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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
November 25, 1998
LOUISIANA CASINO CRUISES, INC.
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(Exact name of registrant as specified in its charter)
LOUISIANA 33-73534 72-1196619
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1717 RIVER ROAD NORTH
BATON ROUGE, LOUISIANA 70802
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code
(504) 381-7777
NOT APPLICABLE
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(Former name or former address, if changed since last report)
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Item 5. OTHER EVENTS.
On November 25, 1998, Louisiana Casino Cruises, Inc. (the "Company"),
announced the sale of $50 million in senior secured increasing notes due in 2001
(the "Notes"). The Notes have an interest rate initially equal to 12.25% and
increase by 0.25% on March 1, 1999 and every quarter thereafter. The Notes are
secured by substantially all of the assets of the Company and will rank senior
in right of payment to any subordinated indebtedness of the Company and equal to
any senior indebtedness. The Notes are redeemable, at the option of the Company,
at a redemption premium that will increase over time from 100% of their face
value through March 1, 1999 to 105% after December 1, 1999. Upon a change of
control, the Company is required to offer to purchase all of the Notes then
outstanding at a purchase price equal to 101% of the principal amount thereof,
plus interest. The Notes were sold in a private placement with registration
rights.
The net proceeds from the offering, estimated at $47.5 million, were
used to repay the Company's outstanding 11-1/2% notes due December 1, 1998,
redeem the Company's outstanding preferred stock and related accrued non-cash
dividends and to pay related offering costs and the remaining proceeds will be
used to satisfy obligations with respect to the Company's redeemable common
stock warrants.
The Company has issued a press release announcing the foregoing event,
a copy of which is attached as Exhibit 99.01 and which is incorporated by
reference.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
10.01 Indenture, dated November 15, 1998 by and between the
Company and U.S. Bank Trust National Association.
10.02 Registration Rights Agreement, dated November 25,
1998 by and between the Company and CIBC Oppenheimer
Corp., as the Initial Purchaser.
10.03 Mortgage, Leasehold Mortgage, Assignment of Rents,
Fixture Filing, Security Agreement and Financing
Statement, dated November 25, 1998, by and between
the Company and U.S. Bank Trust National Association.
10.04 First Preferred Ship Mortgage, dated November 25,
1998, by and between the Company and U.S. Bank Trust
National Association.
10.05 Security Agreement, dated November 25, 1998, by and
between the Company and U.S. Bank Trust National
Association.
99.01 Press release dated November 25, 1998.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
LOUISIANA CASINO CRUISES, INC.
By: /s/ W. PETER TEMLING
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W. Peter Temling
Chief Financial Officer
Dated: December 1, 1998
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EXHIBIT INDEX
EXHIBIT DESCRIPTION
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10.01 Indenture, dated November 15, 1998 by and between the Company
and U.S. Bank Trust National Association.
10.02 Registration Rights Agreement, dated November 25, 1998 by and
between the Company and CIBC Oppenheimer Corp., as the Initial
Purchaser.
10.03 Mortgage, Leasehold Mortgage, Assignment of Rents, Fixture
Filing, Security Agreement and Financing Statement, dated
November 25, 1998, by and between the Company and U.S. Bank
Trust National Association.
10.04 First Preferred Ship Mortgage, dated November 25, 1998, by and
between the Company and U.S. Bank Trust National Association.
10.05 Security Agreement, dated November 25, 1998, by and between the
Company and U.S. Bank Trust National Association.
99.01 Press release dated November 25, 1998.
EXHIBIT 10.01
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LOUISIANA CASINO CRUISES, INC.
and
U.S. BANK TRUST NATIONAL ASSOCIATION,
Trustee
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INDENTURE
Dated as of November 15, 1998
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up to $50,313,200
Senior Secured Increasing Rate Notes
Due 2001
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CROSS-REFERENCE TABLE
TIA Indenture
SECTION
310 (a)(1)................................................. 607
(a)(2)................................................. 607
(a)(3)................................................. N.A.
(a)(4)................................................. N.A.
(a)(5)................................................. 607
(b).................................................... 608 (d)
(c).................................................... N.A.
311 (a).................................................... 613
(b).................................................... 604; 613
(c).................................................... N.A.
312 (a).................................................... 305
(b).................................................... 701
(c).................................................... 701
313 (a).................................................... 702 (a)
(b)(1)................................................. 702 (b) (1)
(b)(2)................................................. 702 (b) (2)
(c).................................................... 703,601,702(a)
(d).................................................... 702 (c)
314 (a).................................................... 703 (1), (2)
(b).................................................... 1201 (d)
(c)(1)................................................. 102
(c)(2)................................................. 102
(c)(3)................................................. N.A.
(d).................................................... 1204
(e).................................................... 102
(f).................................................... N.A.
315 (a)... ................................................ 602 (d)
(b).................................................... 602 (d)
(c).................................................... 602 (b)
(d).................................................... 602 (c)
(e).................................................... 507
316 (a) (last sentence).................................... 104 (f)
(a)(1)(A).............................................. 512
(a)(1)(B).............................................. 513
(a)(2)................................................. N.A.
(b).................................................... 508
(c).................................................... 104 (d)
317 (a)(1)................................................. 503
(a)(2)................................................. 504
___________________ N.A. means Not Applicable
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of the Indenture
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(b).................................................... 1003
318 (a).................................................... 111
(b).................................................... N.A.
(c).................................................... 111
___________________ N.A. means Not Applicable
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of the Indenture
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TABLE OF CONTENTS
PAGE
PARTIES ........................................................... 1
RECITALS ........................................................... 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions............................................... 1
SECTION 102. Compliance Certificates and Opinions...................... 18
SECTION 103. Form of Documents Delivered to Trustee.................... 19
SECTION 104. Acts of Holders........................................... 19
SECTION 105. Notices, etc., to Trustee and Company..................... 21
SECTION 106. Notice to Holders; Waiver................................. 21
SECTION 107. Effect of Headings and Table of Contents.................. 21
SECTION 108. Successors and Assigns.................................... 22
SECTION 109. Separability Clause....................................... 22
SECTION 110. Benefits of Indenture..................................... 22
SECTION 111. Governing Law............................................. 22
SECTION 112. Legal Holidays............................................ 22
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally........................................... 23
SECTION 202. Form of Face of Note...................................... 23
SECTION 203. Form of Reverse of Note................................... 24
SECTION 204. Form of Trustee's Certificate of Authentication........... 27
SECTION 205. Restrictive Legend........................................ 28
SECTION 206. Legends, Generally........................................ 28
SECTION 207. Form of Guarantee......................................... 28
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ARTICLE THREE
THE SECURITIES
SECTION 301. Title and Terms........................................... 29
SECTION 302. Denominations............................................. 30
SECTION 303. Execution, Authentication, Delivery and Dating............ 30
SECTION 304. Temporary Notes........................................... 31
SECTION 305. Registration, Registration of Transfer and Exchange....... 31
SECTION 306. Mutilated, Destroyed, Lost and Stolen Notes............... 32
SECTION 307. Payment of Interest; Interest Rights Preserved............ 33
SECTION 308. Persons Deemed Owners..................................... 34
SECTION 309. Cancellation.............................................. 34
SECTION 310. Computation of Interest................................... 35
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture................... 35
SECTION 402. Application of Trust Money................................ 36
ARTICLE FIVE
DEFAULTS AND REMEDIES
SECTION 501. Events of Default......................................... 36
SECTION 502. Acceleration of Maturity; Rescission and Annulment........ 38
SECTION 503. Collection of Indebtedness and Suits for Enforcement
by Trustee............................................... 39
SECTION 504. Trustee May File Proofs of Claim.......................... 40
SECTION 505. Trustee May Enforce Claims Without Possession of Notes.... 41
SECTION 506. Application of Money Collected............................ 41
SECTION 507. Limitation on Suits....................................... 41
SECTION 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest..................................... 42
SECTION 509. Restoration of Rights and Remedies........................ 42
SECTION 510. Rights and Remedies Cumulative............................ 43
SECTION 511. Delay or Omission Not Waiver.............................. 43
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SECTION 512. Control by Holders........................................ 43
SECTION 513. Waiver of Past Defaults................................... 43
SECTION 514. Waiver of Stay or Extension Laws.......................... 44
ARTICLE SIX
THE TRUSTEE
SECTION 601. Notice of Defaults........................................ 44
SECTION 602. Certain Rights of Trustee................................. 45
SECTION 603. Trustee Not Responsible for Recitals or Issuance of Notes. 47
SECTION 604. May Hold Notes............................................ 47
SECTION 605. Money Held in Trust....................................... 47
SECTION 606. Compensation and Reimbursement............................ 48
SECTION 607. Corporate Trustee Required; Eligibility................... 49
SECTION 608. Resignation and Removal; Appointment of Successor......... 49
SECTION 609. Acceptance of Appointment by Successor.................... 50
SECTION 610. Merger, Conversion, Consolidation or Succession
to Business.............................................. 50
SECTION 611. Paying Agents............................................. 51
SECTION 612. Environmental Matters..................................... 51
SECTION 613. Preferential Collection of Claims Against Company......... 52
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Disclosure of Names and Addresses of Holders.............. 52
SECTION 702. Reports by Trustee........................................ 52
SECTION 703. Reports by Company........................................ 53
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, etc., Only on Certain Terms...... 54
SECTION 802. Successor Substituted..................................... 55
ARTICLE NINE
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SUPPLEMENTAL INDENTURES AND
AMENDMENTS TO SECURITY DOCUMENTS
SECTION 901. Supplemental Indentures and Amendments to Security
Documents Without Consent of Holders..................... 55
SECTION 902. Supplemental Indentures and Amendments to Security
Documents with Consent of Holders........................ 56
SECTION 903. Execution of Supplemental Indentures and Amendments to
the Security Documents................................... 57
SECTION 904. Effect of Supplemental Indentures......................... 58
SECTION 905. Conformity with Trust Indenture Act....................... 58
SECTION 906. Reference in Notes to Supplemental Indentures............. 58
SECTION 907. Notice of Supplemental Indentures and Amendments to
Security Documents....................................... 58
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium, if Any, and Interest....... 58
SECTION 1002. Maintenance of Office or Agency........................... 59
SECTION 1003. Money to Be Held in Trust................................. 59
SECTION 1004. Corporate Existence....................................... 60
SECTION 1005. Payment of Taxes and Other Claims......................... 60
SECTION 1006. Maintenance of Properties................................. 61
SECTION 1007. Insurance................................................. 61
SECTION 1008. Statement by Officers as to Default....................... 61
SECTION 1009. Reports................................................... 62
SECTION 1010. Purchase of Notes upon Change of Control.................. 62
SECTION 1011. Limitation on Incurrence of Additional Indebtedness
and Disqualified Capital Stock....................... 64
SECTION 1012. Payments for Consent...................................... 65
SECTION 1013. Limitation on Restricted Payments......................... 65
SECTION 1014. Limitation on Liens....................................... 66
SECTION 1015. Limitation on Dividends and Other Payment Restrictions
Affecting Subsidiaries................................... 66
SECTION 1016. Limitation on Sale and Lease-back Transactions............ 66
SECTION 1017. Limitation on Sale of Assets and Subsidiary Stock......... 67
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SECTION 1018. Application of Net Cash Proceeds in Event of Loss......... 69
SECTION 1019. Ownership of Equity Interests of Subsidiaries............. 69
SECTION 1020. Limitation on Transactions with Affiliates................ 70
SECTION 1021. Limitation on Lines of Business........................... 70
SECTION 1022. Additional Collateral..................................... 70
SECTION 1023. [Intentionally Omitted]................................... 72
SECTION 1024. [Intentionally Omitted]................................... 72
SECTION 1025. [Intentionally Omitted]................................... 72
SECTION 1026. [Intentionally Omitted]................................... 72
SECTION 1027. Security Documents........................................ 72
SECTION 1028. Validity of Security Interest............................. 72
SECTION 1029. Mandatory Purchase Offers................................. 72
SECTION 1030. Future Subsidiary Guarantees.............................. 73
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Right of Redemption....................................... 74
SECTION 1102. Applicability of Article.................................. 74
SECTION 1103. Election to Redeem; Notice to Trustee..................... 74
SECTION 1104. Selection by Trustee of Notes to Be Redeemed.............. 74
SECTION 1105. Notice of Redemption...................................... 75
SECTION 1106. Deposit of Redemption Price............................... 75
SECTION 1107. Notes Payable on Redemption Date.......................... 75
SECTION 1108. Notes Redeemed in Part.................................... 76
SECTION 1109. Redemption Pursuant to Gaming Laws........................ 76
ARTICLE TWELVE
SECURITY INTEREST
SECTION 1201. Assignment of Security Interest........................... 76
SECTION 1202. Suits to Protect the Collateral........................... 78
SECTION 1203. Further Assurances and Security........................... 78
SECTION 1204. Release of Collateral..................................... 78
SECTION 1205. Reliance on Opinion of Counsel............................ 79
SECTION 1206. Purchaser May Rely........................................ 80
SECTION 1207. Payment of Expenses....................................... 80
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ARTICLE THIRTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1301. Company's Option to Effect Defeasance or Covenant
Defeasance............................................... 80
SECTION 1302. Defeasance and Discharge.................................. 80
SECTION 1303. Covenant Defeasance....................................... 81
SECTION 1304. Conditions to Defeasance or Covenant Defeasance........... 81
SECTION 1305. Deposited Money and U.S. Government Obligations to Be
Held in Trust; Other Miscellaneous Provisions............ 82
SECTION 1306. Reinstatement............................................. 83
ARTICLE FOURTEEN
GUARANTEE OF SECURITIES
SECTION 1401. Guarantee................................................. 83
SECTION 1402. Execution and Delivery of Guarantee....................... 85
SECTION 1403. Limitation of Guarantee................................... 85
SECTION 1404. [Intentionally Omitted]................................... 85
SECTION 1405. Release of Guarantor...................................... 85
SECTION 1406. Waiver of Subrogation..................................... 86
SIGNATURES .......................................................... S-1
EXHIBITS
A. Form of Ship Mortgage
B. Form of Security Agreement
C. Form of Shore Mortgage
D. Form of Legend regarding the Global Note
E. Form of Legend regarding Transfer Restriction
F. Form of Purchaser's Representation Letter
SCHEDULES
1.01 Liens outstanding on Issue Date (after giving effect to the
application of the proceeds of Notes)
1.02 Transactions with affiliates in effect on the Issue Date
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INDENTURE, dated as of November 15, 1998 between Louisiana Casino
Cruises, Inc., a Louisiana corporation (the "Company"), having its principal
office at 1717 River Road N., Baton Rouge, Louisiana 70802, and U.S. Bank Trust
National Association (the "Trustee").
This Indenture may be signed in any number of counterparts each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same Indenture.
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of Senior
Secured Increasing Rate Notes due 2001, of substantially the tenor and amount
hereinafter set forth, and to provide therefor the Company has duly authorized
the execution and delivery of this Indenture.
This Indenture shall be subject to and governed by the provisions of
the Trust Indenture Act of 1939, as amended, that are required to be part of and
to govern indentures qualified under the Trust Indenture Act.
All things necessary have been done to make the Notes, when executed by
the Company and authenticated and delivered hereunder and duly issued by the
Company, the valid obligations of the Company and to make this Indenture a valid
agreement of the Company, in accordance with their and its terms.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Notes
by the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Notes, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
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(a) the terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
(b) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein, and the terms "cash transaction" and
"self-liquidating paper", as used in TIA Section 311, shall have the
meanings assigned to them in the rules of the Commission adopted under the
Trust Indenture Act;
(c) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting
principles, and, except as otherwise herein expressly provided, the term
"generally accepted accounting principles" with respect to any computation
required or permitted hereunder shall mean such accounting principles as
are generally accepted at the date of such computation; and
(d) 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.
"Acquired Indebtedness" means Indebtedness or Disqualified Capital
Stock of any Person existing at the time such Person becomes a Subsidiary of the
Company, including by designation, or is merged or consolidated into or with the
Company or one of its Subsidiaries.
"Acquisition" means the purchase or other acquisition of any Person or
all or substantially all the assets of any Person by any other Person, whether
by purchase, merger, consolidation, or other transfer, and whether or not for
consideration.
"Adequate Provisions", with respect to the payment of claims secured by
a Lien, shall be deemed to have been made if a bond, escrow or trust account for
payment has been established with an independent third party in an amount at
least equal to the total of such outstanding claims.
"Additional Interest" means additional interest on the Notes which the
Company agrees to pay to the Holders, under circumstances specified in the
Registration Rights Agreement.
"Affiliate" means any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company. For
purposes of this definition, the term "control" means the power to direct the
management and policies of a Person, directly or through one or more
intermediaries, whether through the ownership of voting securities, by contract,
or otherwise, PROVIDED that, with respect to ownership interest in the Company
and its Subsidiaries, a Beneficial Owner of 10% or more of the total voting
power normally entitled to vote in the election of directors, managers or
trustees, as applicable, shall for such purposes be deemed to constitute
control.
"Affiliate Transaction" has the meaning specified in Section 1020.
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"Asset Sale" has the meaning specified in Section 1017.
"Attributable Indebtedness" means, in respect of a Sale and Lease-Back
Transaction, as at the time of determination, the greater of (i) the fair value
of the property subject to such arrangement (as determined by the Board of
Directors of the Company) and (ii) the present value of the notes (discounted at
the rate of interest implicit in such transaction) of the total obligations of
the lessee for rental payments during the remaining term of the lease included
in such Sale and Lease-Back Transaction (including any period for which such
lease has been extended).
"Average Life" means, as of the date of determination, with respect to
any security or instrument, the quotient obtained by dividing (i) the sum of the
products of (a) the number of years from the date of determination to the date
or dates of each successive scheduled principal (or redemption) payment of such
security or instrument and (b) the amount of each such respective principal (or
redemption) payment by (ii) the sum of all such principal (or redemption)
payments.
"Bankruptcy Code" means the Bankruptcy Act of Title 11 of the United
States Code, as amended from time to time.
"Beneficial Owner" or "beneficial owner" or "beneficial ownership" for
purposes of the definition of Change of Control, Affiliate and Related Person
has the meaning attributed to it in Rules 13d-3 and 13d-5 under the Exchange Act
(as in effect on the Issue Date), whether or not applicable, except that a
"person" shall be deemed to have "beneficial ownership" of all shares that any
such person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of a Person, to have been duly adopted by
the Board of Directors of such Person and to be in full force and effect on the
date of such certification, and delivered to the Trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in New York, New York
are authorized or obligated by law or executive order to close.
"Capitalized Lease Obligation" means, as to any Person, the obligations
of such Person under a lease that are required to be classified and accounted
for as capital lease obligations under GAAP and, for purposes of this
definition, the amount of such obligations at any date shall be the capitalized
amount of such obligations at such date, determined in accordance with GAAP.
"Capital Stock" means, with respect to any corporation, any and all
shares, interests, rights to purchase (other than convertible or exchangeable
Indebtedness that is not itself otherwise capital stock), warrants, options,
participations or other equivalents of or interests (however designated) in
stock issued by that corporation.
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"Cash Equivalent" means (i) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (PROVIDED that the full faith and credit of the United
States of America is pledged in support thereof) or (ii) time deposits, money
market deposit accounts and certificates of deposit and commercial paper issued
by the parent corporation of any domestic commercial bank of recognized standing
having capital and surplus in excess of $250 million or (iii) commercial paper
issued by others rated at least A-2 or the equivalent thereof by Standard &
Poor's Corporation or at least P-2 or the equivalent thereof by Moody's
Investors Service, Inc., and in the case of each of (i), (ii) and (iii) maturing
within one year after the date of acquisition or (iv) repurchase obligations for
underlying securities of the types and with the maturities described above.
"Casino Rouge" means the riverboat casino and related facilities,
including facilities operated by the Company in Baton Rouge, Louisiana and as
more fully described in the Security Documents.
"Change of Control" means (A) any merger or consolidation of the
Company with or into any Person or any sale, transfer or other conveyance,
whether direct or indirect, of all or substantially all of the assets of the
Company, on a consolidated basis, in one transaction or a series of related
transactions, if, immediately after giving effect to such transaction(s), any
"person" or "group" (as such terms are used for purposes of Sections 13(d) and
14(d) of the Exchange Act, whether or not applicable) (other than an Excluded
Person) is or becomes the "beneficial owner," directly or indirectly, of more
than 50% of the total voting power in the aggregate normally entitled to vote in
the election of directors, managers or trustees, as applicable, of the
transferee(s) or surviving entity or entities, (B) any "person" or "group" (as
such terms are used for purposes of Sections 13(d) and 14(d) of the Exchange
Act, whether or not applicable) (other than an Excluded Person) is or becomes
the "beneficial owner," directly or indirectly, of more than 50% of the total
voting power in the aggregate of all classes of Capital Stock of the Company
then outstanding normally entitled to vote in elections of directors, (C) during
any period of 12 consecutive months after the Issue Date, individuals who at the
beginning of any such 12-month period constituted the Board of Directors of the
Company (together with any new directors whose election by such Board of
Directors or whose nomination for election by the shareholders of the Company
was approved by a vote of a majority of the directors then still in office who
were either directors at the beginning of such period or whose election or
nomination for election was previously so approved, including new directors
designated in or provided for in an agreement regarding the merger,
consolidation or sale, transfer or other conveyance, of all or substantially all
of the assets of the Company, if such agreement was approved by a vote of such
majority of directors) cease for any reason to constitute a majority of the
Board of Directors of the Company then in office or (D) the Company adopts a
plan of liquidation. Notwithstanding anything to the contrary contained herein,
a "change of control" shall not be deemed to include any transaction between CRC
and Jackpot Enterprises, Inc. or among the Company, CRC and Jackpot Enterprises,
Inc.
"Change of Control Offer" has the meaning specified in Section 1010.
"Collateral" means the Company's current and future tangible and
intangible assets (other than such future assets as may secure Purchase Money
Indebtedness and obligations under the Revolving
<PAGE>
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Credit Facility in accordance with clause (j) of the definition of "Permitted
Lien" hereunder, including, but not limited to, real estate, equipment,
inventory, receivables, contracts, licenses, trademarks and intellectual
property as well as anything else referred to as "collateral" in any Security
Document.
"Collateral Account" has the meaning specified in the Security
Agreement.
"Collateral Proceeds" means (a) any Net Cash Proceeds received or
receivable by the Company or any other Grantor as a result of an Asset Sale or
Event of Loss involving the Collateral, (b) all interest or other earnings on
amounts on deposit in the Collateral Account and (c) any amounts required to be
deposited in the Collateral Account pursuant to the Shore Mortgage.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Securities Exchange Act of 1934, or, if
at any time after the execution of this Indenture such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
"Company" means the Person named as the "Company" in the first
paragraph of this Indenture, until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman, its President, any Vice
President, its Treasurer or an Assistant Treasurer, and delivered to the
Trustee.
"Consolidated Coverage Ratio" of any Person on any date of
determination (the "Transaction Date") means the ratio, on a PRO FORMA basis, of
(a) the aggregate amount of Consolidated EBITDA of such Person attributable to
continuing operations and businesses (exclusive of amounts attributable to
operations and businesses permanently discontinued or disposed of) for the
Reference Period to (b) the aggregate Consolidated Fixed Charges of such Person
(exclusive of amounts attributable to operations and businesses permanently
discontinued or disposed of, but only to the extent that the obligations giving
rise to such Consolidated Fixed Charges would no longer be obligations
contributing to such Person's Consolidated Fixed Charges subsequent to the
Transaction Date) during the Reference Period; PROVIDED that, for purposes of
such calculation, (i) Acquisitions which occurred during the Reference Period or
subsequent to the Reference Period and on or prior to the Transaction Date shall
be assumed to have occurred on the first day of the Reference Period without
regard to the effect of subsection (c) of the definition of "Consolidated Net
Income," (ii) transactions giving rise to the need to calculate the Consolidated
Coverage Ratio shall be assumed to have occurred on the first day of the
Reference Period without regard to the effect of subsection (c) of the
definition of "Consolidated Net Income," (iii) the incurrence of any
Indebtedness or issuance of any Disqualified Capital Stock during the Reference
Period or subsequent to the Reference Period and on or prior to the Transaction
Date (and the application of the proceeds therefrom to the extent used to
refinance or retire other Indebtedness) shall be assumed to have occurred on the
first day of the Reference Period, and (iv) the Consolidated Fixed Charges of
such Person
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attributable to interest on any Indebtedness or dividends on any Disqualified
Capital Stock bearing a floating interest (or dividend) rate shall be computed
on a PRO FORMA basis as if the average rate in effect from the beginning of the
Reference Period to the Transaction Date had been the applicable rate for the
entire period, unless such Person or any of its Subsidiaries is a party to an
Interest Swap or Hedging Obligation (which shall remain in effect for the
12-month period immediately following the Transaction Date) that has the effect
of fixing the interest rate on the date of computation, in which case such rate
(whether higher or lower) shall be used.
"Consolidated EBITDA" means, with respect to any Person, for any
period, the Consolidated Net Income of such Person for such period adjusted to
add thereto (to the extent deducted from net income in determining Consolidated
Net Income), without duplication, the sum of (i) Consolidated income tax
expense, (ii) Consolidated depreciation and amortization expense and provision
for write-down of assets, (iii) Consolidated Fixed Charges and (iv) an amount
equal to any extraordinary loss plus any net loss realized in connection with an
Asset Sale, less the amount of all cash payments made by such Person or any of
its Subsidiaries during such period to the extent such payments relate to
non-cash charges that were added back in determining Consolidated EBITDA for
such period or any prior period, PROVIDED that consolidated income tax expense
and depreciation and amortization of a Subsidiary that is a less than
Wholly-owned Subsidiary shall only be added to the extent of the equity interest
of the Company in such Subsidiary.
"Consolidated Fixed Charges" of any Person means, for any period, (1)
the aggregate amount (without duplication and determined in each case in
accordance with GAAP) of (a) interest expensed, capitalized, paid, or accrued,
whether or not actually paid in cash or in kind (including, in accordance with
the following sentence, interest attributable to Capitalized Lease Obligations),
of such Person and its Consolidated Subsidiaries during such period, including
(i) original issue discount and non-cash interest payments or accruals on any
Indebtedness, (ii) the interest portion of all deferred payment obligations, and
(iii) all commissions, discounts and other fees and charges owed with respect to
bankers' acceptances and letters of credit financings and currency and the net
costs associated with Interest Swap and Hedging Obligations, in each case to the
extent attributable to such period, and (b) the amount of dividends accrued or
payable (or guaranteed), whether or not actually paid in cash or in kind, by
such Person or any of its Consolidated Subsidiaries in respect of preferred
stock (other than by Subsidiaries of such Person to such Person or such Person's
Wholly-owned Subsidiaries), less (2) to the extent included in clause (1) above,
amortization expenses or write-off of deferred financing costs of such Person
and its Subsidiaries and any charge related to any premium or penalty paid in
connection with redeeming or retiring any Indebtedness before its stated
maturity, as determined in accordance with GAAP. For purposes of this
definition, (x) interest on a Capitalized Lease Obligation shall be deemed to
accrue at an interest rate reasonably determined in good faith by the Company to
be the rate of interest implicit in such Capitalized Lease Obligation in
accordance with GAAP and (y) interest expense attributable to any Indebtedness
represented by the guaranty by such Person or a Subsidiary of such Person of an
obligation of another person shall be deemed to be the interest expense
attributable to the Indebtedness guaranteed.
<PAGE>
-7-
"Consolidated Net Income" means, with respect to any Person for any
period, the net income (or loss) of such Person and its Consolidated
Subsidiaries (determined on a consolidated basis in accordance with GAAP) for
such period, adjusted to exclude (only to the extent included in computing such
net income (or loss) and without duplication): (a) all gains (but not losses)
which are either extraordinary (as determined in accordance with GAAP) or are
either unusual or nonrecurring (including any gain from the sale or other
disposition of assets outside the ordinary course of business or from the
issuance or sale of any Equity Interests), (b) the net income, if positive, of
any Person, other than a Wholly-owned Consolidated Subsidiary, in which such
person or any of its Consolidated Subsidiaries has an interest, except to the
extent of the amount of any dividends or distributions actually paid in cash to
such Person or a Wholly-owned Consolidated Subsidiary of such Person during such
period, (c) the net income or loss of any Person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition and
(d) the net income, if positive, of any of such Person's Consolidated
Subsidiaries to the extent that the declaration or payment of dividends or
similar distributions is not at the time permitted by operation of the terms of
its charter or bylaws or any other agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to such Consolidated
Subsidiary.
"Consolidated Net Worth" of any Person means the consolidated
stockholders' equity of such Person and its Subsidiaries determined on a
consolidated basis in accordance with GAAP, less (to the extent included)
amounts attributable to Disqualified Capital Stock of such Person.
"Consolidated Subsidiary" means, for any Person, each Subsidiary of
such Person (whether now existing or hereafter created or acquired), the
financial statements of which are consolidated for financial statement reporting
purposes with the financial statements of such Person in accordance with GAAP.
"Consolidation" means, with respect to the Company, the consolidation
of the accounts of the Subsidiaries with those of the Company, all in accordance
with GAAP. The term "consolidated" has a correlative meaning to the foregoing.
"Corporate Trust Office" means the principal corporate trust office of
the Trustee, at which at any particular time its corporate trust business shall
be administered, which office at the date of execution of this Indenture is
located at 180 East 5th Street, St. Paul, Minnesota, 55101, Attention: Corporate
Trust Department.
"Corporation" includes corporations, associations, companies and
business trusts.
"CRC" means CRC Holdings, Inc.
"Default" means any Event of Default, or an event that would constitute
an Event of Default but for the requirement that notice be given or time elapse
or both.
"Defaulted Interest" has the meaning specified in Section 307.
<PAGE>
-8-
"Disqualified Capital Stock" means, with respect to any Person, Equity
Interests of such Person that, by its terms or by the terms of any security into
which it is convertible, exercisable or exchangeable, is, or upon the happening
of an event or the passage of time or both would be, required to be redeemed or
repurchased (except for customary change of control and asset sale provisions,
including at the option of the holder thereof) by such Person or any of its
Subsidiaries, in whole or in part, on or prior to 91 days following the Stated
Maturity of the Notes.
"Equity Interest" of any Person means any shares, interests,
participations or other equivalents (however designated) in such Person's
equity, and shall in any event include any Capital Stock issued by, or
partnership or membership interests in, such Person.
"Event of Default" has the meaning specified in Section 501.
"Event of Loss" means, with respect to any property or asset, (i) any
loss, destruction or damage of such property or asset or (ii) any condemnation,
seizure or taking, by exercise of the power of eminent domain or otherwise, of
such property or asset, or confiscation or requisition of the use of such
property or asset.
"Exchange Notes" has the meaning provided in the Registration Rights
Agreement.
"Excluded Person" means any of CRC, Jackpot Enterprises, Inc., Dan S.
Meadows, Jerry L. Bayles and Thomas L. Meehan, and all Related Persons of each
such Person.
"Exempted Affiliate Transaction" means (a) customary employee
compensation arrangements approved by a majority of independent (as to such
transactions) members of the Board of Directors of the Company, (b) transactions
solely between the Company and any of its Wholly-owned Subsidiaries or solely
among Wholly-owned Subsidiaries of the Company and (c) the Management Agreement
as in effect on the Issue Date.
"Fair Market Value" or "fair value" means, with respect to any asset or
property, the price which could be negotiated in an arm's-length free market
transaction, for cash, between a willing seller and a willing buyer, neither of
whom is under undue pressure or compulsion to complete the transaction. Unless
otherwise specified, Fair Market Value shall be determined by the Board of
Directors of the Company acting in good faith and shall be evidenced by a Board
Resolution delivered to the Trustee.
"GAAP" means United States generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as approved by a significant segment of the
accounting profession in the United States as in effect from time to time.
<PAGE>
-9-
"Gaming Authority" means any agency, authority, board, bureau,
commission, department, office or instrumentality of any nature whatsoever of
the United States federal or foreign government, any state, province or any city
or other political subdivision or otherwise and whether now or hereafter in
existence, or any officer or official thereof, with authority to regulate any
gaming operation (or proposed gaming operation) owned, managed, or operated by
the Company or any of its Subsidiaries.
"Gaming Licenses" means every material license, material franchise or
other material authorization required to own, lease, operate or otherwise
conduct or manage riverboat, dockside or land-based gaming in any state or
jurisdiction in which the Company or any of its Subsidiaries conduct business,
and any applicable liquor licenses.
"Gaming Vessel" means a riverboat casino (i) which is substantially
similar in size and space to the Casino Rouge, (ii) with at least the same
overall qualities and amenities as the Casino Rouge, and (iii) that is
developed, constructed and equipped to be in compliance with all federal, state
and local laws, including, without limitation, the cruising requirements of the
Louisiana Act. In the event the laws of the State of Louisiana change to permit
the development and operation of additional land-based casinos, the terms
"Gaming Vessel" shall be deemed to include a land-based casino meeting the
requirements of clauses (i), (ii) and (iii) above.
"Grantor" means (i) any mortgagor as defined in the Mortgages and (ii)
any other Person that grants a security interest in any of its assets in favor
of the Trustee for its benefit and the benefit of the Holders.
"Governmental Authority" means any agency, authority, board, bureau,
commission, department, office or instrumentality of any nature whatsoever of
the United States or foreign government, any state, province or any city or
other political subdivision or otherwise and whether now or hereafter in
existence, or any officer or official thereof, and any maritime authority.
"Guarantee" means, as the context may require, individually, a
guarantee, or collectively, any and all guarantees, of the obligations of the
Company with respect to the Notes by each Guarantor pursuant to the terms of
Article 14 hereof, substantially in the form set forth in Section 207.
"Guarantors" shall have the meaning given in Section 1030
"Holders" means the holders of the Notes from time to time.
