00, an
opinion as to the fairness of such Affiliate Transaction to TWG
International or such Subsidiary from a financial point of view issued
by an independent investment banking firm of national standing.
(b) This Section does not limit, and shall not apply to, (i) the
payment of reasonable annual compensation to directors or executive
officers of the TWG and TWG International, or any Subsidiary of either
(other than TWG Finance), (ii) transactions between TWG International
and its Subsidiaries or between TWG International's Subsidiaries.
(c) TWG Finance shall not enter into any Affiliate Transactions
other than the transaction contemplated by the Funding Note and
Collateral Funding Agreements.
SECTION 3.18 CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, each Holder of
Securities shall have the right to require the Issuer to repurchase
all or any part of such holder's Securities pursuant to the offer
described below (the "Change of Control Offer") at a purchase price
equal to one hundred percent (100%) of the aggregate principal amount
thereof plus accrued and unpaid interest, if any, to the date of
purchase (the "Change of Control Payment"). Within 30 days following
receipt of any Change of Control Offer, the Issuer shall mail a notice
to each Holder stating: (1) that the Change of Control Offer is being
made pursuant to this Section and that all Securities tendered will be
accepted for payment; (2) the purchase price and the purchase date,
which shall be no earlier than 30 days nor later than 60 days from the
date such notice is mailed (the "Change of Control Payment Date"); (3)
that any Security not tendered will continue to accrue interest in
accordance with its terms; (4) that, unless the Issuer defaults in the
payment of the Change of Control Payment, all Securities accepted for
payment pursuant to the Change of Control Offer shall cease to accrue
interest after the Change of Control Payment Date; (5) that Holders
electing to have any Securities purchased pursuant to a Change of
Control Offer will be required to surrender the Securities, with the
form entitled "Option of Holder to Elect Purchase", on the reverse of
the Securities completed, to the paying agent at the address
specified in the notice prior to the close of business on the third
Business Day preceding the Change of Control Payment Date; (6) that
Holders will be entitled to withdraw their election if the paying
agent receives, not later than the close of business on the second
Business Day preceding the Change of Control Payment Date, a telegram,
telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of Securities delivered for purchase, and
a statement that such Holder is withdrawing his election to have such
Securities purchased; and (7) that Holders whose Securities are being
purchased only in part will be issued new Securities equal in
principal amount to the unpurchased portion of the Securities
surrendered, which unpurchased portion must be equal to $1,000 in
principal amount or an integral multiple thereof. The Issuer shall
comply with the requirements of Rule 14e-1 under the Exchange Act and
any other securities laws and regulations to the extent such laws and
regulations are applicable to the Change of Control Offer.
(b) On the Change of Control Payment Date, the Issuer will, to
the extent lawful, (1) accept for payment Securities or portions
thereof validly tendered pursuant to the Change of Control Offer, (2)
deposit with the paying agent an amount equal to the Change of Control
Payment in respect of all Securities or portions thereof so tendered,
and (3) deliver or cause to be delivered to the Trustee the Securities
so accepted together with an Officers, Certificate identifying the
Securities or portions thereof tendered to the Issuer. The paying
agent will promptly mail to each Holder of Securities so accepted
payment in an amount equal to the purchase price for such Securities,
and the Trustee shall promptly authenticate and mail to each Holder a
new Security equal in principal amount to any unpurchased portion of
the Securities surrendered, if any; provided, however, that each such
new Security shall be in a principal amount of $1,000 or an integral
multiple thereof. The Issuer will publicly announce the results of
the Change of Control Offer on or as soon as practicable after the
Change of Control Payment Date.
SECTION 3.19 LINE OF BUSINESS. TWG International shall not, and shall
not permit any of its Subsidiaries to, engage in any business other than
acquiring, developing and operating local casinos outside the United States
of America and a Related Business (operated outside the United States of
America). TWG shall not, and shall not permit any of its Subsidiaries,
(other than TWG International and its Subsidiaries) to engage in any
business other than acquiring, developing and operating local casinos
inside of the United States and marketing activities relating thereto,
except TWG shall be permitted to do business in Bishkek. TWG Finance shall
not engage in any business other than performance of its obligations
arising under the Funding Note and Funding Indenture, the Funding
Collateral Agreements, the Securities, the Indenture and all documents
related to those two transactions.
SECTION 3.20 PAYMENTS FOR CONSENT. None of the Issuers shall, nor
shall permit any Subsidiary to, directly or indirectly, pay or cause to be
paid any consideration, whether by way of interest, fee or otherwise, to
any Holder of the Securities for or as an inducement to any consent, waiver
or amendment of any terms or provisions of the Securities unless such
consideration is offered to be paid or agreed to be paid to all Holders of
the Securities which so consent, waive or agree in the time frame set forth
in solicitation documents relating to such consent, waiver or agreement.
SECTION 3.21 LIMITATIONS ON SALE AND LEASEBACK TRANSACTIONS. TWG
International shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, enter into any sale and leaseback transaction,
provided that TWG International or any Subsidiaries may enter into a sale
and leaseback transaction if (a) TWG International or such Subsidiary could
have incurred the Indebtedness relating to such sale and leaseback
transaction pursuant to Sections 3.10 . hereof and (b) the net proceeds of
such sale and leaseback transaction are at least equal to the fair market
value of such property (such determination of fair market value in the case
of a sale and leaseback transaction, being evidenced by a resolution of the
Board of Directors of TWG International set forth in an Officers'
Certificate delivered to the Trustee).
SECTION 3.22 WAIVER OF STAY, EXTENSION OR USURY LAWS. The Issuer
covenants (to the extent that it may lawfully do so) that it shall not at
any time insist upon, or plead, or in any manner whatsoever claim, and
shall resist any and all efforts to be compelled to take the benefit or
advantage of, any stay or extension law or any usury law or other law which
would prohibit or forgive the Issuer from paying all or any portion of the
principal of or interest on the Securities 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 it
may lawfully do so) the Issuer hereby expressly waives all benefit or
advantage of any such law and covenants that it shall not hinder, delay or
impede the execution of any power herein granted to the Trustee but shall
suffer and permit the execution of every such power as though no such law
had been enacted.
SECTION 3.23 NON USA OPERATIONS. All business operations outside of
the United States of America shall be under the control of and inure to the
benefit of TWG International and its Wholly Owned Subsidiaries, except in
Bishkek. All business operations other than those of TWG Finance within
the United States and in Bishkek shall be under the control of and inure to
the benefit of TWG. The business operations of TWG Finance shall be
governed by this Indenture and the Collateral Agreements.
SECTION 3.24 COST OF OPERATIONS. TWG International shall be solely
responsible for all costs of operating TWG Finance, TWG International and
TWG International's direct and indirect Subsidiaries. In addition, TWG
International shall be responsible for costs of administration of TWG in
the sum of $25,000 per month, through June 30, 1999, and for one hundred
percent of such costs of administration upon the earlier of (a) the
inability of TWG to pay such costs from income from its business operations
in Louisiana, or (b) after June 30, 1999. TWG shall be solely responsible
for (a) costs associated with its existing operations in the United States,
(b) to the extent it has income from operations, costs of administration of
TWG in excess of $25,000 per month through June 30, 1999, and (c) for no
costs of administration from the earlier of (i) the date TWG no longer has
adequate cash from its business operations in Louisiana to pay such costs,
or (ii) June 30, 1999. Income generated from the Bishkek Facility shall
not be used to fund administrative costs. Costs of administration refer to
all costs associated with the TWG corporate headquarters in New York and
London, including rent and salaries and expenses of all officers and
employees at such location (or any successor location). Income from
Bishkek, from Cage Cash in the Louisiana and Bishkek casinos and collateral
pledged to the holders of the $4.8 million Senior Secured Notes of TWG and
Trans World Gaming of Louisiana, Inc. due December 31, 2005 shall not be
utilized to fund the costs of administration.
SECTION 3.25 FUNDING DOCUMENTS. TWG International shall execute the
Funding Note and Funding Collateral Agreements simultaneously with the
execution of the Securities.
SECTION 3.26 PAYMENTS. All sums received by TWG Finance from any
source, including the Funding Note, shall be immediately tendered to the
Trustee for disbursement pursuant to the terms of this Indenture.
SECTION 3.27 NO MODIFICATION OF FUNDING NOTE. The Issuers agree that
those rights granted to TWG Finance as the holder of the Funding Note and
the Funding Collateral shall be exercised at the direction of the Trustee
of this Indenture, including the waiver of any default and the enforcement
of any default, including as against any property pledged to secure the
repayment of the Funding Note. To the extent this Indenture permits the
Securityholders to provide direction to the Trustee, the Securityholders
shall be allowed to do so as to the Funding Note (including waiver of a
default). Such vote necessary shall be the same as is necessary under this
Indenture as to the same issue in the Funding Note, such as waiver of
default, modification of terms, and so forth.
SECTION 3.28 USE OF PROCEEDS. (a) Notwithstanding any
provision contained herein to the contrary, on the Closing Date the
proceeds of the sale of the Notes hereunder shall be released to TWG
Finance and from TWG Finance to TWG International. TWG International shall
then apply the proceeds of the sale of the Notes as follows: (i) to pay the
purchase price of the Czech casinos pursuant to the Stock Purchase
Agreement, certain liabilities assumed by TWG International in connection
therewith and to fund certain obligations associated with the immediate
operation of the Casinos (including cage cash and a bond) amounting
approximately to $11,780,000; (ii) to pay certain indebtedness in the
approximate amount of $1.36 million which was loaned by Value Partners,
Ltd. to TWG; (iii) to pay the fees and expenses of the placement agent for
the Notes incurred in connection with this transaction; (iv) to pay the
fees and expenses of the Issuer, including legal and accounting, associated
with the Casino acquisitions; (v) to pay the fees and expenses of domestic
and international legal counsel of the Issuers and the purchasers of the
Notes incurred in connection with this transaction, which fees and expenses
are estimated in a Closing Statement (the "Closing Statement") delivered at
Closing; (vi) to pay the fees and expenses of the trustee and its counsel
incurred in connection with this transaction, which fees and expenses are
estimated in the Closing Statement; (vii) to reimburse TWG in the amount of
$250,000 for expenses it incurred in connection with the development and
acquisition of the Czech casinos; (viii) to expand the Ceska and Rozvadov
casinos in an estimated amount of $1,100,000; (ix) to reimburse TWG for the
reasonable and documented out-of-pocket costs and expenses that TWG incurs
in connection with registering the Common Stock underlying the warrants
issued to the purchasers of the Notes and warrants issued to other holders;
(x) other reasonable incidental out-of-pocket costs expenses of TWG
International incurred in connection with the transaction contemplated
hereby; and (xi) with the remainder of the proceeds to be used solely by
TWG International and its wholly-owned subsidiaries for working capital and
to acquire local casinos located outside of the United States and
operations relating thereto.
(b) Upon release of any funds to TWG International after the closing,
such proceeds shall at all times be kept by TWG International in a separate
and segregated accounts in its own name and shall not be commingled with
any accounts of TWG or any other subsidiaries of TWG.
SECTION 3.29 POST CLOSING COOPERATION. Subsequent to the Issuer
Date, the Issuers shall execute such documents as are necessary to grant
the Security Interest in the Collateral and shall reimburse all reasonable
costs and expenses incurred by counsel for the Securityholder in that
process. Such documents shall be completed by June 1, 1998, unless such
deadline is extended in writing by a majority of the holders of the
Securities.
ARTICLE 4
SECURITYHOLDERS' LISTS AND REPORTS
BY THE ISSUER AND THE TRUSTEE
SECTION 4.1 ISSUER TO FURNISH TRUSTEE INFORMATION AS TO NAMES AND
ADDRESSES OF SECURITYHOLDERS. The Issuer covenants and agrees that it will
furnish or cause to be furnished to the Trustee a list in such form as the
Trustee may reasonably require of the names and addresses of the Holders of
the Securities:
(a) semi-annually and not more than 15 days after each record
date for the payment of interest on the Securities, as hereinabove
specified, as of such record date; and
(b) at such other times as the Trustee may request in writing,
within 30 days after receipt by the Issuer of any such request as of a
date not more than 15 days prior to the time such information is
furnished;
PROVIDED that if and so long as the Trustee shall be the Security
registrar, such list shall not be required to be furnished.
SECTION 4.2 PRESERVATION AND DISCLOSURE OF SECURITYHOLDERS' LISTS.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and addresses
of the Holders of Securities contained in the most recent list
furnished to it as provided in Section 4.1 or maintained by the
Trustee in its capacity as Security registrar, if so acting. The
Trustee may destroy any list furnished to it as provided in Section
4.1 upon receipt of a new list so furnished.
(b) The Security register maintained by the Trustee as register
will be available for inspection by any Holder or its attorney in
writing during normal business hours.
