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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under
THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 2)
TRANS WORLD GAMING CORP.
(Name of Issuer)
One Penn Plaza, Suite 1503
New York, New York 10119-0002
Common Stock
(Title of Class of Securities)
893375105
(CUSIP number)*
Copy to:
Christopher P. Baker Christopher G. Karras
120 Boylston St. Dechert Price & Rhoads
Boston, Massachusetts 02116 4000 Bell Atlantic Tower
(617) 423-1080 1717 Arch Street
Philadelphia, Pennsylvania 19103-2793
(Name, address and telephone number of
Person Authorized to Receive Notices
and Communications)
March 31, 1998
(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 [ ]
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
This information required on 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 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
<PAGE>
- - --------------------------------------------------------------------------------
CUSIP NO. 853375105
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
1) Name of Reporting Person Christopher P. Baker
SS. Or I.R.S. Identification
No. of Above Person ###-##-####
- - --------------------------------------------------------------------------------
2) Check the Appropriate Box (a) [ ]
if a Member of a Group (b) [ ]
- - --------------------------------------------------------------------------------
3) SEC Use Only
- - --------------------------------------------------------------------------------
4) Source of Funds 00
- - --------------------------------------------------------------------------------
5) Check Box if Disclosure of
Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) [ ]
- - --------------------------------------------------------------------------------
6) Citizenship or Place of Organization U.S.A.
- - --------------------------------------------------------------------------------
Number of Shares 7) Sole Voting
Beneficially Owned By Each Power 3,026,037
Reporting Person With -----------------------------------
8) Shared Voting
Power 0
-----------------------------------
9) Sole Dispositive
Power 3,026,037
-----------------------------------
10) Shared Dispositive
Power 0
-----------------------------------
- - --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially
Owned by Each Reporting Person 3,026,037
- - --------------------------------------------------------------------------------
12) Check Box if the Aggregate Amount
in Row (11) Excludes Certain Shares [X]*
- - --------------------------------------------------------------------------------
13) Percent of Class Represented
by Amount in Row (11) 52.5%
- - --------------------------------------------------------------------------------
14) Type of Reporting Person IN
- - --------------------------------------------------------------------------------
- - -------------------
* Excludes 5,000 shares of Common Stock and a Warrant for 54,728 shares of
Common Stock owned by Mr. Baker's spouse. Mr. Baekr disclaims beneficial
ownership of such securities.
Page 2 of 160
<PAGE>
- - --------------------------------------------------------------------------------
CUSIP NO. 853375105
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
1) Name of Reporting Person C.P. Baker & Company, Ltd.
SS. Or I.R.S. Identification
No. of Above Person 04-3062259
- - --------------------------------------------------------------------------------
2) Check the Appropriate Box a) [ ]
if a Member of a Group b) [ ]
- - --------------------------------------------------------------------------------
3) SEC Use Only
- - --------------------------------------------------------------------------------
4) Source of Funds 00
- - --------------------------------------------------------------------------------
5) Check Box if Disclosure of
Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) [ ]
- - --------------------------------------------------------------------------------
6) Citizenship or Place of Organization Massachusetts
- - --------------------------------------------------------------------------------
Number of Shares 7) Sole Voting
Beneficially Owned By Each Power 420,366
Reporting Person With -----------------------------------
8) Shared Voting
Power 0
-----------------------------------
9) Sole Dispositive
Power 420,366
-----------------------------------
10) Shared Dispositive
Power 0
-----------------------------------
- - --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially
Owned by Each Reporting Person 420,366
- - --------------------------------------------------------------------------------
12) Check Box if the Aggregate Amount
in Row (11) Excludes Certain Shares [ ]
- - --------------------------------------------------------------------------------
13) Percent of Class Represented
by Amount in Row (11) 12.2%
- - --------------------------------------------------------------------------------
14) Type of Reporting Person CO, BD
- - --------------------------------------------------------------------------------
Page 3 of 160
<PAGE>
<TABLE>
<CAPTION>
- - --------------------------------------------------------------------------------
CUSIP NO. 853375105
- - --------------------------------------------------------------------------------
<S> <C>
- - ----------------------------------------------------------- -------------------------------
1) Name of Reporting Person C.P. Baker Venture Fund I, Limited Partnership
SS. Or I.R.S. Identification
No. of Above Person 04-3234872
- - -------------------------------------------------------------------------------------------
2) Check the Appropriate Box (a) [ ]
if a Member of a Group (b) [ ]
- - -------------------------------------------------------------------------------------------
3) SEC Use Only
- - -------------------------------------------------------------------------------------------
4) Source of Funds 00
- - -------------------------------------------------------------------------------------------
5) Check Box if Disclosure of
Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e)
- - -------------------------------------------------------------------------------------------
6) Citizenship or Place of Organization Massachusetts
- - -------------------------------------------------------------------------------------------
Number of Shares 7) Sole Voting
Beneficially Owned By Each Power 218,862
Reporting Person With -----------------------------------
8) Shared Voting
Power 0
-----------------------------------
9) Sole Dispositive
Power 218,862
-----------------------------------
10) Shared Dispositive
Power 0
-----------------------------------
- - -------------------------------------------------------------------------------------------
11) Aggregate Amount Beneficially
Owned by Each Reporting Person 218,862
- - -------------------------------------------------------------------------------------------
12) Check Box if the Aggregate Amount
in Row (11) Excludes Certain Shares [ ]
- - -------------------------------------------------------------------------------------------
13) Percent of Class Represented
by Amount in Row (11) 6.7%
- - -------------------------------------------------------------------------------------------
14) Type of Reporting Person PN
- - -------------------------------------------------------------------------------------------
</TABLE>
Page 4 of 160
<PAGE>
- - --------------------------------------------------------------------------------
CUSIP NO. 853375105
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
1) Name of Reporting Person CP Baker LLC
SS. Or I.R.S. Identification
No. of Above Person 04-3323325
- - --------------------------------------------------------------------------------
2) Check the Appropriate Box a) [ ]
if a Member of a Group b) [ ]
- - --------------------------------------------------------------------------------
3) SEC Use Only
- - --------------------------------------------------------------------------------
4) Source of Funds 00
- - --------------------------------------------------------------------------------
5) Check Box if Disclosure of
Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) [ ]
- - --------------------------------------------------------------------------------
6) Citizenship or Place of Organization Delaware
- - --------------------------------------------------------------------------------
Number of Shares 7) Sole Voting
Beneficially Owned By Each Power 1,005,667
Reporting Person With -----------------------------------
8) Shared Voting
Power 0
-----------------------------------
9) Sole Dispositive
Power 1,005,667
-----------------------------------
10) Shared Dispositive
Power 0
-----------------------------------
- - --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially
Owned by Each Reporting Person 1,005,667
- - --------------------------------------------------------------------------------
12) Check Box if the Aggregate Amount
in Row (11) Excludes Certain Shares [ ]
- - --------------------------------------------------------------------------------
13) Percent of Class Represented
by Amount in Row (11) 25.7%
- - --------------------------------------------------------------------------------
14) Type of Reporting Person CO
- - --------------------------------------------------------------------------------
Page 5 of 160
<PAGE>
<TABLE>
<CAPTION>
- - --------------------------------------------------------------------------------
CUSIP NO. 853375105
- - --------------------------------------------------------------------------------
<S> <C>
1) Name of Reporting Person Anasazi Partners, Limited Partnership
SS. Or I.R.S. Identification
No. of Above Person 04-3326588
- - --------------------------------------------------------------------------------
2) Check the Appropriate Box a) [ ]
if a Member of a Group b) [ ]
- - --------------------------------------------------------------------------------
3) SEC Use Only
- - --------------------------------------------------------------------------------
4) Source of Funds 00
- - --------------------------------------------------------------------------------
5) Check Box if Disclosure of
Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) [ ]
- - --------------------------------------------------------------------------------
6) Citizenship or Place of Organization Massachusetts
- - --------------------------------------------------------------------------------
Number of Shares 7) Sole Voting
Beneficially Owned By Each Power 1,005,667
Reporting Person With -----------------------------------
8) Shared Voting
Power 0
-----------------------------------
9) Sole Dispositive
Power 1,005,667
-----------------------------------
10) Shared Dispositive
Power 0
-----------------------------------
- - --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially
Owned by Each Reporting Person 1,005,667
- - --------------------------------------------------------------------------------
12) Check Box if the Aggregate Amount
in Row (11) Excludes Certain Shares [ ]
- - --------------------------------------------------------------------------------
13) Percent of Class Represented
by Amount in Row (11) 25.7%
- - --------------------------------------------------------------------------------
14) Type of Reporting Person PN
- - --------------------------------------------------------------------------------
</TABLE>
Page 6 of 160
<PAGE>
ITEM 1. SECURITY AND ISSUER
This Statement on Schedule 13D (the "Statement") relates to the Common
Stock, $.001 par value (the "Common Stock") of Trans World Gaming Corp. (the
"Issuer"). The principal place of business of the Issuer is One Penn Plaza,
Suite 1503, New York, New York 10119-0002.
ITEM 2. IDENTITY AND BACKGROUND
(a) The names of the filing persons are:
Christopher P. Baker ("Mr. Baker")
C.P. Baker & Company Ltd., a corporation incorporated under the
laws of the Commonwealth of Massachusetts ("Baker Ltd."), and
whose directors and executive officers are Mr. Baker, Earl Baker,
Thomas Marturano and Robert Rafferty.
CP Baker LLC, a limited liability company organized under the laws
of the State of Delaware, and whose sole manager and officer is
Mr. Baker.
Anasazi Partners, Limited Partnership, a partnership formed under
the laws of the Commonwealth of Massachusetts ("Anasazi
Partners"), and whose general partner is CP Baker LLC.
C.P. Baker Venture Fund I, Limited Partnership ("Venture Fund") a
partnership formed under the laws of the Commonwealth of
Massachusetts and whose general partner is Baker Ltd.
(b-c) Principal office and principal place of business for Mr. Baker,
Baker Ltd., CP Baker LLC, Anasazi Partners, Venture Fund and
Robert Rafferty:
120 Boylston Street
Boston, MA 02116
Principal office and principal place of business for Thomas
Marturano:
Hackensack Meadowlands Development Commission
1 Dekort Park Plaza
Lyndhurst, NJ 07071
Page 7 of 160
<PAGE>
Principal office and principal place of business for Earl Baker:
Citadel Communications Corp.
1502 Wampanaug Trail
East Providence, RI 02915
Mr. Baker's principal occupation is President of Baker Ltd.
Robert Rafferty's principal occupation is Vice President of Baker
Ltd.
Earl Baker's principal occupation is Account Executive for Citadel
Communications Corp., which manages radio stations.
Thomas Marturano's principal occupation is Director of Solid Waste
Management of Hackensack Meadowlands Development Commission, a
solid waste disposal company.
Baker Ltd.'s principal business is acting as a broker-dealer.
CP Baker LLC's principal business is serving as the general
partner of Anasazi Partners.
Anasazi Partners' principal business is the investment in and
trading of capital stocks, warrants, bonds, notes, debentures and
other securities.
Venture Fund's principal business is the investment in and trading
of capital stocks, warrants, bonds, notes, debentures and other
securities.
(d) During the last five years, none of Mr. Baker, Baker Ltd., CP Baker
LLC, Anasazi Partners, Venture Fund, Earl Baker, Robert Rafferty or
Thomas Marturano has been convicted in a criminal proceeding.
(e) During the last five years, none of Mr. Baker, Baker Ltd., CP Baker
LLC, Anasazi Partners, Venture Fund, Earl Baker, Robert Rafferty or
Thomas Marturano has 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) Each of Mr. Baker, Earl Baker, Thomas Marturano and Robert Rafferty is
a United States citizen.
Page 8 of 160
<PAGE>
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
The Issuer entered into a subscription agreement dated as of March 16, 1998
(the "Subscription Agreement") pursuant to which it proposed to issue certain
securities. It was a condition to the consummation of such agreement that:
(1) certain warrants issued to, among other persons, Mr. Baker, Baker Ltd.
and Venture Fund (the "Outstanding Exchange Warrants"), be exchanged
for new warrants (the "Amended Warrants") that would not contain
certain non-dilutive provisions contained in the Outstanding Exchange
Warrants, pursuant to an Agreement to Amend Warrants dated as of March
25, 1998 (the "Agreement to Amend Warrants"); and
(2) pursuant to a Consent to Amend Indenture, Bonds and Warrants dated as
of March 25, 1998 (the "Consent"), the 12% Secured Convertible Senior
Bonds (the "1996 Bonds") and related warrants (the "1996 Warrants")
issued in 1996 to, among other persons, Anasazi Partners, be exchanged
for non-convertible bonds (the "New Bonds") and new warrants (the "New
Warrants"), and that additional warrants (the "Consent Warrants") be
issued in connection with such exchange.
The Agreement to Amend Warrants was consummated on March 31, 1998. As a
result, Mr. Baker exchanged 266,600 Outstanding Exchange Warrants for 1,094,309
Amended Warrants; Venture Fund exchanged 53,320 Outstanding Exchange Warrants
for 218,862 Amended Warrants; Baker Ltd. exchanged 99,975 Outstanding Exchange
Warrants for 410,366 Amended Warrants; and Adrienne Baker exchanged 13,333
Outstanding Exchange Warrants for 54,728 Amended Warrants. The foregoing is not
intended to be a complete description of the Agreement to Amend Warrants, a copy
of which is attached hereto as Exhibit 2 and the terms of which are incorporated
herein by reference.
The Consent was consummated on March 31, 1998. As a result, Anasazi
Partners exchanged $1,000,000 principal amount of 1996 Bonds for $1,000,000
principal amount of New Bonds; Anasazi Partners exchanged 200,000 1996 Warrants
for 200,000 New Warrants; and the Issuer issued to Anasazi Partners 666,667
Consent Warrants. The foregoing is not intended to be a complete description of
the Consent, a copy of which is attached hereto as Exhibit 3 and the terms of
which are incorporated herein by reference.
Pursuant to a Put Option Agreement dated as of March 24, 1998 between Mr.
Baker and Fundamental Investors, L.P. (the "Fundamental Put"), (i) Mr. Baker
granted Fundamental Investors, L.P. an option to sell to Mr. Baker up to
$200,000 principal amount of New Bonds, and (ii) Fundamental Investors, L.P.
sold to Mr. Baker 133,333 New Warrants. The foregoing is not intended to be a
complete description of the Fundamental Put, a copy of which is attached hereto
as Exhibit 4 and the terms of which are incorporated herein by reference.
Pursuant to a Put Option Agreement dated as of March 24, 1998, between Mr.
Baker and New Generation Limited Partnership (the "Generation Put"), Mr. Baker
granted New
Page 9 of 160
<PAGE>
Generation Limited Partnership an option to sell to Mr. Baker up to $250,000
principal amount of New Bonds and the 166,667 New Warrants issued in connection
with such principal amount. Such option is exercisable from July 1, 1999 through
and including July 31, 1999. The foregoing is not intended to be a complete
description of the Generation Put, a copy of which is attached hereto as Exhibit
5 and the terms of which are incorporated herein by reference.
ITEM 4. PURPOSE OF TRANSACTION
The persons named in Item 2 have each acquired securities of the Issuer for
investment purposes and, with respect to the securities acquired pursuant to the
Agreement to Amend Warrants and the Consent, to satisfy the conditions to the
consummation of the Subscription Agreement. The persons named in Item 2 each
intend to review, from time to time, his or its investment in the Issuer on the
basis of various factors, including but not limited to the Issuer's business,
financial condition, results of operations and prospects, general economic and
industry conditions, the securities market in general and the market for the
Issuer's securities in particular, as well as other developments and other
investment opportunities. Based upon those considerations, the persons named in
Item 2 each may decide to exercise all or some of the New Warrants, the Consent
Warrants, and/or Amended Warrants or to seek to acquire additional securities of
the Issuer on the open market or in privately negotiated transactions, or to
dispose of all or a portion of the securities of the Issuer that he or it owns.
Except as set forth above, none of the persons named in Item 2 has
formulated any plans or proposals of the types referred to in clauses (a)
through (j) of Item 4 of Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a-b) Mr. Baker may be deemed to be the beneficial owner with sole power to
vote and dispose of a total of 3,026,037 shares of Common Stock (or 52.5% of the
outstanding Common Stock as calculated in accordance with Rule 13d-3(d)), which
includes the following: 153,500 shares of Common Stock of which Mr. Baker is the
record holder; 1,227,642 shares of Common Stock that may be acquired upon the
exercise of the Amended Warrants and the New Warrants owned by Mr. Baker; 10,000
shares of Common Stock of which Baker Ltd. is the record holder; 410,366 shares
of Common Stock that may be acquired upon exercise of the Amended Warrants owned
by Baker Ltd.; 218,862 shares of Common Stock that may be acquired upon exercise
of the Amended Warrants owned by Venture Fund; 200,000 shares of Common Stock
that may be acquired upon exercise of the New Warrants owned by Anasazi
Partners; 666,667 shares of Common Stock that may be acquired upon exercise of
the Consent Warrants owned by Anasazi Partners; and the 139,000 shares of Common
Stock held of record by Anasazi Partners.
Anasazi Partners may be deemed to be the beneficial owner with sole power
to vote and dispose of 1,005,667 shares of Common Stock (or 25.7% of the
outstanding Common Stock as calculated in accordance with Rule 13d-3(d)). CP
Baker LLC, the general partner of Anasazi Partners, may be deemed to be the
beneficial owner with sole power to vote and dispose of the same securities. The
1,005,667 shares of Common Stock include 139,000 shares of Common Stock held of
record by Anasazi Partners; 200,000 shares of Common Stock that may
Page 10 of 160
<PAGE>
be acquired upon exercise of the New Warrants owned by Anasazi Partners; and
666,667 shares of Common Stock that may be acquired upon exercise of the Consent
Warrants owned by Anasazi Partners.
Baker Ltd. may be deemed to be the beneficial owner with sole power to vote
and dispose of 420,366 shares of Common Stock (or 12.2% of the outstanding
Common Stock as calculated in accordance with Rule 13d-3(d)). These shares
consist of 10,000 shares of Common Stock held by Baker Ltd. and 410,366 shares
of Common Stock that may be acquired upon exercise of the Amended Warrants owned
by Baker Ltd.
Venture Fund may be deemed to be the beneficial owner with sole power to
vote and dispose of 218,862 shares of Common Stock (or 6.7% of the Outstanding
Common Stock as calculated in accordance with Rule 13d-3(d)). These shares may
be acquired upon exercise of the Amended Warrants owned by Venture Fund.
Thomas Marturano may be deemed to be the beneficial owner with sole power
to vote and dispose of 3,295 shares of Common Stock (or 0.1% of the outstanding
Common Stock as calculated in accordance with Rule 13d-3(d)).
Earl Baker and Robert Rafferty do not beneficially own any securities of
the Issuer.
(c) See Item 3 above.
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER
Except for the Agreement to Amend Warrants, the Consent, the Fundamental
Put and the Generation Put, there are no contracts, arrangements, understandings
or relationships (legal or otherwise) among the persons named in Item 2 and
between such persons and any person with respect to any securities of the
Issuer, including but not limited to transfer or voting of any securities of the
Issuer, finder's fees, joint ventures, loan or option arrangements, puts or
calls, guarantees of profits, division of profits or loss, or the giving or
withholding of proxies.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit 1 Agreement among Christopher P. Baker, C.P. Baker &
Company, Ltd., CP Baker LLC, C.P. Baker Venture Fund I,
Limited Partnership and Anasazi Partners, Limited
Partnership regarding the filing of Schedule 13D.
Exhibit 2 Agreement to Amend Warrants dated as of March 25, 1998,
between Trans World Gaming Corp. and each of C.P. Baker
Page 11 of 160
<PAGE>
Venture Fund I, Limited Partnership, Christopher Baker,
Adrienne Baker, David Friedson and C.P. Baker & Company,
Ltd.