"Indebtedness" of any Person means, without duplication, (a) all
liabilities and obligations, contingent or otherwise, of any such Person, to the
extent such liabilities and obligations would appear as a liability upon the
consolidated balance sheet of such Person in accordance with GAAP, (i) in
respect of borrowed money (whether or not the recourse of the lender is to the
whole of the assets of such Person or only to a portion thereof), (ii) evidenced
by bonds, notes, debentures or similar instruments, or (iii) representing the
deferred and unpaid balance of the purchase price of any property or services,
except
<PAGE>
-10-
those incurred in the ordinary course of its business that would constitute
ordinarily a trade payable to trade creditors (other than accounts payable or
other obligations to trade creditors which have remained unpaid for greater than
120 days past their original due date unless such obligation is being contested
in good faith and by appropriate proceedings and adequate reserves with respect
thereto are maintained on the books of the Company in accordance with GAAP); (b)
all liabilities and obligations, contingent or otherwise, of such Person (x)
evidenced by bankers' acceptances or similar based facilities issued or accepted
by banks, (y) relating to any Capitalized Lease Obligation, or (z) evidenced by
a letter of credit or a reimbursement obligation of such Person with respect to
any letter of credit; (c) all net obligations of such Person under Interest Swap
and Hedging Obligations; (d) all liabilities and obligations of others of the
kind described in the preceding clause (a), (b) or (c) that such Person has
guaranteed or otherwise directly or indirectly provided credit support for or
that is otherwise its legal liability or which are secured by any assets or
property of such Person and all obligations to purchase, redeem or acquire any
Equity Interests of such Person or any of its Affiliates; (e) any and all
deferrals, renewals, extensions, refinancings and refundings (whether direct or
indirect) of, or amendments, modifications or supplements to, any liability of
the kind described in any of the preceding clauses (a), (b), (c) or (d), or this
clause (e), whether or not between or among the same parties; (f) the
Attributable Indebtedness of such Person in respect of Sale and Lease-Back
Transactions; and (g) all Disqualified Capital Stock of such Person (measured at
the greater of its voluntary or involuntary maximum fixed repurchase price plus
accrued and unpaid dividends), PROVIDED that any indebtedness which has been
defeased in accordance with GAAP or defeased pursuant to the deposit of cash or
U.S. Government Obligations (in an amount sufficient to satisfy all such
indebtedness obligations at maturity or redemption, as applicable, and all
payments of interest and premium, if any) in a trust or account created or
pledged for the sole benefit of the holders of such indebtedness, and subject to
no other Liens, and the other applicable terms of the instrument governing such
indebtedness, shall not constitute "Indebtedness." For purposes hereof, the
"maximum fixed repurchase price" of any Disqualified Capital Stock which does
not have a fixed repurchase price shall be calculated in accordance with the
terms of such Disqualified Capital Stock as if such Disqualified Capital Stock
were purchased on any date on which Indebtedness shall be required to be
determined pursuant to the Indenture, and if such price is based upon, or
measured by, the Fair Market Value of such Disqualified Capital Stock, such Fair
Market Value to be determined in good faith by the board of directors of the
issuer (or managing general partner of the issuer) of such Disqualified Capital
Stock. Notwithstanding the foregoing, none of the following shall constitute
Indebtedness: (i) indebtedness arising from agreements providing for
non-competition payments, earn-out payments, indemnification or adjustment of
purchase price or from guarantees securing any obligations of the Company or any
of its Subsidiaries pursuant to such agreements, incurred or assumed in
connection with the acquisition or disposition of any business, assets or
Subsidiary of the Company, other than guarantees or similar credit support by
the Company or any of its Subsidiaries of indebtedness incurred by any Person
acquiring all or any portion of such business, assets or Subsidiary for the
purpose of financing such acquisition; (ii) obligations arising from guarantees
to contractors incurred in the ordinary course of business; (iii) obligations
(other than express guarantees of indebtedness for borrowed money) in respect of
Indebtedness of other Persons arising in connection with (A) the sale or
discount of accounts receivable, (B) trade acceptances and (C) endorsements of
instruments for deposit in the ordinary course of business; (iv) obligations in
respect of performance bonds provided by the Company or its Subsidiaries in the
<PAGE>
-11-
ordinary course of business; (v) obligations arising from the honoring by a bank
or other financial institution of a check, draft or similar instances drawn
against insufficient funds in the ordinary course of business, PROVIDED that
such obligation is extinguished within two business days of its incurrence; and
(vi) any obligations under workers' compensation laws and other similar
legislation.
"Indenture" means this instrument as originally executed and as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Interest Swap and Hedging Obligation" means any obligation of any
Person pursuant to any interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate exchange agreement,
currency exchange agreement or any other agreement or arrangement designed to
protect against fluctuations in interest rates or currency values, including,
without limitation, any arrangement whereby, directly or indirectly, such Person
is entitled to receive from time to time periodic payments calculated by
applying either a fixed or floating rate of interest on a stated notional amount
in exchange for periodic payments made by such Person calculated by applying a
fixed or floating rate of interest on the same notional amount.
"Investment" by any Person in any other Person means (without
duplication) (a) the acquisition (whether by purchase, merger, consolidation or
otherwise) by such Person (whether for cash, property, services, securities or
otherwise) of Equity Interests, bonds, notes, debentures, partnership or other
ownership interests or other securities, including any options or warrants, of
such other Person or any agreement to make any such acquisition; (b) the making
by such Person of any deposit with, or advance, loan or other extension of
credit (other than extensions of trade credit on commercially reasonable terms
consistent with customary trade practice) to, such other Person (including the
purchase of property from another Person subject to an understanding or
agreement, contingent or otherwise, to resell such property to such other
Person) or any commitment to make any such advance, loan or extension (but
excluding accounts receivable, endorsements for collection or deposits arising
in the ordinary course of business); (c) other than guarantees of Indebtedness
of the Company to the extent permitted by Section 1011, the entering into by
such Person of any guarantee of, or other credit support or contingent
obligation with respect to, Indebtedness or other liability of such other
Person; and (d) the making of any capital contribution by such Person to such
other Person.
"Issue Date" means the date of first issuance of the Notes under the
Indenture.
"Lien" means any mortgage, charge, pledge, lien (statutory or
otherwise), privilege, security interest, hypothecation or other encumbrance
upon or with respect to any property of any kind, real or personal, movable or
immovable, now owned or hereafter acquired.
"Louisiana Act" means the Louisiana Riverboat Economic Development and
Gaming Control Act, as amended from time to time.
<PAGE>
-12-
"Management Agreement" means the Casino Consulting and Management
Agreement between the Company and CRC, dated December 11, 1992, as amended, as
described in the Offering Memorandum.
"Mandatory Redemption Offer" has the meaning as set forth in Section
203.
"Maturity", when used with respect to any security, means the date on
which the principal of such security or an installment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, notice of redemption, required purchase or
otherwise.
"Maturity Date", when used with respect to any security, means the date
specified in such security as the fixed date on which the principal of such
security is due and payable.
"Mortgages" means the Ship Mortgage and the Shore Mortgage.
"Net Cash Proceeds" means the aggregate amount of cash or Cash
Equivalents received by the Company in the case of a sale of Qualified Capital
Stock and by the Company and its Subsidiaries in respect of an Asset Sale plus,
in the case of an issuance of Qualified Capital Stock upon any exercise,
exchange or conversion of securities (including options, warrants, rights and
convertible or exchangeable debt) of the Company that were issued for cash on or
after the Issue Date, the amount of cash originally received by the Company upon
the issuance of such securities (including options, warrants, rights and
convertible or exchangeable debt) plus, in the case of an Asset Sale, the amount
of any cash or Cash Equivalents received upon the sale or disposition within 30
days after such Asset Sale of any non-cash consideration received therefrom
less, in each case, the sum of all payments, fees, commissions and (in the case
of Asset Sales, reasonable and customary), expenses (including, without
limitation, the fees and expenses of legal counsel and investment banking fees
and expenses) incurred in connection with such Asset Sale or sale of Qualified
Capital Stock, and, in the case of an Asset Sale only, less the amount
(estimated reasonably and in good faith by the Company) of income, franchise,
sales and other applicable taxes required to be paid by the Company or any of
its respective Subsidiaries in connection with such Asset Sale in the taxable
year that such sale is consummated or in the immediately succeeding taxable
year, the computation of which shall take into account the reduction in tax
liability resulting from any available operating losses and net operating loss
carryovers, tax credits and tax credit carryforwards, and similar tax
attributes.
"Notes" means the Senior Secured Increasing Rate Notes due 2001 issued
by the Company pursuant to this Indenture, including, without limitation, the
Exchange Notes, Private Exchange Notes, if any, and the PIK Notes, if any,
treated as a single class of securities, as amended or supplemented from time to
time in accordance with the terms hereof.
<PAGE>
-13-
"Officers' Certificate" means a certificate signed by the Chairman, the
President or a Vice President, and by the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary of the Company, and delivered to the
Trustee.
"Offering Memorandum" means the Final Offering Memorandum of the
Company dated November 19, 1998, relating to the Notes.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, including an employee of the Company, and who shall be
reasonably acceptable to the Trustee.
"Paying Agent" means any Person (including the Company acting as Paying
Agent) authorized by the Company to pay the principal of (and premium, if any,
on) or interest on any Notes on behalf of the Company.
"Permitted Indebtedness" means that:
(a) the Company may incur Indebtedness evidenced by the Notes,
including the PIK Notes, if any, and represented by the Indenture and the
Security Documents up to the amounts specified therein as of the date
thereof;
(b) the Company may incur Refinancing Indebtedness with respect to any
Indebtedness or Disqualified Capital Stock, as applicable, described in
clause (a) of this definition or incurred under the Debt Incurrence Ratio
test in Section 1011(c) or which is outstanding on the Issue Date (after
giving effect to the repurchase of the 1993 Notes with the net proceeds of
the Offering); PROVIDED that in each case such Refinancing Indebtedness is
secured only by the assets that secured the Indebtedness so refinanced;
and
(c) the Company may incur Indebtedness to any Wholly-owned Subsidiary
and any Wholly-owned Subsidiary may incur Indebtedness to any other
Wholly-owned Subsidiary or to the Company; PROVIDED that, in the case of
Indebtedness of the Company, such obligations shall be unsecured and
subordinated in all respects to the Company's obligations pursuant to the
Notes and any event that causes such Subsidiary no longer to be a
Wholly-owned Subsidiary shall be deemed to be a new incurrence subject to
Section 1011.
"Permitted Investment" means Investments in (a) any of the Notes; (b)
Cash Equivalents; (c) intercompany notes to the extent permitted under clause
(c) of the definition of "Permitted Indebtedness"; and (d) stock, obligations or
securities received in settlement of debts created in the ordinary course of
business and owing to the Company in satisfaction of judgments.
"Permitted Lien" means (a) Liens existing on the Issue Date; (b) Liens
imposed by governmental authorities for taxes, assessments or other charges not
yet subject to penalty or which are being contested in good faith and by
appropriate proceedings, if adequate reserves with respect thereto are
maintained on
<PAGE>
-14-
the books of the Company in accordance with GAAP; (c) statutory liens of
carriers, warehousemen, mechanics, material men, landlords, repairmen or other
like Liens arising by operation of law in the ordinary course of business,
PROVIDED that (i) the underlying obligations are not overdue for a period of
more than 30 days, or (ii) such Liens are being contested in good faith and by
appropriate proceedings and adequate reserves with respect thereto are
maintained on the books of the Company in accordance with GAAP; (d) Liens
securing the performance of bids, trade contracts (other than borrowed money),
leases, statutory obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature incurred in the ordinary course of business;
(e) easements, rights-of-way, zoning, similar restrictions and other similar
encumbrances or title defects which, singly or in the aggregate, do not in any
case materially detract from the value of the property, subject thereto (as such
property is used by the Company or any of its Subsidiaries) or interfere with
the ordinary conduct of the business of the Company or any of its Subsidiaries;
(f) Liens arising by operation of law in connection with judgments and
garnishments, only to the extent, for an amount and for a period not resulting
in an Event of Default with respect thereto; (g) pledges or deposits made in the
ordinary course of business in connection with workers' compensation,
unemployment insurance and other types of social security legislation; (h) Liens
securing the Notes; (i) Liens securing Indebtedness of a Person existing at the
time such Person becomes a Subsidiary or is merged with or into the Company or a
Subsidiary or Liens securing Indebtedness incurred in connection with an
Acquisition, PROVIDED that such Liens were in existence prior to the date of
such acquisition, merger or consolidation, were not incurred in anticipation
thereof, and do not extend to any other assets; (j) Liens arising from Purchase
Money Indebtedness or securing the obligations under the Revolving Credit
Facility, in either case permitted to be incurred pursuant to Section 1011,
PROVIDED that Liens arising from such Purchase Money Indebtedness or
Indebtedness outstanding under the Revolving Credit Facility relate solely to
the property which is subject to such Purchase Money Indebtedness or
Indebtedness outstanding under the Revolving Credit Facility; (k) leases or
subleases granted to other Persons in the ordinary course of business not
materially interfering with the conduct of the business of the Company or any of
its Subsidiaries or materially detracting from the value of the relative assets
of the Company or any Subsidiary; (l) Liens arising from precautionary Uniform
Commercial Code financing statement filings regarding operating leases entered
into by the Company or any of its Subsidiaries in the ordinary course of
business; (m) Liens securing Refinancing Indebtedness incurred to refinance any
Indebtedness that was previously so secured in a manner no more adverse to the
Holders of the Notes than the terms of the Liens securing such refinanced
Indebtedness, and PROVIDED that the Indebtedness secured is not increased and
the Lien is not extended to any additional assets or property that would not
have been security for the Indebtedness refinanced; or (n) other Liens permitted
under the Security Documents.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, limited liability company, trust,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.
"PIK Notes" means those Notes issuable in lieu of cash, at the
Company's option, for that portion of interest above 14.0% per annum, as further
described in Article Three.
<PAGE>
-15-
"Preferred Stock", as applied to the Capital Stock of any Person, means
Capital Stock of such Person of any class or classes (however designated) that
ranks prior, as to the payment of dividends on or to the distribution of assets
upon any voluntary or involuntary liquidation, dissolution or winding up of such
Person, to shares of Capital Stock of any other class of such Person.
"Private Exchange" has the meaning set forth in the Registration Rights
Agreement or, with respect to Notes issued under this Indenture subsequent to
the Issue Date pursuant to Section 2.01, a registration rights agreement
substantially identical to the Registration Rights Agreement.
"Private Exchange Notes" has the meaning set forth in the Registration
Rights Agreement or, with respect to Notes issued under this Indenture
subsequent to the Issue Date pursuant to Section 2.01, a registration rights
agreement substantially identical to the Registration Rights Agreement.
"Public Equity Offering" means an underwritten offering of common stock
of the Company for cash pursuant to an effective registration statement under
the Securities Act.
"Purchase Money Indebtedness" of any Person means any Indebtedness of
such Person to any seller or other Person incurred solely to finance the
acquisition (including in the case of a Capitalized Lease Obligation, the lease)
of any after acquired real or personal tangible property which, in the
reasonable good faith judgment of the Board of Directors of the Company, is
directly related to a Related Business of the Company and which is incurred
substantially concurrently with such acquisition and is secured only by the
assets so financed.
"Qualified Capital Stock" means any Capital Stock of the Company that
is not Disqualified Capital Stock.
"Qualified Exchange" means any legal defeasance, redemption,
retirement, repurchase or other acquisition of Capital Stock of the Company or
Indebtedness of the Company issued on or after the Issue Date with the Net Cash
Proceeds received by the Company from the substantially concurrent sale of
Qualified Capital Stock or any exchange of Qualified Capital Stock for any
Capital Stock or Indebtedness of the Company issued on or after the Issue Date.
"Quarterly Period" means the period from and including the first day of
each of the months of March, June, September, December as the case may be,
through the next day preceding the following Interest Payment Date, except that
the first Quarterly Period shall commence on and include November 25, 1998 and
end on but exclude March 1, 1999.
"Reference Period" with regard to any Person means the four full fiscal
quarters (or such lesser period during which such Person has been in existence)
ended immediately preceding any date upon which any determination is to be made
pursuant to the terms of the Notes or the Indenture.
<PAGE>
-16-
"Refinancing Indebtedness" means Indebtedness or Disqualified Capital
Stock (a) issued in exchange for, or the proceeds from the issuance and sale of
which are used substantially concurrently to repay, redeem, defease, refund,
refinance, discharge or otherwise retire for value, in whole or in part, or (b)
constituting an amendment. modification or supplement to, or a deferral or
renewal of ((a) and (b) above are, collectively, a "Refinancing"), any
Indebtedness or Disqualified Capital Stock in a principal amount or, in the case
of Disqualified Capital Stock, liquidation preference, not to exceed (after
deduction of reasonable and customary fees and expenses incurred in connection
with the Refinancing plus the amount of any premium paid in connection with such
Refinancing in accordance with the terms of the documents governing the
Indebtedness refinanced without giving effect to any modification thereof made
in connection with or in contemplation of such refinancing) the lesser of (i)
the principal amount or, in the case of Disqualified Capital Stock, liquidation
preference, of the Indebtedness or Disqualified Capital Stock so Refinanced and
(ii) if such Indebtedness being Refinanced was issued with an original issue
discount, the accreted value thereof (as determined in accordance with GAAP) at
the time of such Refinancing, PROVIDED that (A) such Refinancing Indebtedness
shall only be used to Refinance outstanding Indebtedness or Disqualified Capital
Stock of such Person issuing such Refinancing Indebtedness, (B) such Refinancing
Indebtedness shall (x) not have an Average Life shorter than the Indebtedness or
Disqualified Capital Stock to be so refinanced at the time of such Refinancing
and (y) in all respects, be no less subordinated or junior, if applicable, to
the rights of Holders of the Notes than was the Indebtedness or Disqualified
Capital Stock to be refinanced, (C) such Refinancing Indebtedness shall have a
final stated maturity or redemption date, as applicable, no earlier than the
final stated maturity or redemption date, as applicable, of the Indebtedness or
Disqualified Capital Stock to be so refinanced, and (D) such Refinancing
Indebtedness shall be secured (if secured) in a manner no more adverse to the
Holders of the Notes than the terms of the Liens (if any) securing such
refinanced Indebtedness, including, without limitation, the amount of
Indebtedness secured shall not be increased.
"Registration Rights Agreement" means the Registration Rights Agreement
dated November 25, 1998 between the Company and the Initial Purchaser, as
amended from time to time.
"Related Business" means the gaming and hotel businesses conducted (or
proposed to be conducted) by the Company and its Subsidiaries as of the Issue
Date and any and all businesses that in the good faith judgment of the Board of
Directors of the Company are materially related businesses.
"Related Person" means any Person who controls, is controlled by or is
under common control with an Excluded Person; PROVIDED that, for purposes of
this definition, "control" means the beneficial ownership of more than 50% of
the total voting power of a Person normally entitled to vote in the election of
directors, managers or trustees, as applicable of a Person.
"Required Regulatory Redemption" means a redemption by the Company of
any of such Holder's Notes pursuant to, and in accordance with, any order of any
Governmental Authority with appropriate jurisdiction and authority relating to a
Gaming License, or to the extent necessary in the reasonable, good faith
judgment of the Board of Directors of the Company to prevent the loss, failure
to obtain or material impairment or to secure the reinstatement of, any material
Gaming License, where such redemption or
<PAGE>
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acquisition is required because the Holder or beneficial owner of Notes is
required to be found suitable or to otherwise qualify under any gaming laws and
is not found suitable or so qualified within a reasonable period of time.
"Responsible Officer", when used with respect to the Trustee, means any
officer in the Trustee's "Corporate Trust Administration Department" or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above-designated officers, and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the particular
subject.
"Restricted Investment" means, in one or a series of related
transactions, any Investment, other than Permitted Investments.
"Restricted Note" has the same meaning as "Restricted Security" set
forth in Rule 144(a)(3) promulgated under the Securities Act; PROVIDED, that the
Trustee shall be entitled to request and conclusively rely upon an Opinion of
Counsel with respect to whether any Note is a Restricted Note.
"Restricted Payment" means, with respect to any Person, (a) the
declaration or payment of any dividend or any other distribution in respect of
Equity Interests of such Person or any parent or Subsidiary of such Person, (b)
any payment on account of the purchase, redemption or other acquisition or
retirement for value of Equity Interests of such Person or any Wholly-owned
Subsidiary or any parent of such Person, (c) other than with the proceeds from
the substantially concurrent sale of, or in exchange for, Refinancing
Indebtedness or Qualified Capital Stock any purchase, redemption, or other
acquisition or retirement for value of, any payment in respect of any amendment
of the terms of or any defeasance of, any Indebtedness which is subordinate to
the Notes in any manner, directly or indirectly, by such Person or a parent or
Subsidiary of such Person prior to the scheduled maturity, any scheduled
repayment of principal, or scheduled sinking fund payment, as the case may be,
of such Indebtedness and (d) any Restricted Investment by such Person; PROVIDED
that the term "Restricted Payment" does not include (i) any dividend,
distribution or other payment on or with respect to Equity Interests of an
issuer to the extent payable solely in shares of Qualified Capital Stock of such
issuer; (ii) any dividend, distribution or other payment to the Company, or to
any of its Wholly-owned Subsidiaries, by any of its Subsidiaries, or (iii) loans
or advances to employees of the Company and its Subsidiaries made in the
ordinary course of business in an aggregate amount not to exceed $250,000 at any
one time outstanding.
"Revolving Credit Facility" means any revolving credit agreement or
similar instrument, including, without limitation, working capital or equipment
purchase lines of credit, entered into by the Company governing the terms of a
BONA FIDE borrowing by the Company from (i) a third party financial institution
that is primarily engaged in the business of commercial banking or (ii) a vendor
or other provider of financial accommodations in connection with the purchase of
equipment, in either case for valid business purposes, including any related
notes, guarantees, collateral documents, instruments and agreements executed in
connection therewith.
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"Sale and Lease-Back Transactions" means any arrangement with any
Person providing for the leasing by the Company or any Subsidiary of any real or
tangible personal property, which property has been or is to be sold or
transferred by the Company or any such Subsidiary to such Person in
contemplation of such leasing.
"Security Agreement" means the Security Agreement dated November 25,
1998, duly executed by the Company and each Grantor, if any, in favor of the
Trustee for its benefit and the benefit of the Holders.
"Security Documents" means this Indenture, the Security Agreement, the
Ship Mortgage and each of the Mortgages and any other mortgage, deed of trust,
security agreement or similar instrument securing the Company's obligations with
respect to the Notes or under this Indenture or any of the Security Documents.
"Ship Mortgage" means the form of Ship Mortgage attached hereto as
Exhibit A.
"Shore Mortgage" means the Mortgage, Leasehold Mortgage, Assignment of
Rents, Security Agreement and Financing Statement between the Company (as
Grantor) and the Trustee (as Grantee).
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Significant Subsidiary" shall have the meaning provided such term
under Regulation S-X of the Securities Act, as in effect on the Issue Date.
"Stated Maturity", when used with respect to any Note, means December
1, 2001.
"Subsidiary", with respect to any person, means (i) a corporation a
majority of whose Equity Interests with voting power, under ordinary
circumstances, to elect directors is at the time, directly or indirectly, owned
by such Person, by such Person and one or more Subsidiaries of such Person or by
one or more Subsidiaries of such Person, (ii) any other Person (other than a
corporation) in which such Person, one or more Subsidiaries of such Person, or
such Person and one or more Subsidiaries of such Person, directly or indirectly,
at the date of determination thereof has at least majority ownership interest,
or (iii) a partnership in which such Person or a Subsidiary of such Person is,
at the time, a general partner and in which such person, directly or indirectly,
at the date of determination thereof has at least a majority ownership interest.
Unless the context otherwise requires, Subsidiary means each direct and indirect
Subsidiary of the Company.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939,
as amended.
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"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
"U.S. Government Obligations" means direct non-callable obligations of,
or noncallable obligations guaranteed by, the United States of America for the
payment of which obligation or guarantee the full faith and credit of the
United States of America is pledged.
"Vessel" means any riverboat or barge, whether now owned or hereafter
acquired by the Company or any Subsidiary, useful for gaming, administrative,
entertainment or any other purpose whatsoever.
"Wholly-owned Subsidiary" means a Subsidiary all the Equity Interests
of which are owned by the Company or one or more Wholly-owned Subsidiaries of
the Company,
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee an Officers' Certificate stating that all conditions precedent, if
any, provided for in this Indenture (including any covenant compliance with
which constitutes a condition precedent) relating to the proposed action have
been complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than pursuant to
Section 1008(a)) shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
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SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company 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 or opinion is based are erroneous. Any such certificate or Opinion
of Counsel may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Company stating that the information with respect to such factual matters is in
the possession of the Company, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agents 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 and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and conclusive in favor of the Trustee and the Company, if made in the
manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of authority. The fact and date of the execution of any such instrument or
writing, or the
<PAGE>
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authority of the Person executing the same, may also be proved in any other
manner which the Trustee deems sufficient.
(c) The principal amount and serial numbers of Notes held by any
Person, and the date of holding the same, shall be proved by the Security
Register.
(d) If the Company shall solicit from the Holders of Notes any request,
demand, authorization, direction, notice, consent, waiver or other act, the
Company may, at its option, by or pursuant to Board Resolution, fix in advance a
record date for the determination of Holders entitled to give such request,
demand, authorization, direction, notice, consent, waiver or other Act, but the
Company shall have no obligation to do so. Notwithstanding TIA Section 316(c),
such record date shall be the record date specified in or pursuant to such Board
Resolution, which shall be a date not earlier than the date 30 days prior to the
first solicitation of Holders generally in connection therewith and not later
than the date such solicitation is completed. If such a record date is fixed,
such request, demand, authorization, direction, notice, consent, waiver or other
act may be given before or after such record date, but only the Holders of
record at the close of business on such record date shall be deemed to be
Holders for the purposes of determining whether Holders of the requisite
proportion of outstanding Notes have authorized or agreed or consented to such
request, demand, authorization, direction, notice, consent, waiver or other act,
and for that purpose the outstanding Notes shall be computed as of such record
date; PROVIDED that no such request, demand, authorization, direction, notice,
consent, waiver or other act by the Holders on such record date shall be deemed
effective unless it shall become effective pursuant to the provisions of this
Indenture not later than eleven (11) months after the record date.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Note shall bind every future Holder of
the same Note and the Holder of every Note issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such Note.
(f) In determining whether the Holders of the required principal amount
of Notes have concurred in any direction, waiver or consent, Notes owned by the
Company, or by any Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company, shall be considered as
though not outstanding, except that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, waiver or consent
only Notes that the Trustee knows are so owned shall be so disregarded.
SECTION 105. Notices, etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver
or act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,
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(1) the Trustee by any Holder or by the Company shall be sufficient for
every purpose hereunder if made, given, furnished or filed in writing to
or with the Trustee at its Corporate Trust Office, Attention: Corporate
Trust Administration, or
(2) the Company by the Trustee or by any Holder shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid, to the Company addressed
to it at the address of its principal office specified in the first
paragraph of this Indenture, or at any other address previously furnished
in writing to the Trustee by the Company.
SECTION 106. Notice to Holders; Waiver.
Where this Indenture provides for notice of any event to Holders by the
Company or the Trustee, such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and mailed, first-class
postage prepaid, to each Holder affected by such event, at his address as it
appears in the Security Register, not later than the latest date, and not
earlier than the earliest date, prescribed for the giving of 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. Any notice
mailed to a Holder in the manner herein prescribed shall be conclusively deemed
to have been received by such Holder, whether or not such Holder actually
receives such notice. Where this Indenture provides for notice in any manner,
such notice may be waived in writing by the Person entitled to receive such
notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
In case by reason of the suspension of or irregularities in regular
mail service or by reason of any other cause, it shall be impracticable to mail
notice of any event to Holders 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 for every purpose hereunder.
SECTION 107. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 108. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
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All covenants and agreements in the Security Documents by each Grantor
shall bind its successors and assigns, whether so expressed or not.
SECTION 109. Separability Clause.
In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 110. Benefits of Indenture.
Nothing in this Indenture or in the Notes, express or implied, shall
give to any Person, other than the parties hereto, any Paying Agent, any
Securities Registrar and their successors hereunder, and the Holders, any
benefit or any legal or equitable right, remedy or claim under this Indenture.
SECTION 111. Governing Law.
This Indenture and the Notes shall be governed by and construed in
accordance with the law of the State of New York. This Indenture is subject to
the provisions of the Trust Indenture Act of 1939, as amended, that are required
to be part of this Indenture and shall, to the extent applicable, be governed by
such provisions.
If any provision hereof limits, qualifies or conflicts with a provision
of the Trust Indenture Act that is required by such act to be a part of and
govern this Indenture, the provision of the TIA shall control. If any provision
of this Indenture modifies or excludes any provision of the TIA that may be so
modified or excluded, the modifying Indenture provision shall apply to the
extent permitted by the TIA. Until such time as this Indenture shall be
qualified under the Trust Indenture Act, this Indenture, the Company, any
Guarantor, and the Trustee shall, as a matter of contract, be deemed for all
purposes hereof to be subject to and governed by the TIA to the same extent as
would be the case if this Indenture were so qualified.
SECTION 112. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity or Maturity of any Note shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Notes) payment
of interest or principal (and premium, if any) 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 Interest Payment Date, Redemption Date or at the Stated
Maturity or Maturity; PROVIDED that no interest shall accrue for the period from
and after such Interest Payment Date, Redemption Date, Stated Maturity or
Maturity, as the case may be.
<PAGE>
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ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally.
The Notes and the Trustee's certificate of authentication shall be in
substantially the forms set forth in this Article, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such Notes, as
evidenced by their execution of the Notes. Any portion of the text of any Note
may be set forth on the reverse thereof, with an appropriate reference thereto
on the face of the Note.
The definitive Notes shall be printed or may be produced in any manner,
all determined by the officers of the Company executing such Notes, as evidenced
by their execution of such Notes.
SECTION 202. Form of Face of Note.
LOUISIANA CASINO CRUISES, INC.
Senior Secured Increasing Rate Notes Due 2001
No.______ $_________
Louisiana Casino Cruises, Inc., a Louisiana corporation (herein called
the "Company", which term includes any successor Person under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
or registered assigns, the principal sum of
Dollars on December 1, 2001, at the office or agency of the Company referred to
below. Interest on the Notes will accrue from the most recent date on which
interest has been paid or, if no interest has been paid, from
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November 25, 1998. The Issuer will pay interest quarterly in arrears on each
March 1, June 1, September 1 and December 1 (the "Interest Payment Dates"),
commencing March 1, 1999. Interest on any given Interest Payment Date will be
payable to holders of record on each February 15, May 15, August 15 and November
15 (whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date.
The Notes will bear interest at an increasing rate per annum for any
quarterly period equal to the sum of (x) 12.25% plus (y) the number of basis
points set forth below (the "Spread"); PROVIDED that the maximum interest rate
shall not exceed 18% per annum at any time. The Spread for the period from
November 25, 1998, through February 28, 1999, will be zero basis points.
Thereafter, the Spread will be increased on the first day of each subsequent
quarterly period, commencing March 1, 1999, to 25 basis points over the Spread
for the immediately preceding quarterly period.
At the Company's option, interest payments for amounts above 14.0% may
be made in additional notes ("PIK Notes"). The PIK Notes, if issued, will be
issued only in fully registered form, without coupons, in denominations of
$100.00 and integral multiples thereon. Interest shall be paid until the
principal hereof is paid or duly provided for, and (to the extent lawful) the
Company shall pay on demand interest on any overdue interest at the rate borne
by the Notes from the date on which such overdue interest becomes payable to the
date payment of such interest has been made or duly provided for.
Holders of this Note will have rights pursuant to a Registration Rights
Agreement between the Company and CIBC Oppenheimer Corp., as Initial Purchaser
of the Notes. The Holders shall be entitled to receive payments of "Additional
Interest" in the event the Company does not perform certain of its obligations
under the Registration Rights Agreement. The maximum Additional Interest that
would be payable on the Notes is 2.0% per year over the interest rate that would
otherwise apply to the Notes.
Reference is hereby made to the provisions of the Indenture governing
this Note, and further to the provisions of this Note set forth on the reverse
hereof, which provisions shall for all purposes have the same effect as if set
forth at this place.
Unless the certificate of authentication hereon has been duly executed
by the Trustee referred to on the reverse hereof by manual signature, this Note
shall not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose.
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IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
Dated: LOUISIANA CASINO CRUISES, INC.
By_____________________________________
SECTION 203. Form of Reverse of Note.
This Note is one of a duly authorized issue of securities of the
Company designated as its Senior Secured Increasing Rate Notes Due 2001 (the
"Notes"), limited (except as otherwise provided in the Indenture referred to
below) in aggregate principal amount to $50,313,200, which may be issued under
an indenture (herein called the "Indenture") dated as of November 15, 1998
between the Company and U.S. Bank Trust National Association, trustee (herein
called the "Trustee", which term includes any successor trustee under the
Indenture), to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights, limitations of rights,
duties, obligations and immunities thereunder of the Company, the Guarantors, if
any, the Trustee and the Holders of the Notes, and of the terms upon which the
Notes are, and are to be, authenticated and delivered.
The Notes are subject to redemption upon not less than 20 Business
Days' nor more than 60 days' notice, at any time, in whole or in part, at the
election of the Company, at a Redemption Price in each case together with
accrued and unpaid interest and Additional Interest, if any, thereon to the
Redemption Date equal to:
PERIOD PERCENTAGE
November 25, 1998 through March 1, 1999 100.000%
March 2, 1999 through June 1, 1999 101.000
June 2, 1999 through September 1, 1999 102.000
September 2, 1999 through December 1, 1999 103.000
After December 1, 1999 105.000%
The Notes will also be redeemable, in whole or in part, at any time
upon not less than 20 Business Days' nor more than 60 days' notice (or such
earlier date as may be ordered by any Governmental Authority) at 100% of the
principal amount thereof together with accrued and unpaid interest and
Additional Interest, if any, thereon to the redemption date, pursuant to a
Required Regulatory Redemption.
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In the case of a partial redemption, the Trustee shall select the Notes
or portions thereof for redemption on a PRO RATA basis, by lot or in such other
manner it deems appropriate and fair. The Notes may be redeemed in part in
multiples of $1,000 only.
The Notes will not have the benefit of any sinking fund.
Except in the case of a Required Regulatory Redemption requiring less
notice, notice of any redemption will be sent, by first class mail, at least 20
Business Days and not more than 60 days prior to the date fixed for redemption
to the Holder of each Note to be redeemed to such Holder's last address as then
shown upon the registry books of the Registrar. Any notice which relates to a
Note to be redeemed in part only must state the portion of the principal amount
equal to the unredeemed portion thereof and must state that on and after the
Redemption Date, upon surrender of such Note, a new Note or Notes in a principal
amount equal to the unredeemed portion thereof will be issued. On and after the
Redemption Date, interest will cease to accrue on the Notes or portion thereof
called for redemption, unless the Company defaults in the payment thereof.
In the event that the Company or any of its Subsidiaries consummates an
offering of (i) any Indebtedness (other than any Indebtedness that would
constitute Permitted Indebtedness or is incurred pursuant to clause (b) of
Section 1011 of the Indenture or (ii) any equity securities for net proceeds in
an amount that, together with all other offerings of equity securities made
since the Issue Date, exceeds $250,000 (each such event described in clauses (i)
and (ii) above, a "Redemption Triggering Offering"), the Company shall, within
30 days after the consummation of any such Redemption Triggering Offering, offer
to purchase (a "Mandatory Redemption Offer") from all Holders of Notes, on a PRO
RATA basis, up to an amount (expressed as a multiple of $1,000) of Notes equal
to 100% of the net cash proceeds received by the Company or any such Subsidiary
from such Redemption Triggering Offering, at the prices set forth in the table
above. Any such repurchase shall be in accordance with the procedures set forth
in the Indenture.