SECTION 4.3 REPORTS BY THE ISSUER. The Issuers covenant:
(a) to cause TWG to file with the Commission, and within 15 days
after TWG files the same with the Commission, file with the Trustee,
and mail or furnish copies to the Trustee and cause the Trustee to
mail to the Holders at their addresses as set forth in the register of
the Securities, copies of the annual reports and of the information,
documents, and other reports (or copies of such portions of any of the
foregoing as the Commission may from time to time by rules and
regulations prescribe) which TWG may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the Exchange Act
or which TWG would be required to file with the Commission if the
Issuer then had a class of securities registered under the Exchange
Act;
(b) As soon as available and in any event within forty-five (45)
days after the end of the first, second and third quarter of each
Fiscal Year, TWG International will deliver the consolidated unaudited
balance sheet of TWG International and its Subsidiaries as at the end
of such quarter and the related consolidated unaudited statements of
income, stockholders equity and cash flows for such quarter and for
the portion of the Fiscal Year ended with such quarter. The financial
statements required hereunder shall in each instance set forth in
comparative form the corresponding figures as at the end of the
corresponding quarter of the preceding Fiscal Year.
(c) As soon as available and in any event within ninety (90)
days after the end of each Fiscal Year, TWG International will deliver
(i) the consolidated balance sheet of TWG International and its
Subsidiaries as at the end of such year and the related consolidated
statements of income, stockholders' equity and cash flows for such
Fiscal Year; and (ii) a report with respect to the financial
statements from its independent public accountants, which report shall
be unqualified as to going concern and scope of audit and shall state
that (A) such consolidated financial statements present fairly the
consolidated financial position of the TWG International and its
Subsidiaries as of the dates indicated and the results of the
operations and cash flow for the periods indicated in conformity with
GAAP and (B) that the examination by such accountants in connection
with such consolidated financial statements has been made in
accordance with generally accepted auditing standards.
(d) As soon as available and in any event within fifteen (15)
days after the end of each calendar month, TWG International will
deliver unaudited statements of income for each of the casinos located
in the Czech Republic, including in Ceska Kubice, Rozvadov and Znojmo
(once operational) for such month and for the portion of the Fiscal
Year ended with such month. The financial statements required
hereunder shall in each instance set forth in comparative from the
corresponding figures as at the end of the corresponding month of the
preceding Fiscal Year.
(e) As soon as available and in any event within seven (7) days
after the end of each calendar week, TWG International will deliver
unaudited statements of net win for each of the casinos located in the
Czech Republic, including Ceska Kubice, Rozvadov and Znojmo (once
operational), for such week.
(f) to cause TWG's annual report to its common stockholders and
any quarterly or other financial reports furnished to its common
stockholders generally to be filed with the Trustee and mailed, no
later than the date such materials are mailed or made available to
TWG's common stockholders to the Holders at their addresses as set
forth in the register of Securities;
(g) [reserved];
(h) If the Issuer is not subject to the requirements of such
Section 13 or 15(d) of the Exchange Act, the Issuer shall nevertheless
continue to cause the TWG annual and quarterly financial statements,
including any notes thereto (and with respect to annual reports, a
copy of an auditors' report by an accounting firm of established
national reputation) and a "Management's Discussion and Analysis of
Financial Condition and Results of Operations", comparable to that
which would have been required to appear in annual or quarterly
reports filed under Section 13 or 15(d) of the Exchange Act to be so
filed with the SEC for public availability and the Trustee to be
mailed to the Holders within 90 days after the end of the Issuer's
Fiscal Year and within 45 days after the end of each of the first
three quarters of each Fiscal Year. In either case, the Issuer shall
continue to furnish Holders of the Securities with substantially the
same quarterly and annual financial information with respect to the
Issuer as provided in the Issuer's consolidated financial statements,
including the notes thereto, for the year ended 1996;
(i) The Issuer shall provide the Trustee with a sufficient
number of copies of all reports and other documents and information
that the Trustee may be required to deliver to the Holders of the
Securities under this Section 4.3.
SECTION 4.4 [Reserved]
ARTICLE 5
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
SECTION 5.1 EVENT OF DEFAULT DEFINED; ACCELERATION OF MATURITY;
WAIVER OF DEFAULT. In case one or more of the following Events of Default
(whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected 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) shall have occurred and be
continuing:
(a) default in the payment of any installment of interest on the
Securities as and when the same becomes due and payable, and the
continuance of such default for 15 calendar days; or
(b) default in the payment of all or any part of the principal
on the Securities as and when the same shall become due and payable
either at maturity, upon acceleration or redemption or otherwise; or
(c) failure on the part of any Issuer duly to observe or perform
any covenants or agreements on the part of the Issuer contained in the
Securities, in this Indenture, in the Subscription Agreement, in any
of the Collateral Agreements, in the Funding Note, the Funding
Collateral Agreements or any related documents, and the continuance of
such failure for a period of 15 days after the date on which written
notice specifying such failure, stating that such notice is a "Notice
of Event of Default" hereunder and demanding that the Issuers remedy
the same, is given to the Issuers by the Trustee or to the Issuers and
the Trustee by the Holders of at least 25% in aggregate principal
amount of the Securities at the time outstanding; or
(d) default under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by any Issuer or any of
its Subsidiaries (or the payment of which is Guaranteed by any Issuer
or any of its Subsidiaries), which default is caused by a failure to
pay due principal or interest on such Indebtedness after any
applicable grace period (a "Payment
Default"), and the principal amount of any such Indebtedness, together
with the principal amount of any other such Indebtedness under which
there has been and is continuing a Payment Default, aggregates
$300,000 or more; or
(e) default under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by any Issuer or any of
its Subsidiaries (or the payment of which is Guaranteed by any Issuer
or any of its Subsidiaries), which default results in the acceleration
of such Indebtedness prior to its express maturity and the principal
amount of any such Indebtedness, together with the principal amount of
any other such Indebtedness under which there has been and is
continuing a Payment Default or the maturity of which has been so
accelerated and not rescinded, aggregates $300,000 or more; or
(f) failure by any Issuer or any of its Subsidiaries to pay
final judgments (other than any judgment as to which a reputable
insurance company has accepted coverage without a reservation of
rights) aggregating in excess of $300,000, which judgments are not
stayed or discharged within 15 days after their entry; or
(g) a court having jurisdiction in the premises shall enter a
decree or order for relief in respect of any Issuer or any of its
Subsidiaries in an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or
appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of any Issuer or any of its
Subsidiaries or for any substantial part of the property of any Issuer
or any of its Subsidiaries or ordering the winding up or liquidation
of the affairs of any Issuer or any of its Subsidiaries and such
decree or order shall remain unstayed and in effect for a period of
15 consecutive days; or
(h) any Issuer or any of its Subsidiaries shall commence a
voluntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or consent to the entry of an
order for relief in an involuntary case under any such law, or consent
to the appointment or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar official) of
any Issuer or any of its Subsidiaries or for any substantial part of
the property of any Issuer or any of its Subsidiaries, or any Issuer
or any of its Subsidiaries shall make any general assignment for the
benefit of creditors;
(i) loss by the Issuer or any Subsidiary of any gambling license
related to the Collateral or the legal right to operate any gaming
establishment related to the Collateral including, without limitation,
those necessary to the Ceska Kubice, Rozvadov and Znojmo locations,
which loss of license is not remedied within ten (10) days (However,
specifically excluding any license in the state of Louisiana).
(j) indictment of any officer or Key Employee of any Issuer or
any Subsidiary by any governmental authority;
(k) fraud by an officer or Key Employee of any Issuer or any
Subsidiary;
(l) any Issuer does not pay, or shall be unable to pay, or shall
admit in writing its inability to pay its debts as such debts become
due;
(m) any event which, in the reasonable judgment of
Securityholders of 50% in principal amount of the Securities has a
material adverse effect on the condition, operations, prospects or
properties (financial or otherwise) of TWG International, TWG
Financing or any of its Subsidiaries, taken as a whole;
(n) any event or series of events within any one year period
which causes a reduction or may cause a reduction in the value of the
Collateral in excess of $300,000; or
(o) if all or any part of the Collateral shall be further
encumbered, hypothecated, mortgaged or made subject to any other lien
or security interest, except as otherwise provided herein.
then, and in each and every such case (other than an Event of Default
specified in clause (g) or (h) above relating to the Issuer), unless the
principal of all of the Securities shall have already become due and
payable, either the Trustee or the Holders of not less than 50% in
aggregate principal amount of the Securities then outstanding hereunder, by
notice in writing to the Issuer (and to the Trustee if given by
Securityholders) (the "Acceleration Notice"), may declare all the
Securities and the accrued interest thereon to be due and payable
immediately (the "Acceleration Date"). If an Event of Default specified in
clause (g) or (h) above relating to the Issuer occurs, all the Securities
and the accrued interest thereon shall be immediately due and payable
without any declaration or other act on the part of the Trustee or any
Securityholder.
SECTION 5.2 COLLECTION OF INDEBTEDNESS BY TRUSTEE; TRUSTEE MAY PROVE
INDEBTEDNESS. The Issuer covenants that (a) in case default shall be made
in the payment of any installment of interest on any of the Securities when
such interest shall have become due and payable, and such default shall
have continued for a period of 15 days, or (b) in case default shall be
made in the payment of all or any part of the principal of any of the
Securities when the same shall have become due and payable, whether upon
maturity or upon any redemption or by declaration or otherwise -- then upon
demand by the Trustee the Issuer will pay to the Trustee for the benefit of
the Holders of the Securities the whole amount that then shall have become
due and payable on all such Securities for principal or interest, as the
case may be (with interest to the date of such payment upon the overdue
principal and, to the extent that payment of such interest is enforceable
under applicable law, on overdue installments of interest at the Default
Rate); and in addition thereto, such further amount as shall be sufficient
to cover the costs and expenses of collection, including such amounts as
shall be due the Trustee and each predecessor Trustee under Section 6.6.
Until such demand is made by the Trustee, the Issuer may pay the
principal of and interest on the Securities to the registered Holders,
whether or not the Securities be overdue.
In case the Issuer shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust,
shall be entitled and empowered to institute any action or proceeding at
law or in equity for the collection of the sums so due and unpaid including
the enforcement of its rights under the Collateral Agreements, and may
prosecute any such action or proceeding to judgment or final decree, and
may enforce any such judgment or final decree against the Issuer or other
obligor upon the Securities and collect in the manner provided by law out
of the Property of the Issuer or other obligor upon the Securities,
wherever situated, the moneys adjudged or decreed to be payable.
In case there shall be pending proceedings relative to the Issuer or
any other obligor upon the Securities under Title 11 of the United States
Code or any other applicable Federal or state bankruptcy, insolvency or
other similar law, or in case a receiver, assignee or trustee in bankruptcy
or reorganization, liquidator, sequestrator or similar official shall have
been appointed for or taken possession of the Issuer or the property of the
Issuer or such other obligor, or in case of any judicial proceedings
relative to the Issuer or other obligor upon the Securities, or to the
creditors or property of the Issuer or such other obligor, the Trustee,
irrespective of whether the principal of the Securities 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 pursuant to
the provisions of this Section 5.2, shall be entitled and empowered, by
intervention in such proceedings or otherwise:
(a) to file and prove a claim or claims for the whole amount of
principal and interest owing and unpaid in respect of the Securities,
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 reasonable compensation to the Trustee and each predecessor
Trustee, and their respective agents, attorneys and counsel, and for
reimbursement of all expenses and liabilities incurred, and all
advances made, by the Trustee and each predecessor Trustee, except as
a result of negligence or bad faith) and of the Securityholders
allowed in any judicial proceedings relative to the Issuer or other
obligor upon the Securities, or to the creditors or Property of the
Issuer or such other obligor;
(b) unless prohibited by applicable law and regulations, to vote
on behalf of the Holders of the Securities in any election of a
trustee or a standby trustee in arrangement, reorganization,
liquidation or other bankruptcy or insolvency proceedings or Person
performing similar functions in comparable proceedings; and
(c) to collect and receive any moneys or other Property payable
or deliverable on any such claims, and to distribute all amounts
received with respect to the claims of the Securityholders and of the
Trustee on their behalf; and any trustee, receiver, or liquidator,
custodian or other similar official is hereby authorized by each of
the Securityholders to make payments to the Trustee, and, in the event
that the Trustee shall consent to the making of payments directly to
the Securityholders, to pay to the Trustee such amounts as shall be
due the Trustee, and each predecessor Trustee under Section 6.6.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or vote for or accept or adopt on behalf of any
Securityholder any plan or reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof,
or to authorize the Trustee to vote in respect of the claim of any
Securityholder in any such proceeding except, as aforesaid, to vote for the
election of a trustee in bankruptcy or similar Person.
All rights of action and of asserting claims under this Indenture, or
under any of the Securities, may be enforced by the Trustee without the
possession of any of the Securities or the production thereof on any trial
or other proceedings relative thereto, and any such action or proceedings
instituted by the Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment, subject to the payment of the
expenses, disbursements and compensation of the Trustee, each predecessor
Trustee and their respective agents and attorneys, shall be for the ratable
benefit of the Holders of the Securities in respect of which such judgment
has been sought.
In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which
the Trustee shall be a party) the Trustee shall be held to represent all
the Holders of the Securities, and it shall not be necessary to make any
Holders of the Securities parties to any such proceedings.