Exhibit 3 Consent to Amend Indenture, Bonds and Warrants dated as
of March 25, 1998 among Trans World Gaming Corp., Trans
World Gaming of Louisiana, Inc., and U.S. Trust Company of
Texas, N.A., solely in its capacity as Indenture Trustee,
and each of Value Partners, Ltd., Anasazi Partners,
Limited Partnership, New Generation Limited Partnership,
Fundamental Investors, L.P., Belvin Friedson and Lucille
Friedson.
Exhibit 4 Put Option Agreement dated as of March 24, 1998 between
Christopher Baker and Fundamental Investors, L.P.
Exhibit 5 Put Option Agreement dated as of March 24, 1998 between
Christopher Baker and New Generation Limited Partnership.
Page 12 of 160
<PAGE>
Signature
---------
After reasonable inquiry and to the best knowledge and belief of the
undersigned, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Dated: April 10, 1998 /s/ Christopher P. Baker
--------------------------
CHRISTOPHER P. BAKER
Page 13 of 160
<PAGE>
Signature
---------
After reasonable inquiry and to the best knowledge and belief of the
undersigned, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
C.P. BAKER & COMPANY, LTD.
Dated: April 10, 1998 By: /s/ Christopher P. Baker
--------------------------
Name: Christopher P. Baker
Title: President
Page 14 of 160
<PAGE>
Signature
---------
After reasonable inquiry and to the best knowledge and belief of the
undersigned, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
CP BAKER LLC
Dated: April 10, 1998 By: /s/ Christopher P. Baker
----------------------------
Name: Christopher P. Baker
Title: President
Page 15 of 160
<PAGE>
Signature
---------
After reasonable inquiry and to the best knowledge and belief of the
undersigned, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
ANASAZI PARTNERS, LIMITED PARTNERSHIP
By: CP BAKER LLC, its general partner
Dated: April 10, 1998 By: /s/ Christopher P. Baker
-----------------------------------
Name: Christopher P. Baker
Title: President
Page 16 of 160
<PAGE>
Signature
---------
After reasonable inquiry and to the best knowledge and belief of the
undersigned, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
C.P. BAKER VENTURE FUND I,
LIMITED PARTNERSHIP
By: C.P. BAKER & COMPANY, LTD.
Dated: April 10, 1998 By: /s/ Christopher P. Baker
-----------------------------
Name: Christopher P. Baker
Title: President
Page 17 of 160
<PAGE>
EXHIBIT INDEX
Exhibit 1 Agreement among Christopher P. Baker, C.P. Baker &
Company, Ltd., CP Baker LLC, C.P. Baker Venture Fund I,
Limited Partnership and Anasazi Partners, Limited
Partnership regarding the filing of Schedule 13D.
Exhibit 2 Agreement to Amend Warrants dated as of March 25, 1998,
between Trans World Gaming Corp. and each of C.P. Baker
Venture Fund I, Limited Partnership, Christopher Baker,
Adrienne Baker, David Friedson and C.P. Baker & Company,
Ltd.
Exhibit 3 Consent to Amend Indenture, Bonds and Warrants dated
as of March 25, 1998 among Trans World Gaming Corp., Trans
World Gaming of Louisiana, Inc., and U.S. Trust Company of
Texas, N.A., solely in its capacity as Indenture Trustee,
and each of Value Partners, Ltd., Anasazi Partners,
Limited Partnership, New Generation Limited Partnership,
Fundamental Investors, L.P., Belvin Friedson and Lucille
Friedson.
Exhibit 4 Put Option Agreement dated as of March 24, 1998 between
Christopher P. Baker and Fundamental Investors, L.P.
Exhibit 5 Put Option Agreement dated as of March 24, 1998 between
Christopher P. Baker and New Generation Limited
Partnership.
Page 18 of 160
<PAGE>
Exhibit 1
AGREEMENT
The undersigned each agree to the filing of a single Schedule 13D with
respect to their respective ownership interests in Trans World Gaming Corp.
Dated: April 10, 1998 /s/ Christopher P. Baker
------------------------------
CHRISTOPHER P. BAKER
C.P. BAKER & COMPANY, LTD.
Dated: April 10, 1998 By: /s/ Christopher P. Baker
-----------------------------
Name: Christopher P. Baker
Title: President
CP BAKER LLC
Dated: April 10, 1998 By: /s/ Christopher P. Baker
------------------------------
Name: Christopher P. Baker
Title: President
ANASAZI PARTNERS, LIMITED
PARTNERSHIP
By: C.P. BAKER LLC, its general partner
Dated: April 10, 1998 By: /s/ Christopher P. Baker
-------------------------------------
Name: Christopher P. Baker
Title: President
Page 19 of 160
<PAGE>
C.P. BAKER VENTURE FUND I, LIMITED
PARTNERSHIP
By: C.P. BAKER & COMPANY, LTD.
Dated: April 10, 1998 By: /s/ Christopher P. Baker
-------------------------------------
Name: Christopher P. Baker
Title: President
Page 20 of 160
<PAGE>
EXHIBIT 2
---------
AGREEMENT TO AMEND WARRANTS
---------------------------
This Agreement to Amend Warrants is entered into as of March 25, 1998 by
and between Trans World Gaming Corp., a Nevada Corporation (the "Company") and
the undersigned (the "Holder"). Exhibits attached hereto are by this reference
incorporated herein.
BACKGROUND
----------
1. The undersigned are the holders of those Warrants to purchase Common
Stock of the Company as set forth under Column 2 on Exhibit "A" (the
"Outstanding Exchange Warrants").
2. The Company has entered into that certain Subscription Agreement (the
"$17 Million Agreement") dated as of March 16, 1998 pursuant to which it
proposes to issue $15 to $17 million of Notes, together with warrants to
purchase common stock of the Company. The parties to the $17 Million Agreement
have made it a condition of that $17 Million Agreement that the Outstanding
Exchange Warrants be modified as set forth herein.
3. Attached hereto as Exhibit "B" is that certain form of amended warrant
to purchase Common Stock of the Company which shall be issued, in the event this
Agreement closes, in exchange for the Outstanding Exchange Warrants, (the
"Amended Warrants") which Outstanding Exchange Warrant shall be cancelled.
TERMS
-----
Intending to be legally bound, in consideration of the mutual covenants and
agreements set forth herein, the parties hereto agree as follows:
1. Amendment
Subject to the terms and conditions set forth herein, each of the
Outstanding Exchange Warrants shall be canceled and each shall be replaced in
its entirety by a newly issued warrant in the form of the Amended Warrant. The
number of shares of common stock of the Company which may be obtained by the
Amended Warrants shall be set at 2,051,912, in the aggregate, and each Holder
shall receive an Amended Warrant for the number of shares next to its name under
column 3 on Exhibit A, at the strike price of one cent ($.01) per share with
such Amended Warrants to expire June 30, 2002. Such number of shares of common
stock issuable pursuant to the Amended Warrants shall not be subject to
adjustment by virtue of the warrants issued pursuant to the $17 Million
Subscription Agreement or any other warrant, right or agreement in existence as
of the date hereof, as of the date of the Closing, or as a result the Closing
hereof (including those issued as a part of that certain Consent to Amend
Indenture, Bonds and Warrants ("Consent Agreement") dated as of March 25, 1998,
pursuant to which certain terms of the 12%
Page 21 of 160
<PAGE>
Secured Convertible Senior Bonds, and related Indenture, and certain Warrants
issued in association therewith under the terms of a Subscription Agreement
dated as of July 1, 1996 (the "1996 Agreement") are amended and pursuant to
which additional warrants are issued.
2. The cancellation of the Outstanding Exchange Warrants and the issuance
of the Amended Warrants as set forth herein shall occur only in the event of the
following:
a. In the event the $17 Million Subscription Agreement closes; and
b. In the event all of the Holders on Exhibit "A" hereto are a party to
this Agreement.
3. Representations and Warranties of Holder.
As of March 31, 1998 (the "Closing Date"), the Holder represents and
warrants as follows:
a. The Holder is the owner, subject to paragraph C below, of and has
not assigned, transferred, sold, pledged, optioned, endorsed or otherwise
conveyed or transferred any interest in the Outstanding Exchange Warrants as set
forth opposite such Holder's name under Column 2 on Exhibit "A" hereto. Other
than certain warrants acquired pursuant to the 1996 Agreement and other than as
set forth on Exhibit "A", neither the Holder nor any related party is the holder
of, directly or indirectly, any other warrant or right of any kind or nature to
acquire common stock or any other class of stock of the Company. For purposes of
this Agreement, related party is to be broadly defined, and shall include any
direct or indirect subsidiary, affiliate, officer, director, employee, partner,
shareholders, legal or equitable beneficiary, or any person related to any such
individual by blood or marriage or otherwise.
b. The Holder has all requisite legal power and authority to enter into
this Agreement. This Agreement has been duly authorized by all necessary action
on the part of the Holder, has been duly executed and delivered by an authorized
officer or representative of the Holder, and is a legal, valid and binding
obligation of the undersigned enforceable in accordance with its terms,
regardless of whether such enforceability is considered in a proceeding in law
or in equity.
c. The Holder has reviewed the Investment Representation Letter
attached hereto as Exhibit "C". All information provided therein and in this
Agreement is true and correct as of the date hereof and as of the date of the
Closing hereof. All information provided therein and in this Agreement is true
and correct as of the date hereof and as of the date of the Closing hereof,
except as modified as follows: New Generation Limited Partnership ("New
Generation"), has entered into a "Put Option Agreement" with Christopher Baker
pursuant to which, under certain conditions, New Generation can require Mr.
Baker to purchase an agreed upon percentage of New Generation's Amended Bond
plus accrued, unpaid interest, plus the Amended Warrants on such portion of the
bond. Also, Fundamental Investors, L.P. ("Fundamental") has entered into a "Put
Option Agreement" with Mr. Baker pursuant to which, immediately subsequent to
the
Page 22 of 160
<PAGE>
Closing hereof, Fundamental has the right to sell Mr. Baker an agreed upon
percentage of Fundamental's Amended Bond and the accrued unpaid interest
thereon. Fundamental has also agreed to sell all Amended Warrants received by it
on such bond to Mr. Baker. Execution of this Agreement shall be deemed execution
of the Investment Representation Letter.
4. Representations and Warranties of the Company.
As of the Closing Date, the Company represents, warrants and covenants to
the Subscriber that:
(a) Organization, Standing, etc. The Company 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. The Company has all requisite
corporate power and authority to (i) execute, deliver, and perform its
obligations under this Agreement and the Amended Warrants and all other
agreements and instruments executed and delivered pursuant to or in connection
with this Agreement and Amended Warrant (collectively the "Operative
Agreements"), and (ii) issue the Amended Warrant in exchange for the Outstanding
Exchange Warrants.
(b) Authorization and Execution; Amended Warrants Validly Issued. The
execution, delivery and performance by the Company of this Agreement and the
other Operative Agreements, and the issuance of the Amended Warrant hereunder
have been duly and validly authorized by the Company. This Agreement and the
other Operative Agreements have been duly executed and delivered by the Company
and constitute valid and binding agreements of the Company enforceable against
the Company in accordance with their respective terms. Upon the Closing, the
shares of common stock issuable pursuant to the Amended Warrant will upon
issuance be duly and validly issued and outstanding, fully paid and
nonassessable (other than the exercise price of the Amended Warrant).
(c) Contravention. The execution, delivery and performance of this
Agreement and the other Operative Agreements and the consummation of the
transactions contemplated thereby 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 the Company or the Amended
Warrant, (ii) the Articles of Incorporation and Bylaws of the Company, or (iii)
any agreements, judgment, injunction, order, decree or other instrument binding
upon the Company or any of its assets or properties, the violation of which
would have a material adverse effect on the Company or on the Amended Warrant.
For purposes of this Agreement, a "material adverse effect" means a
material adverse effect on (a) the business, operations, property or condition
(financial or otherwise) of the Company, (b) the ability of the Company to
perform its obligations under this Agreement, or any other Operative Agreements
to which it is a party, or (c) the validity, enforceability, perfection or
priority of this Agreement or the rights or remedies of the Holder.
Page 23 of 160
<PAGE>
(d) Governmental Regulations. Except as required pursuant to the Securities
Act of 1933, as amended (the "Securities Act"), the Securities Exchange Act of
1934, as amended (the "Exchange Act") and State securities laws, the Company is
not subject to any foreign, Federal or State law or regulation limiting its
ability to enter into this Agreement or any other Operative Agreement, to issue
the Amended Warrant or to perform its obligations required thereby.
(e) Bishkek Casino. The Company will fully fund the "Bishkek Casino"
project with a minimum of US $250,000 prior to April 15, 1998 (which US $250,000
shall include the contribution to cage cash).
(f) Term of Warrants. The terms of the Warrants issued to the persons and
entities listed on Exhibit "A" shall be identical to the terms of the warrants
issued pursuant to the $ 17 Million Agreement, except for the expiration date of
such Warrants. This shall not include the number of warrants or percentage
ownership of the Company, but rather the governing terms. Nothing herein shall
effect the terms of the Warrants as contained in Exhibit "B".
(g) Non-Accountable Expenses. The Company will pay C.P. Baker & Company a
one-time non-accountable expense fee of US $15,000 within ten days following the
Closing of this Agreement.
(h) Tax reporting. To the extent lawful, the Company agrees that for tax
purposes, it will take the position that the Amended Warrant has no value. This
shall not be deemed an indemnity of the Holder by the Company, unless the
company refuses to take such a position when such position is lawful. Subject to
the limitations in this subparagraph, tax filings by the Company will be
prepared in a manner consistent with this treatment.
5. Surrender of Securities.
Immediately following and in the event of the Closing, the Holder shall
surrender to the Company the Outstanding Exchange Warrants, which shall be
canceled and exchanged for the Amended Warrant in the form attached hereto.
6. Closing.
The closing this Agreement shall be deemed to occur simultaneously with and
only in the event of the closing of the $17 Million Agreement (the "Closing").
The Holder acknowledges that the Amended Warrants shall be delivered subsequent
to the Closing and that the Outstanding Exchange Warrants shall be returned to
the Company. The parties hereto agree to act in good faith and to use their best
efforts to the extent additional documents, actions or information are necessary
post-closing and covenant to cooperate with each other in taking all necessary
actions related thereto.
7. Survival of Representations and Warranties; Beneficiaries
Page 24 of 160
<PAGE>
All representations and warranties contained in this Agreement shall
survive the execution and delivery of this Agreement. The parties hereto
acknowledge that the Subscribers to the $17 Million Agreement and the parties to
the Consent Agreement are entitled to rely upon and are beneficiaries of this
Agreement and the representations, warranties, covenants and agreements made
herein.
8. Waiver of Jury Trial.
Each of the parties hereto irrevocably and unconditionally waives the right
to trial by jury in any legal or equitable action, suit or proceeding arising
out of or relating to this agreement, the units or any other operative agreement
or any transaction contemplated hereby or thereby or the subject matter of any
of the foregoing.
9. Notices to the Company.
All notices and other communications provided for herein shall be in
writing and shall be deemed to have been duly given if delivered personally or
sent by registered or certified mail, return receipt requested, postage prepaid,
telex, telecopier or overnight air courier guaranteeing next day delivery:
(a) if to the Company, to it at the following address:
Trans World Gaming Corp.
One Penn Plaza
Suite 1503
New York, New York 10119
Attn: Dominick Valenzano, Chief Financial Officer
(c) if to the Holder, to the address set forth on the signature page
hereto, or at such other address as either party shall have specified
by notice in writing to the other.
All notices and communications shall be deemed to have been duly given: at
the time delivered by hand, if personally delivered; five business days after
being deposited in the mail, certified mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt is orally acknowledged, if telecopied;
and the next business day after timely delivery to the courier, if sent by
overnight air courier guaranteeing next day delivery.
If a notice or communication is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives it.
10. Notification of Changes.
The Holder and the Company agree and covenant to notify the other promptly
upon the occurrence of any event prior to the Closing which would cause any
representation, warranty, covenant or other statement contained in this
Agreement by such person so notifying to be false or incorrect or of any
material change in any statement made herein occurring prior to the Closing
Date.
11. Assignability.
This Agreement is not assignable by the Holder or the Company, and may not
be modified, waived or terminated except by an instrument in writing signed by
the party against whom enforcement of such modifications, waiver or termination
is sought.
12. Binding Effect.
Except as otherwise provided herein, this Agreement shall be binding upon
and inure to the benefit of the parties and their heirs, executors,
administrators, successors, and legal representatives, and assigns, including
any transferee of the Outstanding Exchange Warrants and the Amended Warrant, and
the agreements, representations, warranties and acknowledgments contained herein
shall be deemed to be made by and be binding upon such heirs, executors,
administrators, successors, and legal representatives and assigns. If the Holder
is more than one person, the obligation of the Holder shall be joint and several
and the agreements, representations, warranties and acknowledgments contained
herein shall be deemed to be made by and be binding upon each such person and
his heirs, executors, administrators and successors.
13. Obligations Irrevocable.
The obligations of the Holder shall be irrevocable, except with the consent
of the Company, until the Closing or earlier termination of the $17 Million
Subscription Agreement.
14. Entire Agreement.
This Agreement constitutes the entire agreement of the Holder and the
Company relating to the matters contained herein, superseding all prior
contracts, commitments, or agreements, whether oral or written.
15. Governing Law.
This Agreement shall be governed and controlled as to the validity,
enforcement, interpretations, construction and effect and in all other aspects
by the substantive laws of the State of New York, without reference to conflicts
of laws principles.
16. Severability.
If any provision of this Agreement or the application thereof to any Holder
or circumstance shall be held invalid or unenforceable to any extent, the
remainder of this Agreement and the application of such provision to other
Holders or circumstances shall not be affected thereby and shall be enforced to
the greatest extent permitted by law.
Page 26 of 160
<PAGE>
17. Headings.
The headings in this Agreement are inserted for convenience and
identification only and are not intended to describe, interpret, define, or
limit the scope, extent or intent of this Agreement or any provision hereof.
18. Counterparts.
This Agreement may be executed in any number of counterparts, each of which
when so executed and delivered shall be deemed to be an original and all of
which together shall be deemed to be one and the same agreement.
Page 27 of 160
<PAGE>
IN WITNESS WHEREOF, the undersigned Holder and Company have executed this
Agreement to Amend Warrants this 25 day of March, 1998.
CORPORATE HOLDER:
By:
----------------------------
Its:
---------------------------
INDIVIDUAL HOLDER:
By:
----------------------------
PARTNERSHIP HOLDER:
By:
--------------------------
Its:
-------------------------
TRANS WORLD GAMING CORP:
By: /s/ Andrew Tottenham
-----------------------------
Its: President
-----------------------------
Page 28 of 160
<PAGE>
IN WITNESS WHEREOF, the undersigned Holder and Company have executed this
Agreement to Amend Warrants this 25 day of March, 1998.
CORPORATE HOLDER:
By: /s/ Christopher P. Baker
---------------------------------
Its: Christopher P. Baker, President
--------------------------------
C.P. Baker & Co., Ltd.
--------------------------------
INDIVIDUAL HOLDER:
By: /s/ Christopher P. Baker
--------------------------------
PARTNERSHIP HOLDER:
By: /s/ Christopher P. Baker
--------------------------------
Its: Christopher P. Baker, President
------------------------------
C.P. Baker & Co., Ltd. General
-------------------------------
Partner to C.P. Baker Venture
-----------------------------
Fund I, Limited Partnership
-----------------------------
TRANS WORLD GAMING CORP:
By:
----------------------------------
Its:
---------------------------------
Page 29 of 160
<PAGE>
IN WITNESS WHEREOF, the undersigned Holder and Company have executed this
Agreement to Amend Warrants this 25 day of March, 1998.