Any Mandatory Redemption Offer will be made in compliance with all
applicable laws, rules and regulations, including, if applicable, Regulation 14E
under the Exchange Act and the rules thereunder and all other applicable Federal
and state securities laws. To the extent that the provisions of any securities
laws or regulations conflict with the provisions of this paragraph, compliance
by the Company with such laws and regulations shall not in and of itself cause a
breach of its obligations under the Indenture.
Upon the occurrence of a Change of Control, the Holder of this Note may
require the Company, subject to certain limitations provided in the Indenture,
to repurchase this Note at a purchase price in cash in an amount equal to 101%
of the principal amount thereof with accrued and unpaid interest and Additional
Interest, if any, thereon to the Change of Control Purchase Date.
In the case of any redemption of Notes, interest installments whose
Interest Payment Date is on or prior to the Redemption Date will be payable to
the Holders of such Notes, or one or more Predecessor Notes, of record at the
close of business on the relevant Record Date referred to on the face hereof.
Notes
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(or portions thereof) for whose redemption and payment provision is made in
accordance with the Indenture shall cease to bear interest from and after the
Redemption Date.
In the event of redemption of this Note in part only, a new Note or
Notes for the unredeemed portion hereof shall be issued in the name of the
Holder hereof upon the cancellation hereof.
If an Event of Default shall occur and be continuing, the principal of
all the Notes may be declared due and payable in the manner and with the effect
provided in the Indenture.
The Indenture contains provisions for defeasance at any time of (a) the
entire indebtedness of the Company on this Note and (b) certain restrictive
covenants and the related Defaults and Events of Default, upon compliance by the
Company with certain conditions set forth therein, which provisions apply to
this Note.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders under the Indenture at any time by the
Company and the Trustee with the consent of the Holders of a majority in
aggregate principal amount of the Notes at the time outstanding. The Indenture
also contains provisions permitting the Holders of specified percentages in
aggregate principal amount of the Notes at the time outstanding, on behalf of
the Holders of all the Notes, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by or on behalf of the Holder of
this Note shall be conclusive and binding upon such Holder and upon all future
Holders of this Note and of any Note issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent or waiver is made upon this Note.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and premium, if any, on)
and interest on this Note at the times, place, and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Note is registrable on the Security Register of
the Company, upon surrender of this Note for registration of transfer at the
office or agency of the Company maintained for such purpose in The City of New
York, duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Security Registrar duly executed by,
the Holder hereof or his attorney duly authorized in writing, and thereupon one
or more new Notes, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
The Notes are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set
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forth, the Notes are exchangeable for a like aggregate principal amount of Notes
of a different authorized denomination, as requested by the Holder surrendering
the same.
No service charge shall be made for any registration of transfer or
exchange of Notes, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to the time of due presentment of this Note for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Note is registered as the owner hereof
for all purposes, whether or not this Note be overdue, and neither the Company,
the Trustee nor any agent shall be affected by notice to the contrary.
All terms used in this Note which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
SECTION 204. Form of Trustee's Certificate of Authentication.
The Trustee's certificate of authentication shall be in substantially
the following form:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
This is one of the Notes referred to in the within-mentioned Indenture.
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Trustee
By
------------------------------------------
Authorized Signatory
SECTION 205. Restrictive Legend.
Each Note will contain the legend substantially in the form of Exhibit
E until (i) the Notes are registered under the Securities Act of 1933, as
amended, or (ii) the Trustee has received an Opinion of Counsel that such legend
is not required by law. The Trustee will not register any transfer of a Note
that violates the restrictions set forth in such legend.
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SECTION 206. Legends, Generally.
Each Note shall have such legends and endorsements, each as provided by
the Company, typed, stamped, printed, lithographed or engraved thereon as the
Company may deem appropriate and as are not inconsistent with the provisions of
this Agreement, or as may be required to comply with any law or with any rule or
regulation pursuant thereto or with any rule or regulation of any securities
exchange on which the Notes may be listed, or to conform to customary usage
(including, but not limited to the requirements or customary usage of The
Depository Trust Company or any other similar depository).
SECTION 207. Form of Guarantee.
If any Subsidiaries of the Company are required to provide Guarantees
pursuant to Section 1030 and Article Fourteen, the form of such Guarantee shall
be as follows (modified to suit single or multiple Guarantors):
GUARANTEE
Each of the undersigned (the "Guarantors") hereby jointly and severally
unconditionally guarantees, to the extent set forth in the Indenture dated as of
November 25, 1998 between Louisiana Casino Cruises, Inc., as issuer, and U.S.
Bank Trust National Association, as Trustee (as previously amended, restated or
supplemented from time to time, and as supplemented the date hereof by each of
the undersigned, the "Indenture") relating to Senior Secured Increasing Rate
Notes due 2001 (the "Notes") of the Company, and subject to the provisions of
the Indenture, (a) the due and punctual payment of the principal of, and
premium, if any, and interest on the Notes, when and as the same shall become
due and payable, whether at maturity, by acceleration or otherwise, the due and
punctual payment of interest on overdue principal of, and premium and, to the
extent
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permitted by law, interest, and the due and punctual performance of all other
obligations of the Issuer to the Noteholders or the Trustee, all in accordance
with the terms set forth in Article Fourteen of the Indenture, and (b) in case
of any extension of time of payment or renewal of any Notes or any of such other
obligations, that the same will be promptly paid in full when due or performed
in accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise.
The obligations of the Guarantors to the Holders of Notes and to the
Trustee pursuant to this Guarantee and the Indenture are expressly set forth in
Article Fourteen of the Indenture and reference is hereby made to the Indenture
for the precise terms of this Guarantee.
IN WITNESS WHEREOF, each of the Guarantors has caused this Guarantee to
be signed by a duly authorized officer.
[GUARANTOR]
By:
Name:
Title:
ARTICLE THREE
THE SECURITIES
SECTION 301. Title and Terms.
The Trustee shall authenticate Notes for original issue on the Issue
Date in the aggregate
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principal amount of $50,000,000 upon a written order of the Company in the form
of an Officers' Certificate of the Company. Such written order shall specify the
amount of Notes to be authenticated and the date on which the Notes are to be
authenticated.
Upon receipt of a Company Request and an Officers' Certificate
certifying that a registration statement relating to an exchange offer specified
in the Registration Rights Agreement or, with respect to Notes issued under this
Indenture subsequent to the Issue Date, a registration rights agreement
substantially identical to the Registration Rights Agreement, is effective and
that the conditions precedent to a private exchange thereunder have been met,
the Trustee shall authenticate an additional series of Notes in an aggregate
principal amount not to exceed $50,313,200 for issuance in exchange for the
Notes tendered for exchange pursuant to such exchange offer registered under the
Securities Act or pursuant to a Private Exchange. Exchange Notes or Private
Exchange Notes may have such distinctive series designations and such changes in
the form thereof as are specified in the Company Request referred to in the
preceding sentence.
The Trustee shall, upon receipt of a Company Request and an Officers'
Certificate certifying that the requirements of this Indenture for the issuance
of PIK Notes have been met, authenticate additional series of Notes in an
aggregate principal amount not to exceed $313,200 for issuance as PIK Notes.
The Notes shall be known and designated as the Senior Secured
Increasing Rate Notes Due 2001 of the Company. Their Stated Maturity shall be
December 1, 2001.
The Notes will bear interest at an increasing rate per annum for any
Quarterly Period equal to the sum of (x) 12.25% plus (y) the number of basis
points set forth below (the "Spread"); PROVIDED that the
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maximum interest rate shall not exceed 18% per annum at any time.
The Spread for the first Quarterly Period will be zero basis points.
Thereafter, the Spread will be increased on the first day of each of the
subsequent Quarterly Periods, commencing March 1, 1999, to 25 basis points over
the Spread for the immediately preceding Quarterly Period.
Principal of and interest on each Note shall be payable in cash;
PROVIDED that to the extent the per annum interest rate relating to any Interest
Payment Date exceeds 14% per annum, the portion of interest for such interest
period in excess of 14% per annum may, at the option of the Company, be paid
either in cash or by delivery to the holder thereof of additional PIK Notes, in
accordance with the terms of the Indenture. The PIK Notes will be issued only in
fully registered form, without coupons, in denominations of $100.00 and integral
multiples thereof. If issued at a time when Notes are publicly tradeable, PIK
Notes must either be covered by an effective registration statement under the
Securities Act or otherwise be freely transferable without further registration
under the Securities Act.
The principal of (and premium, if any, on) and interest on the Notes
shall be payable at the office or agency of the Company maintained for such
purpose in The City of New York, or at such other office or agency of the
Company as may be maintained for such purpose; PROVIDED, HOWEVER, that, at the
option of the Company, interest may be paid by check mailed to addresses of the
Persons entitled thereto as such addresses shall appear on the Security
Register.
The Notes shall be redeemable as provided in Article Eleven.
SECTION 302. Denominations.
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The Notes shall be issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof, except that PIK Notes
shall be in denominations of $100 and any integral multiple thereof. The Company
shall pay cash in lieu of issuing PIK Notes in any denominations of less than
$100.
SECTION 303. Execution, Authentication, Delivery and Dating.
One Officer shall sign the Notes for the Company by manual or facsimile
signature.
If an Officer whose signature is on a Note was an Officer at the time
of such execution but no longer holds that office at the time the Trustee
authenticates the Note, the Note shall be valid nevertheless.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Notes executed by the Company to the
Trustee for authentication, together with a Company Order for the authentication
and delivery of such Notes, and the Trustee in accordance with such Company
Order shall authenticate and deliver such Notes.
The Trustee shall have the right to decline to authenticate and
deliver, or cause to be authenticated and delivered, any Notes if the Trustee,
being advised by counsel, determines that such action may not lawfully be taken
or if the Trustee in good faith shall determine that such action would expose
the Trustee to personal liability to existing Holders.
Each Note shall be dated the date of its authentication.
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Note a
certificate of authentication substantially in the form provided for
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herein duly executed by the Trustee by manual signature of an authorized officer
or authorized signatory, and such certificate upon any Note shall be conclusive
evidence, and the only evidence, that such Note has been duly authenticated and
delivered hereunder and is entitled to the benefits of this Indenture.
In case the Company, pursuant to Article Eight, consolidated or merged
with or into any other Person or shall sell, assign, convey, lease or transfer,
of its properties and assets substantially as an entirety to any Person, and the
successor Person resulting from such consolidation, or surviving such merger, or
into which the Company shall have been merged, or the Person which shall have
received a conveyance, transfer, lease or other disposition as aforesaid, shall
have executed an indenture supplemental hereto with the Trustee pursuant to
Article Eight, any of the Notes authenticated or delivered prior to such
consolidation, merger, conveyance, transfer, lease or other disposition may,
from time to time, at the request of the successor Person, be exchanged for
other Notes executed in the name of the successor Person with such changes in
phraseology and form as may be appropriate, but otherwise in substance
substantially identical to the Notes surrendered for such exchange and of like
principal amount; and the Trustee, upon Company Request of the successor Person,
shall authenticate and deliver Notes as specified in such request for the
purpose of such exchange. If Notes shall at any time be authenticated and
delivered in any new name of a successor Person pursuant to this Section in
exchange or substitution for or upon registration of transfer of any Notes, such
successor Person, at the option of the Holders but without expense to them,
shall provide for the exchange of all Notes at the time outstanding for Notes
authenticated and delivered in such new name.
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SECTION 304. Temporary Notes.
Until definitive Notes are prepared and ready for delivery, the Company
may prepare and the Trustee shall authenticate temporary Notes. Temporary Notes
shall be substantially in the form of definitive Notes but may have variations
that the Company considers appropriate for temporary Notes. Without unreasonable
delay, the Company shall prepare and the Trustee shall authenticate definitive
Notes in exchange for temporary Notes. Until such exchange, temporary Notes
shall be entitled to the same rights, benefits and privileges as definitive
Notes.
SECTION 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the register maintained in such office and in any other
office or agency designated pursuant to Section 1002 being herein sometimes
referred to as the "Security Register") in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the registration
of Notes and of transfers of Notes. The Security Register shall be in written
form or any other form capable of being converted into written form within a
reasonable time. At all reasonable times, the Security Register shall be open to
inspection by the Trustee. The Trustee is hereby initially appointed as security
registrar (the "Security Registrar") for the purpose of registering Notes and
transfers of Notes as herein provided.
Upon surrender for registration of transfer of any Note at the office
or agency of the Company designated pursuant to Section 1002, the Company shall
execute, and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Notes of any authorized
denomination or denominations of a like aggregate principal amount.
At the option of the Holder, Notes may be exchanged for other Notes of
any authorized
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denomination and of a like aggregate principal amount, upon surrender of the
Notes to be exchanged at such office or agency. Whenever any Notes are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Notes which the Holder making the exchange is
entitled to receive.
All Notes issued upon any registration of transfer or exchange of Notes
shall be the valid obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or for
exchange shall (if so required by the Company or the Security Registrar) be duly
endorsed, or be accompanied by a written instrument of transfer, in form
satisfactory to the Company and the Security Registrar, duly executed by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange or redemption of Notes, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes, other than
exchanges pursuant to Section 304, 906, 1010, 1017, 1018 or 1108 not involving
any transfer.
The Company shall not be required (i) to issue, register the transfer
of or exchange any Note during a period beginning at the opening of business 15
days before the selection of Notes to be redeemed under Section 1010, 1017, 1018
or 1104 and ending at the close of business on the day of such mailing of the
relevant notice of redemption, or (ii) to register the transfer of or exchange
any Note so selected for
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redemption in whole or in part, except the unredeemed portion of any Note being
redeemed in part.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Notes.
If (i) any mutilated Note is surrendered to the Trustee, or (ii) the
Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Note, and there is delivered to the Company
and the Trustee such security or indemnity as may be required by them to save
each of them harmless, then, in the absence of notice to the Company or the
Trustee that such Note has been acquired by a bona fide purchaser, the Company
shall execute and upon Company order the Trustee shall authenticate and deliver,
in exchange for any such mutilated security or in lieu of any such destroyed,
lost or stolen Note, a new Note of like tenor and principal amount, bearing a
number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Note has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Note, pay such Note.
Upon the issuance of any new Note under this Section, the Company 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 fees and expenses of the Trustee) connected therewith.
Every new Note issued pursuant to this Section in lieu of any
destroyed, lost or stolen Note shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Note shall be at any time enforceable by anyone, and shall be entitled to
all benefits of this Indenture equally and proportionately with any and all
other Notes duly issued hereunder.
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The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Interest on any Note which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in whose
name such Note (or one or more Predecessor Notes) is registered at the close of
business on the Regular Record Date for such interest at the office or agency of
the Company maintained for such purpose pursuant to Section 1002; PROVIDED,
HOWEVER, that each installment of interest may at the Company's option be paid
by (i) mailing a check for such interest, payable to or upon the written order
of the Person entitled thereto pursuant to Section 308 (plus certificates in the
name of such person representing PIK Notes, if applicable), to the address of
such Person as it appears in the Security Register or (ii) wire transfer of cash
to an account maintained by the payee located in the United States or, in the
case of PIK Notes, book-entry transfer.
Any interest on any Note which is payable, but is not punctually paid
or duly provided for, on any Interest Payment Date shall forthwith cease to be
payable to the Holder on the Regular Record Date by virtue of having been such
Holder, and such defaulted interest and (to the extent lawful) interest on such
defaulted interest at the rate borne by the Notes (such defaulted interest and
interest thereon herein collectively called "Defaulted Interest") may be paid by
the Company, at its election in each case, as provided in clause (1) or (2)
below:
(1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Notes (or their respective Predecessor Notes) are
registered at the close of business on a special Record Date for the payment of
such Defaulted Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Note and the date of the proposed
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payment, and at the same time the Company shall deposit with the Trustee in
immediately available funds an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit in immediately
available funds prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to such
Defaulted Interest as in this clause provided. Thereupon the Trustee shall fix a
Special Record Date for the payment of such Defaulted Interest which shall be
not more than 15 days and not less than 10 days prior to the date of the
proposed payment and not less than 10 days after the receipt by the Trustee of
the notice of the proposed payment. The Trustee shall promptly notify the
Company of such Special Record Date, and in the name and at the expense of the
Company, shall cause notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor to be given in the manner provided for in
Section 106, not less than 10 days prior to such Special Record Date. Notice of
the proposed payment of such Defaulted Interest and the Special Record Date
therefor having been so given, such Defaulted Interest shall be paid to the
Persons in whose names the Notes (or their respective Predecessor Notes) are
registered at the close of business on such Special Record Date and shall no
longer be payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Notes may be listed, and upon such notice as may be required by
such exchange, if, after notice given by the Company to the Trustee of the
proposed payment pursuant to this clause, such manner of payment shall be deemed
practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Note
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Note shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Note.
SECTION 308. Persons Deemed Owners.
Prior to the due presentment of a Note for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Note is registered as the owner of such Note for
the purpose of receiving payment of principal of (and premium, if any, on) and
(subject to Sections 305 and 307) interest on such Note and for all other
purposes whatsoever, whether or not such Note be overdue, and none of the
Company, the
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Trustee or any agent of the Company or the Trustee shall be affected by notice
to the contrary.
SECTION 309. Cancellation.
All Notes surrendered for payment, redemption, registration of transfer
or exchange shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee and shall be promptly cancelled by it. The Company may
at any time deliver to the Trustee for cancellation any Notes previously
authenticated and delivered hereunder which the Company may have acquired in any
manner whatsoever, and may deliver to the Trustee (or to any other Person for
delivery to the Trustee) for cancellation any Notes previously authenticated
hereunder which the Company has not issued and sold, and all Notes so delivered
shall be promptly cancelled by the Trustee. If the Company shall so acquire any
of the Notes, however, such acquisition shall not operate as a redemption or
satisfaction of the indebtedness represented by such Notes unless and until the
same are surrendered to the Trustee for cancellation. No Notes shall be
authenticated in lieu of or in exchange for any Notes cancelled as provided in
this Section, except as expressly permitted by this Indenture. All cancelled
Notes held by the Trustee shall be disposed of by the Trustee in accordance with
its customary procedures and certification of their disposal delivered to the
Company unless by Company Order the Company shall direct that cancelled Notes be
returned to it.
SECTION 310. Computation of Interest.
Interest on the Notes shall be computed on the basis of a 360-day year
of twelve 30-day months and actual days elapsed.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
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SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further effect
(except as to surviving rights of registration of transfer or exchange of Notes
herein expressly provided for) and the Trustee, at the expense of the Company,
shall execute proper instruments acknowledging satisfaction and discharge of
this Indenture when
(1) either:
(a) all Notes theretofore authenticated and delivered (other than (i)
Notes which have been destroyed, lost or stolen and which have been replaced or
paid as provided in Section 306 and (ii) Notes for whose payment money has
theretofore been deposited in trust with the Trustee or any Paying Agent or
segregated and held in trust by the Company and thereafter repaid to the Company
or discharged from such trust, as provided in Section 1003) have been delivered
to the Trustee for cancellation; or
(b) all such Notes not theretofore delivered to the Trustee for
cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within one
year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice
of redemption by the Trustee in the name, and at the expense, of
the Company,
and the Company, in the case of (i), (ii) or (iii) above, has irrevocably
deposited or caused to be deposited with the Trustee as trust funds in trust for
the purpose an amount sufficient to pay and discharge the entire indebtedness on
such Notes not theretofore delivered to the Trustee for cancellation, for
principal (and premium, if any) and interest to the date of such deposit (in the
case of Notes which have become due and payable) or to the Stated Maturity or
Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable hereunder
by the Company, including, without limitation, all sums due to the Trustee; and
(3) the Company 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 satisfaction and discharge of this Indenture have been
complied with.
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Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 606 and, if money shall
have been deposited with the Trustee pursuant to subclause (b) of clause (1) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive.
SECTION 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in trust
and applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with the
Trustee; but such money need not be segregated from other funds except to the
extent required by law.
ARTICLE FIVE
DEFAULTS AND REMEDIES
SECTION 501. Events of Default.
The following events are "Event of Default":
(1) the failure by the Company to pay any installment of interest on
the Notes as and when the same becomes due and payable and the continuance of
any such failure for 30 days; or
(2) the failure by the Company to pay all or any part of the principal,
or premium, if any, on the Notes when and as the same becomes due and payable at
maturity, redemption (including, without limitation, pursuant to Section 1029),
by acceleration or otherwise, including, without limitation, payment of the
Change of Control Purchase Price (as defined in Section 1010) or the Asset Sale
Offer Price (as defined in Section 1017), or otherwise; or
(3) the failure by the Company or any Subsidiary of the Company to
observe or perform any other covenant or agreement contained in the Notes or the
Indenture (other than failure to observe or perform a covenant or agreement
specifically addressed elsewhere in this Section 501), and the continuance of
such failure for a period of 60 days after written notice is given to the
Company by the Trustee or to the Company and the Trustee by the Holders of at
least 25% in aggregate principal amount of the Notes outstanding (a "Notice of
Default" hereunder); or
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(4) a default in Indebtedness of the Company or any of its Subsidiaries
with an aggregate principal amount in excess of $5.0 million (a) resulting from
the failure to pay principal at maturity or (b) as a result of which the
maturity of such Indebtedness has been accelerated prior to its stated maturity;
or
(5) the failure by the Company to assign and pledge the Collateral to
the Trustee for the benefit of the Trustee and the Holders within 60 days after
the Issue Date on the terms described in the Security Documents; or
(6) one or more final unsatisfied judgments not covered by insurance
aggregating in excess of $5.0 million at any one time rendered against the
Company or any of its Subsidiaries and not stayed, bonded or discharged within
60 days; or
(7) the entry of a decree or order by a court having jurisdiction in
the premises adjudging the Company or any Significant Subsidiary a bankrupt or
insolvent, or approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company or any
Significant Subsidiary under the Bankruptcy Code or any other applicable federal
or state law, or appointing a receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Company or any Significant
Subsidiary or of any substantial part of its property, or ordering the winding
up or liquidation of its affairs, and the continuance of any such decree or
order unstayed and in effect for a period of 60 days; or
(8) the institution by the Company or any of its Significant
Subsidiaries of proceedings to be adjudicated a bankrupt or insolvent, or the
consent by it to the institution of bankruptcy or insolvency proceedings against
it, or the filing by it of a petition or answer or consent seeking
reorganization or relief under the Bankruptcy Code or any other applicable
federal or state law, or the consent by it to the filing of any such petition or
to the appointment of a receiver, liquidator, assignee, trustee, sequestrator
(or other similar official) of the Company or any of its Significant Subsidiary
or of any substantial part of its property, or the making by it of an assignment
for the benefit of creditors, or the admission by it in writing of its inability
to pay its debts generally as they become due; or
(9) any of the Security Documents ceases to be in full force and effect
or any of the Security Documents ceases to create in favor of the Trustee, with
respect to any material amount of Collateral, a valid and perfected first
priority Lien (subject to Liens permitted by the Security Documents) on the
Collateral purported to be covered thereby; or
(10) the cessation of substantially all gaming operations of the
Company for more than 60 days, except as a result of an Event of Loss, provided
that the Net Cash Proceeds from any such Event of Loss are applied in accordance
with Sections 1017 and 1018; or
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(11) the revocation, suspension, expiration (without previous or
concurrent renewal) or loss of any relevant gaming license for more than 60
days.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than an Event of Default specified in
Section 501(7) or 501(8)) occurs and is continuing, then and in every such case
unless the principal of all of the Notes shall have already become due and
payable, either the Trustee or the Holders of at least 25% in aggregate
principal amount of the Notes then outstanding, by notice in writing to the
Company (and to the Trustee if given by Holders) (an "Acceleration Notice"), may
declare all principal, determined as set forth below, and accrued interest
thereon to be due and payable immediately. If an Event of Default specified in
Section 501(7) or 501(8) relating to the Company occurs, all principal and
accrued interest thereon will be immediately due and payable on all outstanding
Notes without any declaration or other act on the part of Trustee or the
Holders.
Prior to the declaration of acceleration of the maturity of the Notes,
the Holders of a majority in aggregate principal amount of the Notes at the time
outstanding may waive on behalf of all the Holders any default, except on
default with respect to any provision requiring a supermajority approval to
amend, which default may only be waived by such a supermajority, and except a
default in the payment of principal of or interest on any Note not yet cured or
a default with respect to any covenant or provision which cannot be modified or
amended without the consent of the Holder of each outstanding Note affected.
Subject to the provisions hereof relating to the duties of the Trustee, the
Trustee will be under no obligation to exercise any of its rights or powers
hereunder at the request, order or direction of any of the Holders, unless such
Holders have offered to the Trustee reasonable security or indemnity. Subject to
all provisions hereof and applicable law, the Holders of a majority in aggregate
principal amount of the Notes at the time outstanding will have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred on the
Trustee.
At any time after a declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter in this Article provided, the Holders of a majority
in principal amount of the Notes outstanding, by written notice to the Company
and the Trustee, may rescind and annul such declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay,
(A) all overdue interest on all outstanding Notes,
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(B) all unpaid principal of (and premium, if any, on) any
outstanding Notes which has become due otherwise than by
such declaration of acceleration, and interest on such
unpaid principal at the rate borne by the Notes,
(C) to the extent that payment of such interest is lawful,
interest on overdue interest at the rate borne by the Notes,
and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel; and
(2) all Events of Default, other than the non-payment of amounts of
principal of (or premium, if any, on) or interest on Notes which have become due
solely by such declaration of acceleration, have been cured or waived as
provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Notwithstanding the preceding paragraph, in the event of a declaration
of acceleration in respect of the Notes because of an Event of Default specified
in Section 501(4) shall have occurred and be continuing, such declaration of
acceleration shall be automatically annulled if the Indebtedness that is the
subject of such Event of Default has been discharged or the holders thereof have
rescinded their declaration of acceleration in respect of such Indebtedness, and
written notice of such discharge or rescission, as the case may be, shall have
been given to the Trustee by the Company and countersigned by the holders of
such Indebtedness or a trustee, fiduciary or agent for such holders, within 30
days after such declaration of acceleration in respect of the Notes, and no
other Event of Default has occurred during such 30-day period which has not been
cured or waived during such period.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if
(a) default is made in the payment of any installment of interest on
any Note when such interest becomes due and payable and such default continues
for a period of 30 days, or
(b) default is made in the payment of the principal of (or premium, if
any, on) any Note at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to the Trustee for the benefit
of the Holders of such Notes, the whole amount then due and payable on such
Notes for principal (and premium, if any) and interest, and interest on any
overdue principal (and premium, if any) and, to the extent that payment of such
interest shall be legally enforceable, upon any overdue installment of
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interest, at the rate borne by the Notes, and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon the Notes and collect the moneys
adjudged or decreed to be payable in the manner provided by law out of the
property of the Company or any other obligor upon the Notes, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in the other
Security Documents or in aid of the exercise of any power granted herein, or to
enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the Notes
or the property of the Company or of such other obligor or their creditors, the
Trustee (irrespective of whether the principal of the Notes shall then be due
and payable as therein expressed or by declaration or otherwise and irrespective
of whether the Trustee shall have made any demand on the Company for the payment
of overdue principal, premium, if any, or interest) shall be entitled and
empowered, by intervention in such proceeding or otherwise,
(i) to file and prove a claim for the whole amount of principal (and
premium, if any) and interest owing and unpaid in respect of the Notes and to
file such other papers or documents as may be necessary or advisable in order to
have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel) and of the Holders allowed in such judicial proceeding, and
(ii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay the
Trustee any amount due it for the reasonable compensation, expenses,
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disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 606.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Holder in any such proceeding.
SECTION 505. Trustee May Enforce Claims Without Possession of Notes.
All rights of action and claims under this Indenture or the Notes may
be prosecuted and enforced by the Trustee without the possession of any of the
Notes or the production thereof in any proceeding relating thereto, and any such
proceeding instituted by the Trustee shall be brought in its own name and as
trustee of an express trust, and any recovery of judgment shall, after provision
for the payment of the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, be for the ratable benefit of
the Holders of the Notes in respect of which such judgment has been recovered.
SECTION 506. Application of Money Collected.
Any money 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 money on account of principal (or premium,
if any) or interest, upon presentation of the Notes and the notation thereon of
the payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section 606;
SECOND: To the payment of the amounts then due and unpaid for principal
of (and premium, if any, on) and interest on the Notes in respect of which or
for the benefit of which such money has been collected, ratably, without
preference or priority of any kind, according to the amounts due and payable on
such Notes for principal (and premium, if any) and interest, respectively; and
THIRD: The balance, if any, to the Company or such Person or Persons as
a court of competent jurisdiction shall direct.
SECTION 507. Limitation on Suits.
No Holder of any Notes shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
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(1) such Holder has previously given written notice to the Trustee of a
continuing Event of Default;
(2) the Holders of not less than 25% in principal amount of the
outstanding Notes shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default in its own name as Trustee
hereunder;
(3) such Holder or Holders have offered and, if requested, provided to
the Trustee reasonable indemnity satisfactory to the Trustee against the costs,
expenses and liabilities to be incurred in compliance with such request;
(4) the Trustee for 30 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 30-day period by the Holders of a majority or more in
principal amount of the outstanding Notes;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.
No direct or indirect stockholder, employee, officer or director, as
such, past, present or future of the Company or any successor entity shall have
any personal liability in respect of the obligations of the Company under the
Indenture, the Security Documents or the Notes solely by reason of his or its
status as such stockholder, employee, officer or director.
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and
Interest.
Notwithstanding any other provision in this Indenture, the Holder of
any Note shall have the right, which is absolute and unconditional, to receive
payment, as provided herein (including, if applicable, Article Thirteen) and in
such Note of the principal of (and premium, if any, on) and (subject to Section
307) interest on, such Note on the respective Stated Maturities expressed in
such Note (or, in the case of redemption, on the Redemption Date) and to
institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies.
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If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Notes in the last paragraph of Section
306, no right or remedy herein conferred upon or reserved to the Trustee or to
the Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Note to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may
be.
SECTION 512. Control by Holders.
The Holders of not less than a majority in principal amount of the
outstanding Notes shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee, PROVIDED that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture,
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction, and
(3) the Trustee need not take any action which might involve it in
personal liability or be unjustly prejudicial to the Holders not consenting.
SECTION 513. Waiver of Past Defaults.
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The Holders of a majority in aggregate principal amount of the Notes at
the time outstanding may on behalf of the Holders of all the Notes waive any
past default hereunder and its consequences, except a default
(1) with respect to any provision requiring a supermajority approval to
amend, which default may only be waived by such a supermajority, or
(2) in respect of the payment of the principal of (or premium, if any,
on) or interest on any Note not yet cured (provided however, that the Holders of
a majority in aggregate principal amount of Notes may rescind an acceleration if
all existing Events of Default, other than the nonpayment of the principal of,
premium, if any, and interest on the Notes which have become due solely by such
acceleration), have been cured or waived, or
(3) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of each
outstanding Note affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or Event of Default or impair any right consequent thereon.
Subject to the provisions of the Indenture relating to the duties of
the Trustee, the Trustee will be under no obligation to exercise any of its
rights or powers under the Indenture at the request, order or direction of any
of the Holders, unless such Holders have offered to the Trustee reasonable
security or indemnity. Subject to all provisions of the Indenture and applicable
law, the Holders of a majority in aggregate principal amount of the Notes at the
time outstanding will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee.
SECTION 514. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE SIX
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THE TRUSTEE
SECTION 601. Notice of Defaults.
Within 90 days after the occurrence of any Default hereunder, which is
continuing, the Trustee shall transmit in the manner and to the extent provided
in TIA Section 3.13(c), notice of such Default hereunder known to the Trustee,
unless such Default shall have been cured or waived.
The Trustee shall not be deemed to have knowledge of any Default or
Event of Default except (i) provided that the Trustee is the Paying Agent, a
Default or Event of Default arising under Section 501(l) or (2) or (ii) any
Default or Event of Default of which the Trustee shall have received written
notification in accordance with the terms of this Indenture or a Responsible
Officer of the Trustee shall have obtained actual knowledge, and such
notification shall not be deemed to include receipt of information obtained in
any report or other document furnished to the Trustee under Section 703, which
are generally the reports and documents the Company is required as a reporting
company to file with the Commission, which reports and documents the Trustee
shall have no duty to examine.
SECTION 602. Certain Rights of Trustee.
(a) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and no implied covenants
or obligations shall be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and certificates or
opinions furnished to it and conforming to the requirements of this Indenture;
but in the case of any such 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) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
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(c) 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:
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section; and
(2) the Trustee shall not be liable for any error of judgment made
in good faith by a duly authorized officer of the Trustee, unless it shall be
proved that the Trustee was negligent in ascertaining the pertinent facts.
(d) Subject to the provisions of TIA Sections 3.15(a) through 3.15(d):
(1) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document believed by it
to be genuine and to have been signed or presented by the proper party or
parties;
(2) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a Board
Resolution;
(3) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officers' Certificate;
(4) the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(5) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders pursuant to this Indenture, unless such Holders shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction;
(6) 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, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document, but
the Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit, and, if the Trustee shall
determine to make such
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further inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Company, personally or by agent or attorney;
(7) 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 and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder;
(8) the Trustee shall not be liable for any action taken, suffered
or omitted by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture;
(9) No provision of this Indenture shall require the Trustee to
determine the maximum interest rate permissible under applicable law; and
(10) The Trustee shall not be deemed to have knowledge of the
occurrence of any Change of Control, Asset Sale, Event of Loss or the occurrence
of any other event which would trigger a requirement that the Company offer to
purchase Notes with Net Cash Proceeds or otherwise until the Trustee receives
written notice from the Company, such as that required in Sections 1010, 1017,
1018, and 1029 or the Trustee has received actual notice of the occurrence of
such event.
(11) Delivery of reports, information and documents to the Trustee
under Section 703 is for informational purposes only and the Trustee's receipt
of the foregoing shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including
the Company's compliance with any of their covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers' Certificates).
The Trustee shall not be required to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
SECTION 603. Trustee Not Responsible for Recitals or Issuance of Notes.
The recitals contained herein, in the Notes (except for the Trustee's
certificates of authentication) or in any document issued in connection with the
sale of the Notes shall be taken as the statements of the Company, and the
Trustee assumes no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Notes, except that the Trustee represents that it is duly authorized to execute
and deliver this Indenture, authenticate the Notes and perform its obligations
hereunder and that the statements made by it or to be made by it in a Statement
of Eligibility and Qualification of Form T-1 supplied to the Company are true
and accurate, subject to the
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qualifications set forth therein. The Trustee shall not be accountable for the
use or application by the Company of Notes or the proceeds thereof.
The Trustee makes no representations with respect to the effectiveness
or adequacy of any Security Document, or the validity, perfection or priority,
if any, of liens granted to it under this Indenture or the Security Documents.
The Trustee shall not be responsible for ascertaining or maintaining such
validity, perfection or priority, if any, and shall be fully protected in
relying upon certificates and opinions delivered to it in accordance with the
terms of this Indenture or the Security Documents.