SECTION 5.3 APPLICATION OF PROCEEDS. Any moneys collected by the
Trustee pursuant to this Article shall be applied in the following order at
the date or dates fixed by the Trustee:
FIRST: To the payment of all amounts due the Trustee and each
predecessor Trustee under Section 6.6;
SECOND: In case the principal of the Securities shall not have become
and be then due and payable, to the payment of interest in default in the
order of the maturity of the installments of such interest, with interest
(to the extent that such interest has been collected by the Trustee) upon
the overdue installments of interest at the Default Rate borne by the
Securities, such payments to be made ratably to the Persons entitled
thereto, without discrimination or preference;
THIRD: In case the principal of the Securities shall have become and
shall be then due and payable, to the payment of the whole amount then
owing and unpaid upon all the Securities for principal and interest, with
interest upon the overdue principal, and (to the extent that such interest
has been collected by the Trustee) upon overdue installments of interest at
the Default Rate borne by the Securities; and in case such moneys shall be
insufficient to pay in full the whole amount so due and unpaid upon the
Securities, then to the payment of such principal and interest, without
preference or priority of principal over interest, or of interest over
principal, or of any installment of interest over any other installment of
interest, or of any Security over any other Security, ratably to the
aggregate of such principal and accrued and unpaid interest; and
FOURTH: To the payment of the remainder, if any, to the Issuer or any
other Person lawfully entitled thereto.
Whenever moneys are to be applied pursuant to this Section 5.3,
such moneys shall be applied at such times, and from time to time, as the
Trustee shall determine, having due regard for the amount of such moneys
available for application, the likelihood of additional moneys becoming
available for such application in the future, and potential expenses
relating to the exercise of any remedy or right conferred on the Trustee by
this Indenture. Whenever the Trustee shall apply such moneys, it shall fix
the date (which shall be an Interest Payment Date unless it shall deem an
earlier date more suitable) upon which such application is to be made, and
upon such date interest on the amounts of principal to be paid on such date
shall cease to accrue. The Trustee shall give such notice as it may deem
appropriate of the deposit with it of any such moneys and of the fixing of
any such date. Whenever the principal of and interest on all Securities
have been paid in full under the provisions of this Section 5.3 and all
expenses and charges of the Trustee have been paid, any balance remaining
in the Trust Estate shall be paid as provided in Section 10.6 of this
Indenture.
SECTION 5.4 SUITS FOR ENFORCEMENT. In case an Event of Default has
occurred, has not been waived and is continuing, the Trustee may in its
discretion proceed to protect and enforce the rights vested in it by this
Indenture or the Collateral Agreements by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect and enforce
any of such rights, either at law or in equity or in bankruptcy or
otherwise, whether for the specific enforcement of any covenant or
agreement contained in this Indenture or the Collateral Agreements or in
aid of the exercise of any power granted in this Indenture or the
Collateral Agreements or to enforce any other legal or equitable right
vested in the Trustee by this Indenture or the Collateral Agreements or by
law.
SECTION 5.5 RESTORATION OF RIGHTS ON ABANDONMENT OF PROCEEDINGS. In
case the Trustee shall have proceeded to enforce any right under this
Indenture and such proceedings shall have been discontinued or abandoned
for any reason, then and in every such case the Issuer and the Trustee
shall be restored respectively to their former positions and rights
hereunder, and all rights, remedies and powers of the Issuer, the Trustee
and the Securityholders shall continue as though no such proceedings had
been taken.
SECTION 5.6 LIMITATIONS ON SUITS BY SECURITYHOLDERS. No Holder shall
have any right by virtue or by availing of any provision of this Indenture
to institute any action or proceeding at law or in equity or in bankruptcy
or otherwise upon or under or with respect to this Indenture, or for the
appointment of a trustee, receiver, liquidator, custodian or other similar
official or for any other remedy hereunder, unless such Holder previously
shall have given to the Trustee written notice of an Event of Default and
of the continuance thereof, as hereinbefore provided, and unless also the
Holders of not less than 25% in aggregate principal amount of the
Securities then outstanding shall have made written request upon the
Trustee to institute such action or proceeding in its own name as trustee
hereunder and shall have offered to the Trustee such reasonable indemnity
as it may require against the costs, expenses and liabilities to be
incurred therein or thereby and the Trustee for 30 days after its receipt
of such notice, request and offer of indemnity shall have failed to
institute any such action or proceedings and no direction inconsistent with
such written request shall have been given to the Trustee pursuant to
Section 5.9; it being understood and intended, and being expressly
covenanted by the taker and Holder of every Security with every other taker
and Holder and the Trustee, that no one or more Holders of Securities shall
have any right in any manner whatever by virtue or by availing of any
provision of this Indenture to affect, disturb or prejudice the rights of
any other Holder of Securities, or to obtain or seek to obtain priority
over or preference to any other such Holder or to enforce any right under
this Indenture, except in the manner herein provided and for the equal,
ratable and common benefit of all Holders of Securities. For the
protection and enforcement of the provisions of this Section 5.6, each and
every Securityholder and the Trustee shall be entitled to such relief as
can be given either at law or in equity.
SECTION 5.7 UNCONDITIONAL RIGHT OF SECURITYHOLDERS TO INSTITUTE
CERTAIN SUITS. Notwithstanding any other provision in this Indenture and
any provision of any Security, the right of any Holder to receive payment
of the principal of and interest on such Security on or after the
respective due dates expressed in such Security, or to institute suit for
the enforcement of any such payment on or after such respective dates,
shall not be impaired or affected without the consent of such Holder.
SECTION 5.8 POWERS AND REMEDIES CUMULATIVE; DELAY OR OMISSION NOT
WAIVER OF DEFAULT. Except as provided in Section 2.6, no right or remedy
herein or under the Collateral Agreements conferred upon or reserved to the
Trustee or to the Securityholders 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 under the Collateral Agreements or now or thereafter existing
at law or in equity or otherwise. The assertion or employment of any right
or remedy hereunder or under the Collateral Agreements, or otherwise, shall
not prevent the concurrent assertion or employment of any other appropriate
right or remedy.
No delay or omission of the Trustee or of any Holder to exercise any
right or power accruing upon any Event of Default occurring and continuing
as aforesaid shall impair any such right or power or shall be construed to
be a waiver of any such Event of Default or an acquiescence therein; and
subject to Section 5.6, every power and remedy given by this Indenture or
under the Collateral Agreements or by law to the Trustee or to the
Securityholders may be exercised from time to time, as often as shall be
deemed expedient, by the Trustee or by the Securityholders.
SECTION 5.9 CONTROL BY SECURITYHOLDERS. The Holders of 50% in
aggregate principal amount of the Securities at the time outstanding shall
have the right to direct the time, method, and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust
or power conferred on the Trustee by this Indenture; PROVIDED that such
direction shall not be otherwise than in accordance with law and the
provisions of this Indenture; PROVIDED, FURTHER, that the Trustee is
provided with reasonable indemnification by the Holders prior to taking
such action; and PROVIDED, FURTHER, that (subject to the provisions of
Section 6.1) the Trustee shall have the right to decline to follow any such
direction if the Trustee, being advised by counsel, shall determine that
the action or proceeding so directed may not lawfully be taken or if the
Trustee in good faith by its board of directors, the executive committee or
a trust committee of directors or Responsible Officers of the Trustee shall
determine that the action or proceeding so directed would involve the
Trustee in any financial or other liability or if the Trustee in good faith
shall so determine that the actions or forbearances specified in or
pursuant to such direction shall be unduly prejudicial to the interests of
Holders of the Securities not joining in the giving of said direction, it
being understood that (subject to Section 6.1) the Trustee shall have no
duty to ascertain whether or not such actions or forbearances are unduly
prejudicial to such Holders.
Nothing in this Indenture shall impair the right of the Trustee in its
discretion to take any action deemed proper by the Trustee and which is not
inconsistent with such direction by Securityholders.
SECTION 5.10 WAIVER OF PAST DEFAULTS. The Holders of 50% in
aggregate principal amount of the Securities at the time outstanding, by
notice to the Issuer and the Trustee, may on behalf of all Holders, upon
providing the Trustee with reasonable indemnity with respect to any action
that might be taken by the Holders not so consenting, provide forbearances,
waive any default or Event of Default hereunder and its consequences under
this Indenture including acceleration, except a default in the payment of
principal of or interest on any of the Securities or on the Funding Note.
In the case of any such waiver, the Issuer, the Trustee and the Holders of
the Securities shall be restored to their former positions and rights
hereunder, respectively; but no such waiver shall extend to any subsequent
or other default or impair any right consequent thereon.
Upon any such waiver, such default shall cease to exist and be deemed
to have been cured and not to have occurred, and any Event of Default
arising therefrom shall be deemed to have been cured, and not to have
occurred for every purpose of this Indenture; but no such waiver shall
extend to any subsequent or other default or Event of Default or impair any
right consequent thereon.
SECTION 5.11 TRUSTEE TO GIVE NOTICE OF DEFAULT, BUT MAY WITHHOLD IN
CERTAIN CIRCUMSTANCES. The Trustee shall transmit to the Securityholders,
as the names and addresses of such Holders appear on the registry books,
notice by mail of all defaults actually known to a Responsible Officer of
the Trustee, such notice to be transmitted within 90 days after the
occurrence thereof, unless such defaults shall have been cured before the
giving of such notice (the term "default" or "defaults" for the purposes of
this Section 5.11 being hereby defined to mean any event or condition which
is, or with notice or lapse of time or both would become, an Event of
Default); PROVIDED that, except in the case of default in the payment of
the principal of or interest on any of the Securities, the Trustee shall be
protected in withholding such notice if and so long as the board of
directors, the executive committee, or a trust committee of directors
and/or Responsible Officers of the Trustee in good faith determines that
the withholding of such notice is in the interests of the Securityholders.
SECTION 5.12 RIGHT OF COURT TO REQUIRE FILING OF UNDERTAKING TO PAY
COSTS. All parties to this Indenture agree, and each Holder by its
acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or
remedy under this Indenture or in any suit against the Trustee for any
action taken, suffered or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and
that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit, having
due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section 5.12 shall not
apply to any suit instituted by the Trustee, to any suit instituted by any
Securityholder or group of Securityholders holding in the aggregate more
than 25% in aggregate principal amount of the Securities outstanding, or to
any suit instituted by any Securityholder for the enforcement of the
payment of the principal of or interest on any Security on or after the due
date expressed in such Security.
SECTION 5.13 EXCESS CASH FLOW. All references to payments of
principal and interest include Excess Cash Flow payments required by this
Indenture.
ARTICLE 6
CONCERNING THE TRUSTEE
SECTION 6.1 DUTIES AND RESPONSIBILITIES OF THE TRUSTEE; DURING
DEFAULT; PRIOR TO DEFAULT. The Trustee, prior to the occurrence of an
Event of Default and after the curing or waiving of all Events of Default
which may have occurred, undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture. In case an Event
of Default has occurred (which has not been cured or waived) the Trustee
shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise as a
prudent man would exercise or use under the circumstances in the conduct of
his own affairs.
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct, except that:
(a) prior to the occurrence of an Event of Default and after the
curing or waiving of all such Events of Default which may have
occurred:
(i) the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Indenture,
and the Trustee shall not be liable except for the performance of
such duties and obligations as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be read
into this Indenture against the Trustee; and
(ii) in the absence of bad faith on the part of the
Trustee, the Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed
therein, upon any statements, certificates or opinions furnished
to the Trustee and conforming to the requirements of this
Indenture; but in the case of any such statements, certificates
or opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall be
under a duty to examine the same to determine whether or not they
conform to the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer or Responsible Officers of
the Trustee, unless it shall be proved that the Trustee was negligent
in ascertaining the pertinent facts;
(c) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of not less than a 50% in principal
amount of the Securities at the time outstanding relating to the time,
method and place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred upon the
Trustee, under this Indenture;
(d) the Trustee shall not be charged with knowledge of an Event
of Default unless a Responsible Officer of the Trustee obtains written
notice of such default; and
(e) whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the
liability of or affording protection to the Trustee shall be subject
to the provisions of this Section 6.1.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any financial or
other liability in the performance of any of its duties or in the exercise
of any of its rights or powers, if repayment of such funds or adequate
indemnity against such liability is not assured to the reasonable
satisfaction of the Trustee.