CORPORATE HOLDER:
By:
------------------------------------
Its:
------------------------------------
INDIVIDUAL HOLDER:
By: /s/ Adrienne Baker
------------------------------------
PARTNERSHIP HOLDER:
By:
------------------------------------
Its:
------------------------------------
TRANS WORLD GAMING CORP:
By:
------------------------------------
Its:
------------------------------------
Page 30 of 160
<PAGE>
IN WITNESS WHEREOF, the undersigned Holder and Company have executed this
Agreement to Amend Warrants this 25 day of March, 1998.
CORPORATE HOLDER:
By:
-----------------------------------
Its:
-----------------------------------
INDIVIDUAL HOLDER:
By: /s/ David Friedson
------------------------------------
PARTNERSHIP HOLDER:
By:
------------------------------------
Its:
-----------------------------------
TRANS WORLD GAMING CORP:
By:
------------------------------------
Its:
------------------------------------
Page 31 of 160
<PAGE>
Exhibit "A"
<TABLE>
<CAPTION>
1 2 3
- - -
Number of Shares Number of Shares of
Name of Holder Outstanding Amended Warrants
<S> <C> <C>
1. C.P. Baker Venture Fund I., L.P. 53,320 218,862
2. Christopher P. Baker,
individually 266,600 1,094,309
3. Adrienne Baker 13,333 54,728
4. David Friedson 66,667 273,647
5. C.P. Baker & Co., Ltd. 99,975 410,366
-------------------------- ---------------------------
Total 499,895 2,051,912
</TABLE>
Page 32 of 160
<PAGE>
Exhibit "B"
FORM OF AMENDED WARRANT
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 PURSUANT TO AN OPINION OF COUNSEL
SATISFACTORY TO THE ISSUER THAT SUCH
REGISTRATION IS NOT REQUIRED.
WARRANT TO PURCHASE
COMMON STOCK
Series D No. __
TRANS WORLD GAMING CORP.
(a Nevada corporation)
Dated: March 31, 1998
THIS CERTIFIES that (together with its successors or
permitted assigns, the "Holder") is entitled to purchase from Trans World Gaming
Corp., a Nevada corporation ("Company") up to shares of the Company's
common stock, par value $.001 per share (the "Common Stock"), at a purchase
price of $.01 per share of Common Stock (the "Warrant Price"), subject to
adjustment as hereafter provided.
This Warrant is issued pursuant to that certain Agreement to Amend Warrants
dated as of March 25, 1998 (the "Agreement"), between the Company and the
Holder.
1. Exercise of the Warrant.
The rights represented by this Warrant may be exercised at any time on or
before 5:00 p.m., New York time, on June 30, 2002, in whole or in part, by (i)
the surrender of this Warrant (with the purchase form at the end hereof properly
executed) at the principal executive office of the Company (or such other office
or agency of the Company as it may designate by notice in writing to the Holder
at the address of the Holder appearing on the books of the Company); (ii)
payment to the Company of the Warrant Price then in effect for the number of
shares of Common Stock specified in the above-mentioned purchase form together
with applicable stock transfer taxes, if any; and (iii) delivery to the Company
of a duly executed agreement signed by the
Page 33 of 160
<PAGE>
person(s) designated in the purchase form to the effect that such person(s)
agree(s) to be bound by the provisions of Paragraph 5 and subparagraph (b), (c)
and (d) of Paragraph 6 hereof. This Warrant shall be deemed to have been
exercised, in whole or in part to the extent specified, immediately prior to the
close of business on the date this Warrant is surrendered and payment is made in
accordance with the foregoing provisions of this Paragraph 1, and the person or
persons in whose name or names the certificates for the Common Stock shall be
issuable upon such exercise shall become the Holder or Holders of record of such
Common Stock at that time and date. The Common Stock so purchased shall be
delivered to the Holder within a reasonable time, not exceeding ten (10)
business days, after the rights represented by this Warrant shall have been so
exercised. If at any time this Warrant is exercised as to less than the total
number of shares for which it may be exercised, and this Warrant shall not have
expired, the Company shall promptly issue to the Holder a new Warrant identical
in form as to this Warrant as to the remaining shares hereunder.
2. Transfer.
Subject to the legend set forth at the top of the first page hereof, this
Warrant may be assigned in whole or in part by the Holder by (i) completing and
executing the form of assignment at the end hereof and (ii) surrendering this
Warrant with such duly completed and executed assignment form for cancellation,
accompanied by funds sufficient to pay any transfer tax, at the office or agency
of the Company referred to in Paragraph 9(b), hereof; whereupon the Company
shall issue, in the name or names specified by the Holder (including the Holder)
a new Warrant or Warrants of like tenor and representing in the aggregate rights
to purchase the same number of shares of Common Stock as are then purchasable
hereunder.
3. Covenants of the Company.
(a) The Company covenants and agrees that all Common Stock and Common
Stock issuable upon exercise of this Warrant will, upon issuance, be duly and
validly issued, fully paid and nonassessable and no personal liability will, for
Company obligations, attach to the holder thereof by reason of being such a
holder, other than as set forth herein.
(b) The Company covenants and agrees that during the period within
which this Warrant may be exercised, the Company will at all times have
authorized and reserved a sufficient number of shares of Common Stock to provide
for the exercise of this Warrant.
4. No Rights of Stockholder.
This Warrant shall not entitle the Holder to any voting rights or other
rights as a stockholder of the Company, either at law or in equity, and the
rights of the Holder are limited to those expressed in this Warrant and are not
enforceable against the Company except to the extent set forth herein.
5. Registration.
Page 34 of 160
<PAGE>
(a) The Holder shall have the right to have the shares of Common Stock
underlying this Warrant registered as part of the next public offering of the
Common Stock. If no Common Stock offering has occurred by June 30, 1998, then
upon the written request of any combination of the holders of Common Stock or of
Warrants issued by the Company and collectively exercisable into not less than
100,000 shares of Common Stock (as such number may be adjusted under Paragraph
7), and on a one-time basis, the Company shall file, within ninety (90) days
after written request such registration, and use its best efforts to cause to be
declared effective ninety (90) days thereafter, by the Securities and Exchange
Commission, a registration statement or post-effective amendment thereto as
permitted under the Securities Act of 1933, as amended (the "Act"), covering the
sale by the Holder of the Common Stock issuable upon exercise of this Warrant or
any portion hereof (the "Registerable Securities"). The Company shall supply
prospectuses in order to facilitate the public sale or other disposition of the
Registerable Securities, use its best efforts to register and qualify any of the
Registerable Securities for sale in such states as such Holder reasonably
designates and do any and all other acts and things which may be necessary to
enable such Holder to consummate the public sale of the Registerable Securities,
and furnish indemnification in the manner provided in Paragraph 6 hereto. The
Holder shall furnish information reasonably requested by the Company in
accordance with such post-effective amendments or registration statements,
including its intentions with respect thereto, and shall furnish indemnification
as set forth in Paragraph 6.
(b) The Company will maintain such registration statement or
post-effective amendment current and effective under the Act until two years
following the expiration of the exercisability of this Warrant, or until shares
owned by the Holder are eligible for sale without restriction under Rule 144.
(c) The Company shall bear the entire cost and expense of any
registration of securities under Paragraph 5 hereof. Notwithstanding the
foregoing, any Holder whose Registerable Securities are included in any such
registration statement pursuant to this Paragraph 5 shall, however, bear the
fees of any counsel retained by him and any transfer taxes or underwriting
discounts or commissions applicable to the Registerable Securities sold by him
pursuant thereto.
(d) In addition the Company shall:
(i) furnish to the Holder such numbers of copies of a summary
prospectus or other prospectus, including a preliminary prospectus or any
amendment or supplement to any prospectus, in conformity with the requirements
of the 1933 Act, and such other documents, as the Holder may reasonably request
in order to facilitate the public sale or other disposition of the securities
owned by the Holder;
Page 35 of 160
<PAGE>
(ii) use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or blue sky
laws of such jurisdictions as the Holder shall reasonably request, and do any
and all other acts and things which may be necessary or advisable to enable such
Holder to consummate the public sale or other disposition in such jurisdictions
of the securities owned by such Holder, except that the Company shall not for
any such purpose be required to qualify to do business as a foreign corporation
in any jurisdiction wherein it is not so qualified or to file therein any
general consent to service of process;
(iii) use its best efforts to list such securities on any securities
exchange on which any securities of the Company is then listed, if the listing
of such securities is then permitted under the rules of such exchange;
(iv) enter into and perform its obligations under an underwriting
agreement, if the offering is an underwritten offering, in usual and customary
form, with the managing underwriter or underwriters of such underwritten
offering;
(v) notify the Holder of Registrable Securities covered by such
registration statement, at any time when a prospectus relating thereto covered
by such registration statement is required to be delivered under the 1933 Act,
of the happening of any event of which it has knowledge as a result of which the
prospectus included in such registration statement, as then in effect, includes
an untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing; and
(vi) furnish, at the request of the Holder on the date such
Registrable Securities are delivered to the underwriters for sale pursuant to
such registration or, if such Registrable Securities are not being sold through
underwriters, on the date the registration statement with respect to such
Registrable Securities becomes effective, (i) an opinion, dated such date, of
the counsel representing the Company for the purpose of such registration,
addressed to the underwriters, if any, and to the Holder making such request,
covering such legal matters with respect to the registration in respect of which
such opinion is being given as the Holder of such Registrable Securities may
reasonably request and are customarily included in such an opinion and (ii)
letters, dated, respectively, (1) the effective date of the registration
statement and (2) the date such Registrable Securities are delivered to the
underwriters, if any, for sale pursuant to such registration, from a firm of
independent certified public accountants of recognized standing selected by the
Company, addressed to the underwriters, if any, and to the Holder making such
request, covering such financial, statistical and accounting matters with
respect to the registration in respect of which such letters are being given as
the Holder of such Registrable Securities may reasonably request and are
customarily included in such letters; and
(vii) take such other actions as shall be reasonably requested by
any Holder to facilitate the registration and sale of the Registrable
Securities.
6. Indemnification.
Page 36 of 160
<PAGE>
(a) Whenever pursuant to Paragraph 5 a registration statement relating
to any Registerable Securities is filed under the Act, amended or supplemented,
the Company will indemnify and hold harmless each Holder of the Registerable
Securities covered by such registration statement, amendment or supplement (such
holder hereinafter referred to as the "Distributing Holder"), each person, if
any, who controls (within the meaning of the Act) the Distributing Holder, and
each officer, director, employee, partner or agent of the Distributing Holder,
and each underwriter (within the meaning of the Act) of such securities and each
person, if any, who controls (within the meaning of the Act) any such
underwriter and each officer, director, employee, agent or partner of such
underwriter against any losses, claims, damages or liabilities joint or several,
to which the Distributing Holder, any such underwriter or any other person
described above may become subject under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in any such registration statement or any preliminary
prospectus or final prospectus constituting a part thereof or any amendment or
supplement thereto, or arise out of or are based upon the omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading; and will reimburse the Distributing Holder
and each such underwriter or such other person for any legal or other expenses
reasonably incurred by the Distributing Holder, or underwriter or such other
person, in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the Company will not be
liable in any such case (i) to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in said registration statement,
said preliminary prospectus, said final prospectus or said amendment or
supplement in reliance upon and in conformity with written information furnished
by such Distributing Holder, any other Distributing Holder or any such
underwriter or any other such person for use in the preparation thereof, and
(ii) such losses, claims, damages or liabilities arise out of or are based upon
any actual or alleged untrue statement or omission made in or from any
preliminary prospectus, but corrected in the final prospectus, as amended or
supplemented.
(b) Whenever pursuant to Paragraph 5 a registration statement relating
to the Registerable Securities is filed, amended or supplemented under the Act,
the Distributing Holder will indemnify and hold harmless the Company and each
underwriter, each of their respective directors, each of their respective
officers, employees, partners and agents thereto, and each person, if any, who
controls the Company (within the meaning of the Act) against any losses, claims,
damages or liabilities to which the Company or any such director, officer,
employees, partners and agents or controlling person may become subject under
the Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue or alleged
untrue statement of any material fact contained in any such registration
statement or any preliminary prospectus or final prospectus constituting a part
thereof, or any amendment or supplement thereto, or arise out of or are based
upon the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent that such untrue
statement or alleged untrue statement or omission was made in said registration
statement, said preliminary prospectus, said final prospectus or said amendment
or supplement in reliance upon and in conformity with written information
furnished by such Distributing Holder
Page 37 of 160
<PAGE>
for use in the preparation thereof; and will reimburse the Company or any such
director, officer, employees, partners and agents or controlling person for any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action.
(c) Promptly after receipt by an indemnified party under this Paragraph
6 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against any indemnifying party, give the
indemnifying party notice of the commencement thereof; but the omission to so
notify the indemnifying party will not relieve it from any liability which it
may have to any indemnified party otherwise than under this Paragraph 6.
(d) In case any such action is brought against any indemnified party,
and it notifies an indemnifying party of the commencement thereof, the
indemnified party will be entitled to participate in, and, to the extent that
it may wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof with counsel reasonably satisfactory to such
indemnifying party, and after notice from the indemnified party to such
indemnifying party of its election to so assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Paragraph 6 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation.
7. Adjustment of Warrant Price and Number of Securities.
(a) The Warrant Price shall be subject to adjustment from time to time
as follows:
(i) In case the Company shall at any time after the date hereof
pay a dividend in shares of Common Stock or make a
distribution in shares of Common Stock, then upon such
dividend or distribution the Warrant Price in effect
immediately prior to such dividend or distribution shall
forthwith be reduced to a price determined by dividing:
(A) an amount equal to the total number of shares of Common
Stock outstanding immediately prior to such dividend or
distribution multiplied by the Warrant Price in effect
immediately prior to such dividend or distribution, by
(B) the total number of shares of Common Stock outstanding
immediately after such issuance or sale.
For the purposes of any computation to be made in accordance with the
provision of this clause (i), the following provisions shall be applicable:
Common Stock issuable by way of dividend or other distribution on any stock of
the Company shall be deemed to have been issued
Page 38 of 160
<PAGE>
immediately after the opening of business on the date following the date fixed
for the determination of stockholders entitled to receive such dividend or other
distribution.
(ii) In case the Company shall at any time subdivide or combine
the outstanding Common Stock, the Warrant Price shall
forthwith be proportionately decreased in the case of
subdivision or increased in the case of combination. Any
such adjustment shall become effective at the time such
subdivision or combination shall become effective.
(iii) In case the Company shall at any time or from time to time
issue or sell shares of Common Stock (or securities
convertible into or exchangeable for shares of Common Stock,
or any options, warrants or other rights to acquire shares
of Common Stock) at a price per share less than the Market
Price per share of Common Stock (treating the price per
share of any security exchangeable or exercisable into
Common Stock as equal to (x) the sum of the price for such
security convertible, exchangeable or exercisable into
Common Stock plus any additional consideration payable
(without regard to any anti-dilution adjustments) upon the
conversion, exchange or exercise of such security into
Common Stock divided by (y) the number of shares of Common
Stock initially underlying such convertible, exchangeable or
exercisable security), other than issuance or sales of
Common Stock pursuant to any employee benefit plan, then,
and in each such case, the number of shares of Common Stock
thereafter purchasable upon exercise of a Warrant shall be
determined by multiplying the number of shares of Common
Stock theretofore purchasable upon exercise of each Warrant
by a fraction (A) the numerator of which shall be the sum of
the number of shares of Common Stock outstanding on such
date plus the number of additional shares of Common Stock
issued (or the maximum number into which such convertible or
exchangeable securities initially may convert or exchange or
for which such options, warrants or other rights initially
may be exercised) and (B) the denominator of which shall be
the sum of the number of shares of Common Stock outstanding
on such date plus the number of shares of Common Stock which
the aggregate consideration for the total number of such
additional shares of Common Stock so issued (or into which
such convertible or exchangeable securities may convert or
exchange or for which such options, warrants or other rights
may be exercised plus the aggregate amount of any additional
consideration initially payable upon conversion, exchange or
exercise of such security) would purchase at the Market
Price per share of Common Stock on such date. Such
adjustment shall be made whenever such shares,
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securities, options, warrants or other rights are issued,
and shall become effective retroactively immediately after
the close of business on the record date for the
determination of stockholders entitled to receive such
shares, securities, options, warrants or other rights;
provided, that the determination as to whether an adjustment
is required to be made pursuant to this Section 7(a) shall
only be made upon the issuance of such shares or such
convertible or exchangeable securities, options, warrants or
other rights, and not upon the issuance of the security into
which such convertible or exchangeable security converts or
exchanges, or the security underlying such option, warrant
or other right. Notwithstanding the foregoing, in the event
of such issuance or sale of Common Stock at a cash price
less than the Market Price, no such adjustment under this
Section 7(a) need be made to the number of shares underlying
the Warrant unless such adjustment would require an increase
or decrease of at least 1% of the number of shares
underlying the Warrant. Any lesser adjustment shall be
carried forward and shall be made at the time of and
together with the next subsequent adjustment which, together
with any adjustment or adjustments so carried forward, shall
amount to an increase or decrease of at least 1% of number
of shares underlying the Warrant. For the purpose of this
Agreement, the term "Market Price" shall mean (i) if the
Common Stock is traded in the over-the-counter market or on
the National Association of Securities Dealers, Inc.
Automated Quotations System ("NASDAQ"), the average per
share closing prices of the Common Stock on the 20
consecutive trading days immediately preceding the date in
question as reported by NASDAQ or an equivalent generally
accepted reporting service, or (ii) if the Common Stock is
traded on a national securities exchange, the average for
the 20 consecutive trading days immediately preceding the
date in question of the daily per share closing prices of
the Common Stock on the principal stock exchange on which it
is listed, as the case may be. The closing price referred to
above shall be the last reported sales price or in case no
such reported sale takes place on such day, the average of
the reported closing bid and asked prices, in either case on
the national securities exchange or automated quotation
system on which the Common Stock is then listed. Whenever
the number of shares of Common Stock purchasable upon
exercise of each Warrant is adjusted, the Warrant Price for
each share of Common Stock payable upon exercise of each
Warrant shall be adjusted by multiplying such Warrant Price
immediately prior to such adjustment by a fraction, the
numerator of which shall be the number of shares of Common
Stock purchasable upon the exercise of each Warrant
immediately prior to such adjustment and the
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<PAGE>
denominator of which shall be the number of shares of Common
Stock purchasable immediately after such adjustment.
(iv) Within a reasonable time after the close of each quarterly
fiscal period of the Company during which the Warrant Price
or number of shares issuable upon exercise of this Warrant
has been adjusted as herein provided, the Company shall
deliver to the Holder a certificate signed by the President
or Vice President of the Company and by the Treasurer or
Assistant Treasurer or the Secretary or an Assistant
Secretary of the Company, showing in detail the facts
requiring all such adjustments occurring during such period
and the Warrant Price after each such adjustment.
(b) In the event that the number of outstanding shares of Common Stock
is increased by a stock dividend or distribution payable in Common Stock or by a
subdivision of the outstanding Common Stock, then, from and after the record
date thereof, by reason of such dividend, distribution or subdivision, the
number of shares of Common Stock issuable upon the exercise of the Warrant shall
be increased in proportion to such increase in outstanding shares. In the event
that the number of shares of Common Stock outstanding is decreased by a
combination of the outstanding Common Stock, then, from and after the record
date thereof, the number of shares of Common Stock issuable upon the exercise of
the Warrant shall be decreased in proportion to such decrease in the outstanding
shares of Common Stock.