SECTION 604. May Hold Notes.
The Trustee, any Paying Agent, any Security Registrar or any other
agent of the Company or of the Trustee, in its individual or any other capacity,
may become the owner or pledgee of Notes and, subject to TIA Sections 310(b) and
311, may otherwise deal with the Company with the same rights it would have if
it were not Trustee, Paying Agent, Security Registrar or such other agent.
SECTION 605. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed with the Company.
SECTION 606. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(2) to reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the reasonable
compensation and the expenses and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; and
(3) to indemnify the Trustee and its directors, officers, agents
and employees for, and to hold each of them harmless against, any and all
loss, liability, damage, claim or expense (including reasonable attorneys'
fees and expenses) incurred by it or such officer, director, agent or
employee in connection with the acceptance or administration of its duties
under this Indenture, except as set forth in the next succeeding
paragraph. The Trustee or such officer, director, agent or employee (as
the case may be), shall cooperate in the defense of any claim. The
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Trustee and such officer, director, agent or employee (as the case may
be) may have separate counsel reasonably acceptable to the company, and
the Company shall pay the reasonable fees of such counsel. The Company
shall not be required to pay for any settlement made without its consent,
which consent shall not be unreasonably withheld.
The Company shall not be required to hold harmless, reimburse any
expense or indemnify against any loss, liability, damage, claim or expense
incurred by the Trustee or others through the willful misconduct, negligence or
bad faith by any of them.
When the Trustee incurs expenses after the occurrence of an Event of
Default specified in Section 501(7) or 501(8), the expenses are intended to
constitute expenses of administration under any proceeding under the Bankruptcy
Code or any similar proceeding.
The obligations of the Company under this Section to compensate the
Trustee, to pay or reimburse the Trustee for expenses, disbursements and
advances and to indemnify and hold harmless the Trustee shall constitute
additional indebtedness hereunder and shall survive the satisfaction and
discharge of this Indenture. As security for the performance of such obligations
of the Company, the Trustee shall have a claim prior to the Notes upon all
property and funds held or collected by the Trustee as such, except funds held
in trust for the payment of principal of (and premium, if any, on) or interest
on particular Notes. The Company's obligations pursuant to this Section 606
shall survive the resignation or replacement of the Trustee and any discharge or
defeasance of the Notes.
SECTION 607. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be eligible
to act as Trustee under TIA Section 310(a)(1) and shall be a bank or trust
company which is authorized by law to perform all of the duties imposed upon it
hereby and which either (i) has a reported capital and surplus aggregating at
least $25,000,000 or (ii) is a wholly owned subsidiary of a bank, a trust
company or a bank holding company having a reported capital and surplus
aggregating at least $25,000,000. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of federal,
state, territorial or District of Columbia supervising or examining authority,
then for the purposes of this Section, 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. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section, it
shall resign immediately in the manner and with the effect hereinafter specified
in this Article.
SECTION 608. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 609.
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(b) The Trustee may resign at any time by giving written notice thereof
to the Company. If the instrument of acceptance by a successor Trustee required
by Section 609 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by act of the Holders of not
less than a majority in principal amount of the outstanding Notes, delivered to
the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with the provisions of TIA
Section 310(b) after written request therefor by the Company or by any
Holder who has been a bona fide Holder of a Note for at least six months,
or
(2) the Trustee shall cease to be eligible under Section 607 and
shall fail to resign after written request therefor by the Company or by
any Holder who has been a bona fide Holder of a Note for at least six
months, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company, by a Board Resolution, may remove the
Trustee, or (ii) subject to TIA Section 315(e), any Holder who has been a bona
fide Holder of a Note for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by a Board Resolution, shall promptly appoint a successor Trustee. If,
within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee shall be appointed by Act of the
Holders of a majority in principal amount of the outstanding Notes delivered to
the Company and the retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment, become the successor Trustee
and supersede the successor Trustee appointed by the Company. If no successor
Trustee shall have been so appointed by the Company or the Holders and accepted
appointment in the manner hereinafter provided, any Holder who has been a bona
fide Holder of a Note for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee.
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(f) The Company shall give notice of each resignation and each removal
of the Trustee and each appointment of a successor Trustee to the Holders of
Notes in the manner provided for in Section 106. Each notice shall include the
name of the successor Trustee and the address of its Corporate Trust Office.
SECTION 609. Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall execute, acknowledge
and deliver to the Company and to the retiring Trustee an instrument accepting
such appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee; but, on request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder. Upon request of any such successor Trustee, the
Company shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers and
trusts.
No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 610. Merger, Conversion, Consolidation or Succession to Business.
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 all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Notes shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Notes so authenticated with the same effect
as if such successor Trustee had itself authenticated such Notes; and in case at
that time any of the Notes shall not have been authenticated, any successor
Trustee may authenticate such Notes either in the name of any predecessor
hereunder or in the name of the successor Trustee; and in all such cases such
certificates shall have the full force which it is anywhere in the Notes or in
this Indenture provided that the certificate of the Trustee shall have;
PROVIDED, HOWEVER, that the right to adopt the certificate of authentication of
any predecessor Trustee or to authenticate Notes in the name of any predecessor
Trustee shall apply only to its successor or successors by merger, conversion or
consolidation.
SECTION 611. Paying Agents.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting under this Indenture, the term
"Trustee" as used in this Article shall in such
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case (unless the context otherwise requires) be construed as extending to and
including such Paying Agent within its meaning as fully for all intents and
purposes as if such Paying Agent were named in this Article in addition to or in
place of the Trustee; PROVIDED, HOWEVER, that this Section shall not apply to
the Company or any Affiliate of the Company if it or such Affiliate acts as
Paying Agent.
SECTION 612. Environmental Matters.
(a) The Trustee may decline to exercise any right granted by this
Indenture or any of the other Security Documents which, in the reasonable
discretion of the Trustee, based upon the written advice of its counsel, may
cause the Trustee to incur corporate or personal liability under any
Environmental Law.
(b) In the event that the Trustee should be directed by the Holders to
exercise any remedy under this Indenture or any of the Security Documents which
might require the Trustee to take title to or in any way own, manage or operate
Casino Rouge, the Vessel or any other property held in trust by the Trustee in
connection therewith, the Trustee may (i) require that, before exercising such
remedy, an appropriate environmental assessment be made and (ii) require that
the Trustee receive indemnification reasonably satisfactory to the Trustee
against any claims or liabilities under any Environmental Law which may arise in
connection with the exercise of such remedy.
(c) The Trustee shall not be personally liable to the Holders or the
Company or any other person for the Trustee's compliance with any Environmental
Law, including without limiting the generality of the foregoing, compliance with
any reporting requirements except such liability as may arise through the
Trustee's own willful misconduct, negligence or bad faith. Unless directed by
the Holders in accordance with Section 612(b), the Trustee shall have no
obligation to take any actions under this Section 612, and no action or
refraining from action by the Trustee shall be deemed to create any inference
with respect to any claims or liabilities under the Environmental Law.
(d) As used in this Section 612, the following terms have the following
meanings:
"Environmental Laws" means all federal, state and local
environmental, health or safety laws, rules, regulations, decrees and
orders, now or hereafter in effect, regulating or imposing liability with
respect to any Hazardous Substance, including without limiting the
generality of the foregoing, the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (CERCLA).
"Hazardous Substance" means any toxic or hazardous substances,
pollutants or wastes as identified under the Environmental Laws, including
without limitation, asbestos, polychlorinated biphenyls, petroleum
products and by-products and any other substances whose releases or
threatened release may pose a risk to human health or the environment or
otherwise impair the value of the Casino Rouge, the Vessel or any other
property held in trust by the Trustee in connection therewith.
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(e) Without limiting the generality of the indemnification provided in
Section 606, such indemnification is expressly extended to claims and
liabilities arising under Environmental Laws.
SECTION 613. Preferential Collection of Claims Against Company.
The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Disclosure of Names and Addresses of Holders.
Every Holder of Notes, by receiving and holding the same, agrees with
the Company and the Trustee that none of the Company or the Trustee or any agent
of either of them shall be held accountable by reason of the disclosure of any
such information as to the names and addresses of the Holders in accordance with
TIA Section 312, regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of mailing
any material pursuant to a request made under TIA Section 312(b).
SECTION 702. Reports by Trustee.
(a) Within 60 days after May 15 of each year commencing with the first
May 15 after the first issuance of Notes, the Trustee shall transmit to the
Holders, in the manner and to the extent provided in TIA Section 313(c), a brief
report dated as of such May 15 if required by TIA Section 313(a).
(b) The Trustee shall transmit to the Holders within the times
hereinafter specified a brief report with respect to the following:
(1) the release, or release and substitution, of property subject
to any Lien of this Indenture (and the consideration therefor, if any)
unless the fair value of such property, as set forth in the Officers'
Certificate or Opinion of Counsel required by TIA Section 314(d), is less
than 10 percent of the aggregate principal amount of the Notes outstanding
at the time of such release, or such release and substitution, such report
to be so transmitted within 90 days after such time; and
(2) the character and amount of any advances made by it as such
since the date of the last report transmitted pursuant to the provisions
of TIA Section 313(a) (or if no such report
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has yet been so transmitted, since the date of execution of the
Indenture), for the reimbursement of which it claims or may claim a Lien
or charge, prior to that of the Indenture Notes, on the trust estate or on
property or funds held or collected by it as such Trustee, and which it
has not previously reported pursuant to this Section 702(b)(2), if such
advances remaining unpaid at any time aggregate more than l0 percent of
the aggregate principal amount of the Notes outstanding at such time, such
report to be so transmitted within 90 days after such time.
(c) A copy of each such report shall, at the time of such transmission
to the Holders, be filed with each stock exchange, if any, upon which the Notes
are listed, and also with the Commission.
SECTION 703. Reports by Company.
At all times from and after the earlier of (a) the registration of
Exchange Notes and (b) the date that is three months after the Issue Date, in
either case whether or not the Company is then required to file reports with the
Commission, the Company shall:
(1) file with the Trustee, within 15 days after the Company is
required to file the same with the Commission, 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 Company may be required
to file with the Commission pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934; or, if the Company is not required to
file information, documents or reports pursuant to either of said
Sections, then it shall file with the Trustee and the Commission, in
accordance with rules and regulations prescribed from time to time by the
Commission, such of the supplementary and periodic information, documents
and reports which may be required pursuant to Section 13 of the Securities
Exchange Act of 1934 in respect of a security listed and registered on a
national securities exchange as may be prescribed from time to time in
such rules and regulations;
(2) 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 Company with the conditions and covenants of this Indenture as may
be required from time to time by such rules and regulations; and
(3) transmit by mail to all Holders, in the manner and to the
extent provided in TIA Section 313(c), within 30 days after the filing
thereof with the Trustee, such summaries of any information, documents and
reports required to be filed by the Company pursuant to paragraphs (1) and
(2) of this Section as may be required by rules and regulations prescribed
from time to time by the Commission.
Prior to the earlier of the date of (i) the Registration or (ii) the
date that is three months after the Issue Date, the Company shall transmit by
mail to all Holders, at its cost, quarterly and annual reports
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substantially equivalent to those which would be required by the Exchange Act
within 15 days after the date that the Company would be required to file the
same with the Commission if it were registered.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, etc., Only on Certain Terms.
The Company will not consolidate with or merge with or into another
Person or, directly or indirectly, sell, lease, convey or transfer all or
substantially all of its assets (computed on a consolidated basis), whether in a
single transaction or a series of related transactions, to another Person or
group of affiliated Persons, unless:
(i) either (a) the Company is the continuing entity or (b) the
resulting, surviving or transferee entity is a corporation organized under
the laws of the United States, any state thereof or the District of
Columbia and expressly assumes by supplemental indenture all of the
obligations of the Company in connection with the Notes and the Indenture;
(ii) no Default or Event of Default shall exist or shall occur
immediately after giving effect on a PRO FORMA basis to such transaction;
(iii) immediately after giving effect to such transaction on a PRO
FORMA basis, the Consolidated Net Worth of the consolidated surviving or
transferee entity is at least equal to the Consolidated Net Worth of the
Company immediately prior to such transaction; and
(iv) unless such transaction is solely the merger of the Company and
one of its previously existing Wholly-owned Subsidiaries, immediately
after giving effect to such transaction on a PRO FORMA basis, the
consolidated resulting, surviving or transferee entity would immediately
thereafter be permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Debt Incurrence Ratio set forth in Section 1011.
PROVIDED that the Company has delivered to the Trustee an Opinion of Counsel
that all conditions precedent in this Indenture relating to any such
consolidation, merger, sale, assignment, transfer, conveyance or lease have been
complied with.
For purposes of the foregoing, the transfer (by lease, assignment, sale
or otherwise) of all or substantially all of the properties and assets of one or
more Subsidiaries, the Company's interest in which constitutes all or
substantially all of the properties and assets of the Company, shall be deemed
to be the transfer of all or substantially all of the properties and assets of
the Company.
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SECTION 802. Successor Substituted.
Upon any consolidation of the Company with or merger of the Company
with or into any other corporation or any conveyance, transfer or lease of the
properties and assets of the Company substantially as an entirety to any Person
in accordance with Section 801, the successor Person formed by such
consolidation or into which the Company is merged or to which such conveyance,
transfer or lease is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture and the
Security Documents with the same effect as if such successor Person had been
named as the Company herein and therein, and in the event of any such conveyance
or transfer, the Company (which term shall for this purpose mean the Person
named as the "Company" in the first paragraph of this Indenture or any successor
Person which shall theretofore become such in the manner described in Section
801), except in the case of a lease, shall be discharged of all obligations and
covenants under this Indenture, the Notes and the Security Documents and may be
dissolved and liquidated.
ARTICLE NINE
SUPPLEMENTAL INDENTURES AND
AMENDMENTS TO SECURITY DOCUMENTS
SECTION 901. Supplemental Indentures and Amendments to Security Documents
Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto or amendments to the Security
Documents, in form satisfactory to the Trustee, for any of the following
purposes:
(1) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company
contained herein, in the Notes or in the Security Documents; or
(2) to add to the covenants of the Company for the benefit of the
Holders or to surrender any right or power herein conferred upon the
Company; or
(3) to add any additional Events of Default; or
(4) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee pursuant to the requirements of Section
609; or
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(5) to cure any ambiguity, to correct or supplement any provision
herein or in the Security Documents which may be inconsistent with any
other provision herein or therein, or to make any other provisions with
respect to matters or questions arising under this Indenture or under the
Security Documents; PROVIDED that such action shall not adversely affect
the interests of the Holders in any material respect; or
(6) to establish or maintain the Lien of this Indenture and the
other Security Documents as a first priority Lien and prior to Liens
(other than Permitted Liens) that are actually known to the Company or to
correct or amplify the description of any Collateral subject to the Lien
of this Indenture or the other Security Documents, or to subject
additional property to the Lien of this Indenture or other Security
Documents; or
(7) to secure the Notes; or
(8) to make any other change that does not adversely affect the
rights of any Holder.
SECTION 902. Supplemental Indentures and Amendments to Security Documents with
Consent of Holders.
With the consent of the Holders of not less than a majority in
principal amount of the outstanding Notes, by act of said Holders delivered to
the Company and the Trustee, the Company, when authorized by a Board Resolution,
and the Trustee may enter into an indenture or indentures supplemental hereto or
amendments to the Security Documents for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this Indenture
or the Security Documents or of modifying in any manner the rights of the
Holders hereunder or thereunder; PROVIDED, HOWEVER, that no such supplemental
indenture shall, without the consent of Holders of 66-2/3% of the outstanding
aggregate principal amount of Notes (a) modify the provisions (including the
defined terms used therein) of Section 1010 in a manner adverse to the Holders,
or (b) release any security interest that may have been granted in favor of the
Holders (except in accordance with the existing Collateral release provisions of
the Indenture) or otherwise modify the security and collateral provisions of the
Notes, the Indenture or any Security Document in a manner adverse to the
Holders; and PROVIDED, FURTHER, that no such supplemental indenture shall,
without the consent of each Holder affected thereby:
(1) change the Stated Maturity of the principal of, or the Interest
Payment Date for any installment of interest on, any Note, or reduce the
principal amount thereof or the rate of interest thereon or any premium
payable upon the redemption thereof, or change the coin or currency in
which any Note or any premium or the interest thereon is payable, or
impair the right to institute suit for the enforcement of any such payment
after the Stated Maturity or Interest Payment Date thereof (or, in the
case of redemption, on or after the Redemption Date) or, on or after a
Change of Control or an Asset Sale, reduce the Change of Control Purchase
Price or the Asset Sale Offer Price with respect to such Change of Control
Offer or Asset Sale Offer or alter the provisions (including the defined
terms used therein) regarding the right of the Company to
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redeem the Notes as a right or at the option of the Company in a manner
adverse to the Holders, or
(2) reduce the percentage in principal amount of the outstanding
Notes, the consent of whose Holders is required for any such supplemental
indenture, or the consent of whose Holders is required for any waiver of
compliance with certain provisions of this Indenture or certain defaults
hereunder and their consequences provided for in this Indenture, or
(3) modify any of the provisions of this Section or Sections 513
and 1026, except to increase any required percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each outstanding Note affected
thereby, or
(4) permit the creation of any Lien on the Collateral or any part
thereof (other than the Lien of this Indenture and the other Security
Documents and Permitted Liens (as defined herein on the Issue Date)) or
terminate the Lien of this Indenture and the other Security Documents as
to the Collateral or any part thereof or deprive the holders of the
security afforded by the Lien of this Indenture and the other Security
Documents (other than as permitted pursuant to the other Security
Documents), or
(5) cause the Notes to become subordinate in right of payment of
any other Indebtedness.
It shall not be necessary for any act of Holders under this Section to
approve the particular form of any proposed supplemental indenture or amendment
to the Security Documents, but it shall be sufficient if such Act shall approve
the substance thereof.
SECTION 903. Execution of Supplemental Indentures and Amendments to the Security
Documents.
In executing, or accepting the additional trusts created by, any
supplemental indenture or amendment to the Security Documents permitted by this
Article or the modifications thereby of the trusts created by this Indenture or
the Security Documents, the Trustee shall be entitled to receive, and shall be
fully protected in relying upon, an Opinion of Counsel stating that the
execution of such supplemental indenture or amendment to the Security Documents
is authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture or amendment to the
Security Documents which affects the Trustee's own rights, duties or immunities
under this Indenture or under the Security Documents or otherwise.
SECTION 904. Effect of Supplemental Indentures.
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Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Notes theretofore or thereafter authenticated and delivered hereunder shall
be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to the Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 906. Reference in Notes to Supplemental Indentures.
Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Notes so modified as to conform, in the opinion of the Trustee and the
Company, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for
outstanding Notes.
SECTION 907. Notice of Supplemental Indentures and Amendments to Security
Documents.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture or amendment to the Security Documents pursuant to the
provisions of Section 902, the Company shall give notice thereof to the Holders
of each outstanding Note affected, in the manner provided for in Section 106,
setting forth in general terms the substance of such supplemental indenture or
amendment to the Security Documents.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium, if Any, and Interest.
The Company covenants and agrees for the benefit of the Holders that it
will duly and punctually pay the principal of (and premium, if any, on) and
interest on the Notes in accordance with the terms of the Notes and this
Indenture.
SECTION 1002. Maintenance of Office or Agency.
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The Company will maintain in The City of New York, an office or agency
where Notes may be presented or surrendered for payment and where Notes may be
surrendered for registration of transfer or exchange. The Registrar and Transfer
Company, 61 Broadway, Room 1412, New York, New York shall be such office or
agency of the Company, unless the Company shall designate and maintain some
other office or agency for one or more of such purposes. The Company will give
prompt written notice to the Trustee of any change in the location of any such
office or agency. If at any time the Company shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office of the Trustee, and the Company hereby
appoints the Trustee as its agent to receive all such presentations, surrenders,
notices and demands.
The Company may also from time to time designate one or more other
offices or agencies (in or outside of The City of New York) where the Notes may
be presented or surrendered for any or all such purposes and may from time to
time rescind any such designation; PROVIDED, HOWEVER, that no such designation
or rescission shall in any manner relieve the Company of its obligation to
maintain an office or agency in The City of New York for such purposes. The
Company will give prompt written notice to the Trustee of any such designation
or rescission and any change in the location of any such other office or agency.
SECTION 1003. Money to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent, it will,
on or before each due date of the principal of (and premium, if any, on) or
interest on any of the Notes, segregate and hold in trust for the benefit of the
Persons entitled thereto a sum sufficient to pay the principal (and premium, if
any) or interest so becoming due until such sums shall be paid to such Persons
or otherwise disposed of as herein provided and will promptly notify the Trustee
of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for the
Notes, it will, on or before each due date of the principal of (and premium, if
any, on), or interest on, any Notes, deposit with a Paying Agent in immediately
available funds a sum sufficient to pay the principal (and premium, if any) or
interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal, premium or interest, and (unless such Paying
Agent is the Trustee) the Company will promptly notify the Trustee of such
action or any failure so to act.
The Company will cause each Paying Agent (other than the Trustee) to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of
(and premium, if any, on) or interest on Notes in trust for the benefit of
the Persons entitled thereto until such sums shall be paid to such Persons
or otherwise disposed of as herein provided;
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(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Notes) in the making of any payment of principal
(and premium, if any) or interest; and
(3) at any time during the continuance of any such default, upon
the written request of the Trustee, forthwith pay to the Trustee all sums
so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such sums.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of (and premium, if
any, on) or interest on any Note and remaining unclaimed for two years after
such principal (and premium, if any) or interest has become due and payable
shall be paid to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Note shall
thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; PROVIDED, HOWEVER, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company 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 Company.
SECTION 1004. Corporate Existence.
Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect the corporate
existence, rights (charter and statutory) and franchises of the Company and each
Subsidiary; PROVIDED, HOWEVER, that the Company shall not be required to
preserve any such right or franchise if the Board of Directors shall determine
that the preservation thereof is no longer desirable in the conduct of the
business of the Company and its Subsidiaries as a whole and that the loss
thereof is not disadvantageous in any material respect to the Holders.
SECTION 1005. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent and in accordance with the applicable
provisions of the Security Documents, (a) all material taxes, assessments and
governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or property of the Company or any Subsidiary and (b)
all lawful
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claims for labor, materials and supplies, which, if unpaid, might by law become
a lien upon the property of the Company or any Subsidiary; PROVIDED, HOWEVER,
that the Company shall not be required to pay or discharge or cause to be paid
or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings or where the failure to effect such payment or discharge is not
adverse in any material respect to the Holders of the Notes.
SECTION 1006. Maintenance of Properties.
The Company will cause all properties owned by the Company or any
Subsidiary or used or held for use in the conduct of its business or the
business of any Subsidiary to be maintained and kept in good condition, repair
and working order and supplied with all necessary equipment and will cause to be
made all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as required by the Security Documents and as otherwise in the
judgment of the Company may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times;
PROVIDED, HOWEVER, that nothing in this Section shall prevent the Company from
discontinuing the maintenance of any of such properties if such discontinuance
is, in the judgment of the Company, desirable in the conduct of its business or
the business of any Subsidiary and not disadvantageous in any material respect
to the Holders.
SECTION 1007. Insurance.
The Company will, and will cause its Subsidiaries to, maintain
insurance with responsible and reputable insurance companies or associations in
such amounts and covering such risks as is usually carried by companies engaged
in similar businesses and owning similar properties in the same general areas in
which the Company or such Subsidiary operates; PROVIDED that with respect to the
Collateral the Company will, and will cause its Subsidiaries to, maintain
insurance on the terms required by each of the Security Documents.
SECTION 1008. Statement by Officers as to Default.
(a) The Company will deliver to the Trustee, within 120 days after the
end of each fiscal year, a certificate from the principal executive officer,
principal financial officer or principal accounting officer as to his or her
knowledge of the Company's compliance with all conditions and covenants under
this Indenture and each of the Security Documents. For purposes of this Section
1008(a), such compliance shall be determined without regard to any period of
grace or requirement of notice under this Indenture or the Security Documents.
(b) When any Event of Default has occurred and is continuing under this
Indenture, or if the trustee for or the holder of any other evidence of
Indebtedness of the Company or any Subsidiary gives any notice or takes any
other action with respect to a claimed default (other than with respect to
Indebtedness in the principal amount of less than $5,000,000), the Company shall
deliver to the Trustee by registered or certified mail or by telegram, telex or
facsimile transmission an Officers' Certificate
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specifying such event, notice or other action within five Business Days of its
occurrence and describing what action the Company is taking or proposes to take
with respect thereto.
(c) The Company will deliver to the Trustee, within 120 days after the
end of each fiscal year, a certificate from the principal executive officer,
principal financial officer or principal accounting officer stating (i) that he
or she has reviewed the relevant provisions of this Indenture and the Notes as
they relate to accounting matters, and (ii) whether in connection with their
review any Default or Event of Default has come to his or her attention and, if
such a Default or Event of Default has come to their attention, specifying the
nature and period of existence thereof.
(d) The Company will deliver to the Trustee, within 120 days after the
end of each fiscal year, an Officers' Certificate stating (i) that they have
reviewed the relevant provisions of this Indenture and the Notes as they relate
to insurance matters, (ii) that they have consulted such experts as they have
deemed necessary to reach the conclusions stated in such Officers' Certificate
and (iii) whether the Company and each of its Subsidiaries is in compliance with
such provisions and, if not, specifying the nature and period of such
noncompliance.
SECTION 1009. Reports.
Whether or not the Company is subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act, the Company shall deliver to the
Trustee and, to each Holder and to prospective purchasers of Notes identified to
the Company by an Initial Purchaser, within 15 days after it is or would have
been (if it were subject to such reporting obligations) required to file such
annual and quarterly financial statements substantially equivalent to financial
statements that would have been included in reports filed with the Commission,
if the Company were subject to Section 13 or 15(d) of the Exchange Act,
including, with respect to annual information only, a report thereon by the
Company's certified independent public accountants as such would be required in
such reports to the Commission, and, in each case, together with a management's
discussion and analysis of financial condition and results of operations which
would be so required. Unless the Commission will not accept such reports, the
Company shall file with the Commission the annual, quarterly and other reports
which it is or would have been required to file with the Commission. In
addition, the Company shall furnish to the Holders of the Notes and to
prospective investors, upon the requests of such Holders, any information
required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act so
long as the Notes are not freely transferable under the Securities Act.
SECTION 1010. Purchase of Notes upon Change of Control.
(a) Upon the occurrence of a Change of Control, the Company will, in
accordance with the requirements of paragraphs (b) and (c) of this Section 1010,
give each Holder the right to require that the Company repurchase such Holder's
Notes in whole or in part in integral multiples of $1,000, at a purchase price
(the "Change of Control Purchase Price") in cash in an amount equal to 101% of
the principal
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amount thereof plus accrued and unpaid interest and Additional Interest, if any,
to the date of purchase (the "Change of Control Purchase Date").
(b) Within 15 Business Days following a Change of Control, the Company
shall make an offer to purchase the Notes (the "Change of Control Offer") and
shall give a notice to each Holder of the Notes in the manner provided in
Section 106 stating:
(1) that a Change of Control has occurred and that such Holder has
the right to require the Company to repurchase such Holder's Notes at the
Change of Control Purchase Price;
(2) the circumstances and relevant facts regarding such Change of
Control (including but not limited to information with respect to pro
forma historical income, cash flow and capitalization after giving effect
to such Change of Control);
(3) the Change of Control Purchase Date, which shall be no later
than 40 Business Days following the Change of Control; and
(4) the instructions a Holder must follow in order to have its
Notes repurchased in accordance with paragraph (c) of this Section.
(c) The Change of Control Offer shall remain open for at least 20
Business Days following its commencement and until the close of business on the
Change of Control Purchase Date. Holders electing to have Notes purchased will
be required to surrender such Notes to the Company at the address specified in
the notice prior to the close of business on the Business Day preceding the
Change of Control Purchase Date. Holders will be entitled to withdraw their
election if the Company receives, not later than the close of business three
Business Days prior to the Change of Control Purchase Date, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Notes delivered for purchase by the Holder as to which
his election is to be withdrawn and a statement that such Holder is withdrawing
his election to have such Notes purchased. Holders whose Notes are purchased
only in part will be issued new Notes equal in principal amount to the
unpurchased portion of the Notes surrendered.
(d) Neither the Trustee nor the Board of Directors of the Company may
amend or waive the Company's obligations to so offer to purchase all outstanding
Notes in the event of a Change of Control without the holders of not less than a
majority of the aggregate principal amount of the outstanding Notes consenting
to such waiver or amendment.
Notwithstanding the foregoing, the Company will not be required to make
a Change of Control Offer upon a Change of Control if a third party makes the
Change of Control Offer in the manner, at the times and otherwise in compliance
with the requirements set forth in the Indenture applicable to a Change of
Control Offer made by the Company and purchases all Notes validly tendered and
not withdrawn under such Change of Control Offer.
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Any Change of Control Offer will be made in compliance with all
applicable laws, rules and regulations, including, if applicable, Regulation 14E
under the Exchange Act and the rules thereunder and all other applicable Federal
and state securities laws. To the extent that the provisions of any securities
laws or regulations conflict with the provisions of this paragraph, compliance
by the Company with such laws and regulations shall not in and of itself cause a
breach of its obligations hereunder.
SECTION 1011. Limitation on Incurrence of Additional Indebtedness
and Disqualified Capital Stock.
(a) The Company will not, and will not permit any of its Subsidiaries
to, directly or indirectly, issue, assume, guaranty, incur, become
directly or indirectly liable with respect to (including as a result of an
Acquisition), or otherwise become responsible for, contingently or
otherwise (individually and collectively, to "incur" or, as appropriate,
an "incurrence"), any Indebtedness or any Disqualified Capital Stock
(including Acquired Indebtedness), other than Permitted Indebtedness.
Notwithstanding the foregoing, if (i) no Default or Event of Default shall
have occurred and be continuing at the time of, or would occur after
giving effect on a PRO FORMA basis to, such incurrence of indebtedness or
Disqualified Capital Stock and (ii) on the date of such incurrence (the
"Incurrence Date"), the Consolidated Coverage Ratio of the Company for the
Reference period immediately preceding the Incurrence Date, after giving
effect on a PRO FORMA basis to such incurrence of such Indebtedness or
Disqualified Capital Stock and, to the extent set forth in the definition
of Consolidated Coverage Ratio, the use of proceeds thereof, would be at
least 2.4 to 1.0 (the "Debt Incurrence Ratio"), then the Company may incur
such Indebtedness or Disqualified Capital Stock.
(b) In addition, the foregoing limitations will not apply to:
(i) the incurrence by the Company of Indebtedness pursuant to the
Revolving Credit Facility up to an aggregate amount outstanding (including
any Indebtedness incurred to retire, defease, refinance, replace or refund
such Indebtedness) at any time of $5.0 million, and such additional
amounts as may be deemed to be outstanding in the form of Interest Swap
and Hedging Obligations with lenders party to the Revolving Credit
Facility; and
(ii) the incurrence by the Company or any Wholly-owned Subsidiary of
Purchase Money Indebtedness up to an aggregate amount outstanding at any
time not to exceed $2.5 million.
(c) Indebtedness or Disqualified Capital Stock of any Person which is
outstanding at the time such Person becomes a Subsidiary of the Company or
is merged with or into or consolidated with the Company or a Subsidiary of
the Company shall be deemed to have been incurred at the time such Person
becomes such a Subsidiary of the Company or is merged with or into or
consolidated with the Company or a Subsidiary of the Company, as
applicable.
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(d) Notwithstanding any other provision of this covenant, a guarantee
of Indebtedness permitted by the terms of this Indenture at the time such
Indebtedness was incurred or at the time the guarantor thereof became a
Subsidiary of the Company will not constitute a separate incurrence, or
amount outstanding, of Indebtedness. Upon each incurrence, the Company
may, in its sole discretion, designate pursuant to which provision of this
covenant such Indebtedness or Disqualified Capital Stock is being incurred
and such Indebtedness or Disqualified Capital Stock shall not be deemed to
have been incurred or outstanding under any other provision of this
covenant, except as stated otherwise in the foregoing provisions. Accrual
of interest, the accretion of original issue discount and the payment of
interest in the form of additional Indebtedness, in each case in
accordance with the original terms of the relevant Indebtedness incurred
in accordance with this Indenture, will not be deemed to be a separate
incurrence of Indebtedness for purpose of this covenant.
(e) Notwithstanding anything contained herein to the contrary, the
Company will not, and will not permit any of its Subsidiaries to, incur
any Indebtedness that is contractually subordinate to any other
Indebtedness of the Company unless such Indebtedness is at least as
subordinate to the notes.
SECTION 1012. Payments for Consent
Neither the Company nor any of its Subsidiaries shall, directly or
indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any Holder of any Notes for or as an inducement
to any consent, waiver or amendment of any of the terms or provisions of this
Indenture or the Notes unless such consideration is offered to be paid or agreed
to be paid to all Holders of the Notes which so consent, waive or agree to amend
in the time frame set forth in solicitation documents relating to such consent,
waiver or agreement.
SECTION 1013. Limitation on Restricted Payments.
The Company shall not make, directly or indirectly, and shall not
permit any of its Subsidiaries to make, directly or indirectly, any Restricted
Payment.
The immediately preceding sentence, however, will not prohibit (x) the
repurchase of the Company's 12% cumulative redeemable preferred stock
outstanding on the Issue Date, together with accrued and unpaid dividends
thereon, in accordance with the terms of such preferred stock as in effect on
the Issue Date, and the satisfaction of the Company's obligations with respect
to its redeemable common stock warrants, in accordance with the terms of such
warrants as in effect on the Issue Date in an aggregate amount for all such
payments made pursuant to this clause (x) not to exceed the amount of cash or
cash equivalents held by the Company on the date of any such payments without
giving effect to any borrowings or other incurrences of Indebtedness by the
Company or any of its Subsidiaries after the Issue Date (other than the Notes)
or (y) a Qualified Exchange.
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Within five days of each Restricted Payment, the Company shall deliver
an Officers' Certificate to the Trustee describing in reasonable detail the
nature of such Restricted Payment, stating the amount of such Restricted
Payment, stating in reasonable detail the provisions hereof pursuant to which
such Restricted Payment was made and certifying that such Restricted Payment was
made in compliance with the terms hereof;
SECTION 1014. Limitation on Liens.
The Company shall not, and shall not permit any of its Subsidiaries to,
create, incur, assume or suffer to exist any Lien of any kind, other than
Permitted Liens, upon any of their respective assets now owned or acquired on or
after the Issue Date or upon any income or profits therefrom.
SECTION 1015. Limitation on Dividends and Other Payment Restrictions Affecting
Subsidiaries.
The Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create, assume or suffer to exist any consensual
restriction on the ability of any Subsidiary of the Company to pay dividends or
make other distributions to or on behalf of, or to pay any obligation to or on
behalf of, or otherwise to transfer assets or property to or on behalf of, or
make or pay loans or advances to or on behalf of, the Company or any Subsidiary
of the Company, except (a) restrictions imposed by the Notes, the Security
Documents or the Indenture or by other indebtedness of the Company ranking PARI
PASSU with the Notes, PROVIDED that such restrictions are no more restrictive
than those imposed by the Indenture and the Notes, (b) restrictions imposed by
applicable law, (c) existing restrictions under Indebtedness outstanding on the
Issue Date, (d) restrictions under any Acquired Indebtedness not incurred in
violation of the Indenture or any agreement relating to any property, asset, or
business acquired by the Company or any of its Subsidiaries, which restrictions
in each case existed at the time of acquisition, were not put in place in
connection with or in anticipation of such acquisition and are not applicable to
any Person, other than the Person acquired, or to any property, asset or
business, other than the property, assets and business so acquired, (e)
restrictions with respect solely to a Subsidiary of the Company imposed pursuant
to a binding agreement which has been entered into for the sale or disposition
of all or substantially all of the Equity Interests or assets of such
Subsidiary, PROVIDED that such restrictions apply solely to the Equity Interests
or assets of such Subsidiary which are being sold, (f) restrictions on transfer
contained in Purchase Money Indebtedness incurred pursuant to paragraph (b)(ii)
of Section 1011, PROVIDED that such restrictions relate only to the transfer of
the property acquired with the proceeds of such Indebtedness, (g) by reason of
customary non-assignment provisions or other restrictions in leases or licenses
entered into in the ordinary course of business and (h) in connection with and
pursuant to Permitted Refinancings, replacements of restrictions imposed
pursuant to clauses (a), (c), (d), or (f) of this paragraph that are not more
restrictive than those being replaced and do not apply to any other Person or
assets from those that would have been covered by the restrictions in the
Indebtedness so refinanced. Notwithstanding the foregoing, any asset subject to
a Lien which is not prohibited to exist with respect to such asset pursuant to
the terms of the Indenture may be subject to restrictions on the transfer or
disposition thereof.
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SECTION 1016. Limitation on Sale and Lease-back Transactions.
The Company will not, and will not permit any Subsidiary to, enter into
any Sale and Lease-back Transaction unless (i) the consideration received in
such Sale and Lease-Back Transaction is at least equal to the fair market value
of the property sold, as determined by the Board of Directors of the Company and
(ii) the Company could incur the Attributable Indebtedness in respect of such
Sale and Lease-Back Transaction in compliance with Section 1011.
SECTION 1017. Limitation on Sale of Assets and Subsidiary Stock.
The Company will not, and will not permit any of its Subsidiaries to,
in one or a series of related transactions, convey, sell, transfer, assign or
otherwise dispose of, directly or indirectly, any of its property, business or
assets, including by merger or consolidation (in the case of a Subsidiary of the
Company), and including any sale or other transfer or issue of any Equity
Interests of any Subsidiary of the Company, whether by the Company or a
Subsidiary of either or through the issuance, sale or transfer of Equity
Interests by a Subsidiary of the Company, and including any sale and leaseback
transaction (any of the foregoing, an "Asset Sale"), unless (1)(a) with respect
to an Asset Sale of the Casino Rouge or any replacement Gaming Vessel (a
"Replacement Vessel"), the Net Cash Proceeds therefrom (the "Asset Sale Offer
Amount") are applied (i) within 240 days after the date of such Asset Sale to
the purchase by the Company of a Gaming Vessel having a fair market value, as
reasonably determined by the Board of Directors in good faith, at least equal to
the fair market value of the Casino Rouge or such Replacement Vessel immediately
preceding such Asset Sale or (ii) within 270 days after the date of such Asset
Sale to the repurchase of the Notes, at a purchase price of 100% of the
principal amount thereof, together with accrued and unpaid interest and
Additional Interest, if any, thereon to the date of payment, made within 240
days of such Asset Sale and (b) with respect to an Asset Sale of any other
asset, (i) the Asset Sale Offer Amount is applied (x) within 180 days after the
date of such Asset Sale, to the optional redemption of the Notes in accordance
with the terms of the Indenture and, to the extent such Indebtedness is secured
by the assets sold and contains similar provisions requiring the Company to
redeem such Indebtedness as a result of the applicable Asset Sale, to the
redemption of Purchase Money Indebtedness or Indebtedness outstanding under the
Revolving Credit Facility, pro rata in proportion to the respective principal
amounts (or accreted values in the case of Indebtedness issued with an original
issue discount) of the Notes and such other Indebtedness then outstanding or (y)
within 210 days after the date of such Asset Sale, to the repurchase of the
Notes and, to the extent such Indebtedness is secured by the assets sold and
contains similar provisions requiring the Company to repurchase such
Indebtedness as a result of the applicable Asset Sale, to the repurchase of
Purchase Money Indebtedness or Indebtedness outstanding under the Revolving
Credit Facility (the "Asset Sale Offer"), pro rata in proportion to the
respective principal amounts (or accreted values in the case of Indebtedness
issued with an original issue discount) of the Notes and such other Indebtedness
then outstanding, at a purchase price of 100% of the principal amount thereof
(the "Asset Sale Offer Price"), together with accrued interest thereon to the
date of payment, made within 180 days of such Asset Sale or (ii) within 180 days
following such Asset Sale, the Asset Sale Offer Amount is invested in (x) fixed
assets and property (other than notes, bonds and securities) which in the good
faith reasonable judgment of the Board of Directors will immediately
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constitute or be a part of a Related Business of the Company or such Subsidiary
(if it continues to be a Subsidiary) immediately following such transaction or
(y) any Person engaged in a Related Business if as a result of such investment
such Person becomes a Wholly-owned Subsidiary of the Company or such Person is
immediately merged with or into the Company or a Wholly-owned Subsidiary of the
Company, (2) at least 85% of the consideration for such Asset Sale or series of
related Asset Sales consists of cash or Cash Equivalents, (3) no Default or
Event of Default shall have occurred and be continuing at the time of, or would
occur after giving effect, on a PRO FORMA basis, to, such Asset Sale, and (4)
the Board of Directors of the Company determines in good faith that the Company
or such Subsidiary, as applicable, receives fair market value for such Asset
Sale.
An acquisition of Notes pursuant to an Asset Sale Offer may be deferred
until the accumulated Net Cash Proceeds from Asset Sales not applied to the uses
set forth in 1(a)(i), 1(b)(i)(x) or 1(b)(ii) above (the "Excess Proceeds")
exceeds $10.0 million. Each Asset Sale Offer shall remain open for 20 Business
Days following its commencement (the "Asset Sale Offer Period"). Upon expiration
of the Asset Sale Offer Period, the Company shall apply the Asset Sale Offer
Amount plus an amount equal to accrued and unpaid interest and Additional
Interest, if any, thereon to the purchase of all Indebtedness properly tendered
(on a PRO RATA basis if the Asset Sale Offer Amount is insufficient to purchase
all Indebtedness so tendered) at the Asset Sale Offer Price (together with
accrued interest and Additional Interest, if any, thereon). To the extent that
the aggregate amount of Notes and such other PARI PASSU Indebtedness rendered
pursuant to an Asset Sale Offer is less than the Asset Sale Offer Amount, the
Company may use any remaining Net Cash Proceeds for general corporate purposes
as otherwise permitted hereby. Following each Asset Sale Offer the Excess
Proceeds amount shall be reset to zero.
Notwithstanding, and without complying with, the provisions of this
Section 1017:
(i) the Company and its Subsidiaries may, in the ordinary course of
business, (1) convey, sell, transfer, assign or otherwise dispose of
inventory and other assets acquired and held for resale in the ordinary
course of business and (2) liquidate Cash Equivalents;
(ii) the Company and its Subsidiaries may convey, sell, transfer,
assign or otherwise dispose of assets pursuant to and in accordance with
Article Eight;
(iii) the Company and its Subsidiaries may convey, sell, transfer,
assign or otherwise dispose of damaged, worn out or other obsolete
personal property in the ordinary course of business so long as such
property is no longer necessary for the proper conduct of the business of
the Company or such Subsidiary, as applicable;
(iv) the Company and its Subsidiaries may convey, sell, transfer,
assign or otherwise dispose of assets to the Company or any of its
Wholly-owned Subsidiaries; and
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(v) the Company and its Subsidiaries, in the ordinary course of
business, may convey, sell, transfer, assign, or otherwise dispose of
assets (or related assets in related transactions) with a fair market
value of less than $1.0 million.
Any Asset Sale Offer shall be made in compliance with all applicable
laws, rules, and regulations, including, if applicable, Regulation 14E of the
Exchange Act and the rules and regulations thereunder and all other applicable
Federal and state securities laws. To the extent that the provisions of any
securities laws or regulations conflict with the provisions of this paragraph,
compliance by the Company with such laws and regulations shall not in and of
itself cause a breach of its obligations under such paragraph.
If the payment date in connection with an Asset Sale Offer hereunder is
on or after an interest payment Record Date and on or before the associated
Interest Payment Date, any accrued and unpaid interest (and Additional Interest,
if any, thereon due on such Interest Payment Date) will be paid to the person in
whose name a Note is registered at the close of business an such Record Date,
and such interest (or Additional Interest, if applicable) will not be payable to
Holders who tender Notes pursuant to such Asset Sale Offer.
SECTION 1018. Application of Net Cash Proceeds in Event of Loss.
All Net Cash Proceeds from an Event of Loss constituting a substantial
loss of the Casino Rouge or any Replacement Vessel (other than the proceeds of
any business interruption insurance) shall be applied to the purchase by the
Company of a Gaming Vessel having a fair market value, as reasonably determined
by the Board of Directors in good faith, at least equal to the fair market value
of the Casino Rouge or such Replacement Vessel immediately preceding such Event
of Loss or applied to the repurchase of the Notes, all within the period and as
otherwise provided in clause 1(a) of Section 1017. All other Net Cash Proceeds
from an Event of Loss in excess of $1.0 million (other than the proceeds of any
business interruption insurance) shall be invested in (x) fixed assets and
property (other than notes, bonds and securities) which in the good faith
reasonable judgment of the Board of Directors will immediately constitute or be
a part of a Related Business of the Company or such Subsidiary (if it continues
to be a Subsidiary) immediately following such transaction or (y) any Person
engaged in a Related Business if as a result of such investment such Person
becomes a Wholly-owned Subsidiary of the Company or such Person is immediately
merged with or into the Company or a Wholly-owned Subsidiary of the Company or
applied to the redemption or repurchase of the Notes and, to the extent such
Indebtedness is secured by the assets subject to such Event of Loss and contains
similar provisions requiring the Company to repurchase or retire such
Indebtedness with such Net Cash Proceeds, to the retirement of Purchase Money
Indebtedness or Indebtedness outstanding under the Revolving Credit Facility,
pro rata in proportion to the respective principal amounts (or accreted values
in the case of Indebtedness issued with an original issue discount) of the Notes
and such other Indebtedness then outstanding, all within the period and as
otherwise provided above in clause l(b) of Section 1017.
In the event any Event of Loss involves any Collateral, the Company
shall cause such Net Cash Proceeds to be deposited in the Collateral Account on
the business day on which such Net Cash Proceeds
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are received by the Company. Collateral Proceeds (including any earnings
thereon) may be released from the Collateral Account only in accordance with
Section 1204.
On or before the 30th day following such Event of Loss, the Company
shall provide notice thereof to the Trustee in the form of an Officers'
Certificate providing reasonable detail regarding the date and nature of the
Event of Loss.
SECTION 1019. Ownership of Equity Interests of Subsidiaries.
The Company shall at all times maintain, or cause each Subsidiary to
maintain, ownership of all of each class of Equity Interests in each Subsidiary
of the Company, except any Subsidiary that shall be disposed of in its entirety
or consolidated or merged with or into the Company or another Subsidiary, in
each case in accordance with Section 801 and Section 1017.
SECTION 1020. Limitation on Transactions with Affiliates.
Neither the Company nor any of its Subsidiaries will be permitted on or
after the Issue Date to enter into or suffer to exist any contract, agreement,
arrangement or transaction with any Affiliate (an "Affiliate Transaction"), or
any series of related Affiliate Transactions (other than Exempted Affiliate
Transactions), (i) unless it is determined that the terms of such Affiliate
Transaction are fair and reasonable to the Company, and no less favorable to the
Company, than could have been obtained in an arm's length transaction with a
non-Affiliate, and (ii) if involving consideration to either party in excess of
$1.0 million, unless such Affiliate Transaction(s) is evidenced by an Officers'
Certificate addressed and delivered to the Trustee certifying that such
Affiliate Transaction (or Transactions) has been approved by a majority of the
members of the Board of Directors that are disinterested in such transaction, if
any, and (iii) if involving consideration to either party in excess of $5.0
million, unless in addition the Company, prior to the consummation thereof,
obtains a written favorable opinion as to the fairness of such transaction to
the Company from a financial point of view from an independent investment
banking firm of national reputation or, if pertaining to a matter for which such
investment banking firms do not customarily render such opinions, an appraisal
or valuation firm of national reputation. The foregoing will not prohibit (i)
the repurchase of the Preferred Stock outstanding on the Issue Date, together
with accrued and unpaid dividends thereon, in accordance with the terms of such
Preferred Stock as in effect on the Issue Date, together with accrued and unpaid
dividends thereon, in accordance with the terms of such Preferred Stock as in
effect on the Issue Date and (ii) the transactions contemplated by the
Management Agreement as in effect on the Issue Date.
SECTION 1021. Limitation on Lines of Business.
The Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, engage to any substantial extent in any line or lines of
business activity other than that which, in the reasonable good faith judgment
of the Board of Directors of the Company, is a Related Business.
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SECTION 1022. Additional Collateral.
Except as provided in the Security Agreement or as excepted from the
definition of "Collateral" herein, as promptly as possible, but in any event
within 60 days after the Issue Date, the Company will, and will cause each of
its Subsidiaries that owns or leases any assets, to grant to the Trustee a valid
and perfected first priority security interest in such assets including, but not
limited to, the riverboat and the land-based facility comprising the Casino
Rouge, any additions or improvements thereon and all real property, equipment,
inventory, fixtures, receivables, accounts, contract rights, licenses and other
general intangibles, cash, trademarks and trade names forming a part thereof or
used in connection therewith enforceable against all third parties, and to
execute and deliver all documents and to take all action necessary or desirable
to perfect and protect such a security interest in favor of the Trustee,
including, without limitation, the following:
(i) executing and delivering to the Trustee a first preferred ship
mortgage, substantially in the form of the ship mortgage on the Casino
Rouge existing on the Issue Date, on any Vessel that is or becomes part of
such assets and taking all steps necessary to perfect the Lien created by
such ship mortgage (including making all applications, filings or
registrations with the United States Coast Guard or any other applicable
regulatory entity);
(ii) executing and delivering to the Trustee a first priority mortgage
and/or a deed of trust in substantially the form existing on the Issue
Date (appropriately modified to reflect the local law of the jurisdiction
in which such real property interest is located) and covering each real
property interest that is or becomes a part of such assets (an "Additional
Mortgage"), together with (A) evidence that counterparts of such
Additional Mortgage have been duly filed or recorded in all filing or
recording offices necessary or desirable in order to create a valid and
enforceable first Lien on such real property interest in favor of the
Trustee for its benefit and the benefit of the Holders, subject only to
Permitted Liens, and that all filing and recording taxes and fees have
been paid, (B) a fully paid American Land Title Association Lender's
Extended Coverage title insurance policy (or written commitment to issue
such policy) in an amount not less than the fair market value, reasonably
determined by the Company, supplemented by such endorsements as the
Trustee may reasonably request of such real property interest, insuring
the Additional Mortgage to be a valid and enforceable first Lien on such
real property interest, free and clear of all defects and encumbrances,
subject only to Permitted Liens, (C) if necessary, copies of all
authorizations, consents and approvals of, evidence of other actions by,
and notices to and filings with, all governmental authorities and
regulatory bodies required for the due execution, delivery or performance
by the Company or such Subsidiary of the Additional Mortgage certified as
to accuracy and completeness by a duly authorized officer of the Company
or such Subsidiary, and (D) all necessary documentation or consents
required to perfect and maintain the validity, effectiveness and
enforceability of the Additional Mortgage including, without limitation,
with respect to leasehold interests acquired by the Company or such
Subsidiary, fully executed memoranda of lease, in recordable form, and
consents to assignment of the lease; PROVIDED that
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where any such documentation or consents are required from a third
party the Company or such Subsidiary will use all reasonable efforts to
obtain such documentation or consent;
(iii) executing and delivering additional security agreements or
supplements to the Security Agreement (and the schedules thereto) so as to
create a first priority Lien on all personal property that is or becomes
part of such assets (including the filing of Uniform Commercial Code
financing statements, the giving of notices and obtaining appropriate
consents); and
(iv) delivering to the Trustee within 30 days after taking any of the
foregoing actions a favorable Opinion of Counsel with respect to the
validity, perfection and priority of such security interest, including,
without limitation, as to the matters described in clause (i), (ii) and
(iii) being legal, valid and binding obligations of the Person delivering
the same.
SECTION 1023. [Intentionally Omitted].
SECTION 1024. [Intentionally Omitted].
SECTION 1025. [Intentionally Omitted].
SECTION 1026. [Intentionally Omitted].
SECTION 1027. Security Documents.
Simultaneously herewith, the Company shall execute, or cause its
Subsidiaries to execute, the respective Security Documents, as appropriate,
securing the Company's obligations under this Indenture, the Security Documents
and the Notes. Each Holder, by accepting a Note, agrees to all terms and
provisions of the Security Documents as the same may be amended or supplemented
from time to time pursuant to the provisions hereof and thereof. The terms of
the release of the Collateral and the rights of the Holders with respect thereto
shall be governed by the Security Documents and this Indenture; PROVIDED,
HOWEVER, that, except as provided in Section 8 of the Shore Mortgage, in the
event of a conflict between the terms of the Indenture and the terms of any
other Security Documents, the terms of this Indenture shall govern.
SECTION 1028. Validity of Security Interest.
The Company represents and warrants that it has, and covenants that it
shall continue to have, full power and lawful authority to grant, release,
convey, assign, transfer, mortgage, pledge, hypothecate and otherwise create the
Security Interest referred to in Article Twelve; and the Company shall warrant,
preserve and defend the Security Interest of the Trustee in and to the
Collateral or any asset that should constitute Collateral but for the fact that
the Company and/or its Subsidiaries failed to comply with the provisions of the
Indenture or the Security Documents against the claims of all persons, and will
maintain and preserve the Security Interest contemplated by Article Twelve.
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SECTION 1029. Mandatory Purchase Offers.
In the event that the Company or any of its Subsidiaries consummates an
offering of (i) any Indebtedness (other than any Indebtedness that would
constitute Permitted Indebtedness or is incurred pursuant to clause (b) of
Section 1011 of the Indenture or (ii) any equity securities for net proceeds in
an amount that, together with all other offerings of equity securities made
since the Issue Date, exceeds $250,000 (each such event described in clauses (i)
and (ii) above, a "Redemption Triggering Offering"), the Company shall, within
30 days after the consummation of any such Redemption Triggering Offering, offer
to purchase (a "Mandatory Redemption Offer") from all Holders of Notes, on a PRO
RATA basis, up to an amount (expressed as a multiple of $1,000) of Notes equal
to 100% of the net cash proceeds received by the Company or any such Subsidiary
from such Redemption Triggering Offering, at the redemption prices set forth on
the reverse of the Notes. Any such repurchase shall be in accordance with the
procedures set forth in this Section.
Any Mandatory Redemption Offer will be made in compliance with all
applicable laws, rules and regulations, including, if applicable, Regulation 14E
under the Exchange Act and the rules thereunder and all other applicable Federal
and state securities laws. To the extent the provisions of any securities laws
or regulations conflict with the provisions on this paragraph, compliance by the
Company with such laws and regulations shall not in and of itself cause a breach
of its obligations under this Indenture.
If less than all the Notes from the Holders accepting the offer are to
be purchased, the particular Notes to be purchased shall be selected not more
than 15 days subsequent to the last day the Offer is required to remain open by
the Trustee, from the Notes of the Holders accepting the Offer by such method as
the Trustee shall deem fair and appropriate and which may provide for the
selection for purchase of portions of the principal of Notes; PROVIDED, HOWEVER,
that no such partial purchase shall reduce the portion of the principal amount
of a Note not so purchased to less than $1,000 (except that the principal amount
of a PIK Note shall not be reduced to less than $100).
The Trustee shall promptly notify the Company in writing of the Notes
selected for purchase and, in the case of any Notes selected for partial
purchase, the principal amount thereof to be so purchased.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to purchase of Notes shall relate, in the case
of any Note so purchased or to be so purchased only in part, to the portion of
the principal amount of such Note which has been or is to be so purchased.
SECTION 1030. Future Subsidiary Guarantees.
If the Company or any Subsidiary shall organize, acquire or otherwise
invest in another Subsidiary having total assets with a book value in excess of
$10,000, then such transferee or acquired or other Subsidiary shall (i) execute
and deliver to the Trustee a supplemental indenture in form reasonably
satisfactory to the Trustee pursuant to which such Subsidiary shall
unconditionally guarantee all of the Company's obligations under the Notes and
the Indenture on the terms set forth in Article
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Fourteen and (ii) deliver to the Trustee an opinion of counsel that such
supplemental indenture has been duly authorized, executed and delivered by such
Subsidiary and constitutes a legal, valid, binding and enforceable obligation of
such Subsidiary. Thereafter, such Subsidiary shall be a "Guarantor" for all
purposes of the Indenture.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Right of Redemption.
The Notes may be redeemed, at the election of the Company, as a whole
or from time to time in part, at any time, subject to the conditions and at the
Redemption Prices specified in the form of Note, together with accrued interest
to the Redemption Date.
SECTION 1102. Applicability of Article.
Redemption of Notes at the election of the Company or otherwise, as
permitted or required by any provision of this Indenture, shall be made in
accordance with such provision and this Article.
SECTION 1103. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Notes pursuant to Section
1101 shall be evidenced by a Board Resolution. In case of any redemption at the
election of the Company, the Company shall, not less than 30 Business Days nor
more than 60 days prior to the Redemption Date fixed by the Company (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee of such
Redemption Date and of the principal amount of Notes to be redeemed and shall
deliver to the Trustee such documentation and records as shall enable the
Trustee to select the Notes to be redeemed pursuant to Section 1104.
SECTION 1104. Selection by Trustee of Notes to Be Redeemed.
If less than all the Notes are to be redeemed, the particular Notes to
be redeemed shall be selected not more than 60 days prior to the Redemption Date
by the Trustee, from the outstanding Notes not previously called for redemption,
by such method as the Trustee shall deem fair and appropriate and which may
provide for the selection for redemption of portions of the principal of Notes;
PROVIDED, HOWEVER, that no such partial redemption shall reduce the portion of
the principal amount of a Note not redeemed to less than $1,000 (except that the
principal amount of a PIK Note shall not be reduced to less than $100).
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The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Notes selected for partial
redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to redemption of Notes shall relate, in the
case of any Note redeemed or to be redeemed only in part, to the portion of the
principal amount of such Note which has been or is to be redeemed.
SECTION 1105. Notice of Redemption.
Notice of redemption shall be given in the manner provided for in
Section 106 not less than 20 Business Days nor more than 60 days prior to the
redemption Date, to each Holder of Notes to be redeemed. All notices of
redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all outstanding Notes are to be redeemed, the
identification (and, in the case of a partial redemption, the principal
amounts) of the particular Notes to be redeemed,
(4) that on the Redemption Date the Redemption Price (together with
accrued interest, if any, to the Redemption Date payable as provided in
Section 1107) will become due and payable upon each such Note, or the
portion thereof, to be redeemed, and that interest thereon will cease to
accrue on and after said date, and
(5) the place or places where such Notes are to be surrendered for
payment of the Redemption Price.
Notice of redemption of Notes to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
SECTION 1106. Deposit of Redemption Price.
On or prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) in immediately
available funds an amount of money sufficient to pay the Redemption Price of,
and accrued interest on, all the Notes which are to be redeemed on that date.
SECTION 1107. Notes Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Notes so to be
redeemed shall, on the Redemption Date, become due and payable at the Redemption
Price therein specified (together with
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accrued interest, if any, to the Redemption Date), and from and after such date
(unless the Company shall default in the payment of the Redemption Price and
accrued interest) such Notes shall cease to bear interest. Upon surrender of any
such Note for redemption in accordance with said notice, such Note shall be paid
by the Company at the Redemption Price, together with accrued interest, if any,
to the Redemption Date; PROVIDED, HOWEVER, that installments of interest whose
Interest Payment Date is on or prior to the Redemption Date shall be payable to
the Holders of such Notes, or one or more Predecessor Notes, registered as such
at the close of business on the relevant Record Dates according to their terms
and the provisions of Section 307.
If any Note called for redemption shall not be so paid upon surrender
thereof for redemption, the principal (and premium, if any) shall, until paid,
bear interest from the Redemption Date at the rate borne by the Notes.
SECTION 1108. Notes Redeemed in Part.
Any Note which is to be redeemed only in part shall be surrendered at
the office or agency of the Company maintained for such purpose pursuant to
Section 1002 (with, if the Company or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by, the Holder thereof or such Holder's attorney duly
authorized in writing), and the Company shall execute, and the Trustee shall
authenticate and deliver to the Holder of such Note without service charge, a
new Note or Notes, of any authorized denomination as requested by such Holder,
in aggregate principal amount equal to and in exchange for the unredeemed
portion of the principal of the Note so surrendered.
SECTION 1109. Redemption Pursuant to Gaming Laws.
Notwithstanding the provisions of this Article Eleven, if the Louisiana
Gaming Authorities, or any other relevant Gaming Authority does not waive the
qualification requirements as to any Holder (whether the record owner or
beneficial owner) and requires that such Holder be qualified or be found
suitable under the Gaming Laws, then, in such event, such Holder must qualify or
be found suitable under such Laws. If a Holder does not so qualify or is not
found suitable, the Holder must dispose of its interest in the Notes, within 30
days (or within such earlier date as such Gaming Authority may require) after
the Company's receipt of notice of such finding and the giving of notice of such
finding to such Holder, or, at the Company's option, either (a) the Company may
redeem such Notes at the lower of the principal amount thereof or the price at
which the Note was acquired by such Holder, in either case, plus accrued
interest to the Redemption Date or (b) the Holder shall enter into such escrow,
trust or similar arrangement as may be required by such Gaming Authority under
the circumstances.
The Company will as quickly as practicable, in any event no later than
10 days, notify the Trustee by telecopier notice (and will confirm such notice
by overnight courier) of (i) the name or names of any Holder or any beneficial
owner of the Notes described in this Section and (ii) what action, if any, the
Company then intends to take with respect to such Holder or such beneficial
owner.
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ARTICLE TWELVE
SECURITY INTEREST
SECTION 1201. Assignment of Security Interest.
(a) In order to secure the performance of the Company's obligation to
pay the principal amount of, premium, if any, and interest on the Notes when and
as the same shall be due and payable, whether at maturity or on an Interest
Payment Date, by acceleration, call for redemption or otherwise, and interest on
the overdue principal of and interest on, if any, the Notes and performance of
all other obligations of the Company to the Holders and the Trustee under this
Indenture and the Notes, according to the terms hereunder or thereunder, the
Company pursuant to the Security Documents has unconditionally and absolutely
assigned to the Trustee for the benefit of itself and all Holders, a first
priority security interest in the Collateral, subject to the limitations set
forth in Section 1014 (the "Security Interest").
(b) The Security Interest as now or hereafter in effect shall be held
for the Trustee and for the equal and ratable benefit and security of the Notes
without preference, priority or distinction of any thereof over any other by
reason, or difference in time, of issuance, sale or otherwise, and for the
enforcement of the payment of principal of, premium, if any, and interest on the
Notes in accordance with their terms.
(c) The Company has executed and delivered, filed and recorded and/or
will execute and deliver, file and record, all instruments and documents, and
has done or will do or cause to be done all such acts and other things as are
necessary to subject the Collateral to the Lien of the Security Documents. The
Company will execute and deliver, file and record all instruments and do all
acts and other things as may be reasonably necessary or advisable to perfect,
maintain and protect the Security Interest and shall pay all filing, recording,
mortgage or other taxes or fees incidental thereto.
(d) The Company shall furnish to the Trustee (i) promptly after the
recording or filing, or re-recording or re-filing of the Security Documents and
other security filings, an Opinion of Counsel (who may be counsel for the
Company) stating that in the opinion of such counsel the Security Documents and
other security filings have been properly recorded, filed, re-recorded or
re-filed so as to make effective and perfect the Security Interest intended to
be created thereby and reciting the details of such action; and (ii) at least
annually on the anniversary date of the execution and delivery of this
Indenture, an Opinion of Counsel (who may be counsel for the Company) either
stating that in the opinion of such counsel such action with respect to the
recording, filing, re-recording or re-filing of the Security Documents and other
security filings has been taken as is necessary to maintain the Lien and
Security Interest of the Security Documents and other security filings, and
reciting the details of such action, or stating that in the opinion of such
counsel no such action is necessary to maintain such Lien and Security Interest.
In giving the opinions required by this Section 1201(d) above, such counsel may
rely, to the extent recited in such
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opinions, on (i) certificates of relevant public officials; (ii) certificates of
an officer or officers of the Company; (iii) photocopies of filed and recorded
documents certified by public officials as being accurate copies of such
documents; (iv) the opinions of other counsel reasonably acceptable to the
Trustee with respect to matters governed by law of any jurisdiction other than
the state in which such counsel is licensed to practice law; and (v) title
insurance policies and commitments. In addition, such opinions may contain such
qualifications, exceptions and limitations as are appropriate for similar
opinions relating to the nature of the Collateral.
SECTION 1202. Suits to Protect the Collateral.
To the extent permitted under the Security Documents and this
Indenture, the Trustee shall have power to institute and maintain such suits and
proceedings as it may deem expedient to prevent any impairment of the Collateral
by any acts which may be unlawful or in violation of this Indenture or the
Security Documents and such suits and proceedings as the Trustee may deem
expedient to preserve or protect its interests and the interest of the Holders
in the Collateral and in the profits, rents, revenues and other income arising
therefrom (including power to institute and maintain suits or proceedings to
restrain the enforcement of or compliance with any legislative or other
governmental enactment, rule or order that may be unconstitutional or otherwise
invalid if the enforcement of, or compliance with, such enactment, rule or order
would impair the Security Interest thereunder or be prejudicial to the interest
of the Holders or of the Trustee).
SECTION 1203. Further Assurances and Security.
The Company represents and warrants that at the time the Security
Documents and this Indenture are executed, the Company (i) will have full right,
power and lawful authority to grant, bargain, sell, release, convey,
hypothecate, assign, mortgage, pledge, transfer and confirm, absolutely, the
Collateral, in the manner and form done, or intended to be done, in the Security
Documents, free and clear of all Liens, except for the Liens (A) created by the
Security Documents, (B) to the extent otherwise provided in the Security
Documents and (C) Liens contested in good faith or arising by operation of law
and not by contract, and will forever warrant and defend the title to the same
against the claims of all Persons whatsoever; (ii) will execute, acknowledge and
deliver to the Trustee, at the Company's expense, at any time and from time to
time such further assignments, transfer, assurances or other instruments as may,
in the opinion of the Trustee, be required to effectuate the terms of this
Indenture or the Security Documents; and (iii) will at any time and from time to
time do or cause to be done all such acts and things as may be necessary or
proper, or as may be required by the Trustee, to assure and confirm to the
Trustee the Security Interest in the Collateral contemplated hereby and by the
Security Documents.
SECTION 1204. Release of Collateral.
The Company shall cause the Net Cash Proceeds of any Asset Sale
pursuant to Section 1017 that involves Collateral or any Event of Loss that
involves Collateral to be deposited in the Collateral Account on the business
day on which such Net Cash Proceeds are received by the Company or such
Subsidiary.
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Collateral Proceeds (including any earnings thereon) may be released from the
Collateral Account in order to, and in only such amount as is required to, (a)
pay the principal amount of Notes tendered pursuant to an Asset Sale Offer or
Event of Loss Offer or (b) make a Permitted Investment; PROVIDED that upon
consummation of such Permitted Investment the Trustee shall have received a
first priority security interest in the property or assets acquired by the
Company or any of its Subsidiaries in connection therewith and the Company
delivers to the Trustee each of the following:
(1) an Officers' Certificate, dated the date on which Collateral
Proceeds shall be released from the Collateral Account (the "Collateral
Proceeds Release Date"), stating in substance as to certain matters (which
statements shall, on the Collateral Proceeds Release Date, be true),
including the following:
(A) the reason the Company is requesting a release of the Collateral
Proceeds and a description of the use to be made of the Collateral
Proceeds to be released;
(B) in the case of clause (a) above, the aggregate principal amount
of Notes purchased on the Collateral Proceeds Release Date and, in the
case of clause (b) above, a description of the property or assets being
acquired and the Fair Market Value and the purchase price of each such
property or asset to be acquired by the Company and/or its Subsidiaries
(if more than one);
(C) that the amount to be released from the Collateral Account does
not exceed the aggregate principal amount of Notes to be purchased on
the Collateral Proceeds Release Date or the purchase price of the
property or assets to be acquired by the Company or any of its
Subsidiaries, as the case may be;
(D) that, in the case of clause (b) above, the Company and/or its
Subsidiaries, as the case may be, have taken all steps necessary or
desirable so that upon consummation of such Permitted Investment the
Trustee shall receive a first priority security interest in such
property or assets;
(E) that no Default or Event of Default has occurred and is
continuing at the time of or after giving effect to such release of
Collateral Proceeds; and
(F) that all conditions precedent in this Indenture and the Security
Documents relating to the release of the Collateral Proceeds have been
complied with.
(2) An Opinion of Counsel stating that the certificate, opinions, other
instruments or cash which have been or are therewith delivered to and
deposited with the Trustee conform to the requirements of this Indenture,
that the property to be released pursuant to a Company Request may be
lawfully released from the Lien of the Security Documents and that all
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conditions precedent in this Indenture and the Security Documents relating
to such release (including, without limitation, the requirement that the
Trustee receive a first priority security interest in the property or
assets acquired) have been complied with.
SECTION 1205. Reliance on Opinion of Counsel.
The Trustee shall, before taking any action under this Article Twelve,
be entitled to receive an Opinion of Counsel, stating the legal effect of such
action, the steps necessary to consummate the same and to perfect the Trustee's
priority with respect to any Lien in connection therewith and that such action
will not be in contravention of the provisions thereof or this Indenture and
such opinion shall be full protection to the Trustee for any action taken or
omitted to be taken in reliance thereon.
SECTION 1206. Purchaser May Rely.
A purchaser in good faith of the Collateral or any part thereof or
interest therein which is purported to be transferred, granted or released by
the Trustee as provided in this Article Twelve shall not be bound to ascertain,
and may rely on the authority of the Trustee to execute, transfer, grant or
release, or to inquire as to the satisfaction of any conditions precedent to the
exercise of such authority, or to see to the application of the purchase price
therefor.