SECTION 6.2 CERTAIN RIGHTS OF THE TRUSTEE. Subject to Section 6.1:
(a) the Trustee may conclusively rely and shall be fully
protected in acting or refraining from acting upon any resolution,
Officers' Certificate or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, bond, debenture,
note, coupon, security or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or
parties;
(b) any request, direction, order or demand of the Issuer
mentioned herein shall be sufficiently evidenced by an Officers'
Certificate (unless other evidence in respect thereof be herein
specifically prescribed), and any resolution of the Board of Directors
may be evidenced to the Trustee by a copy thereof certified by the
Secretary or an Assistant Secretary of the Issuer;
(c) the Trustee may consult with counsel and any advice or
Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted to be
taken by it hereunder in good faith and in accordance with such advice
or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of
the trusts or powers vested in it by this Indenture at the request,
order or direction of any of the Securityholders pursuant to the
provisions of this Indenture, unless such Securityholders shall have
offered to the Trustee reasonable security and/or indemnity against
the costs, expenses and liabilities which might be incurred therein or
thereby;
(e) the Trustee shall not be liable for any action taken or
omitted by it in good faith and believed by it to be authorized or
within the discretion, rights or powers conferred upon it by this
Indenture;
(f) prior to the occurrence of an Event of Default hereunder and
after the curing or waiving of all Events of Default which may have
occurred, the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent,
order, approval, appraisal, bond, debenture, note, coupon, security,
or other paper or document unless requested in writing so to do by the
Holders of not less than a majority in aggregate principal amount of
the Securities then outstanding; PROVIDED that if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in
the opinion of the Trustee, not reasonably assured to the Trustee by
the security afforded to it by the terms of this Indenture, the
Trustee may require reasonable indemnity against such expenses or
liabilities as a condition to proceeding; the reasonable expenses of
every such examination shall be paid by the Issuer or, if paid by the
Trustee or any predecessor trustee, shall be repaid by the Issuer upon
demand;
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys, custodians or nominees not regularly in
its employ and the Trustee shall not be responsible for any misconduct
or negligence on the part of any such agent, attorney, custodian or
nominee appointed with due care by it hereunder; and
(h) the Trustee makes no representation as to the validity or
adequacy of this Indenture, the Collateral, or the Securities. It
shall not be accountable for the Issuers' use of the proceeds from the
sale of the Securities, and it shall not be responsible for any
statement in the Securities, other than its authentication. Except
required by Section 14.6 of this Indenture, the Trustee shall not be
responsible for any recording, re-recording, filing or refiling of
this Indenture or other document to perfect the Trust Estate's
security interest in the Collateral. The Trustee shall not be bound
to ascertain or inquire as to the performance of the obligations of
the Issuer under this Indenture or the Collateral Agreements. The
Trustee may nevertheless require the Issuer to furnish information
regarding performance of its obligations hereunder and under the
Collateral Agreements, but is not obligated to do so.
SECTION 6.3 TRUSTEE NOT RESPONSIBLE FOR RECITALS, DISPOSITION OF
SECURITIES OR APPLICATION OF PROCEEDS THEREOF. The recitals contained
herein and in the Securities, except the Trustee's certificates of
authentication, shall be taken as the statements of the Issuer, and the
Trustee assumes no responsibility for the correctness of the same. The
Trustee makes no representation as to the validity or sufficiency of this
Indenture or of the Securities. The Trustee shall not be accountable for
the use or application by the Issuer of any of the Securities or of the
proceeds thereof. The Trustee shall not be accountable or responsible for
any information, statement or recital in any prospectus, private offering
memorandum or any other disclosure material prepared or distributed in
connection with the distribution of the Securities.
SECTION 6.4 TRUSTEE AND AGENTS MAY HOLD SECURITIES; COLLECTIONS, ETC.
The Trustee or any agent of the Issuer or the Trustee, in its individual or
any other capacity, may become the owner or pledgee of Securities with the
same rights it would have if it were not the Trustee or such agent and,
subject to Sections 6.8 and 6.13, if operative, may otherwise deal with the
Issuer and receive, collect, hold and retain collections from the Issuer
with the same rights it would have if it were not the Trustee or such
agent.
SECTION 6.5 MONEYS HELD BY TRUSTEE. Subject to the provisions of
Section 10.6 hereof, all moneys received by the Trustee shall, until used
or applied as herein provided, be held in trust for the purposes for which
they were received, but need not be segregated from other funds except to
the extent required by mandatory provisions of law. Neither the Trustee
nor any agent of the Issuer or the Trustee shall be under any liability for
interest on any moneys received by it hereunder.
SECTION 6.6 COMPENSATION AND INDEMNIFICATION OF TRUSTEE AND ITS PRIOR
CLAIM. The Issuer covenants and agrees to pay to the Trustee from time to
time, and the Trustee shall be entitled to, reasonable compensation (which
shall not be limited by any provision of law in regard to the compensation
of a trustee of an express trust) and the Issuer covenants and agrees to
pay or reimburse the Trustee and each predecessor Trustee upon its request
for all reasonable expenses, (including, without limitation, expenses
incurred in connection with notices and other communications to Holders)
disbursements and advances incurred or made by or on behalf of it in
accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel
and of all agents and other Persons not regularly in its employ) except any
such expense, disbursement or advance as may arise from its negligence or
bad faith. The Issuer also covenants to indemnify the Trustee, and each
predecessor trustee for, and to hold it harmless against, any loss,
liability or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of
this Indenture or the trusts hereunder and its duties hereunder, including
the costs and expenses of defending itself against or investigating any
claim of liability in the premises. The obligations of the Issuer under
this Section 6.6 to compensate and indemnify the Trustee and each
predecessor trustee and to pay or reimburse the Trustee and each
predecessor trustee for expenses, disbursements and advances shall
constitute additional indebtedness hereunder and shall survive the
satisfaction and discharge of this Indenture. Such additional indebtedness
shall be a senior claim to that of the Securities upon all Property and
funds held or collected by the Trustee as such, except funds held in trust
for the benefit of the Holders of particular Securities, and the Securities
are hereby subordinated to such senior claim. The Trustee and Issuer shall
enter into a Fee Agreement acceptable to the Trustee and Issuer.
SECTION 6.7 RIGHT OF TRUSTEE TO RELY ON OFFICERS' CERTIFICATE, ETC.
Subject to Section 6.1, whenever in the administration of the trusts of
this Indenture the Trustee shall deem it necessary or desirable that a
matter be proved or established prior to taking or suffering or omitting
any action hereunder, such matter (unless other evidence in respect thereof
be herein specifically prescribed) may, in the absence of bad faith on the
part of the Trustee, be deemed to be conclusively proved and established by
an Officers' Certificate delivered to the Trustee, and such certificate, in
the absence of bad faith on the part of the Trustee, shall be full warrant
and protection to the Trustee for any action taken, suffered or omitted by
it under the provisions of this Indenture upon the faith thereof.
SECTION 6.8 [Reserved].
SECTION 6.9 PERSONS ELIGIBLE FOR APPOINTMENT AS TRUSTEE. The Trustee
hereunder shall at all times be a corporation organized and doing business
under the laws of the United States of America or of any State or territory
or of the District of Columbia having a combined capital and surplus of at
least $50,000,000 (or being a member of a bank holding system with such an
aggregate combined capital and surplus), and which is authorized under such
laws to exercise corporate trust powers and is subject to supervision or
examination by Federal, State, territorial or District of Columbia
authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section
6.9, the combined capital and surplus of such corporation shall be deemed
to be its combined capital and surplus as set forth in its most recent
report of condition so published. Neither the Issuer nor any Person
directly or indirectly controlling, controlled by or under common control
with the Issuer may serve as Trustee hereunder. In case at any time the
Trustee shall cease to be eligible in accordance with the provisions of
this Section 6.9, the Trustee shall resign immediately in the manner and
with the effect specified in Section 6.10.
SECTION 6.10 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR
TRUSTEE. The Trustee may resign at any time by so notifying the Issuer in
writing, such resignation to be effective upon the appointment of a
successor Trustee. The Holders of a majority in principal amount of the
outstanding Securities may remove the Trustee by so notifying the Trustee
in writing and may appoint a successor Trustee with the Issuer's consent
which consent shall not be unreasonably withheld. The Issuer may remove
the Trustee if:
(a) the Trustee fails to comply with Section 6.8 or 6.9;
(b) the Trustee is adjudged a bankrupt or an insolvent;
(c) a receiver or other public officer takes charge of the
Trustee or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason (the Trustee in such event being referred
to herein as the retiring Trustee), the Issuer shall promptly appoint a
successor Trustee that is reasonably acceptable to the Holders of a
majority in principal amount of the Securities. Within one year after the
successor Trustee takes office, the Holders of a majority in principal
amount of the Securities may appoint a successor Trustee to replace the
successor Trustee appointed by the Issuer.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Issuer. Immediately after
that, the retiring Trustee shall transfer all property held by it as
Trustee to the successor Trustee (subject to the senior claim provided in
Section 6.6 and upon being paid the compensation due to it in Section 6.6),
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 Securityholder.
If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Issuer or
the Holders of at least 25% in principal amount of the outstanding
Securities may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee fails to comply with Section 6.8, any Securityholder
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
6.10, the Issuer's obligations under Section 6.6 shall continue for the
benefit of the retiring Trustee.
SECTION 6.11 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR TRUSTEE. Any
successor trustee appointed as provided in Section 6.10 shall execute and
deliver to the Issuer and to its predecessor trustee an instrument
accepting such appointment hereunder, and thereupon the resignation or
removal of the predecessor trustee shall become effective and such
successor trustee, without any further act, deed or conveyance, shall
become vested with all rights, powers, duties and obligations of its
predecessor hereunder, with like effect as if originally named as trustee
herein; but, nevertheless, on the written request of the Issuer or of the
successor trustee, the trustee ceasing to act shall upon being paid the
amounts due it under Section 6.6 pay over to the successor trustee all
moneys at the time held by it hereunder and shall execute and deliver an
instrument transferring to such successor trustee all such rights, powers,
duties and obligations. Upon request of any such successor trustee, the
Issuer shall execute any and all instruments in writing for more fully and
certainly vesting in and confirming to such successor trustee all such
rights and powers. Any trustee ceasing to act shall, nevertheless, retain
a prior claim upon all Property or funds held or collected by such trustee
to secure any amounts then due it pursuant to the provisions of Section
6.6.
No successor trustee shall accept appointment as provided in this
Section 6.11 unless at the time of such acceptance such successor trustee
shall be qualified under the provisions of Section 6.8 and eligible under
the provisions of Section 6.9. No Trustee under this Indenture shall be
personally liable for any action or omission of any successor trustee.
SECTION 6.12 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS OF TRUSTEE. Any corporation into which the Trustee may be merged
or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Trustee
shall be a party, or any corporation succeeding to the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
PROVIDED that such corporation shall be qualified under the provisions of
Section 6.8 and eligible under the provisions of Section 6.9, without the
execution or filing of any paper or any further act on the part of any of
the parties hereto, anything herein to the contrary notwithstanding.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture any of the Securities shall have been
authenticated but not delivered, any such successor to the Trustee may
adopt the certificate of authentication of any predecessor Trustee and
deliver such Securities so authenticated; and, in case at that time any of
the Securities shall not have been authenticated, any successor to the
Trustee may authenticate such Securities either in the name of any
predecessor hereunder or in the name of the successor Trustee; and in all
such cases such certificate shall have the full force which it is anywhere
in the Securities or in this Indenture provided that the certificate of the
Trustee to authenticate Securities in the name of any predecessor Trustee
shall have; PROVIDED that the right to adopt the certificate of
authentication of any predecessor Trustee shall apply only to its successor
or successors by merger, conversion or consolidation.
SECTION 6.13 [Reserved].
SECTION 6.14 INTERVENTION IN LITIGATION. In any judicial proceedings
with respect to the Securities to which the Issuer is a party the Trustee
may intervene on behalf of Holders and shall, subject to Section 6.2 of
this Indenture, intervene if requested in writing by Holders owning not
less than fifty percent (50%) in aggregate principal amount of Securities
then Outstanding.
SECTION 6.15 APPOINTMENT OF CO-TRUSTEES. At any time or times, for
the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Collateral may at the time be located, the Issuer (and in
case of an Event of Default has occurred and is continuing, the Trustee)
shall have the power to appoint one or more persons approved by the Trustee
either to act as co-trustee or co-trustees jointly with the Trustee of all
or any part of the Collateral, or to act as separate trustee or separate
co-trustees of all or any part of the Collateral, and to vest in such
person or persons, in such capacity, such title to the Collateral or any
part of it, and/or such rights, powers, duties, trusts or obligations as
the Issuer and/or the Trustee may consider necessary or desirable subject
to the remaining provisions of this Section 6.15. Upon the request of the
Trustee or of Holder owning not less than fifty percent (50%) in aggregate
principal amount of Securities then Outstanding, the Issuer shall join with
the Trustee in the execution, delivery and performance of all instruments
and agreements necessary or proper to effect such appointment. If the
Issuer shall not have joined in such appointment within 30 days after the
receipt by it of a request so to do, or in case an Event of Default shall
have occurred and be continuing, the Trustee alone shall have the power to
make such appointment. The Issuer shall execute, acknowledge and deliver
all such instruments as may be required by any such co-trustee or separate
trustee for more fully confirming such title, rights, powers, trusts,
duties and obligations to such co-trustee or separate trustee. Every
co-trustee or separate trustee shall, to the extent permitted by law or any
applicable contract, be appointed subject to the following terms, namely:
(i) all rights, powers, trusts, duties and obligations conferred
or imposed upon the trustees shall be conferred or imposed upon and
exercised or performed by the Trustee, or by the Trustee and such
co-trustee, or separate trustee, jointly, as shall be provided in the
instrument appointing such co-trustee or separate trustee, except to
the extent that, under the law of any jurisdiction in which any
particular act or acts are to be performed, the Trustee shall be
incompetent or unqualified to perform such act or acts, in which event
such act or acts shall be performed by such co-trustee or separate
trustee;
(ii) any request in writing by the Trustee to any co-trustee or
separate trustee to take or to refrain from taking any action under
this Indenture shall be sufficient warrant for the taking, or the
refraining from taking, of such action by such co-trustee or separate
trustee;
(iii) any co-trustee or separate trustee to the extent
permitted by law may delegate to the Trustee the exercise of any
right, power, trust, duty or obligation, discretionary or otherwise;
(iv) the Trustee at any time, by an instrument in writing, with
the concurrence of the Issuer evidenced by a resolution, may accept
the resignation of or remove any co-trustee or separate trustee
appointed under this Section 6.15, and, in case an Event of Default
shall have occurred and be continuing, the Trustee shall have power to
accept the resignation of, or remove, any such co-trustee or separate
trustee without the concurrence of the Issuer; upon the request of the
Trustee, the Issuer shall join with the Trustee in the execution,
delivery and performance of all instruments and agreements necessary
or proper to effectuate such resignation or removal; a successor to
any co-trustee or separate trustee so resigned or removed may be
appointed in the manner provided in this Section 6.15;
(v) no trustee under this Indenture shall be personally liable
by reason of any act or omission of any co-trustee or separate trustee
under this Indenture.