(c) In case of any reorganization or reclassification of the
outstanding Common Stock (other than a change in par value, or from par value to
no par value, or as a result of a subdivision or combination), or in case of any
consolidation of the Company with, or merger of the Company into, another
corporation (other than a consolidation or merger in which the Company is the
continuing corporation and which does not result in any reclassification of the
outstanding Common Stock), or in case of any sale or conveyance to another
corporation of the property of the Company as an entirety or substantially as an
entirety, the holder of the Warrant then outstanding shall thereafter have the
right to purchase the kind and amount of shares of common stock and other
securities and property receivable upon such reorganization, reclassification,
consolidation, merger, sale or conveyance by a holder of the number of shares of
Common Stock which the holder of the Warrant shall then be entitled to purchase;
such adjustments shall apply with respect to all such changes occurring between
the date of this Warrant Agreement and the date of exercise or expiration of the
Warrant.
(d) Subject to the provisions of this Section, in case the Company
shall, at any time prior to the exercise of the Warrant, desire to declare a
dividend or make any distribution of its assets to holders of its Common Stock,
whether as a liquidating or a partial liquidating dividend or for any other
purpose, the Company shall provide the holder of the Warrant with written notice
of such intent not less than thirty (30) days prior to the record date to
determine holders of Common Stock entitled to receive such distribution and the
holder of this Warrant shall have until 5:00 p.m. EST on the twentieth (20th)
day following the actual receipt of such notice to elect whether to exercise
this Warrant in accordance with the terms herein. In the event of
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<PAGE>
proper election to exercise the Warrant, the holder of this Warrant shall be
deemed to be a holder of Common Stock as of the record date for such
distribution. Should the holder of the Warrant elect to exercise his Warrant
within 20 days after the record date for the determination of those holders of
Common Stock entitled to such dividend or distribution, he shall be entitled to
receive for the Warrant Price per Warrant, in addition to each share of Common
Stock, the amount of such distribution (or, at the option of the Company, a sum
equal to the value of any such assets at the time of such distribution as
determined by the Board of Directors of the Company in good faith), which would
have been payable to the holder had he been the holder of record of the Common
Stock receivable upon exercise of his Warrant on the record date for the
determination of those entitled to such distribution.
(e) In case of the dissolution, liquidation or winding-up of the
Company, all rights under the Warrant shall terminate on a date fixed by the
Company, such date to be no earlier than ten (10) days prior to the
effectiveness of such dissolution, liquidation or winding-up and not later than
five (5) days prior to such effectiveness. Notice of such termination of
purchase rights shall be given to the last registered holder of this Warrant, as
the same shall appear on the books of the Company, by registered mail at least
thirty (30) days prior to such termination date.
(f) In case the Company shall, at any time prior to the expiration of
this Warrant and prior to the exercise thereof, offer to the holders of its
Common Stock any rights to subscribe for additional shares of any class of the
Company, then the Company shall give written notice thereof to the last
registered holder hereof not less than thirty (30) days prior to the date on
which the books of the Company are closed or a record date is fixed for the
determination of the stockholders entitled to such subscription rights. Such
notice shall specify the date as to which the books shall be closed or record
date fixed with respect to such offer of subscription and the right of the
holder hereof to participate in such offer of subscription shall terminate if
this Warrant shall not be exercised on or before the date of such closing of the
books or such record date.
(g) Any adjustment pursuant to the aforesaid provisions shall be made
on the basis of the number of shares of Common Stock which the holder thereof
would have been entitled to acquire by the exercise of the Warrant immediately
prior to the event giving rise to such adjustment.
(h) Irrespective of any adjustment in the Warrant Price or the number
or kind of shares purchasable upon exercise of this Warrant, Warrants previously
or hereafter issued may continue to express the same price and number and kind
of shares as are stated in this Warrant.
(i) The Company shall retain a firm of independent public accountants
(who may be any such firm regularly employed by the Company) to make any
computation required under this Section.
(j) If at any time, as a result of an adjustment made pursuant to this
Paragraph 7, the Holder of this Warrant shall become entitled to purchase any
securities other than shares of Common Stock, thereafter the number of such
securities so purchasable upon exercise of each
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<PAGE>
Warrant and the Warrant Price for such shares shall be subject to adjustment
from time to time in a manner and on terms as nearly equivalent as practicable
to the provisions with respect to the Common Stock.
8. Fractional Shares.
The Company shall not be required to issue fractions of shares of Common
Stock on the exercise of this Warrant; provided, however, that if a Holder
exercises all the Warrants held of record by such Holder, the fractional
interests shall be eliminated by rounding any fraction up to the nearest whole
number of shares, if the fraction is equal to or greater than .5, and down if
the fraction is less than .5.
9. Miscellaneous.
(a) This Warrant shall be governed by and in accordance with the laws
of the State of New York.
(b) All notices, requests, consents and other communications hereunder
shall be made in writing and shall be deemed to have been duly made when
delivered, or mailed by registered or certified mail, return receipt requested:
(i) if to a Holder, to the address of such Holder as shown on the books of the
Company, or (ii) if to the Company, One Penn Plaza, Suite 1503, New York, NY
10119.
(c) All the covenants and provisions of this Warrant by or for the
benefit of the Company and the Holders inure to the benefit of their respective
successors and assigns hereunder.
(d) Nothing in this Warrant other than Section 6 shall be construed to
give to any person or corporation other than the Company and the registered
Holder or Holders, any legal or equitable right, and this Warrant is for the
sole and exclusive benefit of the Company and the Holder or Holders.
IN WITNESS WHEREOF, Trans World Gaming Corp. has caused this warrant to be
signed by its duly authorized officer and this Warrant to be dated March 31,
1998.
TRANS WORLD GAMING CORP.
By:
-------------------------
Its:
-------------------------
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<PAGE>
FORM OF
NOTICE OF EXERCISE
(To be executed upon partial or full
exercise of the Warrants represented hereby)
The undersigned registered Holder of the Warrants represented by the attached
Warrant Certificate irrevocably exercises such Warrant for and purchases ( )
shares of Common Stock of Trans World Gaming Corp. (the "Company").
The undersigned herewith makes payment therefore in the amount of $ ,
consisting of $ by wire transfer or certified or cashiers' check at a price of $
per share and requests that a certificate (or certificates) in denominations of
( ) shares of Common Stock of the Company hereby purchased be issued in the name
of and delivered to the undersigned or such designee of the undersigned and, if
such shares of Common Stock (together with any shares issued upon exercise of
other Warrants or replacement Warrants) shall not include all of the shares of
Common Stock issuable upon exercise of all Warrants represented by such Warrant
Certificate (or if a new or replacement Warrant is otherwise to be provided
pursuant to the Warrant Certificate), that a new or replacement Warrant
Certificate of like tenor for the number of Warrants not being exercised (and
not being surrendered) hereunder be issued in the name of and delivered to the
undersigned, whose address is .
Dated:
-----------, -----.
-----------------------------
(Signature of Registered Holder)
By:
------------------------------------
Title:
---------------------------------
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<PAGE>
Exhibit "C"
INVESTMENT REPRESENTATION LETTER
(Accredited Investor)
March __, 1998
Trans World Gaming Corp.
One Penn Plaza, Suite 1503
New York, New York 10119
Attn: Mr. Andrew Tottenham, President
Dear Mr. Tottenham:
This letter is submitted in conjunction with and pursuant to the terms and
conditions contained in that certain Agreement to Amend Warrants (the
"Agreement"). The undersigned Purchaser is exchanging all of the issued
outstanding warrants of Trans World Gaming Corp. (the "Company") held by it for
certain new warrants (the "Amended Warrant") issued by the Company pursuant to
the Agreement. In order to induce the Company issue the Amended Warrant (the
"Units") to the Purchaser, the Purchaser makes the representations and
warranties contained herein.
The Company has informed the Purchaser that the Units have not been
registered with the Securities and Exchange Commission nor with the securities
authorities of any state, and that the Units must be held indefinitely unless
they are subsequently registered under the Securities Act of 1933, as amended,
and the appropriate state securities laws, or an exemption from such
registration is available and counsel to the Purchaser provides an opinion
regarding such exemption which is satisfactory to the Company. The Purchaser
understands that the Company is under no obligation to register the Units or to
comply with any such exemption, except as may be set forth in any binding
agreement between the parties. The Purchaser understands that no federal or
state securities authority has made any finding or determination as to the
fairness of investment in, nor any recommendation or endorsement of, the Units.
The Purchaser hereby represents and warrants to the Company that Purchaser
is purchasing the Units for Purchaser's own account for investment and not with
a view to dividing the Units with others, or with a view to or in connection
with an offering or any distribution of the Units, and that the Purchaser has no
present intention of selling or otherwise disposing of the Units.
Page 45 of 160
<PAGE>
In order to assure the Company with respect to the foregoing, the Purchaser
further represents and warrants the following facts:
(a) Except as specifically noted above, it is the intention of the
Purchaser to receive and hold the Units for the private personal investment of
the Purchaser for Purchaser's own account. Any sale or exchange or offer of the
Units will be made in only if the Units are registered under the Securities Act
of 1933, as amended, or the sale can be made pursuant to an exemption from the
registration requirements of such Act and any applicable state securities act
and such exception is set forth in an opinion of Purchaser's counsel
satisfactory to the Company.
(b) The Purchaser has no contract, understanding, agreement or
arrangement with any person or entity to sell or transfer to any such persons or
entities, or to anyone, or to have any such person or entity sell for the
Purchaser the Units and the Purchaser is not engaged in, and does not plan to
engage in any discussion with any person or entity relating to the sale or
transfer of the Units.
(c) Except as specifically noted above, as of the present date, the
Purchaser is not aware of any occurrence, event or circumstance upon the
happening of which Purchaser intends to transfer or sell the Units, or any part
thereof, and the Purchaser does not have any present intention to sell the
Units, or any part thereof, after the lapse of any particular period of time.
Purchaser understands that Purchaser may be required to bear the economic risks
of Purchaser's investment in the Units for an indefinite period of time.
(d) The Purchaser has no present obligation, indebtedness or commitment
and has no knowledge of any circumstances in existence, which would compel the
Purchaser to secure funds by the sale of the Units, nor is the Purchaser a party
to any plans or undertakings requiring funds, which plans or undertakings can be
consummated only by the sale of all or part of the Units.
(e) The Undersigned is an "Accredited Investor" as that term is defined
in Regulation D promulgated by the Securities and Exchange Commission under the
Securities Act of 1933. (f) The negotiations for the purchase of such Units have
been conducted directly between the Purchaser on the one hand and the Company on
the other. The Purchaser has been given the opportunity to ask questions of, and
receive answers from, the Company and its officers concerning the terms and
conditions of the sale of the Units and other matters pertaining to the
investment in the Company in order for the Purchaser to evaluate the merits and
risks of purchase of the Units. The Purchaser acknowledges that Purchaser has
been furnished all information that Purchaser has requested to the extent that
Purchaser considers necessary and advisable, and such information, along with
the information and advice provided by the Purchaser Representative, is
reasonable upon which to base an investment decision.
(g) The Purchaser acknowledges Purchaser's understanding that the
offering and sale of the Units is intended to be exempt from registration under
the Securities Act of 1933, as amended, by virtue of Section 4(2) of that Act,
and that the Company is relying upon the
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<PAGE>
representations made by the Purchasers herein for the purpose of qualifying such
offering thereunder.
(h) Investment in the Units is speculative and involves a high degree
of risk of loss by the Purchaser of the Purchaser's entire investment. The
Purchaser has such knowledge and experience in financial and business matters
that Purchaser is capable of evaluating the merits and risks of the investment
in the Units, can bear the economic risk of losing Purchaser's entire
investment, has adequate means for providing for Purchaser's current needs and
personal contingencies, and has no need for liquidity in an investment in the
Units and is capable of evaluating the merits and risks of the investment in the
Units.
The Purchaser further understands that in the event Purchaser should in
fact resell the Units, or any part thereof, within the foreseeable future,
Purchaser may be deemed to be an underwriter, as that term is defined in the
Securities Act of 1933, as amended. The Purchaser further understands and agrees
that the Units cannot be offered for sale, sold or otherwise transferred on the
register of the Company until Purchaser has notified the Company in writing of
Purchaser's intention to do so and unless and until the Company, if it deems
appropriate, has been furnished with an opinion of counsel for the Purchaser
satisfactory to counsel for the Company that such sale or transfer does not
involve a violation of the Securities Act of 1933, as amended, or the securities
laws of any state having jurisdiction. The Purchaser agrees that an appropriate
restrictive legend may be placed on the certificates evidencing any Units issued
pursuant hereto. The Purchaser hereby agrees to indemnify and hold the Company
and its directors, officers, employees, agents and controlling persons, harmless
from and against any losses, claims, damages or expenses (including attorneys
fees) arising out of or resulting from the untruth of any representation or the
breach of any warranty or covenant herein.
The Purchaser agrees that transfer of the Units may be refused by the
Company or its transfer agent if, in the opinion of counsel for the Company, any
proposed sale or transfer by the Purchaser of the Units would not be in
compliance with the applicable federal and state securities laws. The Purchaser
has not received any offering materials from the Company and the investment is
not made as a result of any general solicitation advertisements.
Sincerely,
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<PAGE>
EXHIBIT 3
CONSENT TO AMEND INDENTURE, BONDS AND WARRANTS
This Consent to Amend Indenture, Bonds and Warrants is entered into as of
March 25, 1998 by and between Trans World Gaming Corp. (the "Parent"), Trans
World Gaming of Louisiana Inc. (the "Subsidiary"), U.S. Trust Company of Texas,
N.A., solely in its capacity as Indenture Trustee (the "Trustee") and the
undersigned (the "Holder"). The Parent and the Subsidiary shall be referred to
herein as the "Company". Exhibits attached hereto are by this reference
incorporated herein.
BACKGROUND
1. Pursuant to that certain Subscription Agreement dated July 1, 1996,
those parties listed on Exhibit "A" hereto (collectively the "Holders")
purchased those certain 12% Secured Convertible Senior Bonds in the sum of
$4,800,000.00 (the "1996 Notes") and warrants to purchase Common Stock of the
Parent (the "1996 Warrants") issued by the Company. An Indenture was executed in
association with the 1996 Notes (the "1996 Indenture").
2. The Parent has entered into that certain Subscription Agreement (the
"$17 Million Agreement") dated as of March 16, 1998 pursuant to which it
proposes to issue $15 to $17 million of Notes, together with warrants to
purchase common stock of the Parent. The parties to the $17 Million Agreement
have made it a condition of that $17 Million Agreement that the 1996 Notes, 1996
Warrants and 1996 Indenture (collectively the "1996 Documents") be modified as
set forth herein.
3. Attached hereto as Exhibit "B" is that certain Trans World Gaming Corp.,
Trans World Gaming of Louisiana, Inc. First Amended Indenture dated as of March
31, 1998, as to the $4.8 million 12% Secured Senior Bonds due 2005 (the "Amended
Indenture") and related bonds (the "Amended Bonds"). Attached hereto as Exhibit
"C" is that certain form of amended 1996 Warrant (the "Amended Warrant"). In
addition, a separate warrant to purchase Common Stock of the Parent is being
issued pursuant to the Amended Indenture to replace certain conversion rights
granted to the Holders in the 1996 Indenture (the "Conversion Warrant"). The
Holder, subject to certain conditions as set forth herein, has agreed that the
1996 Documents shall be amended and restated in form and substance of the
Amended Indenture, Amended Bonds and Amended Warrant as attached hereto, and the
Conversion Warrant attached hereto as Exhibit "D".
TERMS
Intending to be legally bound, in consideration of the mutual covenants and
agreements set forth herein, the parties hereto agree as follows:
Page 48 of 160
<PAGE>
1. Amendment
Subject to the terms and conditions set forth herein, the 1996 Documents
shall be amended and restated pursuant to Section 8.2 of the 1996 Indenture
substantially in the form of the Amended Indenture, Amended Bonds, Amended
Warrant and Conversion Warrant attached hereto. As to the Amended Bonds, the
principal amount thereof shall be the same as the principal amount of the 1996
Notes owned by the Holder, as shall the accrued unpaid interest. The number of
shares of common stock of the Parent which may be obtained by the Amended
Warrant shall be the number set forth on Exhibit "A" next to the Holder's names
at the same strike price ($1.00) as the 1996 Warrants, with such Amended
Warrants to expire December 31, 2005. The number of shares subject to the
Conversion Warrant is also set forth in Exhibit "A" next to the Holder's name.
Such number of shares of common stock issuable pursuant to both the Amended
Warrant and the Original Warrant shall not be subject to adjustment by virtue of
the warrants issued pursuant to the $17 Million Subscription Agreement or any
other warrant, right or agreement in existence as of or as a result the Closing
hereof.
2. This amendment of the 1996 Documents as set forth herein shall occur in
the event of the following:
a. In the event the $17 Million Subscription Agreement closes; and
b. In the event all of the Holders on Exhibit "A" hereto are a party to
this Agreement.
3. Representations and Warranties of Holder.
As of the Closing Date, the Holder represents and warrants as follows:
a. The Holder is the owner, subject to paragraph C below, of and has
not assigned, transferred, sold, pledged, optioned, endorsed or otherwise
conveyed or transferred any interest in the 1996 Note or 1996 Warrant acquired
by such Holder pursuant to the Subscription Agreement and as set forth opposite
such Holder's name on Exhibit "A" hereto.
b. The Holder has all requisite legal power and authority to enter into
this Agreement. This Agreement has been duly authorized by all necessary action
on the part of the Holder, has been duly executed and delivered by an authorized
officer or representative of the Holder, and is a legal, valid and binding
obligation of the undersigned enforceable in accordance with its terms,
regardless of whether such enforceability is considered in a proceeding in law
or in equity.
c. The Holder has reviewed the Investment Representation Letter
attached hereto as Exhibit "E". All information provided therein and in this
Agreement is true and correct as of the date hereof and as of the date of the
Closing hereof, except as modified as follows: New Generation Limited
Partnership ("New Generation"), has entered into a "Put Option Agreement" with
Christopher Baker pursuant to which, under certain conditions, New Generation
can require
Page 49 of 160
<PAGE>
Mr. Baker to purchase an agreed upon percentage of New Generation's Amended Bond
plus accrued, unpaid interest, plus the Amended Warrants on such portion of the
bond. Also, Fundamental Investors, L.P. ("Fundamental") has entered into a "Put
Option Agreement" with Mr. Baker pursuant to which, immediately subsequent to
the Closing hereof, Fundamental has the right to sell Mr. Baker an agreed upon
percentage of Fundamental's Amended Bond and the accrued unpaid interest
thereon. Fundamental has also agreed to sell all Amended Warrants received by it
on such bond to Mr. Baker. Execution of this Agreement shall be deemed execution
of the Investment Representation Letter, as modified in its paragraph.
4. Representations and Warranties of the Company.
As of the Closing Date, the Company represents and warrants to the
Subscriber that:
(a) Organization, Standing, etc. Parent 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. The Subsidiary is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Louisiana and has all requisite corporate power and authority to own
its assets and to carry on its business as presently conducted. Parent and
Subsidiary have all requisite corporate power and authority to (i) execute,
deliver, and perform their obligations under this Agreement, the Amended
Indenture and Amended Bonds, the Amended Warrants, the Conversion Warrants and
all other agreements and instruments executed and delivered pursuant to or in
connection with this Agreement, the Amended Indenture, the Amended Bonds, the
Conversion Warrant and Amended Warrants (collectively the "Operative
Agreements"), and (ii) issue the Amended Bonds, the Conversion Warrants and the
Amended Warrants in exchange for the 1996 Notes and 1996 Warrants.
(b) Authorization and Execution; Amended Bonds, Conversion Warrants and
Amended Warrants Validly Issued. The execution, delivery and performance by
Parent and Subsidiary of this Agreement and the other Operative Agreements, and
the issuance of the Amended Bonds, the Conversion Warrants and the Amended
Warrants hereunder have been duly and validly authorized by Parent and
Subsidiary. This Agreement and the other Operative Agreements have been duly
executed and delivered by Parent and Subsidiary and constitute valid and binding
agreements of Parent and Subsidiary enforceable against Parent and Subsidiary in
accordance with their respective terms. Upon the Closing, the Amended Bonds will
be valid and binding obligations of the Parent and Subsidiary and the shares of
common stock issuable pursuant to the Amended Warrants and the Conversion
Warrants will upon issuance be duly and validly issued and outstanding, fully
paid and nonassessable (other than the exercise price of the Amended Warrants
and Conversion Warrants).