SECTION 1207. Payment of Expenses.
On demand of the Trustee, the Company forthwith shall pay or
satisfactorily provide for the payment of all reasonable expenditures incurred
by the Trustee under this Article Twelve, including, without limitation, the
costs of title insurance, surveys, attorneys' fees and expenses, recording fees
and taxes, transfer taxes, taxes on indebtedness and other expenses incidental
thereto and all such sums shall be a Lien upon the Collateral prior to the Notes
and shall be secured thereby.
ARTICLE THIRTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1301. Company's Option to Effect Defeasance or Covenant Defeasance.
The Company may, at its option by Board Resolution, at any time, with
respect to the Notes, elect to have either Section 1302 or Section 1303 be
applied to all outstanding Notes upon compliance with the conditions set forth
below in this Article Thirteen.
SECTION 1302. Defeasance and Discharge.
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Upon the Company's exercise under Section 1301, after December 1, 2000,
of the option applicable to this Section 1302, the Company shall be deemed to
have been discharged from its obligations with respect to all outstanding Notes
on the date the conditions set forth in Section 1304 are satisfied (hereinafter,
"defeasance"). For this purpose, such defeasance means that the Company shall be
deemed to have paid and discharged the entire indebtedness represented by the
outstanding Notes, which shall thereafter be deemed to be "outstanding" only for
the purposes of Section 1305 and the other Sections of this Indenture referred
to in (A) and (B) below, and to have satisfied all its other obligations under
such Notes and this Indenture insofar as such Notes are concerned (and the
Trustee, at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following which shall survive until
otherwise terminated or discharged hereunder: (A) the rights of Holders of
outstanding Notes to receive, solely from the trust fund described in Section
1304 and as more fully set forth in such Section, payments in respect of the
principal of (and premium, if any, on) and interest on such Notes when such
payments are due from the Trust Funds, (B) the Company's obligations with
respect to such Notes under Sections 304, 305, 306, 1002 and 1003, (C) the
rights, powers, trusts, duties and immunities of the Trustee hereunder and (D)
this Article Thirteen. Subject to compliance with this Article Thirteen, the
Company may exercise its option under this Section 1302 notwithstanding the
prior exercise of its option under Section 1303 with respect to the Notes.
SECTION 1303. Covenant Defeasance.
Upon the Company's exercise under Section 1301 of the option applicable
to this Section 1303, the Company shall be released from its obligations under
any covenant contained in Section 801 and in Sections 1006 through 1030 with
respect to the outstanding Notes on and after the date the conditions set forth
below are satisfied (hereinafter, "covenant defeasance"), and the Notes shall
thereafter be deemed not to be "outstanding" for the purposes of any direction,
waiver, consent or declaration or act of Holders (and the consequences of any
thereof) in connection with such covenants, but shall continue to be deemed
"outstanding" for all other purposes hereunder. For this purpose, such covenant
defeasance means that, with respect to the outstanding Notes, the Company may
omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such covenant or
by reason of any reference in any such covenant to any other provision herein or
in any other document and such omission to comply shall not constitute a Default
or an Event of Default under Section 501(3), but, except as specified above, the
remainder of this Indenture and such Notes shall be unaffected thereby.
SECTION 1304. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to application of either Section
1302 or Section 1303 to the outstanding Notes:
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the
requirements of Section 607 who shall agree to comply with the
provisions of this Article Thirteen applicable to it) for the benefit
of the Holders
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of such Notes, (A) U.S. legal tender, or (B) U.S. Government
Obligations, or (C) a combination thereof, sufficient, in the opinion
of a nationally recognized firm of independent public accountants, to
pay and discharge, the principal of (and premium, if any, on) and
interest on the outstanding Notes on the Stated Maturity (or Redemption
Date, if applicable) of such principal (and premium, if any) or
Interest Payment Date of such installment of interest and the Holders
of Notes must have a valid, perfected, exclusive security interest in
such trust. Before such a deposit, the Company may give to the Trustee,
in accordance with Section 1103 hereof, a notice of its election to
redeem all of the outstanding Notes at a future date in accordance with
Article Eleven hereof.
(2) No Default or Event of Default with respect to the Notes shall
have occurred and be continuing on the date of such deposit or, insofar
as paragraphs (7) and (8) of Section 501 hereof are concerned, at any
time during the period ending on the 91st day after the date of such
deposit (it being understood that this condition shall not be deemed
satisfied until the expiration of such period).
(3) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, this Indenture
or any other material agreement or instrument to which the Company or
any of its Subsidiaries is a party or by which it is bound.
(4) In the case of an election under Section 1302, the Company
shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee stating that (x) the
Company has received from, or there has been published by, the Internal
Revenue Service a ruling, or (y) there has been a change in the
applicable federal income tax law, in either case to the effect that,
and based thereon such opinion shall confirm that, the Holders of the
outstanding Notes will not recognize income, gain or loss for federal
income tax purposes as a result of such defeasance and will be subject
to federal income tax on the same amounts, in the same manner and at
the same times as would have been the case if such defeasance had not
occurred.
(5) In the case of an election under Section 1303, the Company
shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to such Trustee to the effect that the
Holders of the outstanding Notes will not recognize income, gain or
loss for federal income tax purposes as a result of such Covenant
Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been
the case if such Covenant Defeasance had not occurred.
(6) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to either the defeasance under Section
1302 or the covenant defeasance under Section 1303 (as the case may be)
have been complied with (which Officers' Certificate and Opinion of
Counsel shall be updated and redelivered to the Trustee with respect to
the matters described in paragraphs 2 and
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3 of this Section after the end of the 91-day period referred to in
paragraph 2 of this Section). In addition, the Officers' Certificate
shall state that the deposit was not made by the Company with the
intent of preferring the Holders of such Notes over any other creditors
of the Company or with the intent of defeating, hindering, delaying or
defrauding any other creditors of the Company or others.
SECTION 1305. Deposited Money and U.S. Government Obligations to Be Held in
Trust; Other Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section 1003, all
money and U.S. Government Obligations (including the proceeds thereof) deposited
with the Trustee (or other qualifying trustee; collectively for purposes of this
Section 1305, the "Trustee") pursuant to Section 1304 in respect of the
outstanding Notes shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Notes and this Indenture, to the payment,
either directly or through any Paying Agent (including the Company acting as its
own Paying Agent) as the Trustee may determine, to the Holders of such Notes of
all sums due and to become due thereon in respect of principal (and premium, if
any) and interest, but such money need not be segregated from other funds except
to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Governmental Obligations
deposited pursuant to Section 1304 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of the outstanding Notes.
Anything in this Article Thirteen to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or U.S. Government Obligations held by it as provided in
Section 1304 which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect an equivalent defeasance or covenant
defeasance, as applicable, in accordance with this Article.
SECTION 1306. Reinstatement.
If the Trustee or any Paying Agent is unable to apply any money in
accordance with Section 1305 by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 1302 or 1303, as the case may be, until such time as the Trustee or
Paying Agent is permitted to apply all such money in accordance with Section
1305; PROVIDED, HOWEVER, that if the Company makes any payment of principal of
(or premium, if any, on) or interest on any Note following the reinstatement of
its obligations, the Company shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the money held by the Trustee or Paying
Agent.
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ARTICLE FOURTEEN
GUARANTEE OF SECURITIES
SECTION 1401. Guarantee.
Subject to the provisions of this Article Fourteen each Guarantor
hereby jointly and severally, fully and unconditionally guarantees, on a senior
unsecured basis, to each Holder of a Note authenticated and delivered by the
Trustee and to the Trustee and its successors, irrespective of the validity and
enforceability of this Indenture, the Notes or the obligations of the Company or
any other Guarantors to the Holders or the Trustee hereunder or thereunder,
that: (a) the principal of, interest and Additional Interest, if any, on the
Notes will be duly and punctually paid in full when due, whether at maturity, by
acceleration or otherwise, and interest on the overdue principal and (to the
extent permitted by law) interest or Additional Interest, if any, on the Notes
and all other obligations of the Company or the Guarantors to the Holders or the
Trustee hereunder or thereunder (including amounts due the Trustee under Section
606 hereof) and all other obligations of the Company Holders or the Trustee
hereunder or under the Notes (including fees, expenses or other) will be
promptly paid in full or performed, all in accordance with the terms hereof and
thereof; and (b) in case of any extension of time of payment or renewal of any
Notes or any of such other obligations, the same will be promptly paid in full
when due or performed in accordance with the terms of the extension or renewal,
whether at stated maturity, by acceleration or otherwise. Failing payment when
due of any amount so guaranteed, or failing performance of any other obligation
of the Company to the Holders, for whatever reason, each Guarantor will be
obligated to pay, or to perform or cause the performance of, the same
immediately. An Event of Default under this Indenture or the Notes shall
constitute an event of default under this Guarantee, and shall entitle the
Holders of Notes or the Trustee to accelerate the obligations of the Guarantors
hereunder in the same manner and to the same extent as the obligations of the
Company.
Each of the Guarantors hereby agrees that its obligations hereunder
shall be unconditional, irrespective of the validity, regularity or
enforceability of the Notes or this Indenture, the absence of any action to
enforce the same, any waiver or consent by any holder of the Notes with respect
to any provisions hereof or thereof, any release of any other Guarantor, the
recovery of any judgment against the Company, any action to enforce the same,
whether or not a Guarantee is affixed to any particular Note, or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of a guarantor. Each of the Guarantors hereby waives the benefit of
diligence, presentment, demand for payment, filing of claims with a court in the
event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands whatsoever
and covenants that its Guarantee will not be discharged except by complete
performance of the obligations contained in the Notes, this Indenture and this
Guarantee. This Guarantee is a guarantee of payment and not of collection. If
any Holder or the Trustee is required by any court or otherwise to return to the
Company or to any Guarantor, or any custodian, trustee, liquidator or other
similar official
<PAGE>
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acting in relation to the Company or such Guarantor, any amount paid by the
Company or such Guarantor to the Trustee or such Holder, this Guarantee, to the
extent theretofore discharged, shall be reinstated in full force and effect.
Each Guarantor further agrees that, as between it, on the one hand, and the
Holders of Notes and the Trustee, on the other hand, (a) subject to this Article
Fourteen, the maturity of the obligations guaranteed hereby may be accelerated
as provided in Article Five hereof for the purposes of this Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby, and (b) in the
event of any acceleration of such obligations as provided in Article Five
hereof, such obligations (whether or not due and payable) shall forthwith become
due and payable by the Guarantors for the purpose of this Guarantee; provided
that rescission of acceleration may be effected by the Holders in accordance
with the provisions of this Indenture.
This Guarantee shall remain in full force and effect and continue to be
effective should any petition be filed by or against the Company for liquidation
or reorganization, should the Company become insolvent or make an assignment for
the benefit of creditors or should a receiver or trustee be appointed for all or
any significant part of the Company's assets, and shall, to the fullest extent
permitted by law, continue to be effective or be reinstated, as the case may be,
if at any time payment and performance of the Notes are pursuant to applicable
law, rescinded or reduced in amount, or must otherwise be restored or returned
by any obligee on the Notes, whether as a "voidable preference," "fraudulent
transfer" or otherwise, all as though such payment or performance had not been
made. In the event that any payment, or any part thereof, is rescinded, reduced,
restored or returned, the Notes shall, to the fullest extent permitted by law,
be reinstated and deemed reduced only by such amount paid and not so rescinded,
reduced, restored or returned.
No stockholder, officer, director, employee or incorporator, past,
present or future, or any Guarantor, as such, shall have any personal liability
under this Guarantee by reason of his, her or its status as such stockholder,
officer, director, employee or incorporator.
SECTION 1402. Execution and Delivery of Guarantee.
To further evidence the Guarantee set forth in Section 1401, each
Guarantor hereby agrees that a notation of such Guarantee, substantially in the
form included in Section 207 hereto, shall be endorsed on each Note
authenticated and delivered by the Trustee and such Guarantee shall be executed
by either manual or facsimile signature of an Officer or an Officer of a general
partner, as the case may be, of each Guarantor. The validity and enforceability
of any Guarantee shall not be affected by the fact that it is not affixed to any
particular Note.
Each of the Guarantors hereby agrees that its Guarantee set forth in
Section 1401 shall remain in full force and effect notwithstanding any failure
to endorse on each Note a notation of such Guarantee.
If an officer of a Guarantor whose signature is on this Indenture or a
Guarantee no longer holds that office at the time the Trustee authenticate the
Note on which such Guarantee is endorsed or at any time thereafter, such
Guarantor's Guarantee of such Note shall be valid nevertheless.
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The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of any Guarantee set forth in
this Indenture on behalf of the Guarantor.
SECTION 1403. Limitation of Guarantee.
The obligations of each Guarantor are limited to the maximum amount as
will, after giving effect to all other contingent and fixed liabilities of such
Guarantor and after giving effect to any collections from or payments made by or
on behalf of any other Guarantor in respect of the obligations of such other
Guarantor under its Guarantee or pursuant to its contribution obligations under
this Indenture, result in the obligations of such Guarantor under the Guarantee
not constituting a fraudulent conveyance or fraudulent transfer under federal or
state law. Each Guarantor that makes a payment or distribution under a Guarantee
shall be entitled to a contribution from each other Guarantor in a pro rata
amount based on the net assets of each Guarantor, determined in accordance with
GAAP.
SECTION 1404. [Intentionally Omitted].
SECTION 1405. Release of Guarantor.
A Guarantor shall be released from all of its obligations under its
Guarantee if:
(i) the Guarantor has sold all of its assets or the Company sold all of
the Capital Stock of the Guarantor owned by it, in each case in a
transaction in compliance with the terms of this Indenture; PROVIDED that
the Net Cash Proceeds from such an Asset Sale are applied in accordance
with this Indenture; or
(ii) the Guarantor merges with or into or consolidates with, or
transfers all or substantially all of its assets to, the Company or
another Guarantor in a transaction in compliance with the terms of this
Indenture (including Section 801);
and in each such case, the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to such transactions have been complied
with and that such release is authorized and permitted hereunder.
The Trustee shall execute any documents reasonably requested by the
Company or a Guarantor in order to evidence the release of such Guarantor from
its obligations under its Guarantee endorsed on the Notes and under this Article
Fourteen.
SECTION 1406. Waiver of Subrogation.
Each Guarantor hereby irrevocably waives any claim or other rights
which it may now or hereafter acquire against the Company that arise from the
existence, payment, performance or enforcement of such Guarantor's obligations
under this Guarantee and this Indenture, including, without
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limitation, any right of subrogation, reimbursement, exoneration,
indemnification, and any right to participate in any claim or remedy of any
Holder of Notes against the Company, whether or not such claim, remedy or right
arises in equity, or under contract, statute or common law, including, without
limitation, the right to take or receive from the Company, directly or
indirectly, in cash or other property or by set-off or in any other manner,
payment or Note on account of such claim or other rights. If any amount shall be
paid to any Guarantor in violation of the preceding sentence and the Notes shall
not have been paid in full, such amount shall have been deemed to have been paid
to such Guarantor for the benefit of, and held in trust for the benefit of, the
Holders of the Notes, and shall forthwith be paid to the Trustee for the benefit
of such Holders to be credited and applied upon the Notes, whether matured or
unmatured, in accordance with the terms of this Indenture. Each Guarantor
acknowledges that it will receive direct and indirect benefits from the
financing arrangements contemplated by this Indenture and that the waiver set
forth in this Section 1406 is knowingly made in contemplation of such benefits.
<PAGE>
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
LOUISIANA CASINO CRUISES, INC.
By
Title:
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Trustee
By:
Title: Assistant Vice President
EXHIBIT 10.02
================================================================================
REGISTRATION RIGHTS AGREEMENT
dated as of
November 25, 1998
between
LOUISIANA CASINO CRUISES, INC.
and
CIBC OPPENHEIMER CORP.,
as Initial Purchaser
================================================================================
<PAGE>
TABLE OF CONTENTS
PAGE
----
1. Definitions................................................ 1
2. Exchange Offer............................................. 5
3. Shelf Registration......................................... 8
4. Additional Interest........................................ 10
5. Registration Procedures.................................... 12
6. Registration Expenses...................................... 23
7. Indemnification............................................ 24
8. Rules 144 and 144A......................................... 28
9. Underwritten Registrations................................. 28
10. Miscellaneous.............................................. 29
(a) Remedies.......................................... 29
(b) Enforcement....................................... 29
(c) No Inconsistent Agreements........................ 29
(d) Adjustments Affecting Registrable Notes........... 29
(e) Amendments and Waivers............................ 30
(f) Notices........................................... 30
(g) Successors and Assigns............................ 31
(h) Counterparts...................................... 31
(i) Headings.......................................... 31
(j) Governing Law..................................... 31
(k) Severability...................................... 31
(l) Entire Agreement.................................. 32
(m) Notes Held by the Issuer or Its Affiliates........ 32
<PAGE>
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REGISTRATION RIGHTS AGREEMENT (the "AGREEMENT") dated as of
November 25, 1998, between LOUISIANA CASINO CRUISES, INC., a Delaware
corporation (the "ISSUER"), and CIBC OPPENHEIMER CORP., as initial purchaser
("CIBC" or the "INITIAL PURCHASER").
This Agreement is entered into in connection with the Purchase
Agreement, dated as of the date hereof, between the Issuer and the Initial
Purchaser (the "PURCHASE AGREEMENT") relating to the issuance and sale by the
Issuer to the Initial Purchaser of $50,000,000 aggregate principal amount of the
Issuer's Senior Secured Increasing Rate Notes due 2001 (the "NOTES"). In order
to induce the Initial Purchaser to enter into the Purchase Agreement, the Issuer
has agreed to provide the registration rights set forth in this Agreement to the
Initial Purchaser and its direct and indirect transferees and assigns. The
execution and delivery of this Agreement is a condition to the Initial
Purchaser's obligation to purchase the Notes under the Purchase Agreement.
The parties hereby agree as follows:
1. DEFINITIONS
As used in this Agreement, the following terms shall have the
following meanings:
ADDITIONAL INTEREST: See Section 4(a).
ADVICE: See Section 5.
APPLICABLE PERIOD: See Section 2(b).
CIBC: See the introductory paragraph to this Agreement.
CLOSING: See the Purchase Agreement.
CONSUMMATION DATE: The 175th day after the Issue Date.
EFFECTIVENESS DATE: The 135th day after the Issue Date.
EFFECTIVENESS PERIOD: See Section 3(a).
EVENT DATE: See Section 4(b).
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EXCHANGE ACT: The Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC promulgated thereunder.
EXCHANGE NOTES: See Section 2(a).
EXCHANGE OFFER: See Section 2(a).
EXCHANGE REGISTRATION STATEMENT: See Section 2(a).
FILING DATE: The 90th day after the Issue Date.
HOLDER: Any holder of a Registrable Note or Registrable
Notes.
INDEMNIFIED PERSON: See Section 7(c).
INDEMNIFYING PERSON: See Section 7(c).
INDENTURE: The Indenture, dated as of November 15, 1998, by
and between the Issuer and U.S. Bank Trust Association, as trustee, pursuant to
which the Notes are being issued, as amended or supplemented from time to time
in accordance with the terms thereof.
INITIAL PURCHASER: See the introductory paragraph to this
Agreement.
INITIAL SHELF REGISTRATION: See Section 3(a).
INSPECTORS: See Section 5(o).
ISSUE DATE: The Closing Date (as defined in the Purchase
Agreement).
NASD: See Section 5(t).
NOTES: See the introductory paragraph to this Agreement.
PARTICIPANT: See Section 7(a).
PARTICIPATING BROKER-DEALER: See Section 2(b).
PERSON: An individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government (including any agency or political
subdivision thereof).
<PAGE>
-3-
PRIVATE EXCHANGE: See Section 2(b).
PRIVATE EXCHANGE NOTES: See Section 2(b).
PROSPECTUS: The prospectus included in any Registration
Statement (including, without limitation, any prospectus subject to completion
and a prospectus that includes any information previously omitted from a
prospectus filed as part of an effective registration statement in reliance upon
Rule 430A promulgated under the Securities Act), as amended or supplemented by
any prospectus supplement, with respect to the terms of the offering of any
portion of the Registrable Notes covered by such Registration Statement, and all
other amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.
PURCHASE AGREEMENT: See the introductory paragraphs to this
Agreement.
RECORDS: See Section 5(o).
REGISTRABLE NOTES: The Notes upon original issuance of the
Notes and at all times subsequent thereto and, if issued, the Private Exchange
Notes, until in the case of any such Notes or any such Private Exchange Notes,
as the case may be, (i) a Registration Statement covering such Notes or such
Private Exchange Notes has been declared effective by the SEC and such Notes or
such Private Exchange Notes, as the case may be, have been exchanged and/or
disposed of in accordance with such effective Registration Statement, (ii) such
Notes or such Private Exchange Notes, as the case may be, are sold in compliance
with Rule 144 or are saleable pursuant to Rule 144(k) (or any subsequent
provision) under the Securities Act, (iii) in the case of any Note, such Note
has been exchanged for an Exchange Note or Exchange Notes pursuant to an
Exchange Offer or (iv) such Notes or such Private Exchange Notes, as the case
may be, cease to be outstanding.
REGISTRATION DEFAULT: See Section 4(a).
REGISTRATION STATEMENT: Any registration statement of the
Issuer, including, but not limited to, the Exchange Registration Statement,
which covers any of the Registrable Notes pursuant to the provisions of this
Agreement, including the Prospectus, amendments and supplements to such
registration statement, including post-effective amendments, all exhibits,
<PAGE>
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and all material incorporated by reference or deemed to be incorporated by
reference in such registration statement.
RULE 144: Rule 144 promulgated under the Securities Act, as
such Rule may be amended from time to time, or any similar rule (other than Rule
144A) or regulation hereafter adopted by the SEC providing for offers and sales
of securities made in compliance therewith resulting in offers and sales by
subsequent holders that are not affiliates of an issuer of such securities being
free of the registration and prospectus delivery requirements of the Securities
Act.
RULE 144A: Rule 144A promulgated under the Securities Act, as
such Rule may be amended from time to time, or any similar rule (other than Rule
144) or regulation hereafter adopted by the SEC providing for offers and sales
of securities made in compliance therewith resulting in offers and sales by
subsequent holders that are not affiliates of an issuer of such securities being
free of the registration and prospectus delivery requirements of the Securities
Act.
RULE 415: Rule 415 promulgated under the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC.
SEC: The Securities and Exchange Commission.
SECURITIES ACT: The Securities Act of 1933, as amended, and
the rules and regulations of the SEC promulgated thereunder.
SHELF EFFECTIVENESS DATE: See Section 3(b).
SHELF FILING DATE: See Section 3(a).
SHELF NOTICE: See Section 2(c).
SHELF REGISTRATION: See Section 3(c).
SUBSEQUENT SHELF REGISTRATION: See Section 3(c).
TIA: The Trust Indenture Act of 1939, as amended.
TRUSTEE: The trustee under the Indenture.
UNDERWRITTEN REGISTRATION OR UNDERWRITTEN OFFERING: A
registration under the Securities Act in which securities of the Issuer are sold
to an underwriter(s) for reoffering to the public.
<PAGE>
-5-
2. EXCHANGE OFFER
(a) Unless such an offer is not permitted by applicable law or
SEC policy, the Issuer agrees to use its reasonable best efforts to file with
the SEC as soon as practicable after the Closing, but in no event later than the
Filing Date, a registration statement covering an offer to exchange (the
"EXCHANGE OFFER") any and all of the Registrable Notes for a like aggregate
principal amount of debt securities of the Issuer which are identical in all
material respects to the Notes (the "EXCHANGE NOTES") (and which are entitled to
the benefits of the Indenture, except that the Exchange Notes shall have been
registered pursuant to an effective registration statement under the Securities
Act and will not contain terms with respect to transfer restrictions). The
Exchange Offer will be registered under the Securities Act on the appropriate
form (the "EXCHANGE REGISTRATION STATEMENT"), and the Exchange Offer will comply
with all applicable tender offer rules and regulations under the Exchange Act.
The Issuer agrees to use its reasonable best efforts to (x) cause the Exchange
Registration Statement to become effective under the Securities Act on or before
the Effectiveness Date; (y) keep the Exchange Offer open for at least 30 days
(or longer if required by applicable law) after the date that notice of the
Exchange Offer is mailed to Holders; and (z) consummate the Exchange Offer with
respect to all Notes validly tendered on the earliest practicable date after the
Exchange Registration Statement is declared effective (in any event on or prior
to the Consummation Date) (or, in the event of any extension of the Exchange
Offer required by applicable law, the earliest day following any such
extension). Each Holder who participates in the Exchange Offer will be required
to represent that any Exchange Notes received by it will be acquired in the
ordinary course of its business, that at the time of the consummation of the
Exchange Offer such Holder will have no arrangement or understanding with any
Person to participate in the distribution of the Exchange Notes in violation of
the provisions of the Securities Act, that such Holder is not an affiliate of
the Issuer within the meaning of Rule 405 promulgated under the Securities Act
or if it is such an affiliate, that it will comply with the registration and
prospectus delivery requirements of the Securities Act, to the extent
applicable, and that is not acting on behalf of any Person who could not
truthfully make the foregoing representations. No Holder will be entitled to
Additional Interest pursuant to Section 4 hereof unless and until such Holder
has made such representations. Upon consummation of the Exchange Offer in
accordance with this Section 2, the provisions of this Agreement shall continue
to apply, MUTATIS
<PAGE>
-6-
MUTANDIS, solely with respect to Registrable Notes that are Private Exchange
Notes and Exchange Notes held by Participating Broker-Dealers, and the Issuer
shall have no further obligation to register Registrable Notes (other than
Private Exchange Notes and Exchange Notes held by Participating Broker-Dealers)
pursuant to Section 3 of this Agreement.
(b) The Issuer shall include within the Prospectus contained
in the Exchange Registration Statement a section entitled "Plan of
Distribution," reasonably acceptable to the Initial Purchaser, which shall
contain a summary statement of the positions taken or policies made by the staff
of the SEC with respect to the potential "underwriter" status of any
broker-dealer that is the beneficial owner (as defined in Rule 13d-3 promulgated
under the Exchange Act) of Exchange Notes received by such broker-dealer in the
Exchange Offer (a "PARTICIPATING BROKER-DEALER"), whether such positions or
policies have been publicly disseminated by the staff of the SEC or such
positions or policies, in the reasonable judgment of the Initial Purchaser,
represent the prevailing views of the staff of the SEC. Such "Plan of
Distribution" section shall also allow the use of the Prospectus by all Persons
subject to the prospectus delivery requirements of the Securities Act, including
all Participating Broker-Dealers, and include a statement describing the means
by which Participating Broker-Dealers may resell the Exchange Notes.
The Issuer shall use its reasonable best efforts to keep the
Exchange Registration Statement effective and to amend and supplement the
Prospectus contained therein in order to permit such Prospectus to be lawfully
delivered by all Persons subject to the prospectus delivery requirements of the
Securities Act for such period of time as such Persons must comply with such
requirements in order to resell the Exchange Notes, PROVIDED that such period
shall not exceed 180 days (or such longer period if extended pursuant to the
last paragraph of Section 5) (the "APPLICABLE PERIOD").
If, prior to consummation of the Exchange Offer, the Initial
Purchaser holds any Notes acquired by it and having, or which are reasonably
likely to be determined to have, the status as an unsold allotment in the
initial distribution, the Issuer upon the request of the Initial Purchaser
shall, simultaneously with the delivery of the Exchange Notes in the Exchange
Offer, issue and deliver to Initial Purchaser, in exchange (the "PRIVATE
EXCHANGE") for the Notes held by the Initial Purchaser, a like principal amount
of debt securities of the Issuer that are identical in all material respects to
the Exchange Notes (the "PRIVATE EXCHANGE NOTES"), except for the placement of a
restrictive legend on the Private Exchange Notes. If possible, the Private
Exchange Notes shall bear the
<PAGE>
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same CUSIP number as the Exchange Notes. Interest on the Exchange Notes and
Private Exchange Notes will accrue from the last interest payment date on which
interest was paid on the Notes surrendered in exchange therefor or, if no
interest has been paid on the Notes, from the Issue Date. Holders of Exchange
Notes and Private Exchange Notes shall vote together as a class on all matters
under the Indenture.
In connection with the Exchange Offer, the Issuer shall:
(i) mail to each Holder a copy of the Prospectus forming part of the
Exchange Registration Statement, together with an appropriate letter of
transmittal and related documents;
(ii) utilize the services of a depositary for the Exchange Offer with
an address in the Borough of Manhattan, The City of New York; and
(iii) permit Holders to withdraw tendered Notes at any time prior to
the close of business, New York City time, on the last business day on
which the Exchange Offer shall remain open.
As soon as practicable after the close of the Exchange Offer
or the Private Exchange, as the case may be, the Issuer shall:
(i) accept for exchange all Notes tendered and not validly withdrawn
pursuant to the Exchange Offer or the Private Exchange;
(ii) deliver promptly to each Holder of Notes, Exchange Notes or
Private Exchange Notes, as the case may be, equal in principal amount
to the Notes of such Holder so accepted for exchange.
(c) If (1) prior to the consummation of the Exchange Offer,
the Issuer or Holders of at least a majority in aggregate principal amount of
the Registrable Notes reasonably determine in good faith that (i) the Exchange
Notes would not, upon receipt, be freely transferable by such Holders which are
not affiliates (within the meaning of the Securities Act) of the Issuer without
restriction under the Securities Act and without restrictions under applicable
state securities laws or (ii) after conferring with counsel, the SEC is unlikely
to permit the commencement of the Exchange Offer prior to the Effectiveness
Date, (2) subsequent to the consummation of the
<PAGE>
-8-
Private Exchange, any holder of the Private Exchange Notes so requests or (3)
the Exchange Offer is commenced and not consummated prior to the Consummation
Date, then the Issuer shall promptly deliver to the Holders written notice
thereof (the "SHELF NOTICE") and shall file an Initial Shelf Registration
pursuant to Section 3. The parties hereto agree that following the delivery of a
Shelf Notice to the Holders of Registrable Notes (in the circumstances
contemplated by clauses (1) and (3) of the preceding sentence), the Issuer shall
not have any further obligation to conduct the Exchange Offer or the Private
Exchange under this Section 2.
3. SHELF REGISTRATION
If a Shelf Notice is required to be delivered as contemplated
by Section 2(c) or if the Initial Purchaser shall hold any Notes on the Filing
Date, then:
(A) INITIAL SHELF REGISTRATION. The Issuer shall prepare and
file with the SEC a Registration Statement for an offering to be made on a
continuous basis pursuant to Rule 415 covering all of the then existing
Registrable Notes (the "INITIAL SHELF REGISTRATION"). The Issuer shall use its
reasonable best efforts to file with the SEC the Initial Shelf Registration as
promptly as practicable but, in any event, within 45 days following delivery of
the Shelf Notice (the "SHELF FILING DATE"). The Initial Shelf Registration shall
be on Form S-1 or another appropriate form permitting registration of such
Registrable Notes for resale by such Holders in the manner or manners reasonably
designated by them (including, without limitation, one or more underwritten
offerings). The Issuer shall not permit any securities other than the
Registrable Notes to be included in the Initial Shelf Registration or any
Subsequent Shelf Registration.
(B) EFFECTIVENESS. The Issuer shall use its reasonable best
efforts to cause the Initial Shelf Registration to be declared effective under
the Securities Act, as soon as practicable after the filing thereof and in no
event later than 45 days after filing of the Initial Shelf Registration (the
"SHELF EFFECTIVENESS DATE"), and to keep the Initial Shelf Registration
continuously effective under the Securities Act until the date which is 24
months from the date on which such Initial Shelf Registration is declared
effective (subject to extension pursuant to the last paragraph of Section 5
hereof), or such shorter period ending when (i) all Registrable Notes covered by
the Initial Shelf Registration have been sold in the manner set forth and as
contemplated in the Initial Shelf Registration, (ii) a Subsequent Shelf
Registration covering all of the Registrable Notes has been declared effective
under the Securities Act or (iii) such Registrable Notes are eligible for
<PAGE>
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resale pursuant to Rule 144(k) under the Securities Act (the "EFFECTIVENESS
PERIOD").
(C) SUBSEQUENT SHELF REGISTRATIONS. If the Initial Shelf
Registration or any Subsequent Shelf Registration ceases to be effective for any
reason at any time prior to the termination of the Effectiveness Period, the
Issuer shall use its reasonable best efforts to promptly restore the
effectiveness thereof, and in any event shall, within 45 days of such cessation
of effectiveness, amend the Shelf Registration in a manner reasonably expected
to restore the effectiveness thereof, or file an additional "shelf" Registration
Statement pursuant to Rule 415 covering all of the then existing Registrable
Notes (a "SUBSEQUENT SHELF REGISTRATION"). If a Subsequent Shelf Registration is
filed, the Issuer shall use its reasonable best efforts to cause the Subsequent
Shelf Registration to be declared effective as soon as practicable after such
filing and to keep such Registration Statement continuously effective for a
period equal to the number of days in the Effectiveness Period less the
aggregate number of days during which the Initial Shelf Registration or any
Subsequent Shelf Registration was previously continuously effective. As used
herein the term "SHELF REGISTRATION" means the Initial Shelf Registration and
any Subsequent Shelf Registration.
(D) SUPPLEMENTS AND AMENDMENTS. The Issuer shall promptly
supplement and amend the Shelf Registration if required by the rules,
regulations or instructions applicable to the registration form used for such
Shelf Registration or if required by the Securities Act. The Issuer shall
promptly supplement and amend the Shelf Registration if any such supplement or
amendment is requested by the Holders of a majority in aggregate principal
amount of the Registrable Notes covered by such Registration Statement or by any
underwriter(s) of such Registrable Notes.
(E) SUSPENSION PERIOD. The Issuer shall not be deemed to have
breached its obligations pursuant to this Section if it shall be required to
amend the Shelf Registration Statement or the effectiveness of the Shelf
Registration Statement shall be suspended, or the prospectus contained in the
Shelf Registration Statement shall not be usable, as a result of a corporate
transaction involving the Issuer that is not adequately reflected in the Shelf
Registration Statement; provided that the failure to keep the Shelf Registration
Statement effective and usable for such reasons shall last no longer than 45
days in any 12-month period (whereafter Additional Interest pursuant to Section
4 shall accrue) Any
<PAGE>
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such period during which the Issuer fails to keep the Shelf Registration
Statement effective and usable is referred to as a "Suspension Period." A
Suspension Period shall commence on and include the date that the Issuer gives
notice that the Shelf Registration Statement is no longer effective or the
prospectus included therein is no longer usable and shall end on the earlier to
occur of (i) the date when each seller of Registrable Notes covered by such
Shelf Registration Statement either receives copies of the supplemented or
amended prospectus or is advised in writing by the Issuer that the use of the
prospectus may be resumed and (ii) the expiration of the 45 days in any 12-month
period during which one or more Suspension Periods has been in effect.