(vi) any demand, request, direction, appointment, removal,
notice, consent, waiver or other action in writing executed by any
Holder and delivered to the Trustee shall be deemed to have been
delivered to each such co-trustee or separate trustee; and
(vii) any moneys, papers, securities or other items of
personal property received by any such co-trustee or separate trustee
under this Indenture shall forthwith, so far as may be permitted by
law, be turned over to the Trustee.
Upon the acceptance in writing of appointment by any such co-trustee or
separate trustee, it, she or he shall be vested with the pledge and
assignment of the Collateral and with such rights, powers, duties, trusts
or obligations as shall be specified in the instrument of appointment,
jointly with the Trustee (except insofar as local law makes it necessary
for any such co-trustee or separate trustee to act alone), subject to all
the terms of this Indenture. Every such acceptance shall be filed with the
Trustee and the Issuer.
SECTION 6.16 EFFECT OF DEATH, INCAPACITY, RESIGNATION OR REMOVAL
OF CO-TRUSTEE OR SEPARATE TRUSTEE. In case any co-trustee or separate
trustee shall die, become incapable of acting, resign or be removed, the
pledge and assignment of the Collateral and all rights, powers, trusts,
duties and obligations of the co-trustee or separate trustee shall, so far
as permitted by law, vest in and be exercised by the Trustee unless and
until a successor co-trustee or separate trustee shall be appointed in the
same manner as provided for with respect to the appointment of a successor
Trustee pursuant to Section 6.10 of this Indenture.
ARTICLE 7
CONCERNING THE SECURITYHOLDERS
SECTION 7.1 EVIDENCE OF ACTION TAKEN BY SECURITYHOLDERS. Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by Securityholders
may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Securityholders in Person or by
agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee. Proof of execution of any
instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Indenture and (subject to Sections 6.1 and 6.2)
conclusive in favor of the Trustee and the Issuer if made in the manner
provided in this Article.
SECTION 7.2 PROOF OF EXECUTION OF INSTRUMENTS AND OF HOLDING OF
SECURITIES. Subject to Sections 6.1 and 6.2, the execution of any
instrument by a Securityholder or his agent or proxy may be proved in
accordance with such reasonable rules and regulations as may be prescribed
by the Trustee or in such manner as shall be satisfactory to the Trustee.
The holdings of Securities shall be proved by the Security register or by a
certificate of the registrar thereof.
SECTION 7.3 HOLDERS TO BE TREATED AS OWNERS. The Issuer, the Trustee
and any agent of the Issuer or the Trustee may deem and treat the Person in
whose name any Security shall be registered upon the Security register as
the absolute owner of such Security (whether or not such Security shall be
overdue and notwithstanding any notation of ownership or other writing
thereon) for the purpose of receiving payment of or on account of the
principal of and, subject to the provisions of this Indenture, interest on
such Security and for all other purposes; and neither the Issuer nor the
Trustee nor any agent of the Issuer or the Trustee shall be affected by
any notice to the contrary. All such payments so made to any such Person,
or upon his order, shall be valid, and, to the extent of the sum or sums so
paid, effectual to satisfy and discharge the liability for moneys payable
upon any such Security.
SECTION 7.4 SECURITIES OWNED BY ISSUER DEEMED NOT OUTSTANDING. In
determining whether the Holders of the requisite aggregate principal amount
of Securities have concurred in any direction, consent or waiver under this
Indenture, Securities which are owned by the Issuer or any other obligor on
the Securities or by any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Issuer or
any other obligor on the Securities (other than any holder of Securities on
the Issuance Date) shall be disregarded and deemed not to be outstanding
for the purpose of any such determination, except that for the purpose of
determining whether the Trustee shall be protected in relying on any such
direction, consent or waiver only Securities which the Responsible Officer
actually knows are so owned shall be so disregarded. "Actual knowledge"
means the fact of knowing without a duty to investigate. Securities so
owned which have been pledged in good faith may be regarded as outstanding
if the pledgee establishes to the satisfaction of the Trustee the pledgee's
right so to act with respect to such Securities and that the pledgee is not
the Issuer or any other obligor upon the Securities or any Person directly
or indirectly controlling or controlled by or under direct or indirect
common control with the Issuer or any other obligor of the Securities. In
case of a dispute as to such right, the advice of counsel shall be full
protection in respect of any decision made by the Trustee in accordance
with such advice. Upon request of the Trustee, the Issuer shall furnish to
the Trustee promptly an Officers' Certificate listing and identifying all
Securities, if any, known by the Issuer to be owned or held by or for the
account of any of the above described Persons; and, subject to Section 6.1,
the Trustee shall be entitled to accept such Officers' Certificate as
conclusive evidence of the facts therein set forth.
SECTION 7.5 RIGHT OF REVOCATION OF ACTION TAKEN. At any time prior
to (but not after) the evidencing to the Trustee, as provided in Section
7.1, of the taking of any action by the Holders of the percentage in
aggregate principal amount of the Securities specified in this Indenture in
connection with such action, any Holder of a Security the serial number of
which is shown by the evidence to be included among the serial numbers of
the Securities the Holders of which have consented to such action may, by
filing written notice at the Corporate Trust Office and upon proof of
holding as provided in this Article, revoke such action so far as concerns
such Security. Except as aforesaid, any such action taken by the Holder of
any Security shall be conclusive and binding upon such Holder and upon all
future Holders and owners of such Security and of any Securities issued in
exchange or substitution therefor, irrespective of whether or not any
notation in regard thereto is made upon any such Security. Any action
taken by the Holders of the percentage in aggregate principal amount of the
Securities specified in this Indenture in connection with such action shall
be conclusively binding upon the Issuer, the Trustee and the Holders of all
the Securities.
ARTICLE 8
SUPPLEMENTAL INDENTURES
SECTION 8.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF
SECURITYHOLDERS. The Issuer, when authorized by a resolution of its Board
of Directors, and the Trustee may from time to time and at any time enter
into an indenture or indentures supplemental heretofor one or more of the
following purposes:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Securities in addition to or
in place of certificated Securities;
(c) to provide for the assumption of the Issuer's obligations
hereunder to the Holders in the case of a merger or consolidation
pursuant to Article Nine hereof; or
(d) to make any change that would provide any additional rights
or benefits to the Holders or that does not adversely affect the legal
rights hereunder of any Holder.
The Trustee is hereby authorized to join in the execution of any such
supplemental indenture, to make any further appropriate agreements and
stipulations which may be therein contained and to accept the conveyance,
transfer, assignment, mortgage or pledge of any property thereunder, but
the Trustee shall not be obligated to enter into any such supplemental
indenture which affects the Trustee's own rights, duties or immunities
under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this
Section 8.1 may be executed without the consent of the Holders of any of
the Securities at the time outstanding, notwithstanding any of the
provisions of Section 8.2.
SECTION 8.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF SECURITYHOLDERS.
With the consent (evidenced as provided in Article Seven) of the Holders of
not less than a majority in aggregate principal amount of the Securities at
the time outstanding (including consents obtained in connection with a
tender offer or exchange offer for the Securities), the Issuer, when
authorized by a resolution of the Board of Directors, and the Trustee may,
from time to time and at any time, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of this Indenture or of
any supplemental indenture or of modifying in any manner the rights of the
Holders of the Securities; PROVIDED that no such supplemental indenture
shall, without the consent of each Holder affected thereby (with respect to
any Securities held by a non-consenting Securityholder), (i) reduce the
principal amount of Securities whose Holders must consent to an amendment,
supplement or waiver, (ii) reduce the principal of or change the fixed
maturity of any Security or alter the provisions with respect to the
redemption of the Securities, (iii) reduce the rate of or change the time
for payment of interest on any Security, (iv) waive a Default or Event of
Default in the payment of principal of or premium, if any, or interest on
the Securities (except a rescission of acceleration of the Securities by
the Holders of at least a majority in aggregate principal amount of the
then outstanding Securities and a waiver of the payment default that
resulted from such acceleration), (v) make any Security payable in money
other than that stated in the Securities, (vi) make any change in the
provisions of the Indenture relating to waivers of past Defaults or the
rights of Holders of Securities to receive payments of principal of or
interest on the Securities, (vii) waive a redemption payment with respect
to any Security or (viii) make any change in the foregoing amendment and
waiver provisions.
The Issuer may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any
indenture supplemental hereto. If a record date is fixed, then those
Persons who were Holders at such record date (or their duly designated
proxies), and only those Persons, shall be entitled to consent to such
supplemental indenture or to
revoke any consent previously given, whether or not such Persons continue
to be Holders after such record date. No such consent shall be valid or
effective for more than 90 days after such record date.
Upon the request of the Issuer accompanied by a copy of a resolution
of the Board of Directors certified by the Secretary or an Assistant
Secretary of the Issuer authorizing the execution of any such supplemental
indenture, and upon the filing with the Trustee of evidence of the consent
of the required Securityholders and other documents, if any, required by
Section 7.1, the Trustee shall join with the Issuer in the execution of
such supplemental indenture unless such supplemental indenture affects the
Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not
be obligated to, enter into such supplemental indenture.
It shall not be necessary for the consent of the Securityholders under
this Section 8.2 to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such consent shall
approve the substance thereof.
Promptly after the execution by the Issuer and the Trustee of any
supplemental indenture pursuant to the provisions of this Section 8.2, the
Issuer shall mail a notice thereof by first-class mail to the Holders of
Securities at their addresses as they shall appear on the registry books of
the Issuer, setting forth in general terms the substance of such
supplemental indenture. Any failure of the Issuer to mail such notice, or
any defect therein, shall not, however, in any way impair or affect the
validity of any such supplemental indenture.
SECTION 8.3 EFFECT OF SUPPLEMENTAL INDENTURE. Upon the execution of
any supplemental indenture pursuant to the provisions hereof, this
Indenture shall be and be deemed to be modified and amended in accordance
therewith and the respective rights, limitations of rights, obligations,
duties and immunities under this Indenture of the Trustee, the Issuer and
the Holders of Securities shall thereafter be determined, exercised and
enforced hereunder subject in all respects to such modifications and
amendments, and all the terms and conditions of any such supplemental
indenture shall be and be deemed to be part of the terms and conditions of
this Indenture for any and all purposes.
SECTION 8.4 DOCUMENTS TO BE GIVEN TO TRUSTEE. In connection with the
execution and delivery of any supplemental indenture pursuant to this
Article Eight, the Trustee shall receive an Officers' Certificate and an
Opinion of Counsel and, subject to the provisions of Sections 6.1 and 6.2,
may rely thereon as conclusive evidence that any such supplemental
indenture complies with the applicable provisions of this Indenture. The
Opinion of Counsel delivered pursuant to this Section 8.4 shall include a
statement that the execution, delivery and performance of such supplemental
indenture by the Issuer shall not result in a breach or violation of, or
constitute a default under, this Indenture. Subject to Section 6.1, the
Trustee may conclusively rely on an Opinion of Counsel with respect to the
effect a supplemental indenture will have on a Holder under Section 8.1(d).
SECTION 8.5 NOTATION ON SECURITIES IN RESPECT OF SUPPLEMENTAL
INDENTURES. Securities authenticated and delivered after the execution of
any supplemental indenture pursuant to the provisions of this Article may
bear a notation in form approved by the Trustee as to any matter provided
for by such supplemental indenture or as to any action taken at any such
meeting. If the Issuer or the Trustee shall so determine, new Securities
so modified as to conform, in the opinion of the Trustee and the Board of
Directors, to any modification of this Indenture contained in any such
supplemental indenture may be prepared and executed by the Issuer,
authenticated by the Trustee and delivered in exchange for the Securities
then outstanding.
ARTICLE 9
NO CONSOLIDATION, MERGER, SALE OR CONVEYANCE
Except with the prior written consent of each Holder, neither of the
Issuers shall consolidate with, or merge with or into (whether or not such
Issuer is the surviving corporation), or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its properties
or assets as an entirety in one or more related transactions to, another
corporation, person or entity. For purposes of this Article 9, the
transfer (by lease, assignment, sale or otherwise), in a single transaction
or series of transactions), of all or substantially all of the properties
or assets of one or more Subsidiaries of the Issuer, the Capital Stock of
which constitutes all or substantially all of the properties and assets of
the Issuer, shall be deemed to be the transfer of all or substantially all
of the properties and assets of the Issuer. Nothing herein shall prohibit
TWG or Trans World Gaming of Louisiana, Inc. from selling or otherwise
disposing of assets (other than any interest in TWG International) to
satisfy claims of the holders of those certain 12% Secured Convertible
Senior Bonds due 1999.