(c) Contravention. The execution, delivery and performance of this
Agreement and the other Operative Agreements and the consummation of the
transactions contemplated thereby 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 Parent or Subsidiary or on the
Amended Bonds, the Conversion Warrants and the Amended Warrants, (ii) the
Articles of
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Incorporation and Bylaws of Parent or Subsidiary, or (iii) any agreements,
judgment, injunction, order, decree or other instrument binding upon Parent or
Subsidiary or any of their assets or properties, the violation of which would
have a material adverse effect on Parent or Subsidiary or on the Amended Bonds,
the Conversion Warrants and the Amended Warrants.
For purposes of this Agreement, a "material adverse effect" means a
material adverse effect on (a) the business, operations, property or condition
(financial or otherwise) of Parent and Subsidiary, (b) the ability of the Parent
or Subsidiary to perform their respective obligations under this Agreement, or
any other Operative Agreement to which any of them is a party, or (c) the
validity, enforceability, perfection or priority of this Agreement or the rights
or remedies of the Trustee or the holder of the Amended Bonds, Amended Warrants
or Conversion Warrants.
(d) Governmental Regulations. Except as required pursuant to the
Securities Act of 1933, as amended (the "Securities Act"), the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and State securities laws,
Parent and Subsidiary are not subject to any foreign, Federal or State law or
regulation limiting their ability to enter into this Agreement or any other
Operative Agreement, to issue the Amended Bonds, the Conversion Warrants and the
Amended Warrants or to perform their obligations required thereby.
5. Surrender of Securities; Value of Securities.
Immediately following the Closing, the Holder shall surrender to the
Indenture Trustee the 1996 Note and the 1996 Warrant, which shall be replaced
with the Amended Bond in the form attached hereto, the Amended Warrant in the
form attached hereto and the Conversion Warrant in the form attached hereto. The
Parties hereby agree that, to the extent lawful, the parties will take the
position, for income tax reporting purposes, that the value of the Amended Bonds
are not greater than the value of the 1996 Notes and that the Amended Warrants
and the Conversion Warrants have no value.
6. Closing.
The closing this Agreement shall be deemed to occur simultaneously with and
only in the event of the closing of the $17 Million Agreement (the "Closing").
The Holder acknowledges that the Amended Notes, Amended Warrants and Conversion
Warrants shall be delivered subsequent to the Closing and that the 1996 Notes
and 1996 Warrants shall be returned to the Indenture Trustee. The parties hereto
agree to act in good faith and to use their best efforts to the extent
additional documents, actions or information are necessary post-closing and
covenant to cooperate with each other in taking all necessary actions related
thereto.
7. Survival of Representations and Warranties.
All representations and warranties contained in this agreement shall
survive the execution and delivery of this Agreement.
8. Waiver of Jury Trial.
Page 51 of 160
<PAGE>
Each of the parties hereto irrevocably and unconditionally waives the right
to trial by jury in any legal or equitable action, suit or proceeding arising
out of or relating to this agreement, the units or any other operative agreement
or any transaction contemplated hereby or thereby or the subject matter of any
of the foregoing.
9. Notices to the Company.
All notices and other communications provided for herein shall be in
writing and shall be deemed to have been duly given if delivered personally or
sent by registered or certified mail, return receipt requested, postage prepaid,
telex, telecopier or overnight air courier guaranteeing next day delivery:
(a) if to the Company, to it at the following address:
Trans World Gaming Corp.
One Penn Plaza
Suite 1503
New York, New York 10119
Attn: Dominick Valenzano, Chief Financial Officer
(b) if to the Indenture Trustee, to it at the following address:
U.S. Trust Company of Texas
2001 Ross Avenue
Dallas, Texas 75201
Attn: John Stohlmann, Vice President
(c) if to the Holder, to the address set forth on the signature page
hereto, or at such other address as either party shall have specified by notice
in writing to the other.
All notices and communications shall be deemed to have been duly given: at
the time delivered by hand, if personally delivered; five business days after
being deposited in the mail, certified mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt is orally acknowledged, if telecopied;
and the next business day after timely delivery to the courier, if sent by
overnight air courier guaranteeing next day delivery.
If a notice or communication is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives it.
10. Notification of Changes.
The Holder and the Company agree and covenant to notify the other promptly
upon the occurrence of any event prior to the Closing which would cause any
representation, warranty,
Page 52 and 160
<PAGE>
covenant or other statement contained in this Agreement by such person so
notifying to be false or incorrect or of any change in any statement made herein
occurring prior to the Closing Date.
11. Assignability.
This Agreement is not assignable by the Holder or the Company, and may not
be modified, waived or terminated except by an instrument in writing signed by
the party against whom enforcement of such modifications, waiver or termination
is sought.
12. Binding Effect.
Except as otherwise provided herein, this Agreement shall be binding upon
and inure to the benefit of the parties and their heirs, executors,
administrators, successors, and legal representatives, and assigns, including
any transferee of the Amended Bonds, Amended Warrants and Conversion Warrants,
and the agreements, representations, warranties and acknowledgments contained
herein shall be deemed to be made by and be binding upon such heirs, executors,
administrators, successors, and legal representatives and assigns. If the Holder
is more than one person, the obligation of the Holder shall be joint and several
and the agreements, representations, warranties and acknowledgments contained
herein shall be deemed to be made by and be binding upon each such person and
his heirs, executors, administrators and successors. By entering into this
Agreement, the Holder agrees that this agreement and the amendment to the 1996
Indenture authorized herein shall not constitute a default under the 1996
Indenture.
13. Obligations Irrevocable.
The obligations of the Holder shall be irrevocable, except with the consent
of the Company, until the Closing or earlier termination of the $17 Million
Subscription Agreement.
14. Entire Agreement.
This Agreement constitutes the entire agreement of the Holder and the
Company relating to the matters contained herein, superseding all prior
contracts, commitments, or agreements, whether oral or written.
15. Governing Law.
This Agreement shall be governed and controlled as to the validity,
enforcement, interpretations, construction and effect and in all other aspects
by the substantive laws of the State of New York, without reference to conflicts
of laws principles.
16. Severability.
If any provision of this Agreement or the application thereof to any Holder
or circumstance shall be held invalid or unenforceable to any extent, the
remainder of this Agreement
Page 53 of 160
<PAGE>
and the application of such provision to other Holders or circumstances shall
not be affected thereby and shall be enforced to the greatest extent permitted
by law.
17. Headings.
The headings in this Agreement are inserted for convenience and
identification only and are not intended to describe, interpret, define, or
limit the scope, extent or intent of this Agreement or any provision hereof.
18. Counterparts.
This Agreement may be executed in any number of counterparts, each of which
when so executed and delivered shall be deemed to be an original and all of
which together shall be deemed to be one and the same agreement.
Page 54 of 160
<PAGE>
IN WITNESS WHEREOF, the undersigned Holder and Company have executed this
Consent to Amend Indenture, Bonds and Warrants this 25 day of March, 1998.
CORPORATE HOLDER:
By:
------------------------------------
Its:
------------------------------------
INDIVIDUAL HOLDER:
By:
------------------------------------
PARTNERSHIP HOLDER:
By:
------------------------------------
Its:
-----------------------------------
TRANS WORLD GAMING CORP:
By: /s/ Andrew Tottenham
------------------------------------
Its: President
-----------------------------------
TRANS WORLD GAMING
OF LOUISIANA, INC.
By: /s/ Dominic Valenzano
------------------------------------
Its: Treasurer
-----------------------------------
Page 55 of 160
<PAGE>
IN WITNESS WHEREOF, the undersigned Holder and Company have executed this
Consent to Amend Indenture, Bonds and Warrants this 25 day of March, 1998.
CORPORATE HOLDER:
By:
-----------------------------------
Its:
-----------------------------------
INDIVIDUAL HOLDER:
By:
-----------------------------------
PARTNERSHIP HOLDER:
Value Partners, Ltd.
By: Ewing Partners, Its General Partner
By: /s/ Timothy G. Ewing
-----------------------------------
Timothy G. Ewing, Partner
TRANS WORLD GAMING CORP:
By:
-----------------------------------
Its:
-----------------------------------
TRANS WORLD GAMING
OF LOUISIANA, INC.
By:
-----------------------------------
Its:
-----------------------------------
page 56 of 160
<PAGE>
IN WITNESS WHEREOF, the undersigned Holder and Company have executed this
Consent to Amend Indenture, Bonds and Warrants this 25 day of March, 1998.
CORPORATE HOLDER:
By:
------------------------------------
Its:
-----------------------------------
INDIVIDUAL HOLDER:
By:
------------------------------------
PARTNERSHIP HOLDER:
By: /s/ Christopher P. Baker
-----------------------------------
Its: Christopher P. Baker, President
C.P. Baker Inc., General Partner
to Anasazi Partners, Limited Partnership
TRANS WORLD GAMING CORP:
By:
------------------------------------
Its:
------------------------------------
TRANS WORLD GAMING
OF LOUISIANA, INC.
By:
------------------------------------
Its:
------------------------------------
Page 57 of 160
<PAGE>
IN WITNESS WHEREOF, the undersigned Holder and Company have executed this
Consent to Amend Indenture, Bonds and Warrants this 25 day of March, 1998.
CORPORATE HOLDER:
By:
------------------------------------
Its:
-----------------------------------
INDIVIDUAL HOLDER:
By:
------------------------------------
PARTNERSHIP HOLDER:
New Generation Limited Partnership
By: New Generation Advisers, Inc.,
its General Partner
By: /s/ George Putnam III
------------------------------------
Its: President
----------------------------------
TRANS WORLD GAMING CORP:
By:
------------------------------------
Its:
-----------------------------------
TRANS WORLD GAMING
OF LOUISIANA, INC.
By:
------------------------------------
Its:
-----------------------------------
Page 58 of 160
<PAGE>
IN WITNESS WHEREOF, the undersigned Holder and Company have executed this
Consent to Amend Indenture, Bonds and Warrants this 25 day of March, 1998.
CORPORATE HOLDER:
By:
------------------------------------
Its:
------------------------------------
INDIVIDUAL HOLDER:
By:
------------------------------------
PARTNERSHIP HOLDER:
Fundamental Investors L.P.
By: Robinson Value Group Inc.
-----------------------------------
Its: General Partner
-----------------------------------
By: /s/ Marius Robinsons
-----------------------------------
TRANS WORLD GAMING CORP.
By:
------------------------------------
Its:
-----------------------------------
TRANS WORLD GAMING
OF LOUISIANA, INC.
By:
------------------------------------
Its:
-----------------------------------
Page 59 of 160
<PAGE>
IN WITNESS WHEREOF, the undersigned Holder and Company have executed this
Consent to Amend Indenture, Bonds and Warrants this 25 day of March, 1998.
CORPORATE HOLDER:
By:
------------------------------------
Its:
-----------------------------------
INDIVIDUAL HOLDER:
By: /s/ Lucille Friedson
------------------------------------
By: /s/ Belvin Friedson
------------------------------------
PARTNERSHIP HOLDER:
By:
------------------------------------
Its:
-----------------------------------
TRANS WORLD GAMING CORP:
By:
------------------------------------
Its:
-----------------------------------
TRANS WORLD GAMING
OF LOUISIANA, INC.
By:
------------------------------------
Its:
-----------------------------------
Page 60 of 160
<PAGE>
Exhibit "A"
<TABLE>
<CAPTION>
Number of Number of Shares as
Series # Series # Shares as to to Conversion
Name of 1996 of 1996 Principal amount Amended Warrant
of Holder Note Warrant of Amended Bond Warrant
- - --------- -------- -------- ---------------- ------------ -------------------
<S> <C> <C> <C>
Value Partners, Ltd. $3,000,000 600,000 2,000,000
Anasazi Partners $1,000,000 200,000 666,667
Limited Partnership
New Generation $500,000 100,000 333,333
Limited Partnership
Fundamental $200,000 40,000 133,333
Investors, L.P.
Kevin Friedson and
Lucille Friedson $100,000 20,000 66,667
</TABLE>
Page 61 of 160
<PAGE>
Exhibit "B"
FORM OF AMENDED INDENTURE AND BOND
================================================================================
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
================================================================================
Page 62 of 160
<PAGE>
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
Page 63 of 160
<PAGE>
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:
------------------------------------
Page 64 of 160
<PAGE>
[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
Page 65 of 160
<PAGE>
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.
Page 66 of 160
<PAGE>
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:
----------------------------------------
Authorized Signatory
Page 67 of 160
<PAGE>
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.
- - ------------------------------------------------------------------------------
- - ------------------------------------------------------------------------------
(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)
Page 68 of 160
<PAGE>
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
Page 69 of 160
<PAGE>
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:
Page 70 of 160
<PAGE>
(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
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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.
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"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.
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"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.
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"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.
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"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.
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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
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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
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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.
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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
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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.
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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) 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
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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
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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
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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
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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
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(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
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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
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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;
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(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
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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
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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
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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.
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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
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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 solely to the Excess Cash Flow payments required by Section 3.17
of this Indenture.
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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,
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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;
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(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.
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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
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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
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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.
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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
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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.
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(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.
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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
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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.
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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.
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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).
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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
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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
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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
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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
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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
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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
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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.
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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.
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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
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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.
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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.
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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
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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
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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
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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
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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.
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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)
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Exhibit "C"
FORM OF AMENDED WARRANT
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 PURSUANT TO AN OPINION OF COUNSEL
SATISFACTORY TO THE ISSUER THAT SUCH
REGISTRATION IS NOT REQUIRED.
WARRANT TO PURCHASE
COMMON STOCK
Series A. No. __
TRANS WORLD GAMING CORP.
(a Nevada corporation)
Dated: March 31, 1998
THIS CERTIFIES that (together with its successors or
permitted assigns, the "Holder") is entitled to purchase from Trans World Gaming
Corp., a Nevada corporation ("Company") up to shares of the Company's
common stock, par value $.001 per share (the "Common Stock"), at a purchase
price of $1.00 per share of Common Stock (the "Warrant Price"), subject to
adjustment as hereafter provided.
This Warrant is issued pursuant to that certain Consent to Amend Indenture,
Bonds and Warrants Agreement dated as of March 25, 1998 (the "Agreement"),
between the Company and the Holder.
1. Exercise of the Warrant.
-----------------------
The rights represented by this Warrant may be exercised at any time on or
before 5:00 p.m., New York time, on December 31, 2005, in whole or in part, by
(i) the surrender of this Warrant (with the purchase form at the end hereof
properly executed) at the principal executive office of the Company (or such
other office or agency of the Company as it may designate by notice in writing
to the Holder at the address of the Holder appearing on the books of the
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Company); (ii) payment to the Company of the Warrant Price then in effect for
the number of shares of Common Stock specified in the above-mentioned purchase
form together with applicable stock transfer taxes, if any; and (iii) delivery
to the Company of a duly executed agreement signed by the person(s) designated
in the purchase form to the effect that such person(s) agree(s) to be bound by
the provisions of Paragraph 5 and subparagraph (b), (c) and (d) of Paragraph 6
hereof. This Warrant shall be deemed to have been exercised, in whole or in part
to the extent specified, immediately prior to the close of business on the date
this Warrant is surrendered and payment is made in accordance with the foregoing
provisions of this Paragraph 1, and the person or persons in whose name or names
the certificates for the Common Stock shall be issuable upon such exercise shall
become the Holder or Holders of record of such Common Stock at that time and
date. The Common Stock so purchased shall be delivered to the Holder within a
reasonable time, not exceeding ten (10) business days, after the rights
represented by this Warrant shall have been so exercised. If at any time this
Warrant is exercised as to less than the total number of shares for which it may
be exercised, and this Warrant shall not have expired, the Company shall
promptly issue to the Holder a new Warrant identical in form as to this Warrant
as to the remaining shares hereunder.
2. Transfer.
--------
Subject to the legend set forth at the top of the first page hereof, this
Warrant may be assigned in whole or in part by the Holder by (i) completing and
executing the form of assignment at the end hereof and (ii) surrendering this
Warrant with such duly completed and executed assignment form for cancellation,
accompanied by funds sufficient to pay any transfer tax, at the office or agency
of the Company referred to in Paragraph 9(b), hereof; whereupon the Company
shall issue, in the name or names specified by the Holder (including the Holder)
a new Warrant or Warrants of like tenor and representing in the aggregate rights
to purchase the same number of shares of Common Stock as are then purchasable
hereunder.
3. Covenants of the Company.
------------------------
(a) The Company covenants and agrees that all Common Stock and Common
Stock issuable upon exercise of this Warrant will, upon issuance, be duly and
validly issued, fully paid and nonassessable and no personal liability will, for
Company obligations, attach to the holder thereof by reason of being such a
holder, other than as set forth herein.
(b) The Company covenants and agrees that during the period within
which this Warrant may be exercised, the Company will at all times have
authorized and reserved a sufficient number of shares of Common Stock to provide
for the exercise of this Warrant.
Page 127 of 160
<PAGE>
4. No Rights of Stockholder.
------------------------
This Warrant shall not entitle the Holder to any voting rights or other
rights as a stockholder of the Company, either at law or in equity, and the
rights of the Holder are limited to those expressed in this Warrant and are not
enforceable against the Company except to the extent set forth herein.
5. Registration.
------------
(a) The Holder shall have the right to have the shares of Common Stock
underlying this Warrant registered as part of the next public offering of the
Common Stock. If no Common Stock offering has occurred by June 30, 1998, then
upon the written request of any combination of the holders of Common Stock or of
Warrants issued by the Company and collectively exercisable into not less than
100,000 shares of Common Stock (as such number may be adjusted under Paragraph
7), and on a one-time basis, the Company shall file, within ninety (90) days
after written request such registration, and use its best efforts to cause to be
declared effective ninety (90) days thereafter, by the Securities and Exchange
Commission, a registration statement or post-effective amendment thereto as
permitted under the Securities Act of 1933, as amended (the "Act"), covering the
sale by the Holder of the Common Stock issuable upon exercise of this Warrant or
any portion hereof (the "Registerable Securities"). The Company shall supply
prospectuses in order to facilitate the public sale or other disposition of the
Registerable Securities, use its best efforts to register and qualify any of the
Registerable Securities for sale in such states as such Holder reasonably
designates and do any and all other acts and things which may be necessary to
enable such Holder to consummate the public sale of the Registerable Securities,
and furnish indemnification in the manner provided in Paragraph 6 hereto. The
Holder shall furnish information reasonably requested by the Company in
accordance with such post-effective amendments or registration statements,
including its intentions with respect thereto, and shall furnish indemnification
as set forth in Paragraph 6.
(b) The Company will maintain such registration statement or
post-effective amendment current and effective under the Act until two years
following the expiration of the exercisability of this Warrant, or until shares
owned by the Holder are eligible for sale without restriction under Rule 144.
(c) The Company shall bear the entire cost and expense of any
registration of securities under Paragraph 5 hereof. Notwithstanding the
foregoing, any Holder whose Registerable Securities are included in any such
registration statement pursuant to this Paragraph 5 shall, however, bear the
fees of any counsel retained by him and any transfer taxes or underwriting
discounts or commissions applicable to the Registerable Securities sold by him
pursuant thereto.