4. ADDITIONAL INTEREST
(a) The Issuer and the Initial Purchaser agree that the
Holders of Registrable Notes will suffer damages if the Issuer fails to fulfill
its obligations under Section 2 or Section 3 hereof and that it would not be
feasible to ascertain the extent of such damages with precision. Accordingly,
the Issuer agrees to pay additional interest on the Notes ("ADDITIONAL
INTEREST") under the circumstances and to the extent set forth below:
(i) if the Exchange Registration Statement has not been filed on or
prior to the Filing Date or the Initial Shelf Registration has not been
filed on or prior to the Shelf Filing Date;
(ii) if the Exchange Registration Statement has not been declared
effective on or prior to the Effectiveness Date or the Initial Shelf
Registration has not been declared effective on or prior to the Shelf
Effectiveness Date; and/or
(iii) if (A) the Issuer has not exchanged the Exchange Notes for all
Notes validly tendered in accordance with the terms of the Exchange
Offer on or prior to the 40th day after the date on which the Exchange
Offer Registration Statement was declared effective or (B) the Exchange
Registration Statement ceases to be effective at any time prior to the
time that the Exchange Offer is consummated as to all Notes validly
tendered or (C) if applicable, the Shelf Registration has been declared
effective and such Shelf Registration ceases to be effective at any
time prior to the termination of the Effectiveness Period (other than
in accordance with Section 3(e)).
<PAGE>
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(each such event referred to in clauses (i) through (iii) above is a
"REGISTRATION DEFAULT"). The sole remedy available to Holders of the Notes for a
Registration Default will be the accrual of Additional Interest as follows: the
per annum interest rate on the Notes will increase by 25 basis points during the
first 90-day period following the occurrence of a Registration Default and until
it is waived or cured; and the per annum interest rate will increase by an
additional 25 basis points for each subsequent 90-day period during which the
Registration Default remains uncured, up to a maximum additional interest rate
of 200 basis points per annum; (y) the Issuer shall in no event be required to
pay Additional Interest for more than one Registration Default at any given time
and (z) (1) upon the filing of the Exchange Registration Statement or the
Initial Shelf Registration (in the case of (i) above), (2) upon the
effectiveness of the Exchange Registration Statement or a Shelf Registration (in
the case of (ii) above) or (3) upon the exchange of Exchange Notes for all Notes
tendered or the effectiveness of a Shelf Registration (in the case of (iii)(A)
above), or upon the subsequent effectiveness of the Exchange Registration
Statement which had ceased to remain effective or the effectiveness of a Shelf
Registration (in the case of (iii)(B) above), or upon the subsequent
effectiveness of the Shelf Registration which had ceased to remain effective (in
the case of (iii)(C) above), Additional Interest on the Notes as a result of
such clause (i), (ii) or (iii) (or the relevant subclause thereof), as the case
may be, shall cease to accrue and the interest rate on the Notes will revert to
the interest rate otherwise applicable to the Notes.
(b) The Issuer shall notify the Holders within one business
day after each and every date on which an event occurs in respect of which
Additional Interest is required to be paid (an "EVENT DATE"). Any amounts of
Additional Interest due pursuant to (a)(i), (a)(ii) or (a)(iii) of this Section
4 will be payable in cash quarterly on each March 1, June 1, September 1 and
December 1 (to the Holders of record on the February 15, May 15, August 15 and
November 15 immediately preceding such dates), commencing with the first such
date occurring after any such Additional Interest commences to accrue and until
such Registration Default is cured, immediately available funds in sums
sufficient to pay such Additional Interest. The amount of Additional Interest
will be determined by multiplying the applicable Additional Interest rate by the
principal amount of the Registrable Notes, multiplied by a fraction, the
numerator of which is the number of days such Additional Interest rate was
applicable during such period (determined on the basis of a 360-day year
comprised of twelve 30-day months and, in the case
<PAGE>
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of a partial month, the actual number of days elapsed), and the denominator of
which is 360.
5. REGISTRATION PROCEDURES
In connection with the filing of any Registration Statement
pursuant to Section 2 or 3 hereof, the Issuer shall effect such registrations to
permit the sale of the securities covered thereby in accordance with the
intended method or methods of disposition thereof, and pursuant thereto the
Issuer shall:
(a) Prepare and file with the SEC, as provided herein, a
Registration Statement or Registration Statements as prescribed by
Section 2 or 3, and use their respective reasonable best efforts to
cause each such Registration Statement to become effective and remain
effective as provided herein, PROVIDED that, if (1) such filing is
pursuant to Section 3, or (2) a Prospectus contained in an Exchange
Registration Statement filed pursuant to Section 2 is required to be
delivered under the Securities Act by any Participating Broker-Dealer
who seeks to sell Exchange Notes during the Applicable Period, before
filing any Registration Statement or Prospectus or any amendments or
supplements thereto, the Issuer shall, upon written request, furnish to
and afford the Holders of the Registrable Notes covered by such
Registration Statement and each such Participating Broker-Dealer, as
the case may be, their counsel and the managing underwriter(s), if any,
a reasonable opportunity to review copies of all such documents
(including copies of any documents to be incorporated by reference
therein and all exhibits thereto) proposed to be filed (to the extent
practicable, at least 5 business days prior to such filing). The Issuer
shall not file any Registration Statement or Prospectus or any
amendments or supplements thereto in respect of which the Holders must
be afforded an opportunity to review prior to the filing of such
document, if the Holders of a majority in aggregate principal amount of
the Registrable Notes covered by such Registration Statement, or such
Participating Broker-Dealer, as the case may be, their counsel, or the
managing underwriter(s), if any, shall reasonably object within five
business days after the receipt thereof.
(b) Prepare and file with the SEC such amendments and
post-effective amendments to each Shelf Registration or Exchange
Registration Statement, as the case may be, as may be necessary to keep
such Registration Statement continuously effective for the
Effectiveness Period or the Applicable Period, as the case may be, or
to cause the
<PAGE>
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Suspension Period to terminate; cause the related Prospectus to be
supplemented by any prospectus supplement required by applicable law,
and as so supplemented to be filed pursuant to Rule 424 (or any similar
provisions then in force) under the Securities Act; and comply with the
provisions of the Securities Act and the Exchange Act applicable to
them with respect to the disposition of all securities covered by such
Registration Statement as so amended or in such Prospectus as so
supplemented and with respect to the subsequent resale of any
securities being sold by a Participating Broker-Dealer covered by any
such Prospectus; the Issuer shall be deemed not to have used its
reasonable best efforts to keep a Registration Statement effective
during the Applicable Period if it voluntarily takes any action that
would result in selling Holders of the Registrable Notes covered
thereby or Participating Broker-Dealers seeking to sell Exchange Notes
not being able to sell such Registrable Notes or such Exchange Notes
during that period unless such action is required by applicable law or
unless the Issuer complies with this Agreement, including without
limitation, the provisions of clauses 3(e), 5(c)(v) and (vi) below.
(c) If (1) a Shelf Registration is filed pursuant to Section
3, or (2) a Prospectus contained in an Exchange Registration Statement
filed pursuant to Section 2 is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell
Exchange Notes during the Applicable Period, notify the selling Holders
of Registrable Notes, or each such Participating Broker-Dealer, as the
case may be, their counsel and the managing underwriter(s), if any,
promptly (but in any event within two business days), and confirm such
notice in writing, (i) when a Prospectus or any prospectus supplement
or post-effective amendment thereto has been filed, and, with respect
to a Registration Statement or any post-effective amendment thereto,
when the same has become effective under the Securities Act (including
in such notice a written statement that any Holder may, upon request,
obtain, without charge, one conformed copy of such Registration
Statement or post-effective amendment thereto including financial
statements and schedules, documents incorporated or deemed to be
incorporated by reference and exhibits), (ii) of the issuance by the
SEC of any stop order suspending the effectiveness of a Registration
Statement or of any order preventing or suspending the use of any
preliminary Prospectus or the initiation of any proceedings for that
purpose, (iii) if
<PAGE>
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at any time when a Prospectus is required by the Securities Act to be
delivered in connection with sales of the Registrable Notes or resales
of Exchange Notes by Participating Broker-Dealers the representations
and warranties of the Issuer contained in any agreement (including any
underwriting agreement) contemplated by Section 5(n) below cease to be
true and correct, (iv) of the receipt by the Issuer of any notification
with respect to the suspension of the qualification or exemption from
qualification of a Registration Statement or any of the Registrable
Notes or the Exchange Notes to be sold by any Participating
Broker-Dealer for offer or sale in any jurisdiction, or the initiation
or threatening of any proceeding for such purpose, (v) of the happening
of any event or any information becoming known that makes any statement
made in such Registration Statement or related Prospectus or any
document incorporated or deemed to be incorporated therein by reference
untrue in any material respect or that requires the making of any
changes in, or amendments or supplements to, such Registration
Statement, Prospectus or documents so that, in the case of the
Registration Statement, it will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and
that in the case of the Prospectus, it will not contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading, and (vi) of the Issuer's reasonable determination that
a post-effective amendment to a Registration Statement would be
necessary or appropriate.
(d) If (1) a Shelf Registration is filed pursuant to Section
3, or (2) a Prospectus contained in an Exchange Registration Statement
filed pursuant to Section 2 is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell
Exchange Notes during the Applicable Period, use their reasonable best
efforts to prevent the issuance of any order suspending the
effectiveness of a Registration Statement or of any order preventing or
suspending the use of a Prospectus or suspending the qualification (or
exemption from qualification) of any of the Registrable Notes or the
Exchange Notes to be sold by any Participating Broker-Dealer, for sale
in any jurisdiction, and, if any such order is issued, to use their
reasonable best efforts to obtain the withdrawal of any such order as
promptly as practicable.
<PAGE>
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(e) If a Shelf Registration is filed pursuant to Section 3 and
if requested by the managing underwriter(s), if any, or the Holders of
a majority in aggregate principal amount of the Registrable Notes being
sold in connection with an underwritten offering, (i) promptly
incorporate in a Prospectus supplement or post-effective amendment such
information as the managing underwriter(s), if any, or such Holders
reasonably request to be included therein and (ii) make all required
filings of such Prospectus supplement or such post-effective amendment
as soon as practicable after the Issuer has received notification of
the matters to be incorporated in such Prospectus supplement or
post-effective amendment.
(f) If (1) a Shelf Registration is filed pursuant to Section
3, or (2) a Prospectus contained in an Exchange Registration Statement
filed pursuant to Section 2 is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell
Exchange Notes during the Applicable Period, furnish to each selling
Holder of Registrable Notes who so requests and to each such
Participating Broker-Dealer who so requests and to counsel and the
managing underwriter(s), if any, without charge, one conformed copy of
the Registration Statement or Registration Statements and each
post-effective amendment thereto, including financial statements and
schedules, and, if requested, all documents incorporated or deemed to
be incorporated therein by reference and all exhibits.
(g) If (1) a Shelf Registration is filed pursuant to Section
3, or (2) a Prospectus contained in an Exchange Registration Statement
filed pursuant to Section 2 is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell
Exchange Notes during the Applicable Period, deliver to each selling
Holder of Registrable Notes, or each such Participating Broker-Dealer,
as the case may be, their counsel, and the managing underwriter or
underwriters, if any, without charge, as many copies of the Prospectus
or Prospectuses (including each form of preliminary Prospectus) and
each amendment or supplement thereto and any documents incorporated by
reference therein as such Persons may reasonably request; and, subject
to the last paragraph of this Section 5, the Issuer hereby consents to
the use of such Prospectus and each amendment or supplement thereto by
each of the selling Holders of Registrable Notes or each such
Participating Broker-Dealer, as the case may be, and the managing
underwriter
<PAGE>
-16-
or underwriters or agents, if any, and dealers (if any), in connection
with the offering and sale of the Registrable Notes covered by, or the
sale by Participating Broker-Dealers of the Exchange Notes pursuant to,
such Prospectus and any amendment or supplement thereto.
(h) Prior to any public offering of Registrable Notes or any
delivery of a Prospectus contained in the Exchange Registration
Statement by any Participating Broker-Dealer who seeks to sell Exchange
Notes during the Applicable Period, to use their reasonable best
efforts to register or qualify, and to cooperate with the selling
Holders of Registrable Notes or each such Participating Broker-Dealer,
as the case may be, the managing underwriter or underwriters, if any,
and their respective counsel in connection with the registration or
qualification of (or exemption from such registration or
qualification), such Registrable Notes for offer and sale under the
securities or Blue Sky laws of such jurisdictions within the United
States as any selling Holder, Participating Broker-Dealer, or the
managing underwriter or underwriters, if any, reasonably request in
writing, PROVIDED that where Exchange Notes held by Participating
Broker-Dealers or Registrable Notes are offered other than through an
underwritten offering, the Issuer agrees to cause its counsel to
perform Blue Sky investigations and file registrations and
qualifications required to be filed pursuant to this Section 5(h); keep
each such registration or qualification (or exemption therefrom)
effective during the period such Registration Statement is required to
be kept effective and do any and all other acts or things reasonably
necessary or advisable to enable the disposition in such jurisdictions
of the Exchange Notes held by Participating Broker-Dealers or the
Registrable Notes covered by the applicable Registration Statement;
PROVIDED that Issuer shall not be required to (A) qualify generally to
do business in any jurisdiction where it is not then so qualified, (B)
take any action that would subject it to general service of process in
any such jurisdiction where it is not then so subject or (C) subject
itself to taxation in any such jurisdiction where it is not otherwise
so subject.
(i) If a Shelf Registration is filed pursuant to Section 3,
cooperate with the selling Holders of Registrable Notes and the
managing underwriter or underwriters, if any, to facilitate the timely
preparation and delivery of certificates representing Registrable Notes
to be sold, which certificates shall not upon sale in accordance with
the Shelf Registration bear any restrictive legends and shall be in a
form eligible for
<PAGE>
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deposit with The Depository Trust Company; and enable such Registrable
Notes to be in such denominations and registered in such names as the
managing underwriter or underwriters, if any, or Holders may reasonably
request.
(j) Use their reasonable best efforts to cause the Registrable
Notes covered by the Registration Statement to be registered with or
approved by such other governmental agencies or authorities as may be
necessary to enable the seller or sellers thereof or the managing
underwriter or underwriters, if any, to consummate the disposition of
such Registrable Notes, except as may be required solely as a
consequence of the nature of such selling Holder's business, in which
case the Issuer will cooperate in all reasonable respects with the
filing of such Registration Statement and the granting of such
approvals.
(k) If (1) a Shelf Registration is filed pursuant to Section
3, or (2) a Prospectus contained in an Exchange Registration Statement
filed pursuant to Section 2 is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell
Exchange Notes during the Applicable Period, upon the occurrence of any
event contemplated by paragraph 5(c)(v) or 5(c)(vi), as promptly as
reasonably practicable, subject to the provisions of Section 3(e),
prepare and (subject to Section 5(a)) file with the SEC, at the expense
of the Issuer, a supplement or post-effective amendment to the
Registration Statement or a supplement to the related Prospectus or any
document incorporated or deemed to be incorporated therein by
reference, or file any other required document so that, as thereafter
delivered to the purchasers of the Registrable Notes being sold
thereunder or to the purchasers of the Exchange Notes to whom such
Prospectus will be delivered by a Participating Broker-Dealer, any such
Prospectus will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(l) Prior to the effective date of the first Registration
Statement relating to the Registrable Notes, (i) issue certificates for
the Registrable Notes or Exchange Notes, as the case may be, in a form
eligible for deposit with The Depository Trust Company and (ii) provide
a CUSIP number for the Registrable Notes or Exchange Notes, as the case
may be, it being understood that all Registrable Notes, for so long as
such securities are
<PAGE>
-18-
Registrable Notes, will continue to bear any appropriate restrictive
legends.
(m) In connection with an underwritten offering of Registrable
Notes pursuant to a Shelf Registration requested by the Holders of at
least a majority in aggregate principal amount of Registrable Notes
covered by such Shelf Registration, enter into an underwriting
agreement upon such reasonable terms and conditions as are customary in
underwritten offerings of debt securities similar to the Notes and take
all such other actions as are reasonably requested by the managing
underwriter(s), if any, in order to expedite or facilitate the
registration or the disposition of such Registrable Notes, and in such
connection, (i) make such reasonable representations and warranties to
the managing underwriter or underwriters on behalf of any underwriters,
with respect to the business of the Issuer and the Registration
Statement, Prospectus and documents, if any, incorporated or deemed to
be incorporated by reference therein, in each case, as are customarily
made by issuers to underwriters in underwritten offerings of debt
securities similar to the Notes, and confirm the same if and when
requested; (ii) obtain opinions of counsel to the Issuer and updates
thereof in form and substance reasonably satisfactory to the managing
underwriter or underwriters, addressed to the managing underwriter or
underwriters covering the matters customarily covered in opinions
received in underwritten offerings of debt securities similar to the
Notes and such other customary matters as may be reasonably requested
by the managing underwriter(s); (iii) obtain "cold comfort" letters and
updates thereof in form and substance reasonably satisfactory to the
managing underwriter or underwriters from the independent certified
public accountants of the Issuer (and, if necessary, any other
independent certified public accountants of any business acquired by
the Issuer for which financial statements and financial data are, or
are required to be, included in the Registration Statement), addressed
to the managing underwriter or underwriters on behalf of any
underwriters, such letters to be in customary form and covering matters
of the type customarily covered in "cold comfort" letters in connection
with underwritten offerings of debt securities similar to the Notes and
such other matters as may be reasonably requested by the managing
underwriter or underwriters; and (iv) if an underwriting agreement is
entered into, the same shall contain indemnification provisions and
procedures no less favorable than those set forth in Section 7 hereof
(or such other provisions and procedures acceptable to Holders of a
majority in aggregate principal amount of Registrable Notes covered by
<PAGE>
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such Registration Statement and the managing underwriter or
underwriters or agents) with respect to all parties to be indemnified
pursuant to said Section. The above shall be done at each closing under
such underwriting agreement, or as and to the extent required
thereunder.
(n) If (1) a Shelf Registration is filed pursuant to Section
3, or (2) a Prospectus contained in an Exchange Registration Statement
filed pursuant to Section 2 is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell
Exchange Notes during the Applicable Period, make available for
inspection by a representative of any selling Holders of such
Registrable Notes being sold, or each such Participating Broker-Dealer,
as the case may be, the managing underwriter or underwriters
participating in any such disposition of Registrable Notes, if any, and
any attorney, accountant or other agent retained by a representative of
any such selling Holders or each such Participating Broker-Dealer, as
the case may be (collectively, the "INSPECTORS"), at the offices where
normally kept, during reasonable business hours, all financial and
other records, pertinent corporate documents and properties of the
Issuer (collectively, the "RECORDS") as shall be reasonably necessary
to enable them to exercise any applicable due diligence
responsibilities, and cause the officers, directors and employees of
the Issuer to supply all information in each case reasonably requested
by any such Inspector in connection with such Registration Statement.
Records which the Issuer determines, in good faith, to be confidential
and any Records which they notify the Inspectors are confidential shall
not be disclosed by the Inspectors unless (i) the release of such
Records is ordered pursuant to a subpoena or other order from a court
of competent jurisdiction or (ii) the information in such Records has
been made generally available to the public. Each selling Holder of
such Registrable Notes and each such Participating Broker-Dealer or
underwriter will be required to agree that information obtained by it
as a result of such inspections shall be deemed confidential and shall
not be used by it as the basis for any market transactions in the
securities of the Issuer or for any purpose other than in connection
with such Registration Statement unless and until such is made
generally available to the public by the Issuer. Each selling Holder of
such Registrable Notes and each such Participating Broker-Dealer will
be required to further agree that it will, upon learning that
disclosure of such Records is sought in a court of competent
<PAGE>
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jurisdiction, give prompt notice to the Issuer and allow the Issuer to
undertake appropriate action to prevent disclosure of the Records
deemed confidential at their expense.
(o) Provide an indenture trustee for the Registrable Notes or
the Exchange Notes, as the case may be, and cause the Indenture to be
qualified under the TIA not later than the effective date of the
Exchange Registration Statement or the first Registration Statement
relating to the Registrable Notes; and in connection therewith,
cooperate with the Holders of the Registrable Notes to enable the
Indenture to be so qualified in accordance with the terms of the TIA;
and execute, and use their respective reasonable best efforts to cause
such trustee to execute, all forms and documents required to be filed
with the SEC to enable the Indenture to be so qualified in a timely
manner.
(p) Comply in all material respects with all applicable rules
and regulations of the SEC and make generally available to its
securityholders earnings statements satisfying the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder (or any
similar rule promulgated under the Securities Act) no later than 90
days after the end of any 12-month period (i) commencing at the end of
any fiscal quarter in which Registrable Notes are sold to underwriters
in a firm commitment or best efforts underwritten offering and (ii) if
not sold to underwriters in such an offering, commencing on the first
day of the first fiscal quarter of the Issuer after the effective date
of a Registration Statement, which statements shall cover said 12-month
periods.
(q) Upon consummation of an Exchange Offer or a Private
Exchange, obtain an opinion of counsel to the Issuer, in a form
reasonable and customary for underwritten offerings of debt securities
similar to the Notes, addressed to the Trustee for the benefit of all
Holders of Registrable Notes participating in the Exchange Offer or the
Private Exchange, as the case may be, and which includes an opinion
that (i) the Issuer has duly authorized, executed and delivered the
Exchange Notes and Private Exchange Notes and the Indenture and (ii)
each of the Exchange Notes or the Private Exchange Notes, as the case
may be, and the Purchase Agreement constitute a legal, valid and
binding obligation of the Issuer, enforceable against the Issuer in
accordance with its respective terms (with reasonable and customary
exceptions and qualifications).
<PAGE>
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(r) If an Exchange Offer or a Private Exchange is to be
consummated, upon delivery of the Registrable Notes by Holders to the
Issuer (or to such other Person as directed by the Issuer) in exchange
for the Exchange Notes or the Private Exchange Notes, as the case may
be, the Issuer shall mark, or cause to be marked, on such Registrable
Notes that such Registrable Notes are being canceled in exchange for
the Exchange Notes or the Private Exchange Notes, as the case may be;
and, in no event shall such Registrable Notes be marked as paid or
otherwise satisfied.
(s) Cooperate with each seller of Registrable Notes covered by
any Registration Statement and the managing underwriter(s), if any,
participating in the disposition of such Registrable Notes and their
respective counsel in connection with any filings required to be made
with the National Association of Securities Dealers, Inc. (the "NASD").
(t) Use their respective reasonable best efforts to take all
other reasonable steps necessary to effect the registration of the
Registrable Notes covered by a Registration Statement contemplated
hereby.
Notwithstanding the foregoing, nothing in this Agreement shall
be deemed to require the Issuer to register any of the Notes or the Exchange
Notes pursuant to the Exchange Act unless such Notes or Exchange Notes are
listed on any securities exchange.
The Issuer may require each seller of Registrable Notes or
Participating Broker-Dealer as to which any registration is being effected to
furnish to the Issuer such information regarding such seller or Participating
Broker-Dealer and the distribution of such Registrable Notes or Exchange Notes
to be sold by such Participating Broker-Dealer, as the case may be, as the
Issuer may, from time to time, reasonably request. The Issuer may exclude from
such registration the Registrable Notes of any seller or Participating
Broker-Dealer who fails to furnish such information within a reasonable time
after receiving such request. Each seller as to which any Shelf Registration is
being effected agrees to furnish promptly to the Issuer all information required
to be disclosed in order to make the information previously furnished to the
Issuer by such seller not materially misleading. No Holder of Registrable Notes
shall be entitled to Additional Interest pursuant to Section 4
<PAGE>
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hereof unless and until such Holder has provided all such information.
Each Holder of Registrable Notes and each Participating
Broker-Dealer agrees by acquisition of such Registrable Notes or Exchange Notes
to be sold by such Participating Broker-Dealer, as the case may be, that, upon
receipt of any notice from the Issuer of the happening of any event of the kind
described in Section 5(c)(ii), 5(c)(iv), 5(c)(v) or 5(c)(vi) hereof, such Holder
will forthwith discontinue disposition of such Registrable Notes covered by such
Registration Statement or Prospectus or Exchange Notes to be sold by such Holder
or Participating Broker-Dealer, as the case may be, until such Holder's or
Participating Broker-Dealer's receipt of the copies of the supplemented or
amended Prospectus contemplated by Section 5(k), or until it is advised in
writing (the "ADVICE") by the Issuer that the use of the applicable Prospectus
may be resumed, and has received copies of any amendments or supplements
thereto. If so requested by the Issuer, each Holder will use commercially
reasonable efforts to deliver to the Issuer (at the Issuer's cost) all copies,
other than permanent file copies, then in such Holder's possession, of the
requested Prospectus within a reasonable period after receipt of such notice. In
the event the Issuer shall give any such notice, each of the Effectiveness
Period and the Applicable Period shall be extended by the number of days during
such periods from and including the date of the giving of such notice to and
including the date when each seller of Registrable Notes covered by such
Registration Statement or Exchange Notes to be sold by such Holder or
Participating Broker-Dealer, as the case may be, shall have received (x) the
copies of the supplemented or amended Prospectus contemplated by Section 5(k) or
(y) the Advice.
6. REGISTRATION EXPENSES
(a) All reasonable fees and expenses incident to the
performance of or compliance with this Agreement by the Issuer shall be borne by
the Issuer, whether or not the Exchange Offer or a Shelf Registration is filed
or becomes effective, including, without limitation, (i) all registration and
filing fees (including, without limitation, (A) fees with respect to filings
required to be made with the NASD in connection with an underwritten offering
and (B) fees and expenses of compliance with state securities or Blue Sky laws
(including, without limitation, reasonable fees and disbursements of counsel in
connection with Blue Sky qualifications of the Registrable Notes or Exchange
Notes and determination of the eligibility of the Registrable Notes or Exchange
Notes for investment under the laws of such jurisdictions in the United States
(x) where the Holders of Registrable Notes are located, in the case of
<PAGE>
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the Exchange Notes, or (y) as provided in Section 5(h), in the case of
Registrable Notes or Exchange Notes to be sold by a Participating Broker-Dealer
during the Applicable Period)), (ii) printing expenses (including, without
limitation, expenses of printing certificates for Registrable Notes or Exchange
Notes in a form eligible for deposit with The Depository Trust Company and of
printing Prospectuses if the printing of Prospectuses is reasonably requested by
the managing underwriter or underwriters, if any, or, in respect of Registrable
Notes or Exchange Notes to be sold by any Participating Broker-Dealer during the
Applicable Period, if reasonably requested by the Holders of a majority in
aggregate principal amount of the Registrable Notes included in any Registration
Statement or of such Exchange Notes, as the case may be), (iii) messenger,
telephone and delivery expenses related thereto, (iv) reasonable fees and
disbursements of counsel for the Issuer and reasonable fees and disbursements of
special counsel for the sellers of Registrable Notes (subject to the provisions
of Section 6(b)), (v) fees and disbursements of all independent certified public
accountants referred to in Section 5(m)(iii) (including, without limitation, the
expenses of any special audit and "cold comfort" letters required by or incident
to such performance), (vi) rating agency fees, (vii) Securities Act liability
insurance, if the Issuer desires such insurance, (viii) fees and expenses of the
Trustee and its counsel, (ix) fees and expenses of all other Persons retained by
the Issuer, (x) internal expenses of the Issuer (including, without limitation,
all salaries and expenses of officers and employees of the Issuer performing
legal or accounting duties), (xi) the expense of any annual audit undertaken by
the Issuer, (xii) the fees and expenses incurred in connection with any listing
of the securities, initiated by the Issuer in its sole discretion, to be
registered on any securities exchange and (xiii) the expenses relating to
printing, word processing and distributing all Registration Statements,
underwriting agreements, indentures, securities sales agreements and any other
documents necessary in order to comply with this Agreement. In the event of an
underwritten offering of Registrable Notes the Issuer shall not be responsible
for any "roadshow" expenses in connection therewith.
(b) In connection with any Shelf Registration hereunder, the
Issuer shall reimburse the Holders of the Registrable Notes being registered in
such registration for the reasonable fees and disbursements of not more than one
counsel (in addition to appropriate local counsel) chosen by the Holders of a
majority in aggregate principal amount of the Registrable Notes to be included
in such Registration Statement.
<PAGE>
-24-
(c) Notwithstanding any of the foregoing, the Issuer shall not
have any obligation to pay any underwriting fees, discounts or commissions
attributable to the sale of Registrable Notes.
7. INDEMNIFICATION
(a) The Issuer agrees to indemnify and hold harmless each
Holder of Registrable Notes and each Participating Broker-Dealer selling
Exchange Notes during the Applicable Period, the officers and directors of each
such Person, and each Person, if any, who controls any such Person within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act (each, a "PARTICIPANT"), from and against any and all losses, claims,
damages and liabilities (including, without limitation, the reasonable legal
fees and other expenses actually incurred in connection with any suit, action or
proceeding or any claim asserted) caused by, arising out of or based upon any
untrue statement or alleged untrue statement of a material fact contained in any
Registration Statement or Prospectus (as amended or supplemented if the Issuer
shall have furnished any amendments or supplements thereto) or any preliminary
Prospectus, or caused by, arising out of or based upon any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except insofar as such losses,
claims, damages or liabilities are caused by any untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in conformity
with information relating to any Participant furnished to the Issuer in writing
by such Participant expressly for use therein; PROVIDED that the foregoing
indemnity with respect to any preliminary Prospectus shall not inure to the
benefit of any Participant (or to the benefit of an officer or director of such
Participant or any Person controlling such Participant) from whom the Person
asserting any such losses, claims, damages or liabilities purchased Registrable
Notes or Exchange Notes if such untrue statement or omission or alleged untrue
statement or omission made in such preliminary Prospectus is eliminated or
remedied in the related Prospectus (as amended or supplemented if the Issuer
shall have furnished any amendments or supplements thereto) and a copy of the
related Prospectus (as so amended or supplemented) shall have been furnished to
such Participant at or prior to the sale of such Registrable Notes or Exchange
Notes, as the case may be, to such Person.
(b) Each Participant will be required to agree, severally and
not jointly, to indemnify and hold harmless the Issuer, its respective directors
and officers and each Person who controls the Issuer within the meaning of
Section 15 of the
<PAGE>
-25-
Securities Act or Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from the Issuer to each Participant, but only with reference
to information relating to such Participant furnished to the Issuer in writing
by such Participant expressly for use in any Registration Statement or
Prospectus, any amendment or supplement thereto, or any preliminary Prospectus.
The liability of any Participant under this paragraph (b) shall in no event
exceed the proceeds received by such Participant from sales of Registrable Notes
or Exchange Notes giving rise to such obligations.
(c) If any suit, action, proceeding (including any
governmental or regulatory investigation), claim or demand shall be brought or
asserted against any Person in respect of which indemnity may be sought pursuant
to either paragraph (a) or (b) of this Section 7, such Person (the "INDEMNIFIED
PERSON") shall promptly notify the Person against whom such indemnity may be
sought (the "INDEMNIFYING PERSON") in writing, and the Indemnifying Person, upon
request of the Indemnified Person, shall retain one counsel reasonably
satisfactory to the Indemnified Person to represent the Indemnified Person and
any others the Indemnifying Person may reasonably designate in such proceeding
and shall pay the reasonable fees and expenses incurred by such counsel related
to such proceeding. In any such proceeding, any Indemnified Person shall have
the right to retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Person unless (i) the Indemnifying
Person and the Indemnified Person shall have mutually agreed in writing to the
contrary, (ii) the Indemnifying Person has failed to retain counsel reasonably
satisfactory to the Indemnified Person or (iii) the named parties in any such
proceeding (including any impleaded parties) include both the Indemnifying
Person and the Indemnified Person and such Indemnified Person shall have been
advised by counsel that there may be one or more legal defenses available to it
which are different from or additional to those available to any such
Indemnifying Person. It is understood that the Indemnifying Person shall not, in
connection with any proceeding or related proceeding in the same jurisdiction,
be liable for the reasonable fees and expenses of more than one separate law
firm (in addition to any local counsel) for all Indemnified Persons, and that
all such reasonable fees and expenses shall be reimbursed as they are incurred.
Any such separate firm for the Participants and such control Persons of
Participants shall be designated in writing by Participants who sold a majority
in interest of Registrable Notes and Exchange Notes sold by all such
Participants and any such separate firm for the Issuer, its directors, its
officers and such control Persons of the Issuer shall be designated in writing
by the
<PAGE>
-26-
Issuer. The Indemnifying Person shall not be liable for any settlement of any
proceeding effected without its prior written consent, but if settled with such
consent or if there is a final judgment for the plaintiff for which the
Indemnified Person is entitled to indemnification pursuant to this Agreement,
the Indemnifying Person agrees to indemnify any Indemnified Person from and
against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an Indemnified Person
shall have requested an Indemnifying Person to reimburse the Indemnified Person
for reasonable fees and expenses incurred by counsel as contemplated by the
third sentence of this paragraph, the Indemnifying Person agrees that it shall
be liable for any settlement of any proceeding effected without its written
consent if (i) such settlement is entered into more than 60 days after receipt
by such Indemnifying Person of the aforesaid request, (ii) such Indemnifying
Party shall have received notice of the terms of such settlement at least ten
days prior to such settlement being entered into and (iii) such Indemnifying
Person shall not have reimbursed the Indemnified Person in accordance with such
request prior to the date of such settlement; PROVIDED, HOWEVER, that the
Indemnifying Person shall not be liable for any settlement effected without its
consent pursuant to this sentence if the Indemnifying Party is contesting, in
good faith, the request for reimbursement. No Indemnifying Person shall, without
the prior written consent of the Indemnified Person, effect any settlement of
any pending or threatened proceeding in respect of which any Indemnified Person
is a party and indemnity has been sought hereunder by such Indemnified Person,
unless such settlement includes an unconditional release (or any other release
reasonably acceptable to the Indemnified Person) of such Indemnified Person from
all liability on claims that are the subject matter of such proceeding.
(d) If the indemnification provided for in paragraphs (a) and
(b) of this Section 7 is unavailable to an Indemnified Person in respect of any
losses, claims, damages or liabilities referred to therein (other than as a
result of the proviso set forth in Section 7(a)), then each Indemnifying Person
under such paragraphs, in lieu of indemnifying such Indemnified Person
thereunder, shall contribute to the amount paid or payable by such Indemnified
Person as a result of such losses, claims, damages or liabilities in such
proportion as is appropriate to reflect the relative fault of the Issuer on the
one hand and the Participants on the other in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative fault of the Issuer
on the one hand and the Participants on the other shall be determined by
reference to, among other things, whether the
<PAGE>
-27-
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Issuer
or by the Participants and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
(e) The parties agree that it would not be just and equitable
if contribution pursuant to this Section 7 were determined by PRO RATA
allocation (even if the Participants were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an Indemnified Person as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any reasonable legal or other expenses actually incurred by such
Indemnified Person in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 7, in no event shall a
Participant be required to contribute any amount in excess of the amount by
which proceeds received by such Participant from sales of Registrable Notes or
Exchange Notes exceeds the amount of any damages that such Participant has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
(f) The indemnity and contribution agreements contained in
this Section 7 will be in addition to any liability which the Indemnifying
Persons may otherwise have to the Indemnified Persons referred to above.