ARTICLE 10
SATISFACTION AND DISCHARGE
OF INDENTURE; UNCLAIMED MONEYS
SECTION 10.1 SATISFACTION AND DISCHARGE OF INDENTURE. This Indenture
shall cease to be of further effect as to all outstanding Securities
(except as to (A) rights of registration of transfer and exchange, and the
Issuer's right of optional redemption, (B) substitution of apparently
mutilated, defaced, destroyed, lost or stolen Securities, (C) rights of
Holders to receive payments of principal thereof and interest thereon, (D)
the rights, obligations and immunities of the Trustee hereunder and (E) the
rights of the Securityholders as beneficiaries hereof with respect to the
property so deposited with the Trustee under the provisions of this Section
10.1) when (a) all outstanding Securities, except lost, stolen or destroyed
Securities which shall have been replaced, as provided in Section 2.6, or
paid have been delivered to the Trustee for cancellation or (b) the Issuer
shall have paid or caused to be paid the principal of and interest on the
Securities outstanding hereunder, as and when the same shall have become
due and payable, or (c) (i) the Securities not theretofore delivered to the
Trustee for cancellation shall have become due and payable, or are by their
terms to become due and payable within one year or are to be called for
redemption under arrangements satisfactory to the Trustee upon the giving
of notice of redemption, and (ii) the Issuer shall have irrevocably
deposited or caused to be deposited with the Trustee, as trust funds, (A)
money in an amount or (B) Government Securities which through the payment
of interest and principal will provide, no later than one day before the
due date of payments in respect of the Securities, money in an amount or
(C) a combination thereof, any one of options (A), (B) or (C) being
sufficient in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered
to the Trustee, to pay the principal of and interest on the outstanding
Securities to the date of maturity or redemption, as the case may be. The
Trustee, on demand of the Issuer accompanied by an Officers' Certificate
and an Opinion of Counsel and at the cost and expense of the Issuer, shall
execute proper instruments acknowledging such satisfaction of and
discharging this Indenture. The Issuer agrees to reimburse the Trustee for
any costs or expenses (including the reasonable fees of its counsel) there
after reasonably and properly incurred, to compensate the Trustee for any
services thereafter reasonably and properly rendered by the Trustee in
connection with this Indenture or the Securities and to indemnify the trust
referred to in Section 10.2(a) for any tax liability and pay any expenses
of such trust not otherwise provided for pursuant to such Section.
SECTION 10.2 DEFEASANCE AND DISCHARGE OF INDENTURE. The Issuer shall
be deemed to have paid and discharged the entire Indebtedness on all the
outstanding Securities on the date of the deposit referred to in
subparagraph (a) hereof, and the provisions of this Indenture, as it
relates to such outstanding Securities, shall no longer be in effect (and
the Trustee, at the expense of the Issuer, shall execute proper instruments
acknowledging the same), except as to: (1) rights of registration of
transfer and exchange, and the Issuer's right of optional redemption, (2)
substitution of apparently mutilated, defaced, destroyed, lost or stolen
Securities, (3) rights of Holders to receive payments of principal thereof
and interest thereon, (4) the rights, obligations and immunities of the
Trustee hereunder and (5) the rights of the Securityholders as
beneficiaries hereof with respect to the property so deposited with the
Trustee payable to all or any of them; PROVIDED that all of the following
conditions shall have been satisfied:
(a) the Issuer has deposited or caused to be irrevocably
deposited with the Trustee (or another trustee satisfying the
requirements of Section 6.9) as trust funds in trust, specifically
pledged as security for, and dedicated solely to, the benefit of the
Holders of the Securities, (i) money in an amount or (ii) Government
Securities which through the payment of interest and principal in
respect thereof in accordance with their terms will provide not later
than one day before the due date of any payment referred to below
money in an amount, or (iii) a combination thereof, any one of options
(i), (ii) or (iii) being sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and
discharge without consideration of the reinvestment of such interest
and after payment of all federal, state and local taxes or other
charges and assessments in respect thereof payable by the Trustee, the
principal of and each installment of principal and interest on the
outstanding Securities as of the maturity date of such principal or
installment of interest;
(b) [reserved];
(c) such deposit shall not result in a breach or violation of,
or constitute a default under, this Indenture or any other agreement
or instrument to which the Issuer is a party or by which it is bound;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit;
(e) the Issuer has delivered to the Trustee an Opinion of
Counsel to the effect that (i) the Holders of the Securities shall not
recognize income, gain or loss for Federal income tax purposes as a
result of such deposits, defeasance and discharge and will be subject
to Federal income tax on the same amount and in the same manner and at
the same times as would have been the case if such deposit, defeasance
and discharge had not occurred, (ii) the creation of the trust will
not violate the Investment Company Act of 1940, as amended, and (iii)
Holders of the Securities will have a valid, first priority lien on
the trust funds; and
(f) the Issuer has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for relating to the defeasance
contemplated by this provision have been complied with.
SECTION 10.3 DEFEASANCE OF CERTAIN OBLIGATIONS. The Issuer may omit
to comply with any term, provision or condition set forth in Article 13 and
in Sections 3.5 to 3.13 inclusive, and will not be subject to the Events of
Default described under clauses (d), (e) and (f) of Section 5.1 hereof,
with respect to the Securities, if all of the following conditions have
been satisfied:
(a) the Issuer has deposited or caused to be irrevocably
deposited with the Trustee (or another trustee satisfying the
requirements of Section 6.9) as trust funds in trust, specifically
pledged as security for, and dedicated solely to, the benefit of the
Holders of the Securities, (i) money in an amount, or (ii) Government
Securities which through the payment of interest and principal in
respect thereof in accordance with their terms will provide not later
than one day before the due date of any payment referred to below
money in an amount, or (iii) a combination thereof, any one of options
(i), (ii) or (iii) being sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and
discharge without consideration of the reinvestment of such interest
and after payment of all federal, state and local taxes or other
charges and assessments in respect thereof payable by the Trustee, the
principal of and each installment of principal and interest on the
outstanding Securities on the maturity date of such principal or
installment of principal or interest;
(b) [Reserved].
(c) such deposit shall not result in a breach or violation of,
or constitute a default under, this Indenture or any other agreement
or instrument to which the Issuer is a party or by which it is bound;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit;
(e) the Issuer has delivered to the Trustee an Opinion of
Counsel to the effect that (i) the Holders of the Securities shall not
recognize income, gain or loss for Federal income tax purposes as a
result of such deposit and defeasance of certain obligations and will
be subject to Federal income tax on the same amount and in the same
manner and at the same times as would have been the case if such
deposit and defeasance had not occurred, (ii) the creation of the
trust will not violate the Investment Company Act of 1940, as amended,
and (iii) Holders of the Securities will have a valid, first-priority
lien on the trust funds; and
(f) the Issuer has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein provided for relating to the defeasance
contemplated by this Section 10.3 have been complied with.
SECTION 10.4 APPLICATION BY TRUSTEE OF FUNDS DEPOSITED FOR PAYMENT OF
SECURITIES. Subject to Section 10.6, all moneys and Governmental
Securities deposited with the Trustee pursuant to Sections 10.1, 10.2 and
10.3 shall be held in trust and applied by it to the payment, either
directly or through any paying agent (including the Issuer acting as paying
agent), to the Holders of the particular Securities for the payment or
redemption of which such moneys have been deposited with the Trustee, of
all sums due and to become due thereon for principal and interest; but such
money and Government Securities need not be segregated from other funds
except to the extent required by law.
SECTION 10.5 REPAYMENT OF MONEYS HELD BY PAYING AGENT. In connection
with the satisfaction and discharge of this Indenture all moneys and
Government Securities then held by any paying agent under the provisions of
this Indenture shall, upon demand of the Issuer, be repaid to the Issuer or
paid to the Trustee and thereupon such paying agent shall be released from
all further liability with respect to such moneys and Government Securities.
SECTION 10.6 RETURN OF MONEYS HELD BY TRUSTEE AND PAYING AGENT
UNCLAIMED FOR ONE YEAR. Any moneys and Government Securities deposited
with or paid to the Trustee or any paying agent for the payment of the
principal of or interest on any Security and not applied but remaining
unclaimed for one year after the date upon which such principal or interest
shall have become due and payable shall, upon the written request of the
Issuer and unless otherwise required by mandatory provisions of applicable
escheat or abandoned or unclaimed property law, be repaid to the Issuer by
the Trustee or such paying agent, and the Holder of such Security shall,
unless otherwise required by mandatory provisions of applicable escheat or
abandoned or unclaimed property laws, thereafter look only to the Issuer
for any payment which such Holder may be entitled to collect, and all
liability of the Trustee or any paying agent with respect to such moneys
and Government Securities shall thereupon cease; PROVIDED, HOWEVER, that
the Trustee or such paying agent before being required to make any such
repayments may, at the expense of the Issuer, cause to be published once,
in a newspaper published in the English language, customarily published on
each Business Day and of general circulation in the Borough of Manhattan,
the City of New York, notice that such money remains unclaimed and that
after a date specified therein, which shall not be less than 30 days from
the date of such publication, any unclaimed balance of such money then
remaining will be repaid to the Issuer. In the event any Securities are
not presented for payment when due, either at maturity or at the date fixed
for redemption thereof or otherwise, if funds sufficient to pay such
Securities shall have been made available to the Trustee or Paying Agent
for the benefit of the Holders thereof, all liability of the Issuer to the
Holders for payment of such Securities shall terminate and be completely
discharged. The Trustee shall hold such segregated funds, without
liability for interest thereon, for the benefit of the Holders, who shall
thereafter be restricted exclusively to such funds for the satisfaction of
any claim of whatever nature on their part under this Indenture or relating
to such Securities.
SECTION 10.7 REINSTATEMENT. If the Trustee or paying agent is unable
to apply any moneys or Government Securities in accordance with this
Article Ten 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 Issuer's obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to this Article Ten until such time as the
Trustee or paying agent is permitted to apply all such moneys or Government
Securities in accordance with this Article; PROVIDED, HOWEVER, that if the
Issuer has made any payment of principal of or interest on any Securities
because of the reinstatement of its obligations, the Issuer shall be
subrogated to the rights of the Holders of such Securities to receive such
payment from the moneys or Government Securities held by the Trustee or
paying agent.
ARTICLE 11
MISCELLANEOUS PROVISIONS
SECTION 11.1 INCORPORATORS, SHAREHOLDERS, OFFICERS AND DIRECTORS OF
ISSUER EXEMPT FROM INDIVIDUAL LIABILITY. No recourse under or upon any
obligation, covenant or agreement contained in this Indenture, or in any
Security, or because of any indebtedness evidenced thereby, shall be had
against any incorporator, as such, or against any past, present or future
stockholder, officer, employee, director, or creditor, as such, of the
Issuer or the Trustee or any subsidiary of the Issuer or any successor of
the Issuer or the Trustee or any such subsidiary, whether directly or
through the Issuer or any subsidiary of the Issuer or any successor of the
Issuer or any such subsidiary, under any rule of law, statute or
constitutional provision or by the enforcement of any assessment or by any
legal or equitable proceeding or otherwise, all such liability being
expressly waived and released by the acceptance of the Securities by the
Holders thereof and as part of the consideration for the issue of the
Securities.
SECTION 11.2 PROVISIONS OF INDENTURE FOR THE SOLE BENEFIT OF PARTIES
AND SECURITYHOLDERS. Nothing in this Indenture or in the Securities,
express or implied, shall give or be construed to give to any Person, firm
or corporation, other than the parties hereto and their successors and the
Holders of the Securities, any legal or equitable right, remedy or claim
under this Indenture or under any covenant or provision herein contained.
SECTION 11.3 SUCCESSORS AND ASSIGNS OF ISSUER BOUND BY INDENTURE.
All the covenants, stipulations, promises and agreements in this Indenture
contained by or on behalf of the Issuer shall bind its successors and
assigns, whether so expressed or not.
SECTION 11.4 NOTICES AND DEMANDS ON ISSUER, TRUSTEE AND
SECURITYHOLDERS. Any notice or demand which by any provision of this
Indenture is required or permitted to be given or served by the Trustee or
by the Holders of Securities to or on the Issuer shall be given or served
by (i) delivery in Person, (ii) telecopy (confirmed by copy sent by first-
class mail) or (iii) certified or registered mail, return receipt requested
(except as otherwise specifically provided herein), in each case addressed
(until another address of the Issuer is filed by the Issuer with the
Trustee) to Trans World Gaming Corp., One Penn Plaza, Suite 1503, New York,
NY 10119, Attention: President (Telecopy No.: (212) 563-3380). Any
notice, direction, request or demand by the Issuer or any Securityholder to
or upon the Trustee shall be deemed to have been sufficiently given or
made, for all purposes, if given or served by one of the methods described
in the first sentence of this Section 11.4, addressed to the Corporate
Trust Office (Telecopy No.: 212-754-1303).