Page 128 of 160
<PAGE>
(d) In addition the Company shall:
(i) furnish to the Holder such numbers of copies of a summary
prospectus or other prospectus, including a preliminary
prospectus or any amendment or supplement to any prospectus,
in conformity with the requirements of the 1933 Act, and such
other documents, as the Holder may reasonably request in order
to facilitate the public sale or other disposition of the
securities owned by the Holder;
(ii) use its best efforts to register and qualify the securities
covered by such registration statement under such other
securities or blue sky laws of such jurisdictions as the
Holder shall reasonably request, and do any and all other acts
and things which may be necessary or advisable to enable such
Holder to consummate the public sale or other disposition in
such jurisdictions of the securities owned by such Holder,
except that the Company shall not for any such purpose be
required to qualify to do business as a foreign corporation in
any jurisdiction wherein it is not so qualified or to file
therein any general consent to service of process;
(iii) use its best efforts to list such securities on any
securities exchange on which any securities of the Company is
then listed, if the listing of such securities is then
permitted under the rules of such exchange;
(iv) enter into and perform its obligations under an underwriting
agreement, if the offering is an underwritten offering, in
usual and customary form, with the managing underwriter or
underwriters of such underwritten offering;
(v) notify the Holder of Registrable Securities covered by such
registration statement, at any time when a prospectus relating
thereto covered by such registration statement is required to
be delivered under the 1933 Act, of the happening of any event
of which it has knowledge as a result of which the prospectus
included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the
light of the circumstances then existing; and
(vi) furnish, at the request of the Holder on the date such
Registrable Securities are delivered to the underwriters for
sale pursuant to such registration or, if such Registrable
Securities are not being sold through underwriters, on the
date the registration statement with respect to such
Registrable Securities becomes effective, (i) an opinion,
dated such date, of the counsel representing the Company for
the purpose of such registration, addressed to the
underwriters, if any, and to the Holder making such request,
covering such legal matters with respect to the registration
in respect of which such opinion is being given as the Holder
of such Registrable Securities may reasonably request and are
customarily included in such an opinion and (ii) letters,
dated, respectively, (1) the effective date of the
registration statement and (2) the date such Registrable
Securities are delivered to the underwriters, if any, for sale
pursuant to such registration, from a firm of independent
certified public accountants of recognized standing
Page 129 of 160
<PAGE>
selected by the Company, addressed to the underwriters, if
any, and to the Holder making such request, covering such
financial, statistical and accounting matters with respect to
the registration in respect of which such letters are being
given as the Holder of such Registrable Securities may
reasonably request and are customarily included in such
letters; and
(vii)take such other actions as shall be reasonably requested by
any Holder to facilitate the registration and sale of the
Registrable Securities.
6. Indemnification.
---------------
(a) Whenever pursuant to Paragraph 5 a registration statement relating
to any Registerable Securities is filed under the Act, amended or supplemented,
the Company will indemnify and hold harmless each Holder of the Registerable
Securities covered by such registration statement, amendment or supplement (such
holder hereinafter referred to as the "Distributing Holder"), each person, if
any, who controls (within the meaning of the Act) the Distributing Holder, and
each officer, director, employee, partner or agent of the Distributing Holder,
and each underwriter (within the meaning of the Act) of such securities and each
person, if any, who controls (within the meaning of the Act) any such
underwriter and each officer, director, employee, agent or partner of such
underwriter against any losses, claims, damages or liabilities joint or several,
to which the Distributing Holder, any such underwriter or any other person
described above may become subject under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in any such registration statement or any preliminary
prospectus or final prospectus constituting a part thereof or any amendment or
supplement thereto, or arise out of or are based upon the omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading; and will reimburse the Distributing Holder
and each such underwriter or such other person for any legal or other expenses
reasonably incurred by the Distributing Holder, or underwriter or such other
person, in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the Company will not be
liable in any such case (i) to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in said registration statement,
said preliminary prospectus, said final prospectus or said amendment or
supplement in reliance upon and in conformity with written information furnished
by such Distributing Holder, any other Distributing Holder or any such
underwriter or any other such person for use in the preparation thereof, and
(ii) such losses, claims, damages or liabilities arise out of or are based upon
any actual or alleged untrue statement or omission made in or from any
preliminary prospectus, but corrected in the final prospectus, as amended or
supplemented.
(b) Whenever pursuant to Paragraph 5 a registration statement relating
to the Registerable Securities is filed, amended or supplemented under the Act,
the Distributing Holder will indemnify and hold harmless the Company and each
underwriter, each of their respective directors, each of their respective
officers, employees, partners and agents thereto, and each
Page 130 of 160
<PAGE>
person, if any, who controls the Company (within the meaning of the Act) against
any losses, claims,damages or liabilities to which the Company or any such
director, officer, employees, partners and agents or controlling person may
become subject under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue or alleged untrue statement of any material fact contained in
any such registration statement or any preliminary prospectus or final
prospectus constituting a part thereof, or any amendment or supplement thereto,
or arise out of or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent that such untrue statement or alleged untrue statement or omission was
made in said registration statement, said preliminary prospectus, said final
prospectus or said amendment or supplement in reliance upon and in conformity
with written information furnished by such Distributing Holder for use in the
preparation thereof; and will reimburse the Company or any such director,
officer, employees, partners and agents or controlling person for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action.
(c) Promptly after receipt by an indemnified party under this Paragraph
6 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against any indemnifying party, give the
indemnifying party notice of the commencement thereof; but the omission to so
notify the indemnifying party will not relieve it from any liability which it
may have to any indemnified party otherwise than under this Paragraph 6.
(d) In case any such action is brought against any indemnified party,
and it notifies an indemnifying party of the commencement thereof, the
indemnified party will be entitled to participate in, and , to the extent that
it may wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof with counsel reasonably satisfactory to such
indemnifying party, and after notice from the indemnified party to such
indemnifying party of its election to so assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Paragraph 6 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation.
7. Adjustment of Warrant Price and Number of Securities.
----------------------------------------------------
(a) The Warrant Price shall be subject to adjustment from time to time
as follows:
(i) In case the Company shall at any time after the date hereof
pay a dividend in shares of Common Stock or make a
distribution in shares of Common Stock, then upon such
dividend or distribution the Warrant Price in effect
immediately prior to such dividend or
Page 131 of 160
<PAGE>
distribution shall forthwith be reduced to a price determined
by dividing:
(A) an amount equal to the total number of shares of Common
Stock outstanding immediately prior to such dividend or
distribution multiplied by the Warrant Price in effect
immediately prior to such dividend or distribution, by
(B) the total number of shares of Common Stock outstanding
immediately after such issuance or sale.
For the purposes of any computation to be made in accordance with the
provision of this clause (i), the following provisions shall be applicable:
Common Stock issuable by way of dividend or other distribution on any stock of
the Company shall be deemed to have been issued immediately after the opening of
business on the date following the date fixed for the determination of
stockholders entitled to receive such dividend or other distribution.
(ii) In case the Company shall at any time subdivide or combine
the outstanding Common Stock, the Warrant Price shall
forthwith be proportionately decreased in the case of
subdivision or increased in the case of combination. Any such
adjustment shall become effective at the time such
subdivision or combination shall become effective.
(iii) In case the Company shall at any time or from time to time
issue or sell shares of Common Stock (or securities
convertible into or exchangeable for shares of Common Stock,
or any options, warrants or other rights to acquire shares of
Common Stock) at a price per share less than the Market Price
per share of Common Stock (treating the price per share of
any security exchangeable or exercisable into Common Stock as
equal to (x) the sum of the price for such security
convertible, exchangeable or exercisable into Common Stock
plus any additional consideration payable (without regard to
any anti-dilution adjustments) upon the conversion, exchange
or exercise of such security into Common Stock divided by (y)
the number of shares of Common Stock initially underlying
such convertible, exchangeable or exercisable security),
other than issuance or sales of Common Stock pursuant to any
employee benefit plan, then, and in each such case, the
number of shares of Common Stock thereafter purchasable upon
exercise of a Warrant shall be determined by multiplying the
number of shares of Common Stock theretofore purchasable upon
exercise of each Warrant by a fraction (A) the numerator of
which shall be the sum
Page 132 of 160
<PAGE>
of the number of shares of Common Stock outstanding on such
date plus the number of additional shares of Common Stock
issued (or the maximum number into which such convertible or
exchangeable securities initially may convert or exchange or
for which such options, warrants or other rights initially
may be exercised) and (B) the denominator of which shall be
the sum of the number of shares of Common Stock outstanding
on such date plus the number of shares of Common Stock which
the aggregate consideration for the total number of such
additional shares of Common Stock so issued (or into which
such convertible or exchangeable securities may convert or
exchange or for which such options, warrants or other rights
may be exercised plus the aggregate amount of any additional
consideration initially payable upon conversion, exchange or
exercise of such security) would purchase at the Market Price
per share of Common Stock on such date. Such adjustment shall
be made whenever such shares, securities, options, warrants
or other rights are issued, and shall become effective
retroactively immediately after the close of business on the
record date for the determination of stockholders entitled to
receive such shares, securities, options, warrants or other
rights; provided, that the determination as to whether an
adjustment is required to be made pursuant to this Section
7(a) shall only be made upon the issuance of such shares or
such convertible or exchangeable securities, options,
warrants or other rights, and not upon the issuance of the
security into which such convertible or exchangeable security
converts or exchanges, or the security underlying such
option, warrant or other right. Notwithstanding the
foregoing, in the event of such issuance or sale of Common
Stock at a cash price less than the Market Price, no such
adjustment under this Section 7(a) need be made to the number
of shares underlying the Warrant unless such adjustment would
require an increase or decrease of at least 1% of the number
of shares underlying the Warrant. Any lesser adjustment shall
be carried forward and shall be made at the time of and
together with the next subsequent adjustment which, together
with any adjustment or adjustments so carried forward, shall
amount to an increase or decrease of at least 1% of number of
shares underlying the Warrant. For the purpose of this
Agreement, the term "Market Price" shall mean (i) if the
Common Stock is traded in the over-the-counter market or on
the National Association of Securities Dealers, Inc.
Automated Quotations System ("NASDAQ"), the average per share
closing prices of the Common Stock on the 20 consecutive
trading days immediately preceding the date in question as
reported
Page 133 of 160
<PAGE>
by NASDAQ or an equivalent generally accepted reporting
service, or (ii) if the Common Stock is traded on a national
securities exchange, the average for the 20 consecutive
trading days immediately preceding the date in question of
the daily per share closing prices of the Common Stock on the
principal stock exchange on which it is listed, as the case
may be. The closing price referred to above shall be the last
reported sales price or in case no such reported sale takes
place on such day, the average of the reported closing bid
and asked prices, in either case on the national securities
exchange or automated quotation system on which the Common
Stock is then listed. Whenever the number of shares of Common
Stock purchasable upon exercise of each Warrant is adjusted,
the Warrant Price for each share of Common Stock payable upon
exercise of each Warrant shall be adjusted by multiplying
such Warrant Price immediately prior to such adjustment by a
fraction, the numerator of which shall be the number of
shares of Common Stock purchasable upon the exercise of each
Warrant immediately prior to such adjustment and the
denominator of which shall be the number of shares of Common
Stock purchasable immediately after such adjustment.
(iv) Within a reasonable time after the close of each quarterly
fiscal period of the Company during which the Warrant Price
or number of shares issuable upon exercise of this Warrant
has been adjusted as herein provided, the Company shall
deliver to the Holder a certificate signed by the President
or Vice President of the Company and by the Treasurer or
Assistant Treasurer or the Secretary or an Assistant
Secretary of the Company, showing in detail the facts
requiring all such adjustments occurring during such period
and the Warrant Price after each such adjustment.
(b) In the event that the number of outstanding shares of Common Stock
is increased by a stock dividend or distribution payable in Common Stock or by a
subdivision of the outstanding Common Stock, then, from and after the record
date thereof, by reason of such dividend, distribution or subdivision, the
number of shares of Common Stock issuable upon the exercise of the Warrant shall
be increased in proportion to such increase in outstanding shares. In the event
that the number of shares of Common Stock outstanding is decreased by a
combination of the outstanding Common Stock, then, from and after the record
date thereof, the number of shares of Common Stock issuable upon the exercise of
the Warrant shall be decreased in proportion to such decrease in the outstanding
shares of Common Stock.
(c) In case of any reorganization or reclassification of the
outstanding Common Stock (other than a change in par value, or from par value to
no par value, or as a result
Page 134 of 160
<PAGE>
of a subdivision or combination), or in case of any consolidation of the Company
with, or merger of the Company into, another corporation (other than a
consolidation or merger in which the Company is the continuing corporation and
which does not result in any reclassification of the outstanding Common Stock),
or in case of any sale or conveyance to another corporation of the property of
the Company as an entirety or substantially as an entirety, the holder of the
Warrant then outstanding shall thereafter have the right to purchase the kind
and amount of shares of common stock and other securities and property
receivable upon such reorganization, reclassification, consolidation, merger,
sale or conveyance by a holder of the number of shares of Common Stock which the
holder of the Warrant shall then be entitled to purchase; such adjustments shall
apply with respect to all such changes occurring between the date of this
Warrant Agreement and the date of exercise or expiration of the Warrant.
(d) Subject to the provisions of this Section, in case the Company
shall, at any time prior to the exercise of the Warrant, desire to declare a
dividend or make any distribution of its assets to holders of its Common Stock,
whether as a liquidating or a partial liquidating dividend or for any other
purpose, the Company shall provide the holder of the Warrant with written notice
of such intent not less than thirty (30) days prior to the record date to
determine holders of Common Stock entitled to receive such distribution and the
holder of this Warrant shall have until 5:00 p.m. EST on the twentieth (20th)
day following the actual receipt of such notice to elect whether to exercise
this Warrant in accordance with the terms herein. In the event of proper
election to exercise the Warrant, the holder of this Warrant shall be deemed to
be a holder of Common Stock as of the record date for such distribution. Should
the holder of the Warrant elect to exercise his Warrant within 20 days after the
record date for the determination of those holders of Common Stock entitled to
such dividend or distribution, he shall be entitled to receive for the Warrant
Price per Warrant, in addition to each share of Common Stock, the amount of such
distribution (or, at the option of the Company, a sum equal to the value of any
such assets at the time of such distribution as determined by the Board of
Directors of the Company in good faith), which would have been payable to the
holder had he been the holder of record of the Common Stock receivable upon
exercise of his Warrant on the record date for the determination of those
entitled to such distribution.
(e) In case of the dissolution, liquidation or winding-up of the
Company, all rights under the Warrant shall terminate on a date fixed by the
Company, such date to be no earlier than ten (10) days prior to the
effectiveness of such dissolution, liquidation or winding-up and not later than
five (5) days prior to such effectiveness. Notice of such termination of
purchase rights shall be given to the last registered holder of this Warrant, as
the same shall appear on the books of the Company, by registered mail at least
thirty (30) days prior to such termination date.
(f) In case the Company shall, at any time prior to the expiration of
this Warrant and prior to the exercise thereof, offer to the holders of its
Common Stock any rights to subscribe for additional shares of any class of the
Company, then the Company shall give written notice thereof to the last
registered holder hereof not less than thirty (30) days prior to the date on
Page 135 of 160
<PAGE>
which the books of the Company are closed or a record date is fixed for the
determination of the stockholders entitled to such subscription rights. Such
notice shall specify the date as to which the books shall be closed or record
date fixed with respect to such offer of subscription and the right of the
holder hereof to participate in such offer of subscription shall terminate if
this Warrant shall not be exercised on or before the date of such closing of the
books or such record date.
(g) Any adjustment pursuant to the aforesaid provisions shall be made
on the basis of the number of shares of Common Stock which the holder thereof
would have been entitled to acquire by the exercise of the Warrant immediately
prior to the event giving rise to such adjustment.
(h) Irrespective of any adjustment in the Warrant Price or the number
or kind of shares purchasable upon exercise of this Warrant, Warrants previously
or hereafter issued may continue to express the same price and number and kind
of shares as are stated in this Warrant.
(i) The Company shall retain a firm of independent public accountants
(who may be any such firm regularly employed by the Company) to make any
computation required under this Section.
(j) If at any time, as a result of an adjustment made pursuant to this
Paragraph 7, the Holder of this Warrant shall become entitled to purchase any
securities other than shares of Common Stock, thereafter the number of such
securities so purchasable upon exercise of each Warrant and the Warrant Price
for such shares shall be subject to adjustment from time to time in a manner and
on terms as nearly equivalent as practicable to the provisions with respect to
the Common Stock.
8. Fractional Shares.
-----------------
The Company shall not be required to issue fractions of shares of Common
Stock on the exercise of this Warrant; provided, however, that if a Holder
exercises all the Warrants held of record by such Holder, the fractional
interests shall be eliminated by rounding any fraction up to the nearest whole
number of shares, if the fraction is equal to or greater than .5, and down if
the fraction is less than .5.
9. Miscellaneous.
-------------
(a) This Warrant shall be governed by and in accordance with the laws
of the State of New York.
(b) All notices, requests, consents and other communications hereunder
shall be made in writing and shall be deemed to have been duly made when
delivered, or mailed by registered or certified mail, return receipt requested:
(i) if to a Holder, to the address of such
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<PAGE>
Holder as shown on the books of the Company, or (ii) if to the Company, One Penn
Plaza, Suite 1503, New York, NY 10119.
(c) All the covenants and provisions of this Warrant by or for the
benefit of the Company and the Holders inure to the benefit of their respective
successors and assigns hereunder.
(d) Nothing in this Warrant other than Section 6 shall be construed to
give to any person or corporation other than the Company and the registered
Holder or Holders, any legal or equitable right, and this Warrant is for the
sole and exclusive benefit of the Company and the Holder or Holders.
IN WITNESS WHEREOF, Trans World Gaming Corp. has caused this warrant to be
signed by its duly authorized officer and this Warrant to be dated March 31,
1998.
TRANS WORLD GAMING CORP.
By:
------------------------
Its:
------------------------
Page 137 of 160
<PAGE>
FORM OF
NOTICE OF EXERCISE
(To be executed upon partial or full
exercise of the Warrants represented hereby)
The undersigned registered Holder of the Warrants represented by the attached
Warrant Certificate irrevocably exercises such Warrant for and purchases
( ) shares of Common Stock of Trans World Gaming Corp.
(the "Company").
The undersigned herewith makes payment therefore in the amount of $ ,
consisting of $ by wire transfer or certified or cashiers' check at
a price of $ per share and requests that a certificate (or certificates) in
denominations of ( ) shares of Common Stock of the
Company hereby purchased be issued in the name of and delivered to the
undersigned or such designee of the undersigned and, if such shares of Common
Stock (together with any shares issued upon exercise of other Warrants or
replacement Warrants) shall not include all of the shares of Common Stock
issuable upon exercise of all Warrants represented by such Warrant Certificate
(or if a new or replacement Warrant is otherwise to be provided pursuant to the
Warrant Certificate), that a new or replacement Warrant Certificate of like
tenor for the number of Warrants not being exercised (and not being surrendered)
hereunder be issued in the name of and delivered to the undersigned, whose
address is .
Dated: , 199 .
-------------------------------
Signature of Registered Holder)
By:
-----------------------
Title:
--------------------
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<PAGE>
Exhibit "D"
FORM OF CONVERSION WARRANT
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 PURSUANT TO AN OPINION OF COUNSEL
SATISFACTORY TO THE ISSUER THAT SUCH
REGISTRATION IS NOT REQUIRED.
WARRANT TO PURCHASE
COMMON STOCK
Series B. No. __
TRANS WORLD GAMING CORP.
(a Nevada corporation)
Dated: March 31, 1998
THIS CERTIFIES that (together with its successors or permitted assigns, the
"Holder") is entitled to purchase from Trans World Gaming Corp., a Nevada
corporation ("Company") up to shares of the Company's common stock, par value
$.001 per share (the "Common Stock"), at a purchase price of $1.50 per share of
Common Stock (the "Warrant Price"), subject to adjustment as hereafter provided.
This Warrant is issued pursuant to that certain Consent to Amend Indenture,
Bonds and Warrants and that certain First Amended Indenture dated as of March
31, 1998 as to the $4,800,000.00 12% Secured Senior Bonds due 2005 dated as of
March 25, 1998 (the "Agreement"), between the Company and the Holder.
1. Exercise of the Warrant.
-----------------------
The rights represented by this Warrant may be exercised at any time on or
before 5:00 p.m., New York time, on December 31, 2005, in whole or in part, by
(i) the surrender of this Warrant (with the purchase form at the end hereof
properly executed) at the principal executive
Page 139 of 160
<PAGE>
office of the Company (or such other office or agency of the Company as it may
designate by notice in writing to the Holder at the address of the Holder
appearing on the books of the Company); (ii) payment to the Company of the
Warrant Price then in effect for the number of shares of Common Stock specified
in the above-mentioned purchase form together with applicable stock transfer
taxes, if any; and (iii) delivery to the Company of a duly executed agreement
signed by the person(s) designated in the purchase form to the effect that such
person(s) agree(s) to be bound by the provisions of Paragraph 5 and subparagraph
(b), (c) and (d) of Paragraph 6 hereof. This Warrant shall be deemed to have
been exercised, in whole or in part to the extent specified, immediately prior
to the close of business on the date this Warrant is surrendered and payment is
made in accordance with the foregoing provisions of this Paragraph 1, and the
person or persons in whose name or names the certificates for the Common Stock
shall be issuable upon such exercise shall become the Holder or Holders of
record of such Common Stock at that time and date. The Common Stock so purchased
shall be delivered to the Holder within a reasonable time, not exceeding ten
(10) business days, after the rights represented by this Warrant shall have been
so exercised. If at any time this Warrant is exercised as to less than the total
number of shares for which it may be exercised, and this Warrant shall not have
expired, the Company shall promptly issue to the Holder a new Warrant identical
in form as to this Warrant as to the remaining shares hereunder.
2. Transfer.
--------
Subject to the legend set forth at the top of the first page hereof, this
Warrant may be assigned in whole or in part by the Holder by (i) completing and
executing the form of assignment at the end hereof and (ii) surrendering this
Warrant with such duly completed and executed assignment form for cancellation,
accompanied by funds sufficient to pay any transfer tax, at the office or agency
of the Company referred to in Paragraph 9(b), hereof; whereupon the Company
shall issue, in the name or names specified by the Holder (including the Holder)
a new Warrant or Warrants of like tenor and representing in the aggregate rights
to purchase the same number of shares of Common Stock as are then purchasable
hereunder.
3. Covenants of the Company.
------------------------
(a) The Company covenants and agrees that all Common Stock and Common
Stock issuable upon exercise of this Warrant will, upon issuance, be duly and
validly issued, fully paid and nonassessable and no personal liability will, for
Company obligations, attach to the holder thereof by reason of being such a
holder, other than as set forth herein.
(b) The Company covenants and agrees that during the period within
which this Warrant may be exercised, the Company will at all times have
authorized and reserved a sufficient number of shares of Common Stock to provide
for the exercise of this Warrant.
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<PAGE>
4. No Rights of Stockholder.
------------------------
This Warrant shall not entitle the Holder to any voting rights or other
rights as a stockholder of the Company, either at law or in equity, and the
rights of the Holder are limited to those expressed in this Warrant and are not
enforceable against the Company except to the extent set forth herein.
5. Registration.
------------
(a) The Holder shall have the right to have the shares of Common Stock
underlying this Warrant registered as part of the next public offering of the
Common Stock. If no Common Stock offering has occurred by June 30, 1998, then
upon the written request of any combination of the holders of Common Stock or of
Warrants issued by the Company and collectively exercisable into not less than
100,000 shares of Common Stock (as such number may be adjusted under Paragraph
7), and on a one-time basis, the Company shall file, within ninety (90) days
after written request such registration, and use its best efforts to cause to be
declared effective ninety (90) days thereafter, by the Securities and Exchange
Commission, a registration statement or post-effective amendment thereto as
permitted under the Securities Act of 1933, as amended (the "Act"), covering the
sale by the Holder of the Common Stock issuable upon exercise of this Warrant or
any portion hereof (the "Registerable Securities"). The Company shall supply
prospectuses in order to facilitate the public sale or other disposition of the
Registerable Securities, use its best efforts to register and qualify any of the
Registerable Securities for sale in such states as such Holder reasonably
designates and do any and all other acts and things which may be necessary to
enable such Holder to consummate the public sale of the Registerable Securities,
and furnish indemnification in the manner provided in Paragraph 6 hereto. The
Holder shall furnish information reasonably requested by the Company in
accordance with such post-effective amendments or registration statements,
including its intentions with respect thereto, and shall furnish indemnification
as set forth in Paragraph 6.
(b) The Company will maintain such registration statement or
post-effective amendment current and effective under the Act until two years
following the expiration of the exercisability of this Warrant, or until shares
owned by the Holder are eligible for sale without restriction under Rule 144.
(c) The Company shall bear the entire cost and expense of any
registration of securities under Paragraph 5 hereof. Notwithstanding the
foregoing, any Holder whose Registerable Securities are included in any such
registration statement pursuant to this Paragraph 5 shall, however, bear the
fees of any counsel retained by him and any transfer taxes or underwriting
discounts or commissions applicable to the Registerable Securities sold by him
pursuant thereto.
(d) In addition the Company shall:
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<PAGE>
(i) furnish to the Holder such numbers of copies of a summary
prospectus or other prospectus, including a preliminary
prospectus or any amendment or supplement to any prospectus,
in conformity with the requirements of the 1933 Act, and such
other documents, as the Holder may reasonably request in order
to facilitate the public sale or other disposition of the
securities owned by the Holder;
(ii) use its best efforts to register and qualify the securities
covered by such registration statement under such other
securities or blue sky laws of such jurisdictions as the
Holder shall reasonably request, and do any and all other acts
and things which may be necessary or advisable to enable such
Holder to consummate the public sale or other disposition in
such jurisdictions of the securities owned by such Holder,
except that the Company shall not for any such purpose be
required to qualify to do business as a foreign corporation in
any jurisdiction wherein it is not so qualified or to file
therein any general consent to service of process;
(iii) use its best efforts to list such securities on any
securities exchange on which any securities of the Company is
then listed, if the listing of such securities is then
permitted under the rules of such exchange;
(iv) enter into and perform its obligations under an underwriting
agreement, if the offering is an underwritten offering, in
usual and customary form, with the managing underwriter or
underwriters of such underwritten offering;
(v) notify the Holder of Registrable Securities covered by such
registration statement, at any time when a prospectus relating
thereto covered by such registration statement is required to
be delivered under the 1933 Act, of the happening of any event
of which it has knowledge as a result of which the prospectus
included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the
light of the circumstances then existing; and
(vi) furnish, at the request of the Holder on the date such
Registrable Securities are delivered to the underwriters for
sale pursuant to such registration or, if such Registrable
Securities are not being sold through underwriters, on the
date the registration statement with respect to such
Registrable Securities becomes effective, (i) an opinion,
dated such date, of the counsel representing the Company for
the purpose of such registration, addressed to the
underwriters, if any, and to the Holder making such request,
covering such legal matters with respect to the registration
in respect of which such opinion is being given as the Holder
of such Registrable Securities may reasonably request and are
customarily included in such an opinion and (ii) letters,
dated, respectively, (1) the effective date of the
registration statement and (2) the date such Registrable
Securities are delivered to the underwriters, if any, for sale
pursuant to such registration, from a firm of independent
certified public accountants of recognized standing selected
by the Company, addressed to the underwriters, if any, and to
the Holder making such request, covering such financial,
statistical and accounting matters with respect to the
registration
Page 142 of 160
<PAGE>
in respect of which such letters are being given as the Holder
of such Registrable Securities may reasonably request and are
customarily included in such letters; and
(vii) take such other actions as shall be reasonably requested by
any Holder to facilitate the registration and sale of the
Registrable Securities.
6. Indemnification.
---------------
(a) Whenever pursuant to Paragraph 5 a registration statement relating
to any Registerable Securities is filed under the Act, amended or supplemented,
the Company will indemnify and hold harmless each Holder of the Registerable
Securities covered by such registration statement, amendment or supplement (such
holder hereinafter referred to as the "Distributing Holder"), each person, if
any, who controls (within the meaning of the Act) the Distributing Holder, and
each officer, director, employee, partner or agent of the Distributing Holder,
and each underwriter (within the meaning of the Act) of such securities and each
person, if any, who controls (within the meaning of the Act) any such
underwriter and each officer, director, employee, agent or partner of such
underwriter against any losses, claims, damages or liabilities joint or several,
to which the Distributing Holder, any such underwriter or any other person
described above may become subject under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in any such registration statement or any preliminary
prospectus or final prospectus constituting a part thereof or any amendment or
supplement thereto, or arise out of or are based upon the omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading; and will reimburse the Distributing Holder
and each such underwriter or such other person for any legal or other expenses
reasonably incurred by the Distributing Holder, or underwriter or such other
person, in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the Company will not be
liable in any such case (i) to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in said registration statement,
said preliminary prospectus, said final prospectus or said amendment or
supplement in reliance upon and in conformity with written information furnished
by such Distributing Holder, any other Distributing Holder or any such
underwriter or any other such person for use in the preparation thereof, and
(ii) such losses, claims, damages or liabilities arise out of or are based upon
any actual or alleged untrue statement or omission made in or from any
preliminary prospectus, but corrected in the final prospectus, as amended or
supplemented.
(b) Whenever pursuant to Paragraph 5 a registration statement relating
to the Registerable Securities is filed, amended or supplemented under the Act,
the Distributing Holder will indemnify and hold harmless the Company and each
underwriter, each of their respective directors, each of their respective
officers, employees, partners and agents thereto, and each person, if any, who
controls the Company (within the meaning of the Act) against any losses, claims,
damages or liabilities to which the Company or any such director, officer,
employees,
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<PAGE>
partners and agents or controlling person may become subject under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue or alleged untrue
statement of any material fact contained in any such registration statement or
any preliminary prospectus or final prospectus constituting a part thereof, or
any amendment or supplement thereto, or arise out of or are based upon the
omission or the alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent that such untrue statement or
alleged untrue statement or omission was made in said registration statement,
said preliminary prospectus, said final prospectus or said amendment or
supplement in reliance upon and in conformity with written information furnished
by such Distributing Holder for use in the preparation thereof; and will
reimburse the Company or any such director, officer, employees, partners and
agents or controlling person for any legal or other expenses reasonably incurred
by them in connection with investigating or defending any such loss, claim,
damage, liability or action.
(c) Promptly after receipt by an indemnified party under this Paragraph
6 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against any indemnifying party, give the
indemnifying party notice of the commencement thereof; but the omission to so
notify the indemnifying party will not relieve it from any liability which it
may have to any indemnified party otherwise than under this Paragraph 6.
(d) In case any such action is brought against any indemnified party,
and it notifies an indemnifying party of the commencement thereof, the
indemnified party will be entitled to participate in, and , to the extent that
it may wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof with counsel reasonably satisfactory to such
indemnifying party, and after notice from the indemnified party to such
indemnifying party of its election to so assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Paragraph 6 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation.
7. Adjustment of Warrant Price and Number of Securities.
----------------------------------------------------
(a) The Warrant Price shall be subject to adjustment from time to time
as follows:
(i) In case the Company shall at any time after the date hereof
pay a dividend in shares of Common Stock or make a
distribution in shares of Common Stock, then upon such
dividend or distribution the Warrant Price in effect
immediately prior to such dividend or distribution shall
forthwith be reduced to a price determined by dividing:
Page 144 of 160
<PAGE>
(A) an amount equal to the total number of shares of Common
Stock outstanding immediately prior to such dividend or
distribution multiplied by the Warrant Price in effect
immediately prior to such dividend or distribution, by
(B) the total number of shares of Common Stock outstanding
immediately after such issuance or sale.
For the purposes of any computation to be made in accordance with the
provision of this clause (i), the following provisions shall be applicable:
Common Stock issuable by way of dividend or other distribution on any stock of
the Company shall be deemed to have been issued immediately after the opening of
business on the date following the date fixed for the determination of
stockholders entitled to receive such dividend or other distribution.
(ii) In case the Company shall at any time subdivide or combine
the outstanding Common Stock, the Warrant Price shall
forthwith be proportionately decreased in the case of
subdivision or increased in the case of combination. Any such
adjustment shall become effective at the time such
subdivision or combination shall become effective.
(iii) In case the Company shall at any time or from time to time
issue or sell shares of Common Stock (or securities
convertible into or exchangeable for shares of Common Stock,
or any options, warrants or other rights to acquire shares of
Common Stock) at a price per share less than the Market Price
per share of Common Stock (treating the price per share of
any security exchangeable or exercisable into Common Stock as
equal to (x) the sum of the price for such security
convertible, exchangeable or exercisable into Common Stock
plus any additional consideration payable (without regard to
any anti-dilution adjustments) upon the conversion, exchange
or exercise of such security into Common Stock divided by (y)
the number of shares of Common Stock initially underlying
such convertible, exchangeable or exercisable security),
other than issuance or sales of Common Stock pursuant to any
employee benefit plan, then, and in each such case, the
number of shares of Common Stock thereafter purchasable upon
exercise of a Warrant shall be determined by multiplying the
number of shares of Common Stock theretofore purchasable upon
exercise of each Warrant by a fraction (A) the numerator of
which shall be the sum of the number of shares of Common
Stock outstanding on such date plus the number of additional
shares of Common Stock issued
Page 145 of 160
<PAGE>
(or the maximum number into which such convertible or
exchangeable securities initially may convert or exchange or
for which such options, warrants or other rights initially
may be exercised) and (B) the denominator of which shall be
the sum of the number of shares of Common Stock outstanding
on such date plus the number of shares of Common Stock which
the aggregate consideration for the total number of such
additional shares of Common Stock so issued (or into which
such convertible or exchangeable securities may convert or
exchange or for which such options, warrants or other rights
may be exercised plus the aggregate amount of any additional
consideration initially payable upon conversion, exchange or
exercise of such security) would purchase at the Market Price
per share of Common Stock on such date. Such adjustment shall
be made whenever such shares, securities, options, warrants
or other rights are issued, and shall become effective
retroactively immediately after the close of business on the
record date for the determination of stockholders entitled to
receive such shares, securities, options, warrants or other
rights; provided, that the determination as to whether an
adjustment is required to be made pursuant to this Section
7(a) shall only be made upon the issuance of such shares or
such convertible or exchangeable securities, options,
warrants or other rights, and not upon the issuance of the
security into which such convertible or exchangeable security
converts or exchanges, or the security underlying such
option, warrant or other right. Notwithstanding the
foregoing, in the event of such issuance or sale of Common
Stock at a cash price less than the Market Price, no such
adjustment under this Section 7(a) need be made to the number
of shares underlying the Warrant unless such adjustment would
require an increase or decrease of at least 1% of the number
of shares underlying the Warrant. Any lesser adjustment shall
be carried forward and shall be made at the time of and
together with the next subsequent adjustment which, together
with any adjustment or adjustments so carried forward, shall
amount to an increase or decrease of at least 1% of number of
shares underlying the Warrant. For the purpose of this
Agreement, the term "Market Price" shall mean (i) if the
Common Stock is traded in the over-the-counter market or on
the National Association of Securities Dealers, Inc.
Automated Quotations System ("NASDAQ"), the average per share
closing prices of the Common Stock on the 20 consecutive
trading days immediately preceding the date in question as
reported by NASDAQ or an equivalent generally accepted
reporting service, or (ii) if the Common Stock is traded on a
national securities
Page 146 of 160
<PAGE>
exchange, the average for the 20 consecutive trading days
immediately preceding the date in question of the daily per
share closing prices of the Common Stock on the principal
stock exchange on which it is listed, as the case may be. The
closing price referred to above shall be the last reported
sales price or in case no such reported sale takes place on
such day, the average of the reported closing bid and asked
prices, in either case on the national securities exchange or
automated quotation system on which the Common Stock is then
listed. Whenever the number of shares of Common Stock
purchasable upon exercise of each Warrant is adjusted, the
Warrant Price for each share of Common Stock payable upon
exercise of each Warrant shall be adjusted by multiplying
such Warrant Price immediately prior to such adjustment by a
fraction, the numerator of which shall be the number of
shares of Common Stock purchasable upon the exercise of each
Warrant immediately prior to such adjustment and the
denominator of which shall be the number of shares of Common
Stock purchasable immediately after such adjustment.
(iv) Within a reasonable time after the close of each quarterly
fiscal period of the Company during which the Warrant Price
or number of shares issuable upon exercise of this Warrant
has been adjusted as herein provided, the Company shall
deliver to the Holder a certificate signed by the President
or Vice President of the Company and by the Treasurer or
Assistant Treasurer or the Secretary or an Assistant
Secretary of the Company, showing in detail the facts
requiring all such adjustments occurring during such period
and the Warrant Price after each such adjustment.
(b) In the event that the number of outstanding shares of Common Stock
is increased by a stock dividend or distribution payable in Common Stock or by a
subdivision of the outstanding Common Stock, then, from and after the record
date thereof, by reason of such dividend, distribution or subdivision, the
number of shares of Common Stock issuable upon the exercise of the Warrant shall
be increased in proportion to such increase in outstanding shares. In the event
that the number of shares of Common Stock outstanding is decreased by a
combination of the outstanding Common Stock, then, from and after the record
date thereof, the number of shares of Common Stock issuable upon the exercise of
the Warrant shall be decreased in proportion to such decrease in the outstanding
shares of Common Stock.
(c) In case of any reorganization or reclassification of the
outstanding Common Stock (other than a change in par value, or from par value to
no par value, or as a result of a subdivision or combination), or in case of any
consolidation of the Company with, or merger of the Company into, another
corporation (other than a consolidation or merger in which the
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<PAGE>
Company is the continuing corporation and which does not result in any
reclassification of the outstanding Common Stock), or in case of any sale or
conveyance to another corporation of the property of the Company as an entirety
or substantially as an entirety, the holder of the Warrant then outstanding
shall thereafter have the right to purchase the kind and amount of shares of
common stock and other securities and property receivable upon such
reorganization, reclassification, consolidation, merger, sale or conveyance by a
holder of the number of shares of Common Stock which the holder of the Warrant
shall then be entitled to purchase; such adjustments shall apply with respect to
all such changes occurring between the date of this Warrant Agreement and the
date of exercise or expiration of the Warrant.
(d) Subject to the provisions of this Section, in case the Company
shall, at any time prior to the exercise of the Warrant, desire to declare a
dividend or make any distribution of its assets to holders of its Common Stock,
whether as a liquidating or a partial liquidating dividend or for any other
purpose, the Company shall provide the holder of the Warrant with written notice
of such intent not less than thirty (30) days prior to the record date to
determine holders of Common Stock entitled to receive such distribution and the
holder of this Warrant shall have until 5:00 p.m. EST on the twentieth (20th)
day following the actual receipt of such notice to elect whether to exercise
this Warrant in accordance with the terms herein. In the event of proper
election to exercise the Warrant, the holder of this Warrant shall be deemed to
be a holder of Common Stock as of the record date for such distribution. Should
the holder of the Warrant elect to exercise his Warrant within 20 days after the
record date for the determination of those holders of Common Stock entitled to
such dividend or distribution, he shall be entitled to receive for the Warrant
Price per Warrant, in addition to each share of Common Stock, the amount of such
distribution (or, at the option of the Company, a sum equal to the value of any
such assets at the time of such distribution as determined by the Board of
Directors of the Company in good faith), which would have been payable to the
holder had he been the holder of record of the Common Stock receivable upon
exercise of his Warrant on the record date for the determination of those
entitled to such distribution.
(e) In case of the dissolution, liquidation or winding-up of the
Company, all rights under the Warrant shall terminate on a date fixed by the
Company, such date to be no earlier than ten (10) days prior to the
effectiveness of such dissolution, liquidation or winding-up and not later than
five (5) days prior to such effectiveness. Notice of such termination of
purchase rights shall be given to the last registered holder of this Warrant, as
the same shall appear on the books of the Company, by registered mail at least
thirty (30) days prior to such termination date.