Where this Indenture provides for notice to Holders, such notice shall
be sufficiently given (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid, to each Holder entitled
thereto, at his last address as it appears in the Security register. Any
notice which is delivered, telecopied (and confirmed by mail) or mailed in
the manner herein provided shall be conclusively presumed to have been
given, whether or not the addressee receives such notice. In any case
where notice to Holders is given by mail, neither the failure to mail such
notice, nor any defect in any notice so mailed to any particular Holder
shall affect the sufficiency of such notice with respect to other Holders.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any
action taken in reliance upon such waiver.
In case, by reason of the suspension of or irregularities in regular
mail service, it shall be impracticable to mail notice or confirm by mail
telecopy notice to the Issuer and Securityholders when such notice is
required to be given pursuant to any provision of this Indenture, then any
manner of giving such notice as shall be satisfactory to the Trustee shall
be deemed to be a sufficient giving of such notice.
SECTION 11.5 COMPLIANCE CERTIFICATES AND OPINIONS OF COUNSEL;
STATEMENTS TO BE CONTAINED THEREIN. Upon an application or demand by the
Issuer to the Trustee to take any action under any of the provisions of
this Indenture, the Issuer shall furnish to the Trustee (i) an Officers'
Certificate stating that all conditions precedent provided for in this
Indenture relating to the proposed action have been complied with and (ii)
an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent have been complied with and (iii) if appropriate, an
Accountants' Certificate stating that in the opinion of such accountants
all such conditions precedent have been complied with, except that in the
case of any such application or demand as to which the furnishing of such
documents is specifically required by any provision of this Indenture
relating to such particular application or demand, no additional
certificate or opinion need be furnished.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or
covenant provided for in this Indenture shall include (a) a statement that
the Person making such certificate or opinion has read such covenant or
condition, (b) 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, (c) 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
(d) a statement as to whether or not, in the opinion of such Person, such
condition or covenant has been complied with.
Any certificate, statement or opinion of an officer of the Issuer may
be based, insofar as it relates to legal matters, upon a certificate or
opinion of or representations by counsel, unless such officer knows that
the certificate or opinion or representations with respect to the matters
upon which his certificate, statement or opinion may be based as aforesaid
are erroneous, or in the exercise of reasonable care should know that the
same are erroneous. Any certificate, statement or opinion of counsel may
be based, insofar as it relates to factual matters and information which is
in the possession of the Issuer, upon the certificate, statement or opinion
of or representations by an officer or officers of the Issuer, unless such
counsel knows that the certificate, statement or opinion or representations
with respect to the matters upon which his certificate, statement or
opinion may be based as aforesaid are erroneous, or in the exercise of
reasonable care should know that the same are erroneous.
Any certificate, statement or opinion of an officer of the Issuer or
of counsel may be based, insofar as it relates to accounting matters, upon
a certificate or opinion of or representations by an accountant or firm of
accountants in the employ of the Issuer unless such officer or counsel, as
the case may be, knows that the certificate or opinion or representations
with respect to the accounting matters upon which his certificate,
statement or opinion may be based as aforesaid are erroneous, or in the
exercise of reasonable care should know that the same are erroneous.
Any certificate or opinion of any independent firm of public
accountants filed with the Trustee shall contain a statement that such firm
is independent.
SECTION 11.6 PAYMENTS DUE ON SATURDAYS, SUNDAYS AND HOLIDAYS. If the
date of maturity of interest on or principal of the Securities or the date
fixed for redemption of any Security shall not be a Business Day, then
payment of interest or principal need not be made on such date, but may be
made on the next succeeding Business Day with the same force and effect as
if made on the date of maturity or the date fixed for redemption, and no
interest shall accrue for the period after such date.
SECTION 11.7 [Reserved].
SECTION 11.8 APPLICABLE LAW. NEW YORK LAW TO GOVERN. THIS INDENTURE
AND EACH SECURITY SHALL BE DEEMED TO BE A CONTRACT UNDER THE LAWS OF THE
STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS (OTHER THAN CHOICE OF LAW RULES) OF SAID STATE. THE ISSUER
HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED
STATES FEDERAL OR NEW YORK STATE COURT SITTING IN NEW YORK CITY IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE OR THE
SECURITIES AND THE ISSUER HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN
RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY
SUCH UNITED STATES FEDERAL OR NEW YORK STATE COURT. THE ISSUER IRREVOCABLY
WAIVES ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE
LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDINGS
IN SUCH RESPECTIVE JURISDICTIONS. THE ISSUER IRREVOCABLY CONSENTS TO THE
SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING BROUGHT IN
ANY COURT IN OR OF THE STATE OF NEW YORK BY THE DELIVERY OF COPIES OF SUCH
PROCESS TO THE ISSUER, AT ITS ADDRESS SPECIFIED IN SECTION 11.4 HEREOF OR
BY CERTIFIED MAIL DIRECT TO SUCH ADDRESS.
WHENEVER POSSIBLE EACH PROVISION OF THIS INDENTURE SHALL BE
INTERPRETED IN SUCH MANNER AS TO BE EFFECTIVE AND VALID UNDER APPLICABLE
LAW, BUT IF ANY PROVISION OF THIS INDENTURE SHALL BE PROHIBITED BY OR
INVALID UNDER APPLICABLE LAW, SUCH PROVISION SHALL BE INEFFECTIVE TO THE
EXTENT OF SUCH PROHIBITION OR INVALIDITY, WITHOUT INVALIDATING THE
REMAINDER OF SUCH PROVISION OR THE REMAINING PROVISIONS OF THIS INDENTURE.
WHENEVER IN THIS INDENTURE REFERENCE IS MADE TO THE ISSUER OR A HOLDER,
SUCH REFERENCE SHALL BE DEEMED TO INCLUDE, AS APPLICABLE, A REFERENCE TO
THEIR RESPECTIVE SUCCESSORS AND ASSIGNS. THE PROVISIONS OF THIS INDENTURE
SHALL BE BINDING UPON AND SHALL INURE TO THE BENEFIT OF SUCH SUCCESSOR AND
ASSIGNS. THE ISSUER'S SUCCESSORS AND ASSIGNS SHALL INCLUDE, WITHOUT
LIMITATION, A RECEIVER, TRUSTEE OR DEBTOR IN POSSESSION FOR THE ISSUER.
SECTION 11.9 COUNTERPARTS. This Indenture may be executed in any
number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.
SECTION 11.10 EFFECT OF HEADINGS. The Article and Section headings
herein and the Table of Contents are for convenience only and shall not
affect the construction hereof.
SECTION 11.11 WAIVER OF USURIOUS INTEREST. All agreements between
Issuer, the Trustee and the Holders, whether now existing or hereafter
arising and whether written or oral, are hereby limited so that in no
contingency, whether by reason of demand or acceleration of the final
maturity date of the Securities or otherwise, shall the interest contracted
for, charged, received, paid or agreed to be paid to Holders exceed the
maximum amount permissible under the laws of the State of New York
(hereinafter the "Applicable Law"). If, from any circumstance whatsoever,
interest would otherwise be payable to the Holders in excess of the maximum
amount permissible under Applicable Law, the interest payable to the
Holders shall be reduced to the maximum amount permissible under Applicable
Law, and if from any circumstance the Holders shall ever receive anything
of value deemed interest by the Applicable Law in excess of the maximum
amount permissible under the Applicable Law, an amount equal to the
excessive interest shall be applied to the reduction of the principal
hereof and not to the payment of interest, or if such excessive amount of
interest exceeds the unpaid principal balance of principal hereof, such
excess shall be refunded to Issuer. All interest paid or agreed to be paid
to the Holders shall, to the extent permitted by the Applicable Law, be
amortized, prorated, allocated and spread throughout the full period
(including any renewal or extension) until payment in full of the principal
so that the interest hereon for such full period shall not exceed the
maximum amount permissible under the Applicable Law. The Holders expressly
disavow any intent to contract for, charge or receive interest in an amount
which exceeds the maximum amount permissible under the Applicable Law.
This paragraph shall control agreements between the Issuer and the Holders.
SECTION 11.12 VALUE OF SECURITIES. To the extent lawful, Warrants
issued pursuant to the Subscription Agreement have a deminimus value and
shall be valued at zero for U.S. income tax purpose, including adjustment
to the Securities.
ARTICLE 12
REDEMPTION OF SECURITIES
SECTION 12.1 RIGHT OF OPTIONAL REDEMPTION; PRICES. Subject to the
terms and conditions of this Indenture, the Issuer at its option may redeem
all or any portion of, the Securities upon payment of the amount redeemed,
together with accrued and unpaid interest to the date fixed for redemption
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date). To exercise
this option to redeem the Securities, the Issuer shall give the Trustee
written notice thereof not less than 30 but not no more than 60 days prior
to the redemption date selected by the Issuer and specified in such notice.
If less than all of the Securities are to be redeemed, then the Issuer
shall specify the principal amount of Securities to be redeemed. The
redemption price shall be equal to unpaid principal to be redeemed and
accrued and unpaid interest to the date fixed for redemption.
If less than all of the Outstanding Securities are to be called for
redemption, the Securities shall be redeemed on a reasonably proportionate
basis, in minimum amounts of $100.00, according to the principal amount of
securities represented by such Securities Outstanding
SECTION 12.2 NOTICE OF REDEMPTION. Notice of redemption to the
Holders of Securities to be redeemed as a whole shall be given by mailing
notice of such redemption by first-class mail, postage prepaid, at least 30
and not more than 60 days prior to the date fixed for redemption to such
Holders of Securities at their last addresses as they shall appear upon the
registry books. Any notice which is mailed in the manner herein provided
shall be conclusively
presumed to have been duly given, whether or not the Holder receives the
notice. Failure to give notice by mail, or any defect in the notice to the
Holder of any Security designated for redemption as a whole or in part,
shall not affect the validity of the proceedings for the redemption of any
other Security.
The notice of redemption to each such Holder shall specify the
principal amount of each Security held by such Holder to be redeemed, the
date fixed for redemption, the redemption price, the place or places of
payment, that payment will be made upon presentation and surrender of such
Securities, that interest accrued to the date fixed for redemption to the
extent provided in Section 12.1 will be paid as specified in said notice,
that on and after said date interest thereon will cease to accrue.
The notice of redemption of Securities to be redeemed shall be given
by the Issuer or, at the Issuer's request, by the Trustee in the name and
at the expense of the Issuer. The Issuer shall notify the Trustee of such
redemption at least 15 days prior to the date the notice of redemption is
to be sent to the Holders and shall specify in such notice whether the
Trustee is to give such notice.
At least one Business Day prior to the redemption date specified in
the notice of redemption given as provided in this Section 12.2, the Issuer
will deposit with the Trustee or with one or more paying agents (or, if the
Issuer is acting as paying agent, set aside, segregate and hold in trust as
provided in Section 3.4) in immediately available funds an amount of money
sufficient to redeem in immediately available funds on the redemption date
all the Securities so called for redemption at the appropriate redemption
price, together with accrued interest to the date fixed for redemption to
the extent provided in Section 12.1.
SECTION 12.3 PAYMENT OF SECURITIES CALLED FOR REDEMPTION. If notice
of redemption has been given as above provided, the Securities shall become
due and payable on the date and at the place stated in such notice at the
applicable redemption price, together with interest accrued to the date
fixed for redemption, and on and after said date (unless the Issuer shall
default in the payment of such Securities at the redemption price, together
with interest accrued to said date to the extent provided in Section 12.1)
interest on the Securities or portions of Securities so called for
redemption shall cease to accrue and, except as provided in Sections 6.5
and 10.6, such Securities shall cease from and after the date fixed for
redemption to be entitled to any benefit or security under this Indenture,
and the Holders thereof shall have no right in respect of such Securities
except the right to receive the redemption price thereof and unpaid
interest to the date fixed for redemption to the extent provided in Section
12.1. On presentation and surrender of such Securities at a place of
payment specified in said notice, said Securities shall be paid and
redeemed by the Issuer at the applicable redemption price, together with
interest accrued thereon to the date fixed for redemption; PROVIDED that
any semi-annual payment of interest becoming due on the date fixed for
redemption shall be payable to the Holders of such Securities registered as
such on the relevant record date subject to the terms and provisions of
Section 2.4 hereof.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal shall, until paid or duly
provided for, bear interest from the date fixed for redemption at the rate
borne by the Security.
SECTION 12.4 EXCLUSION OF CERTAIN SECURITIES FROM ELIGIBILITY FOR
SELECTION FOR REDEMPTION. Securities shall be excluded from eligibility
for selection for redemption if they are identified by registration and
certificate number in an Officer's Certificate and delivered to the Trustee
at least 40 days prior to the last date on which notice of redemption may
be given as being owned of record and beneficially by, and not pledged or
hypothecated by, (a) the Issuer or (b) an entity specifically identified in
such written statement as directly or indirectly controlling or controlled
by or under direct or indirect common control with the Issuer (other than a
holder of the Securities on the Issuance Date).