(f) In case the Company shall, at any time prior to the expiration of
this Warrant and prior to the exercise thereof, offer to the holders of its
Common Stock any rights to subscribe for additional shares of any class of the
Company, then the Company shall give written notice thereof to the last
registered holder hereof not less than thirty (30) days prior to the date on
which the books of the Company are closed or a record date is fixed for the
determination of the stockholders entitled to such subscription rights. Such
notice shall specify the date as to which
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<PAGE>
the books shall be closed or record date fixed with respect to such offer of
subscription and the right of the holder hereof to participate in such offer of
subscription shall terminate if this Warrant shall not be exercised on or before
the date of such closing of the books or such record date.
(g) Any adjustment pursuant to the aforesaid provisions shall be made
on the basis of the number of shares of Common Stock which the holder thereof
would have been entitled to acquire by the exercise of the Warrant immediately
prior to the event giving rise to such adjustment.
(h) Irrespective of any adjustment in the Warrant Price or the number
or kind of shares purchasable upon exercise of this Warrant, Warrants previously
or hereafter issued may continue to express the same price and number and kind
of shares as are stated in this Warrant.
(i) The Company shall retain a firm of independent public accountants
(who may be any such firm regularly employed by the Company) to make any
computation required under this Section.
(j) If at any time, as a result of an adjustment made pursuant to this
Paragraph 7, the Holder of this Warrant shall become entitled to purchase any
securities other than shares of Common Stock, thereafter the number of such
securities so purchasable upon exercise of each Warrant and the Warrant Price
for such shares shall be subject to adjustment from time to time in a manner and
on terms as nearly equivalent as practicable to the provisions with respect to
the Common Stock.
8. Fractional Shares.
-----------------
The Company shall not be required to issue fractions of shares of Common
Stock on the exercise of this Warrant; provided, however, that if a Holder
exercises all the Warrants held of record by such Holder, the fractional
interests shall be eliminated by rounding any fraction up to the nearest whole
number of shares, if the fraction is equal to or greater than .5, and down if
the fraction is less than .5.
9. Miscellaneous.
-------------
(a) This Warrant shall be governed by and in accordance with the laws
of the State of New York.
(b) All notices, requests, consents and other communications hereunder
shall be made in writing and shall be deemed to have been duly made when
delivered, or mailed by registered or certified mail, return receipt requested:
(i) if to a Holder, to the address of such Holder as shown on the books of the
Company, or (ii) if to the Company, One Penn Plaza, Suite 1503, New York, NY
10119.
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<PAGE>
(c) All the covenants and provisions of this Warrant by or for the
benefit of the Company and the Holders inure to the benefit of their respective
successors and assigns hereunder.
(d) Nothing in this Warrant other than Section 6 shall be construed to
give to any person or corporation other than the Company and the registered
Holder or Holders, any legal or equitable right, and this Warrant is for the
sole and exclusive benefit of the Company and the Holder or Holders.
IN WITNESS WHEREOF, Trans World Gaming Corp. has caused this warrant to be
signed by its duly authorized officer and this Warrant to be dated March 31,
1998.
TRANS WORLD GAMING CORP.
By:
----------------------------
Its:
---------------------------
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<PAGE>
FORM OF
NOTICE OF EXERCISE
(To be executed upon partial or full
exercise of the Warrants represented hereby)
The undersigned registered Holder of the Warrants represented by the attached
Warrant Certificate irrevocably exercises such Warrant for and purchases
( )shares of Common Stock of Trans World Gaming Corp.
(the "Company").
The undersigned herewith makes payment therefore in the amount of $
consisting of $ by wire transfer or certified or cashiers' check at
a price of $ per share and requests that a certificate (or certificates) in
denominations of ( ) shares of Common Stock of the
Company hereby purchased be issued in the name of and delivered to the
undersigned or such designee of the undersigned and, if such shares of Common
Stock (together with any shares issued upon exercise of other Warrants or
replacement Warrants) shall not include all of the shares of Common Stock
issuable upon exercise of all Warrants represented by such Warrant Certificate
(or if a new or replacement Warrant is otherwise to be provided pursuant to the
Warrant Certificate), that a new or replacement Warrant Certificate of like
tenor for the number of Warrants not being exercised (and not being surrendered)
hereunder be issued in the name of and delivered to the undersigned, whose
address is .
Dated: , 199 .
----------------- --
--------------------------------
(Signature of Registered Holder)
By:
-----------------------------
Title:
-------------------------
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<PAGE>
Exhibit "E"
INVESTMENT REPRESENTATION LETTER
(Accredited Investor)
March __, 1998
Trans World Gaming Corp.
Trans World Gaming of Louisiana
One Penn Plaza, Suite 1503
New York, New York 10119
Attn: Mr. Andrew Tottenham, President
Dear Mr. Tottenham:
This letter is submitted in conjunction with the execution and delivery of
the First Amended Indenture (herein so called) dated as of March_,1998, between
Trans World Gaming Corp. and Trans World Gaming of Louisiana, Inc.
(collectively, the "Company") and U.S. Trust Company of Texas, N.A. ("Trustee")
and the issuance by the Company to the undersigned of its 12% Senior Bonds Due
2005 (the "Bonds") and certain Warrants as described herein, pursuant to the
terms and conditions contained in the Consent to Amend Indenture, Bonds and
Warrants. The undersigned Purchaser is exchanging its 12% Secured Convertible
Senior Bonds Due 1999 (the "1999 Bonds") for the Bonds, its warrants issued in
association with the 1999 Bonds for the "Amended Warrants" and additional
warrants in exchange for the cancellation of certain conversion rights pursuant
to the terms of the First Amended Indenture (the "Conversion Warrants"). In
order to induce the Company issue the Bonds, the Amended Warrants and the
Conversion Warrants (collectively the "Unit") to the Purchaser, the Purchaser
makes the representations and warranties contained herein.
The Company has informed the Purchaser that the Units have not been
registered with the Securities and Exchange Commission nor with the securities
authorities of any state, and that the Units must be held indefinitely unless
they are subsequently registered under the Securities Act of 1933, as amended,
and the appropriate state securities laws, or an exemption from such
registration is available and counsel to the Purchaser provides an opinion
regarding such exemption which is satisfactory to the Company. The Purchaser
understands that the Company is under no obligation to register the Units or to
comply with any such exemption, except as may be set forth in any binding
agreement between the parties. The Purchaser understands that no federal or
state securities authority has made any finding or determination as to the
fairness of investment in, nor any recommendation or endorsement of, the Units.
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<PAGE>
The Purchaser hereby represents and warrants to the Company that Purchaser
is purchasing the Units for Purchaser's own account for investment and not with
a view to dividing the Units with others, or with a view to or in connection
with an offering or any distribution, and that the Purchaser has no present
intention of selling or otherwise disposing of the Units.
In order to assure the Company with respect to the foregoing, the Purchaser
further represents and warrants the following facts:
(a) Except as specifically noted above, it is the present intention of
the Purchaser to receive and hold the Units for the private personal investment
of the Purchaser for Purchaser's own account. Any sale or exchange or offer of
the Units will be made only if the Units are registered under the Securities Act
of 1933, as amended, or the sale can be made pursuant to an exemption from the
registration requirements of such Act and any applicable state Securities act
and such exception is set forth in an opinion of Purchaser's counsel
satisfactory to the Company.
(b) The Purchaser has no contract, understanding, agreement or
arrangement with any person or entity to sell or transfer to any such persons or
entities, or to anyone, or to have any such person or entity sell for the
Purchaser the Units and the Purchaser is not engaged in, and does not plan to
engage, within the foreseeable future, in any discussion with any person or
entity relating to the sale or transfer of the Units.
(c) Except as specifically noted above, as of the present date, the
Purchaser is not aware of any occurrence, event or circumstance upon the
happening of which Purchaser intends to transfer or sell the Units, or any part
thereof, and the Purchaser does not have any present intention to sell the
Units, or any part thereof, after the lapse of any particular period of time.
Purchaser understands that Purchaser may be required to bear the economic risks
of Purchaser's investment in the Units for an indefinite period of time.
(d) The Purchaser has no present obligation, indebtedness or commitment
and has no knowledge of any circumstances in existence, which would compel the
Purchaser to secure funds by the sale of the Units, nor is the Purchaser a party
to any plans or undertakings requiring funds, which plans or undertakings can be
consummated only by the sale of all or part of the Units.
(e) The Undersigned is an "Accredited Investor" as that term is defined
in Regulation D promulgated by the Securities and Exchange Commission under the
Securities Act of 1933.
(f) The negotiations for the purchase of such Units have been conducted
directly between the Purchaser on the one hand and the Company on the other. The
Purchaser has been given the opportunity to ask questions of, and receive
answers from, the Company and its officers concerning the terms and conditions
of the sale of the Units and other matters pertaining to the investment in the
Company in order for the Purchaser to evaluate the merits and
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<PAGE>
risks of purchase of the Units. The Purchaser acknowledges that Purchaser has
been furnished all information that Purchaser has requested to the extent that
Purchaser considers necessary and advisable, and such information, along with
the information and advice provided by the Purchaser Representative, is
reasonable upon which to base an investment decision.
(g) The Purchaser acknowledges Purchaser's understanding that the
offering and sale of the Units is intended to be exempt from registration under
the Securities Act of 1933, as amended, by virtue of Section 4(2) of that Act,
and that the Company is relying upon the representations made by the Purchasers
herein for the purposes of qualifying such offering thereunder.
(h) Investment in the Units is speculative and involves a high degree
of risk of loss by the Purchaser of the Purchaser's entire investment. The
Purchaser has such knowledge and experience in financial and business matters
that Purchaser is capable of evaluating the merits and risks of the investment
in the Units, can bear the economic risk of losing Purchaser's entire
investment, has adequate means for providing for Purchaser's current needs and
personal contingencies, and has no need for liquidity in an investment in the
Units and is capable of evaluating the merits and risks of the investment in the
Units.
The Purchaser further understands that in the event Purchaser should in
fact resell the Units, or any part thereof, within the foreseeable future,
Purchaser may be deemed to be an underwriter, as that term is defined in the
Securities Act of 1933, as amended. The Purchaser further understands and agrees
that the Units cannot be offered for sale, sold or otherwise transferred on the
register of the Company until Purchaser has notified the Company in writing of
Purchaser's intention to do so and unless and until the Company, if it deems
appropriate, has been furnished with an opinion of counsel for the Purchaser
satisfactory to counsel for the Company that such sale or transfer does not
involve a violation of the Securities Act of 1933, as amended, or the securities
laws of any state having jurisdiction. The Purchaser agrees that the an
appropriate restrictive legend may be placed on the certificates evidencing any
Units issued pursuant hereto.
The Purchaser agrees that transfer of the Units may be refused by the
Company or its transfer agent if, in the opinion of counsel for the Company, any
proposed sale or transfer by the Purchaser of the Units would not be in
compliance with the applicable federal and state securities laws. The Purchaser
has not received any offering materials from the Company and the investment is
not made as a result of any general solicitation or advertisements.
Sincerely,
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<PAGE>
Exhibit 4
---------
PUT OPTION AGREEMENT
--------------------
THIS PUT OPTION AGREEMENT, dated as of March 24, 1998 (the "Agreement"), is
made between Christopher P. Baker, an individual residing at 4 Longfellow Place,
#3603, Boston, Massachusetts 02114 ("Grantor") and Fundamental Investors, L.P.,
a Delaware limited partnership, located at 53 Main St., Concord, MA 01742
("Grantee").
WHEREAS
-------
A. The Grantee is the beneficial owner of a 12% Secured Convertible
Senior Bond, due June 30, 1999 (the "Bond") issued by Trans World Gaming Corp. a
Nevada corporation (the "Company"). The Bond has an aggregate principal amount
of $200,000 and was amended on March 31, 1998.
B. Grantor desires to grant to Grantee a put option relating to the
Bond on the terms and conditions described herein.
NOW, THEREFORE, Grantor and Grantee hereby agree as follows:
1. Grant of Option
---------------
1.1 For the consideration described in Section 1.2 below, the Grantor
hereby grants to the Grantee an option ("the Option") to sell to Grantor up to
$200,000 principal amount of the Bond, plus (i) the unpaid interest as shall
accrue on such principal amount of the Bond from the date hereof through the
Exercise Date (as defined in Section 3.1 below). Notwithstanding the foregoing,
the principal amount of the Bond subject to the Option (and the pro rata amount
of unpaid interest sold in connection therewith) shall be reduced by the amount
of any principal paid by the Company to Grantee from the date hereof through the
Exercise Date.
1.2 Grantee hereby sells, conveys and transfers to Grantor, as
consideration for the Option, all Warrants issued by the Company to Grantee in
connection with the original principal amount of the Bond as a result of the
Company's restructuring completed on March 31, 1998, together with any other
rights and privileges issued, as of this date or in the future, in connection
with the original principal amount of the Bond (other than interest on the
Bond). Grantee shall provide to Grantor within ten days after such Warrants or
rights are issued by the Company, a certificate, duly authorized and executed by
the Company, representing such Warrants and other rights, together with such
instruments of transfer as Grantor shall reasonably request.
1.3 The Option may be exercised at any time after July 1, 1999 through
and including July 31, 1999.
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<PAGE>
1.4 The Option may be exercised, at Grantee's election, in respect of
all of the property described above in Section 1.1 or any lesser portion
thereof.
2. Exercise Price. The exercise price of the Option shall equal the
principal amount of the portion of the Bond purchased by Grantor as of the
Exercise Date plus an amount equal to the accrued but unpaid interest on such
principal amount as shall accrue from the date hereof through the Exercise Date
(collectively, the "Exercise Price").
3. Exercise of Option.
------------------
3.1 If the Grantee wishes to exercise the Option it shall do so by
giving written notice to the Grantor of its intent to exercise the Option ("the
Notice"). The date of Grantor's receipt of such Notice shall be deemed to be the
"Exercise Date." Notice shall be deemed received (i) one business day after
sending the Notice via a recognized national overnight courier service, (ii)
three business days after sending the Notice via the United States mails,
postage prepaid, or (iii) when acknowledged if sent via telecopy or e-mail.
3.2 Within ten (10) calendar days after Grantor's receipt of the
Notice, Grantor shall transfer to Grantee an amount, in dollars, equal to the
Exercise Price and Grantee shall transfer to Grantor a certificate representing
the portion of the Bond subject to the Option and the accrued but unpaid
interest thereon. Grantee shall not be liable to Grantor for any delay in
delivering such certificate to Grantor caused by the Company's failure to
promptly issue a new certificate to Grantee for the correct amount to be
transferred.
4. Assignment. This Agreement shall be freely assignable by Grantee.
5. Governing Law. This Agreement shall be governed by the law of the
Commonwealth of Massachusetts, without giving effect to conflict of laws
principles.
6. Termination. This Agreement shall terminate at the end of the day on
July 31, 1999 (the "Termination Date"), it being understood that, in the event
the Option is exercised prior to such time and the closing of the purchase and
sale permitted by the Option has not yet occurred prior to the Termination Date,
then the terms and conditions contained herein shall continue in effect until
the Closing has occurred.
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<PAGE>
IN WITNESS WHEREOF, this Agreement has been entered into as of the day and
year first before written.
By: /s/ Christopher P. Baker
--------------------------------------
Christopher P. Baker
FUNDAMENTAL INVESTORS, L.P.
By: /s/ Marius Robinson
-------------------------------------
Name: Marius Robinson
Title: President of Robinson Value Group,
the General Partner
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<PAGE>
Exhibit 5
---------
PUT OPTION AGREEMENT
--------------------
THIS PUT OPTION AGREEMENT, dated as of March 24, 1998 (the "Agreement"), is
made between Christopher P. Baker, an individual residing at 4 Longfellow Place,
#3603, Boston, Massachusetts 02114 ("Grantor") and New Generation Limited
Partnership, a Massachusetts partnership, located at 225 Friend St., Suite 801,
Boston, MA 02114 ("Grantee").
WHEREAS
-------
A. The Grantee is the beneficial owner of a 12% Secured Convertible
Senior Bond, due June 30, 1999 (the "Bond") issued by Trans World Gaming Corp. a
Nevada corporation (the "Company"). The Bond has an aggregate principal amount
of $500,000 and was amended on March 31, 1998. The Bond subject to the Option
(as defined below) shall include any subsequent amendments to the Bond.
B. Grantor desires to grant to Grantee a put option relating to the
Bond on the terms and conditions described herein.
NOW, THEREFOR, for good and valuable consideration, the receipt of which is
hereby acknowledged, Grantor and Grantee hereby agree as follows:
1. Grant of Option
---------------
1.1 The Grantor hereby grants to the Grantee an option ("the Option") to
sell to Grantor up to $250,000 principal amount of the Bond, plus (i) the unpaid
interest as shall accrue on such principal amount of the Bond from the date
hereof through the Exercise Date (as defined below) and (ii) the Warrants issued
by the Company to Grantee in connection with such principal amount of the Bond
as a result of the Company's restructuring completed on March 31, 1998, together
with any other rights and privileges issued in connection with such principal
amount of the Bond prior to the Exercise Date. Notwithstanding the foregoing,
the principal amount of the Bond subject to the Option (and the pro rata amounts
of interest, Warrants and other rights sold in connection therewith) shall be
reduced by the amount of any principal paid by the Company to Grantee from the
date hereof through the Exercise Date.
1.2 The Option may be exercised at any time after July 1, 1999 through
and including July 31, 1999.
1.3 The Option may be exercised, at Grantee's election, in respect of
all of the property described above in Section 1.1 or any lesser portion
thereof.
2. Exercise Price. The exercise price of the Option shall equal the
principal amount of the portion of the Bond purchased by Grantor as of the
Exercise Date plus an amount equal to
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<PAGE>
the accrued but unpaid interest on such principal amount as shall accrue from
the date hereof through the Exercise Date (collectively, the "Exercise Price").
3. Exercise of Option
------------------
3.1 If the Grantee wishes to exercise the Option it shall do so by
giving written notice to the Grantor of its intent to exercise the Option ("the
Notice"). The date of Grantor's receipt of such Notice shall be deemed to be the
"Exercise Date." Notice shall be deemed received (i) one business day after
sending the Notice via a recognized national overnight courier service, (ii)
three business days after sending the Notice via the United States mails,
postage prepaid, or (iii) when acknowledged if sent via telecopy or e-mail.
3.2 Within ten (10) calendar days after Grantor's receipt of the Notice,
Grantor shall transfer to Grantee an amount, in dollars, equal to the Exercise
Price and Grantee shall transfer to Grantor a certificate representing the
portion of the Bond subject to the Option and the accrued but unpaid interest
thereon. Grantee shall not be liable to Grantor for any delay in delivering such
certificate to Grantor caused by the Company's failure to promptly issue a new
certificate to Grantee for the correct amount to be transferred.
4. Assignments. This Agreement shall be freely assignable by Grantee.
5. Governing Law. This Agreement shall be governed by the law of the
Commonwealth of Massachusetts, without giving effect to conflict of laws
principles.
6. Termination. This Agreement shall terminate at the end of the day on
July 31, 1999 (the "Termination Date"), it being understood that, in the event
the Option is exercised prior to such time and the closing of the purchase and
sale permitted by the Option has not yet occurred prior to the Termination Date,
then the terms and conditions contained herein shall continue in effect until
the Closing has occurred.
Page 159 of 160
<PAGE>
IN WITNESS WHEREOF, this Agreement has been entered into as of the day and
year first before written.
By: /s/ Christopher P. Baker
----------------------------------------
Christopher P. Baker
NEW GENERATION LIMITED PARTNERSHIP
By: /s/ George Putnam III
----------------------------------------
Name: George Putnam III
Title: President of the General Partner
Page 160 of 160