SECTION 12.5 PARTIAL REDEMPTION OF SECURITIES. In case part but not
all of an Outstanding Security shall be selected for redemption, upon
presentation and Surrender of such Security by the Holder thereof or its
attorney duly authorized in writing (with due endorsement by, or a written
instrument of transfer in such form satisfactory to the Trustee) the
Trustee shall authenticate and deliver to a, upon the order of such Holder,
without change there for, for the unredeemed portion of the principal
amount of the Security so surrendered, a Security or Securities, at the
option of such Holder, of like tenor. Fully registered Securities so
presented and surrendered shall be canceled in accordance with this
Indenture.
ARTICLE 13
RIGHT OF FIRST REFUSAL
13.1 OPTION. In the event either Issuer or any Subsidiary or any
Affiliate thereof, directly or indirectly, is able to obtain an indication
of interest from a bona fide lender of recourse financing for any use
related to any aspect of TWG International's permitted line of business
(other than as related to the development of an opportunity or
opportunities in Bishkek), as set forth in Section 3.19 (a "Qualified Loan
Agreement"), the Securityholders (or permitted assigns) shall be provided
the option to act as the lender pursuant to the terms of such Qualified
Loan Agreement (the "Right of First Refusal").
13.2 TERMS. Not less than five (5) business days (the "Notice
Period") following the documentation of a Qualified Loan Agreement, TWG
International shall provide written notice to each Securityholder of the
Qualified Loan Agreement and enclose a copy thereof. The right of the
Securityholders to participate as a lender under a Qualified Loan Agreement
shall be referred to herein as the "Qualified Offer". Each Securityholder
desiring to so participate as a lender must so notify TWG International in
writing, to be received by TWG International not less than 10 days
following the expiration of the Notice Period. If the Qualified Offer is
not accepted in writing by at least one Securityholder, or a permitted
assign thereof, the Qualified Offer shall be deemed rejected. If at least
one Securityholder, but less than all Securityholders, timely accepts the
Qualified Offer, such consenting Securityholder(s) shall be provided an
additional five business days thereafter to agree, on a pro rata basis, and
in any combination of Securityholders, to fund the nonconsenting
Securityholders' commitments under the terms of the Qualified Loan
Agreement. If any combination of consenting Securityholders so agree, such
Securityholders shall become the lender under the Qualified Loan Agreement.
If no combination of Securityholders timely agrees to fund 100% of the sums
required under the Qualified Loan Agreement, such Qualified Offer shall be
deemed rejected. The terms and conditions of any Qualified Loan Agreement
negotiated by the Company shall include terms taking into account the need
of the Issuer to comply with the terms of this Section and shall provide
the accepting Securityholders ten days within which to fund such loan
amount following final acceptance pursuant to the terms hereof.
13.3 EXPIRATION OF RIGHT OF FIRST REFUSAL. This Right of First
Refusal shall expire on the earlier of (a) 18 months from the date of this
Indenture, (b) the date all Obligations under this Indenture are defeased
pursuant to Section 10.2, and (c) the date all Obligations are satisfied in
full.
13.4 ENFORCEMENT OF RIGHTS. Should the Issuer fails to comply with
the terms of this Section, such failure shall be deemed an Event of Default
under the terms of this Indenture should holders of the majority of the
principal amount of the Securities outstanding deem it as such by written
notice to the Trustee.
ARTICLE 14
SECURITY
SECTION 14.1 PLEDGE AND SECURITY INTEREST. "Collateral" means all of
the capital stock of TWG International and of TWG Finance and all Property
of TWG Finance, including the Funding Note. All references herein to the
"Security Interest" and to the "Lien of this Indenture" shall be deemed to
mean and refer to the Liens granted to the Trustee and the Holders pursuant
to the terms of the Collateral Agreements.
SECTION 14.2 SECURITY FOR OBLIGATION. The Security Interest secures
among other things the payment and performance of all obligations of the
Issuer now or hereafter existing under the Securities, the Collateral
Agreements or this Indenture, including without limitation the prompt
payment when due (whether by acceleration or otherwise) of the principal of
or interest on the Securities (all such obligations of the Issuer being
herein called the "Obligations").
SECTION 14.3 PERFECTION OF SECURITY INTEREST.
(a) The Issuer shall cause this Indenture, the Collateral
Agreements, financing statements, continuation statements,
notifications of secured transactions and other instruments with
respect to the Collateral to be promptly executed, recorded,
registered and filed and to be kept recorded, registered and filed in
such manner and in such places as may be required by law, and take all
such other actions as may be required, including delivery of
possession of the Funding Note and of certificates evidencing the
capital stock of TWG International and TWG Finance to the Trustee, in
order to make effective the Security Interest in all personal property
constituting part of the Collateral.
(b) A schedule of the known Collateral Agreements may be
attached hereto as an Exhibit.
SECTION 14.4 NO DISPOSITION OF COLLATERAL; RELEASE OF LIEN OF
INDENTURE. Neither TWG International nor any Subsidiary thereof may sell
or otherwise dispose of Collateral, including the Capital Stock of or an
interest in any of its direct and indirect Subsidiaries, except pursuant to
Section 3.12. TWG Finance may not sell or otherwise dispose of Collateral
except at the direction of the Trustee for the benefit of the
Securityholders pursuant to the terms of the Collateral Agreements and/or
the Funding Collateral Agreements.
SECTION 14.5 OTHER LIENS. The Issuer will not create or permit to
exist any Lien upon or with respect to any of the Collateral, except for
any Lien permitted by the terms hereof or of the Collateral Agreements.
SECTION 14.6 TRUSTEE APPOINTED ATTORNEY-IN-FACT. The Trustee shall
take any action required or permitted to be taken by the Trustee under the
Collateral Agreements if directed in writing to do so by the Holders of at
least 50% in aggregate principal amount of the Securities then outstanding;
provided, however, that no action shall be taken which, in the Opinion of
Counsel, impairs the enforceability, priority or perfection of the Lien of
this Indenture as to the Collateral then subject thereto, unless directed
by all Holders.
SECTION 14.7 RETURN OF COLLATERAL. Upon the payment in full of the
obligations or upon satisfaction and discharge of this Indenture in
accordance with Article 10 (and the Trustee receiving written confirmation
thereof satisfactory to the Trustee), the Trustee, subject to the terms of
the Collateral Agreements, shall forthwith take all necessary action to
return any Collateral in the Trustee's possession to the Issuer or its
Subsidiaries, as the case may be, and release the Liens thereon and
Security Interests therein.
SECTION 14.8 DEFAULT REMEDIES. The Trustee shall have the rights set
forth in the Collateral Agreements to exercise the remedies to realize upon
the Collateral set forth in the Collateral Agreements.
SECTION 14.9 PROCEEDS. The proceeds of any sale or other disposition
of the Collateral received by the Trustee pursuant to the terms of the
Collateral Agreements shall be applied by the Trustee:
First: to the payment of the costs and expenses of such sale,
including a reasonable compensation to the Trustee, and its agents,
attorneys and counsel, and of all charges, expenses, liabilities and
advances incurred or made by the Trustee under this Indenture;
Second: to the reimbursement of the Trustee for any sum advanced
by the Trustee to the Issuer in order to preserve the Collateral
together with interest at the rate charged publicly announced by
Citibank, N.A. from time to time in New York, New York as its
reference rate; and
Third: as provided in Section 5.3.
SECTION 14.10 DEFICIENCY. The Issuer shall remain liable for any
unfulfilled obligations, together with interest thereon, in accordance with
and subject to the provisions of the Securities and this Indenture.
SECTION 14.11 TRUSTEE'S DUTIES. The powers conferred upon the
Trustee by this Article 14 are solely to protect its interest and the
interest of the Holders in the Collateral and shall not impose any duty
upon the Trustee to exercise any such powers except as expressly provided
in this Indenture or in the Collateral Agreements. The Trustee shall be
under no duty to the Issuer 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 the Obligations, or to take any steps necessary to
preserve any rights against prior parties except as expressly provided in
this Indenture or in the Collateral Agreements. The Trustee shall not be
liable to the Issuer for failure to collect or realize upon any or all of
the obligations or Collateral, or for any delay in so doing, nor shall the
Trustee be under any duty to the Issuer to take any action whatsoever with
regard thereto. The Trustee shall have no duty to the Issuer to comply
with any recording, filing, or other legal requirements necessary to
establish or maintain the validity, priority or enforceability of, or the
Trustee's rights in or to, any of the Collateral.
SECTION 14.12 SPECIAL TRUSTEE POWERS DUE TO ENVIRONMENTAL CONDITIONS.
The Trustee shall have the power to settle or compromise at any time any
and all claims against the Trust Estate or the Trustee (either in its
corporate capacity, or in the personal capacity of the individuals serving
as trust officers on behalf of the Trustee), which may be asserted by any
governmental body or private party involving the alleged violation of any
applicable Environmental Laws affecting the Collateral or any other
property held in trust with respect to or in connection with the
Collateral. Notwithstanding any provision in this subparagraph to the
contrary, the Trustee may not settle or compromise any claim against the
Trust Estate or the Trustee which may result in any liability being
asserted against Issuer without Issuer having had a reasonable opportunity
to resolve the alleged violation, which reasonable opportunity shall not
exceed 60 days from the date on which Issuer shall have been notified of
such alleged violation by a governmental body or a private party; provided,
however, in the event that Issuer shall be in default under the Indenture
or under the Collateral Agreements, then it shall have none of the rights
afforded to it in this paragraph.
The Trustee shall not be personally liable to the Holders or any other
Person for any decrease in value of the Collateral by reason of the
Trustee's compliance with any Applicable Environmental Laws (as defined in
the Collateral Agreements), specifically including any reporting
requirement under such law. Neither the acceptance by the Trustee of
property nor failure by the Trustee to inspect property shall be deemed to
create any inference as to whether or not there is or may be any liability
under any applicable Environmental Laws with respect to such property.
Notwithstanding anything in this Indenture or the Collateral
Agreements to the contrary, the Trustee shall not be required to initiate
foreclosure proceedings with respect to the Collateral, and shall not
otherwise be required to acquire possession of, or take other action with
respect to the Collateral which could cause the Trustee to be considered an
"owner" or "operator" within the meaning of the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended from time to
time, or any other law dealing with the environmental matters or hazardous
substances, unless the Trustee has sufficient comfort, based on previous
determinations by experts on which it can rely, including environmental
report, that:
(a) there are no circumstances present at the Collateral
relating to the use, management or disposal of any hazardous
substances, hazardous materials, hazardous wastes or petroleum-based
materials for which investigation, testing, monitoring, contaminant
clean up or remedial action could be required under any environmental
laws, or that if any such materials are present for which such action
could be required, that it would be nevertheless in the best economic
interest of the Trustee and the Holders to take such actions with
respect to the Collateral;
(b) if the Trustee has determined that it would be in the best
economic interest of the Trustee and the Holders, the Trustee must be
satisfied that they will suffer no unreimbursed liabilities and will
be adequately reimbursed for all liabilities, expenses and costs from
available funds in Trustee's possession and control; and
(c) if the Trustee has determined that it would be in the best
economic interest of the Trustee and the Holders to take any such
action and its aforementioned liabilities, expenses and costs are
adequately reimbursed, the Trustee has so notified the Holders and has
not received, within 30 days of such notification, instructions from
owners of fifty percent (50%) or more in principal amount of the then
outstanding Securities directing it not to take such action.
If the foregoing conditions are not satisfied and the Trustee is not
willing to waive such conditions and initiate foreclosure proceedings, then
the Trustee shall take such actions as are reasonably necessary or
appropriate in order to facilitate the appointment of a co-trustee, being a
person or entity designated by the Holders of a majority in principal
amount of the Securities then outstanding and to assign to such person or
entity (subject, however, to the trusts created pursuant to the Indenture)
the beneficial interest under the Collateral Agreements which secures the
obligations under the Indenture, for the limited purpose of conducting a
foreclosure of such Collateral Agreements and receiving and holding any
title to real property obtained as a result of such foreclosure. Persons
or entities appointed as co-trustees or agents of the Trustee pursuant to
this Section shall not be required to meet the criteria of Section 6.9 of
this Indenture, or any other criteria, in order to serve as such.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and, where appropriate, their respective corporate seals
to be hereunto affixed and attested, all as of March 31, 1998.
[CORPORATE SEAL] TRANS WORLD GAMING CORP.
Attest: By:
-------------------------------------
By: By:
------------------------ -------------------------------------
[CORPORATE SEAL] TWG INTERNATIONAL U.S. CORPORATION
Attest: By:
-------------------------------------
By: By:
------------------------ -------------------------------------
[CORPORATE SEAL] TWG FINANCE CORP.
Attest: By:
-------------------------------------
By: By:
------------------------ -------------------------------------
U.S. TRUST COMPANY OF TEXAS, N.A. , as
Trustee
By:
--------------------------------
--------------------------------
(Name and Title)
EXHIBIT A TO INDENTURE
USE OF PROCEEDS
Pursuant to Section 3.28 of the Indenture, the proceeds from the Securities
will be used as described below, and to the extent not further or otherwise
instructed by the Issuer in a letter of instructions, the Trustee is
authorized and directed to apply the proceeds as follows:
PAYEE AMOUNT
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