8. RULES 144 AND 144A
The Issuer covenants that it will file the reports required to
be filed by it under the Securities Act and the Exchange Act and the rules and
regulations adopted by the SEC thereunder in a timely manner and, if at any time
the Issuer is not required to file such reports, it will, upon the request of
any Holder of Registrable Notes, make publicly available other information of a
like nature so long as necessary to permit sales pursuant to Rule 144 or Rule
144A. The Issuer further covenants that so long as any Registrable Notes remain
outstanding to make available to any Holder of Registrable
<PAGE>
-28-
Notes in connection with any sale thereof, the information required by Rule
144A(d)(4) under the Securities Act in order to permit resales of such
Registrable Notes pursuant to (a) such Rule 144A, or (b) any similar rule or
regulation hereafter adopted by the SEC.
9. UNDERWRITTEN REGISTRATIONS
If any of the Registrable Notes covered by any Shelf
Registration are to be sold in an underwritten offering, the investment banking
firm or firms that will underwrite the offering and the manager or managers that
will manage the offering will be selected by the Holders of a majority in
aggregate principal amount of such Registrable Notes included in such offering
and shall be reasonably acceptable to the Issuer.
No Holder of Registrable Notes may participate in any
underwritten offering hereunder unless such Holder (a) agrees to sell such
Holder's Registrable Notes on the basis provided in any underwriting
arrangements approved by the Persons entitled hereunder to approve such
arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements.
10. MISCELLANEOUS
(A) REMEDIES. In the event of a breach by the Issuer or any
Holder of any of its obligations under this Agreement, other than the occurrence
of an event which requires payment of Additional Interest, the Issuer and each
Holder of Registrable Notes, in addition to being entitled to exercise all
rights provided herein, in the Purchase Agreement or, in the case of the Initial
Purchaser, in the Purchase Agreement or granted by law, including recovery of
damages, will be entitled to specific performance of its rights under this
Agreement. The Issuer and each Holder agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of any
of the provisions of this Agreement and hereby further agrees that, in the event
of any action for specific performance in respect of such breach, it shall waive
the defense that a remedy at law would be adequate.
(B) ENFORCEMENT. The Trustee shall be authorized to enforce
the provisions of this Agreement for the ratable benefit of the Holders.
(C) NO INCONSISTENT AGREEMENTS. The Issuer has not entered, as
of the date hereof, and the Issuer shall not enter,
<PAGE>
-29-
after the date of this Agreement, into any agreement with respect to any of
their securities that is inconsistent with the rights granted to the Holders of
Registrable Notes in this Agreement or otherwise conflicts with the provisions
hereof. The Issuer has not entered nor will enter into any agreement with
respect to any of its securities which will grant to any Person piggy-back
rights with respect to a Registration Statement required to be filed under this
Agreement.
(D) ADJUSTMENTS AFFECTING REGISTRABLE NOTES. The Issuer shall
not, directly or indirectly, take any action with respect to the Registrable
Notes as a class that would adversely affect the ability of the Holders of
Registrable Notes to include such Registrable Notes in a registration undertaken
pursuant to this Agreement.
(E) AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the Issuer has obtained the written consent of Holders
of at least a majority of the then outstanding aggregate principal amount of
Registrable Notes. Notwithstanding the foregoing, a waiver or consent to depart
from the provisions hereof with respect to a matter that relates exclusively to
the rights of Holders of Registrable Notes whose securities are being sold
pursuant to a Registration Statement and that does not directly or indirectly
affect, impair, limit or compromise the rights of other Holders of Registrable
Notes may be given by Holders of at least a majority in aggregate principal
amount of the Registrable Notes being sold by such Holders pursuant to such
Registration Statement, PROVIDED that the provisions of this sentence may not be
amended, modified or supplemented except in accordance with the provisions of
the immediately preceding sentence.
(F) NOTICES. All notices and other communications (including
without limitation any notices or other communications to the Trustee) provided
for or permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, next-day courier or telecopier:
(i) if to a Holder of Registrable Notes or any Participating
Broker-Dealer, at the most current address given by the Trustee to the
Issuer; and
(ii) If sent to the Issuer, shall be mailed, delivered or telecopied
and confirmed in writing, to Louisiana Casino Cruises, Inc., 1717 N.
River Road, Baton Rouge, Louisiana,
<PAGE>
-30-
Attention: Dale Darrough, with copies to (i) Dan S. Meadows, c/o Sport
Light, 2231 E. Camelback Road, Suite 202, Phoenix, Arizona, 85016, (ii)
W. Peter Temling, 3250 Mary Street, 5th Floor, Miami, Florida, 33133
and (iii) Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A.,
150 West Flagler Street, Suite 2200, Miami, Florida 31330, Attention:
Richard Schatz.
All such notices and communications shall be deemed to have
been duly given: (i) when delivered by hand, if personally delivered; (ii) five
business days after being deposited in the mail, postage prepaid, if mailed;
(iii) one business day after being timely delivered to a next-day courier; and
(iv) when receipt is acknowledged by the addressee, if telecopied.
(G) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including without limitation and without the need for an express
assignment, subsequent Holders of Registrable Notes; PROVIDED that, with respect
to the indemnity and contribution agreements in Section 7, each Holder of
Registrable Notes subsequent to the Initial Purchaser shall be bound by the
terms thereof if such Holder elects to include Registrable Notes in a Shelf
Registration; PROVIDED, HOWEVER, that this Agreement shall not inure to the
benefit of or be binding upon a successor or assign of a Holder unless and
except to the extent such successor or assign holds Registrable Notes.
(H) COUNTERPARTS. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(I) HEADINGS. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(J) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO
CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO
THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
<PAGE>
-31-
(K) SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable best efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction.
(L) ENTIRE AGREEMENT. This Agreement, together with the
Purchase Agreement, is intended by the parties as a final expression of their
agreement, and is intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject
matter contained herein and therein.
(M) NOTES HELD BY THE ISSUER OR ITS AFFILIATES. Whenever the
consent or approval of Holders of a specified percentage of Registrable Notes is
required hereunder, Registrable Notes held by the Issuer or its affiliates (as
such term is defined in Rule 405 under the Securities Act) shall not be counted
in determining whether such consent or approval was given by the Holders of such
required percentage.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
LOUISIANA CASINO CRUISES, INC.
By: ___________________________
Name: Dan S. Meadows
Title: President and Director
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
CIBC OPPENHEIMER CORP.
By: ____________________________
Name: Bruce Spohler
Title: Managing Director
EXHIBIT 10.03
[Baton Rouge]
- --------------------------------------------------------------------------------
MORTGAGE, LEASEHOLD MORTGAGE, ASSIGNMENT OF RENTS,
FIXTURE FILING, SECURITY AGREEMENT AND
FINANCING STATEMENT
Dated as of November __, 1998
LOUISIANA CASINO CRUISES, INC.
("Grantor")
to
U.S. BANK TRUST NATIONAL ASSOCIATION
as Trustee
("Mortgagee")
- --------------------------------------------------------------------------------
Prepared in the Offices of:
Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
ATTENTION: Roger Meltzer, Esq.
<PAGE>
TABLE OF CONTENTS
PARAGRAPH PAGE
- --------- ----
Granting Clauses.............................................................3
Habendum.....................................................................8
Representations, Warranties, Covenants, Agreements and Conditions............8
1. Payment of Secured Obligations......................................8
2. Warranty of Title...................................................8
3. Subordinate Mortgages and Liens.....................................8
4. Representations and Warranties......................................9
5. Covenants of Grantor as to Performance and Other Matters...........10
6. Performance by Mortgagee...........................................14
7. Conflicts with Security Agreement..................................14
8. Insurance..........................................................14
9. Payment of Taxes, etc..............................................17
10. Escrow Fund........................................................18
11. Space Leases, Rents and Cash Collateral............................19
12. Maintenance of the Property; Alterations...........................21
13. Damage to and Destruction of the Mortgaged Property................21
14. Condemnation.......................................................22
-i-
<PAGE>
PARAGRAPH PAGE
- --------- ----
15. Compliance with Agreements, Laws, etc..............................22
16. Contest of Taxes, Assessments and Liens............................23
17. Cure of Defaults by Mortgagee......................................24
18. Indemnity..........................................................25
19. Events of Default..................................................26
20. Additional Remedies................................................27
21. Authorization to Execute Deeds, Appointment of Keeper, etc.........28
22. Proceeds of Foreclosure Sale.......................................29
23. Purchase of the Property by Mortgagee..............................30
24. Waiver of Right to Bring Counterclaim in Foreclosure Action........30
25. Uniform Commercial Code............................................31
26. Certificate as to No Default, etc.; Information....................32
27. Terms Subject to Applicable Law; Severability......................32
28. Modifications by Mortgagee.........................................33
29. Change in Laws Regarding Taxation..................................33
30. Documentary Stamps.................................................33
31. Cumulative Remedies of Mortgagee; No Waiver........................34
32. Filing of Shore Mortgage, etc......................................34
33. Marshalling........................................................35
34. Waiver of Notice...................................................35
35. Recovery of Sums Required to Be Paid...............................35
-ii-
<PAGE>
PARAGRAPH PAGE
- --------- ----
36. Further Assurances.................................................35
37. Notices............................................................36
38. Liability..........................................................36
39. Headings, etc......................................................36
40. Successors and Assigns.............................................36
41. Discharge of Lien..................................................36
42. Survival of Assignment.............................................37
43. Miscellaneous......................................................37
44. Governing Law; Interpretation......................................37
45. True Copy..........................................................38
46. Expenses of Enforcement............................................38
47. Waiver.............................................................38
48. Construction Mortgage..............................................39
49. The Mortgagee's Duties.............................................39
50. Shore Mortgage Absolute............................................39
51. Authentic Evidence.................................................40
52. Confession of Judgment.............................................40
Schedule A - Leasehold Interest
Schedule B - Permitted Encumbrances
-iii-
<PAGE>
MORTGAGE, LEASEHOLD * UNITED STATES OF
MORTGAGE, ASSIGNMENT OF LEASES AMERICA
AND RENTS, FIXTURE FILING, *
SECURITY AGREEMENT AND
FINANCING STATEMENT *
STATE OF NEW YORK
BY *
LOUISIANA CASINO CRUISES, * COUNTY OF NEW YORK
INC.
TO *
U.S. BANK TRUST NATIONAL *
ASSOCIATION,
*
AS TRUSTEE
* * * * * * * * * * * * * * * * * * * *
BE IT KNOWN, that as of this __th day of November, 1998, before me the
undersigned Notary Public duly commissioned and qualified, personally came and
appeared:
LOUISIANA CASINO CRUISES, INC., a Louisiana corporation (Federal
Taxpayer Identification No. 72-1196619), appearing through its
undersigned officer duly authorized hereunto by virtue of a resolution
of the Board of Directors thereof, a certified copy of which is
attached hereto as Schedule C, which has a mailing address of 1717
River Road North, Baton Rouge, Louisiana 70802
("GRANTOR"), who declared that Grantor does by these presents declare and
acknowledge an indebtedness unto:
U.S. BANK TRUST NATIONAL ASSOCIATION, a national banking association
(Federal Taxpayer Identification No. 41-0257700), as trustee for the
Holders under an Indenture, dated as of November __, 1998 (such
Indenture, as amended or otherwise modified from time to time, the
"INDENTURE"), between Grantor and Trustee, appearing herein through its
undersigned officer duly authorized hereunto, which has a mailing
address of 180 East 5th Street, St. Paul, Minnesota 55101, Attention:
Corporate Trust Administration.
("MORTGAGEE"), here present who accepts this Mortgage, Leasehold Mortgage,
Assignment of Leases and Rents, Fixture Filing, Security Agreement and Financing
Statement (this "SHORE MORTGAGE"; capitalized terms not otherwise defined
<PAGE>
-2-
in this Shore Mortgage shall have the meanings set forth for such terms in the
Indenture).
W I T N E S S E T H :
WHEREAS, Grantor is the owner of a leasehold interest (the
"LEASEHOLD INTEREST") created under that certain Ground Lease Agreement, dated
June 16, 1993, between Capitol Lake Properties, Inc., as landlord, and Grantor,
as tenant, as amended by that certain Supplemental Agreement to Ground Lease,
dated October 13, 1993, between Capitol Lake Properties, Inc. and Grantor and
that certain Amendment to Ground Lease Agreement, dated September 30, 1993,
between Capitol Lake Properties, Inc. and Grantor (as so amended, the "LEASE"),
for certain premises located in East Baton Rouge Parish, Louisiana, and more
particularly described on SCHEDULE A attached hereto (such leasehold and fee
simple interest being hereinafter defined as the "REAL PROPERTY"); and
WHEREAS, Grantor has entered into the Indenture, pursuant to
which Grantor has issued or will issue up to $50,000,000 of its Senior Secured
Increasing Rate Notes due 2001 (the "NOTES"); and
WHEREAS, Grantor has entered into a Purchase Agreement, dated
as of November __, 1998 (the "PURCHASE AGREEMENT") with the Initial Purchaser
(as defined therein) pursuant to which the Purchasers have agreed to purchase
the Notes specified in such Purchase Agreement; and
WHEREAS, the proceeds of the purchase of the Notes will be
available to Grantor to enable Grantor to repay the existing $43.8 million of 11
1/2% First Mortgage Notes due December 1, 1998 and for working capital purposes,
and therefore, Grantor will derive substantial direct benefit from the
transactions contemplated herein, in the Indenture and the Security Documents
(as defined in the Indenture; such documents being collectively hereinafter
referred to as the "TRANSACTION DOCUMENTS") and the Purchase Agreement; and
WHEREAS, it is a condition precedent to the purchase of the
Notes by the Initial Purchaser and the Purchase Agreement that Grantor shall
have executed and delivered this Shore Mortgage.
GRANTING CLAUSES
NOW, THEREFORE, in consideration of ten dollars and other good
and valuable consideration, the receipt of and
<PAGE>
-3-
sufficiency of which are hereby acknowledged, and to secure (i) the payment when
due of indebtedness evidenced by the Notes in the principal sum of FIFTY MILLION
DOLLARS $50,000,000, payable to the order of the Holders, bearing interest as
set forth in the Indenture and maturing on a date three years from the Issue
Date, such date being the Maturity Date, as defined in the Indenture, and any
notes exchanged for the Notes or issued in replacement of the Notes (in each
case pursuant to the terms of the Indenture), including, without limitation, all
accrued and unpaid interest thereon, and premiums and penalties, if any,
thereon, including late payment charges and Additional Interest (as defined in
Paragraph 17 hereof), (ii) the payment by Grantor if and when due of (a) the
Purchase Price (as defined in Section 1010 of the Indenture), in an amount not
to exceed such amount calculated in accordance with Section 1010 of the
Indenture, (b) amounts due in connection with an Asset Sale Offer (as defined in
Section 1017 of the Indenture) in an amount not to exceed such amount calculated
in accordance with Section 1017 of the Indenture and (c) amounts due in
connection with an Event of Loss Offer (as defined in Section 1018 of the
Indenture) in an amount not to exceed such amount calculated in accordance with
Section 1018 of the Indenture, in each case together with interest thereon as
set forth in the Indenture, and premiums and penalties, if any, thereon,
including Additional Interest, (iii) all other sums that may or shall become due
hereunder, in connection with the Notes or under the other Transaction
Documents, including the costs and expenses of enforcing any provision of any of
the foregoing documents or any extensions or modifications of the Notes or any
substitutions therefor, (iv) the reimbursement to Mortgagee of all monies which
may be advanced as herein provided and of any and all costs and expenses
(including reasonable attorneys' fees and expenses) incurred or paid on account
of any litigation at law or in equity that may arise in respect of this Shore
Mortgage or the obligations secured hereby or the lands and premises and other
property herein mentioned or in obtaining possession of said lands and premises
and other property after any sale that may be made as hereinafter provided, (v)
the payment by Grantor to Mortgagee of all sums, if any, as may be duly expended
or advanced by Mortgagee in the performance of any obligation of Grantor as
provided hereunder, (vi) the payment of any and all other indebtedness that this
Shore Mortgage by its terms secures and (vii) the performance and observance of
the covenants, agreements and obligations of Grantor contained herein and in the
other Transaction Documents (all obligations and sums included in the foregoing
clauses (i), (ii), (iii), (iv), (v), (vi) and (vii) being hereinafter
collectively referred to as the "SECURED OBLIGATION"), and in order to charge
with such
<PAGE>
-4-
performance and with such payments said lands and premises and other property
hereinafter described and the rents, revenues, issues, income and profits
thereof, Grantor does hereby mortgage, affect, hypothecate, to inure to the use
and benefit of Mortgagee (as trustee under the Indenture), and its successors
and assigns, all right, title and interest of Grantor now owned or leased, or
hereafter acquired, in, to or under, or derived from each and all of the
following properties, estates, rights, titles and interests (collectively, the
"MORTGAGED PROPERTY"):
(a) the Real Property and all tenements, hereditaments,
appurtenances, estates and rights in and to any of the Real Property
and all component parts of the Real Property;
(b) all buildings, improvements and other structures now or
hereafter located on any of the Real Property (the "IMPROVEMENTS");
(c) all of Grantor's right, title and interest in and to all
servitudes, easements, rights-of-way, gores of land, streets, ways,
alleys, passages, sewer rights, waters, water courses, water rights and
powers, and all estates, rights, title, interests, privileges,
liberties, prescriptions, advantages and appurtenances of any nature
whatsoever, in any way belonging, relating or pertaining to any of the
Real Property or the Improvements;
(d) all of Grantor's right, title and interest in and to any
right to purchase, or to use and occupy, any land adjacent to any of
the Real Property and any land lying in the bed of any street, road or
avenue, opened or proposed, in front of or adjoining any of the Real
Property;
(e) all of Grantor's right, title and interest to all
machinery, apparatus, equipment, fittings, fixtures and other property
of every kind and nature whatsoever now or hereafter located upon any
of the Real Property or the Improvements, and all component parts of
any building or other construction located on any of the Real Property
or appurtenances thereto, and used in connection with the operation and
occupancy of any of the Real Property or the Improvements, and all
building equipment, materials and supplies of any nature whatsoever now
or hereafter located in or upon any of the Real Property or the
Improvements, including, without limitation, ships, boats, barges and
vessels together with all of the boilers, engines,
<PAGE>
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machinery, masts, spars, sails, anchors, cables, chains, rigging,
tackle, fittings and all other appurtenances thereunto appertaining or
belonging, and all structural steel and other metals, lumber and lumber
products, bricks, stones, building blocks, sand, cement, roofing
materials, paint, doors, windows, hardware, wires, wiring and other
building materials and any building equipment, materials and supplies
obtained for use in connection with any of the Real Property or the
Improvements and all additions, replacements, modifications and
alterations of any of the foregoing, including, but without limiting
the generality of the foregoing, all heating, lighting, incinerating
and power equipment, engines, pipes, tanks, motors, conduits,
switchboards, plumbing, lifting, cleaning, fire prevention, fire
extinguishing, refrigerating, ventilating and communications apparatus,
air cooling and air conditioning apparatus, elevators, ducts and
compressors and all other equipment and fixtures (collectively, the
"EQUIPMENT"). Grantor acknowledges that all Equipment is part and
parcel of the real estate and appropriated to the use of the real
estate and, whether or not affixed or annexed to the Improvements,
shall for the purpose of this Shore Mortgage be deemed conclusively to
be real estate and mortgaged hereby;
(f) all of Grantor's right, title and interest to all plans
and specifications for the Real Property and the Improvements, all
contracts with architects and engineers responsible for the design of
the Improvements, the preparation or evaluation of any of such plans
and specifications or the supervision of the construction of any of the
Improvements, all contracts to which Grantor is now or hereafter a
party providing for the construction of any of the Improvements, or the
furnishing of labor or materials in connection therewith or the
furnishing or installation of any Equipment or other personal property
in connection therewith, all contracts to which Grantor is now or
hereafter a party providing for the management of the construction of
any of the Improvements, all rights of Grantor as a third party
beneficiary under all contracts and subcontracts pertaining to the Real
Property or the Improvements as to which Grantor is not a party, all
payment and performance bonds relating to the Real Property or the
Improvements and all other contracts and agreements related to the
design, management, construction, equipping and development of the Real
Property or the Improvements (collectively, the "CONSTRUCTION
DOCUMENTS");
<PAGE>
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(g) all of Grantor's right, title and interest to all awards
or payments, and any interest paid or payable with respect thereto,
that may be made with respect to all or any portion of the Real
Property, the Improvements or the Equipment, whether from the exercise
of right of condemnation, eminent domain or similar proceedings
(including any transfer made in lieu of the exercise of said right), or
from any taking for public use, or for any other injury to or decrease
in the value of all or any portion of the Real Property, the
Improvements or the Equipment, or as a result of the exercise by any
governmental authority of any right or option to purchase any of the
Real Property, all of the foregoing to be held, applied and paid in
accordance with the provisions of this Shore Mortgage (collectively,
the "EMINENT DOMAIN AWARDS");
(h) all of Grantor's right, title and interest to all
proceeds of, and any unearned premiums on, any insurance policies
covering all or any portion of the Real Property, the Improvements or
the Equipment or the Rents (as hereinafter defined), including, without
limitation, the right to receive and apply the proceeds of any
insurance, judgments, or settlements made in lieu thereof, for damage
to all or any portion of the Real Property, the Improvements or the
Equipment and any interest actually paid with respect thereto, all of
the foregoing to be held, applied and paid in accordance with the
provisions of this Shore Mortgage (collectively, the "INSURANCE
PROCEEDS");
(i) all of Grantor's right, title and interest as lessor or
landlord to all leases and other agreements affecting the use or
occupancy of any of the Real Property or the Improvements now in effect
or hereafter entered into (including, without limitation, subleases
(including subleases of the Lease, licenses, concessions, tenancies and
other occupancy agreements covering or encumbering all or any portion
of the Real Property or the Improvements), but excluding any licenses
and permits to the extent not assignable under applicable law,
including without limitation, liquor and gaming licenses, together with
any modifications, extensions or renewals of the same (collectively,
excluding the Lease, the "SPACE LEASES") and the rents, revenues,
issues, income, products and profits of the Real Property and the
Improvements, including, without limitation, any security deposits or
other funds deposited with Grantor pursuant to the Space Leases
(collectively, the "RENTS"), together with any
<PAGE>
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guarantees of the Space Leases or Rents delivered to the Grantor from
time to time, and any modifications, extensions and renewals of any
such guarantees, together with the right, but not the obligation, to
exercise options, to give consents and to collect, receive and receipt
for the Rents and apply the Rents to the payment of the Secured
Obligations and to demand, sue for and recover the Rents (when due and
payable), subject to a license in favor of Grantor in respect thereof
prior to the occurrence of an Event of Default (as defined in Paragraph
19 hereof); and
(j) any and all other, further or additional rights, title,
estates and interests of Grantor in and to any of the Real Property or
the Improvements or the Equipment, and all renewals, substitutions and
replacements of and all additions and appurtenances to any of the Real
Property or the Improvements or the Equipment or constructed, assembled
or placed on any of the Real Property or the Improvements, and all
conversions of the security constituted thereby that, immediately upon
such acquisition, construction, assemblage, placement or conversion, as
the case may be, and in each such case without any further mortgage,
conveyance, assignment or other act by Grantor, shall become subject to
the lien of this Shore Mortgage as fully and completely, and with the
same effect, as though now owned by Grantor, Grantor expressly agreeing
that if Grantor shall at any time acquire any other right, title,
estate or interest in and to any of the Real Property, the Improvements
or the Equipment, the lien of this Shore Mortgage shall automatically
attach to and encumber such other right, title, estate or interest as a
first lien thereon.
AND, as additional security, Grantor hereby grants to
Mortgagee a continuing security interest in (a) the Equipment, (b) the
Construction Documents, (c) the Insurance Proceeds, (d) the Eminent Domain
Awards, (e) the Space Leases, (f) the Rents, (g) all proceeds of the foregoing
and (h) all proceeds of any of the Real Property and the Improvements
(collectively, the "SECURITY INTEREST PROPERTY") and this Shore Mortgage shall
be effective as a security agreement pursuant to the Uniform Commercial Code as
enacted and in effect in the state in which any of the Real Property is located
(the "CODE").
HABENDUM
TO HAVE AND TO HOLD the Mortgaged Property, the rights and
privileges hereby conveyed or assigned, or intended
<PAGE>
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so to be, unto Mortgagee (as trustee under the Indenture), its successors and
assigns, forever for the uses and purposes and subject to the terms and
conditions herein set forth.
REPRESENTATIONS, WARRANTIES, COVENANTS, AGREEMENTS AND CONDITIONS
THIS SHORE MORTGAGE FURTHER WITNESSETH the following
representations, warranties, covenants, agreements and conditions:
1. PAYMENT OF SECURED OBLIGATIONS. The Grantor will duly and
punctually pay the principal (and premium, if any) and interest on the Notes in
accordance with the terms of the Notes and the Indenture.
2. WARRANTY OF TITLE. Grantor warrants that it has good and
marketable title to all of the Real Property and the Improvements, subject only
to the encumbrances set forth on Schedule B hereto ("PERMITTED ENCUMBRANCES");
Grantor has and will continue to have full power and lawful authority to
encumber and convey the Mortgaged Property as provided herein. Grantor owns all
other Mortgaged Property free and clear of all liens, charges and encumbrances
of every kind and character, subject only to the Permitted Encumbrances and
Permitted Liens (as defined in the Indenture). Grantor further covenants that it
will preserve such title and will forever warrant and defend the title to the
Mortgaged Property unto Mortgagee against all claims whatsoever, subject to
Permitted Encumbrances and Permitted Liens (as defined in the Indenture) and
will forever warrant and defend the validity, enforceability and priority of the
lien of this Shore Mortgage against the claims of all persons and parties
whomsoever.
3. SUBORDINATE MORTGAGES AND LIENS. This Shore Mortgage is and
shall be maintained by Grantor as a valid first mortgage lien on and first
security interest in the Mortgaged Property, subject only to the Permitted
Encumbrances and Permitted Liens (as defined in the Indenture) and such other
matters as may be expressly permitted under the Transaction Documents. Except as
otherwise provided in the Transaction Documents, Grantor shall not, directly or
indirectly, create or suffer, or permit to be created or suffered, against the
Mortgaged Property or any part thereof, including, without limitation, the
Equipment or the Rents, and Grantor will promptly discharge, any mortgage, lien
(including the liens of mechanics and materialmen), pledge, title retention
agreement, attachment, security interest, encumbrance or charge that may affect
the Mortgaged Property, or any part thereof, or interest
<PAGE>
-9-
therein, EXCEPT (i) the Permitted Encumbrances and Permitted Liens (as defined
in the Indenture) and (ii) matters being contested in good faith and by
appropriate proceedings in the manner permitted by Paragraph 16 of this Shore
Mortgage. If any mortgage or other lien not permitted hereunder is filed,
Grantor will cause the same to be discharged promptly by payment or bonding or
otherwise to the satisfaction of Mortgagee and will exhibit to Mortgagee
evidence of payment, discharge, bonding or other disposition satisfactory to
Mortgagee.
4. REPRESENTATIONS AND WARRANTIES. In order to induce (i)
Initial Purchaser to purchase the Notes, and (ii) Mortgagee to accept this Shore
Mortgage, Grantor represents and warrants to Mortgagee that:
(a) The representations and warranties contained in the
Transaction Documents are true and correct as of the date hereof.
(b) This Shore Mortgage constitutes a valid mortgage and, upon
proper recording hereof, will constitute a valid and perfected mortgage
lien on, and security interest in, the Mortgaged Property (subject only
to the Permitted Encumbrances and Permitted Liens (as defined in the
Indenture)), and there are no defenses or offsets to Grantor's
obligations pursuant to this Shore Mortgage or the other Transaction
Documents, including, without limitation, Grantor's applicable
obligations to pay and perform the Secured Obligations.
(c) Grantor's possession of the Mortgaged Property has been
peaceable and undisturbed and, to the best of Grantor's knowledge, the
title thereto has never been disputed or questioned, and Grantor does
not know of any facts by reason of which any adverse claim to any part
of the Mortgaged Property or to any undivided interest therein might be
set up or made.
(d) There are no federal, state or local tax claims or liens
assessed or filed against Grantor or the Mortgaged Property for taxes
which are due and payable, unsatisfied of record or docketed in any
court of the state in which the Real Property is located or in any
other court located in the United States, and no petition in bankruptcy
has ever been filed by Grantor, or, to the best of Grantor's knowledge,
against Grantor, and Grantor has never made any assignment for the
benefit of creditors
<PAGE>
-10-
or taken advantage of any insolvency act or any act for the benefit of
debtors.
(e) The Mortgaged Property has not been damaged or destroyed
by fire or other casualty, and no condemnation or eminent domain
proceedings have been commenced and are pending with respect to the
Mortgaged Property, and, to the best of Grantor's knowledge, no such
condemnation or eminent domain proceedings are about to be commenced.
(f) The Lease is now a valid and subsisting lease and is in
full force and effect in accordance with the terms thereof and has not
been modified, and all of the rental, additional rental and other
charges payable under the Lease prior to the execution hereof have been
paid, and all of the material terms, conditions and agreements
contained in the Lease have been performed by Grantor, and no material
default exists under the Lease. This Shore Mortgage is lawfully
executed and delivered in conformity with the Lease and is and will be
kept a valid first priority lien on the interest of the Grantor
therein.
5. COVENANTS OF GRANTOR AS TO PERFORMANCE AND OTHER MATTERS.
(a) Grantor shall perform, observe and comply in all material respects with all
agreements, covenants and obligations imposed by the provisions of this Shore
Mortgage and each other Transaction Document or imposed upon or assumed by
Grantor by virtue of the provisions of any deed, conveyance, lease, agreement,
statute or ordinance pursuant to which Grantor or any predecessor in title of
the Mortgaged Property acquired the Mortgaged Property or any rights or
privileges appurtenant thereto or for the benefit thereof.
(b) Except as otherwise expressly permitted under the
Transaction Documents or as otherwise expressly permitted hereunder, Grantor,
without the prior written consent of Mortgagee, shall not effect, and shall not
permit, any sale, lease, transfer or other disposition of any of its assets,
including, without limitation, any of the Mortgaged Property.
(c) Subject to Section 1004 of the Indenture, Grantor will do
or cause to be done all things necessary to preserve and keep in full force and
effect the corporate existence, rights (charter and statutory) and franchises of
Grantor.
(d) Grantor shall not, without Mortgagee's prior consent,
which consent will not be unreasonably withheld, enter into any agreement with
or conveyance to any other person or
<PAGE>
-11-
entity permitting the use of any excess development rights that might otherwise
be used by Grantor in expanding, altering, reconstructing, replacing or
otherwise improving the Improvements or making any other improvements on the
Mortgaged Property, or otherwise permit or suffer any change of the zoning of
the Mortgaged Property or the use that may be made thereof.
(e) Grantor shall indemnify Mortgagee and each Holder from and
against any claims for brokerage fees or commissions payable to any broker or
finder with whom Grantor has dealt (or Grantor is alleged to have dealt) in
connection with this Shore Mortgage and shall pay all expenses incurred by
Mortgagee or any Holder in connection with the defense of any action brought to
collect any such brokerage fee or commission by any such person or entity.
(f) Intentionally Omitted
(g) Without limiting the foregoing, with respect to the Lease,
Grantor hereby covenants and agrees that:
(i) Grantor will promptly pay when due and payable the
rentals, additional rentals and other charges mentioned in and payable
under the Lease within the grace and cure periods provided in the
Lease.
(ii) Grantor will promptly perform and observe all of the
terms, covenants and conditions required to be performed and observed
by Grantor, as lessee under the Lease, within the grace and cure
periods provided in the Lease, and will do all things reasonably
necessary to preserve and to keep unimpaired its rights under the
Lease. Grantor will enforce or cause to be enforced the obligations of
the lessor under the Lease, to the end that Grantor may enjoy all of
the material rights granted to it as lessee under the Lease.
(iii) Grantor will promptly notify Mortgagee of any material
default by Grantor in the performance or observance of any of the
terms, covenants or conditions on the part of Grantor to be performed
or observed under the Lease.
(iv) Grantor will (1) promptly notify Mortgagee of the
receipt by Grantor of any notice from the lessor under the Lease of a
default by Grantor in the performance or observance of any of the
terms, covenants or conditions on the part of Grantor to be performed
or observed under the
<PAGE>
-12-
Lease, (2) promptly notify Mortgagee of the receipt by Grantor of any
notice from the lessor under the Lease to Grantor of termination of the
Lease pursuant to the provisions thereof and (3) promptly cause a copy
of each such notice received by Grantor from the lessor under the Lease
to be delivered to Mortgagee.
(v) Grantor will not, without the prior consent of Mortgagee
(1) terminate, cancel, modify, supplement or surrender or suffer or
permit any termination, modification or surrender of the Lease, (2)
fail or refuse to take timely and appropriate action to renew the Lease
pursuant to the applicable provisions thereof, (3) consent or refuse to
consent to any action taken or to be taken by the lessor or anyone else
under the Lease, the result of which would materially diminish or
impair the security of this Shore Mortgage (as determined by
Mortgagee), (4) further encumber the Leasehold Interest,
notwithstanding any such right given to Grantor under the Lease, or (5)
subordinate or consent to the subordination of the Lease to any
mortgage on the lessor's interest in the premises demised by the Lease.
(vi) Supplementing the provisions of subparagraph (v) above,
if the Lease is rejected or disaffirmed by the lessor thereunder (or by
any receiver, trustee, custodian or other party who succeeds to the
rights of such lessor, such receiver, trustee, custodian or other party
being collectively, the "acting lessor") pursuant to any bankruptcy,
insolvency, reorganization, moratorium or similar law (any such law
hereinafter collectively referred to as a "BANKRUPTCY LAW"), Grantor
covenants that it will not elect to treat the Lease as terminated under
11 U.S.C. /section/ 365(h) or any similar or successor law or right,
and hereby assigns to Mortgagee the sole and exclusive right to make or
refrain from making any such election, and Grantor agrees that any such
election, if made by Grantor, shall be void and of no force or effect.
(vii) If the lessor or acting lessor under the Lease rejects
or disaffirms the Lease pursuant to any Bankruptcy Law and Mortgagee
elects to have Grantor remain in possession under any legal right
Grantor may have to occupy the premises leased pursuant to the Lease,
then (1) Grantor shall remain in such possession and shall perform all
acts necessary for Grantor to retain its right to remain in such
possession for the unexpired term of the Lease (including all renewals
thereof) whether such acts are required under the then existing terms
and provisions
<PAGE>
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of the Lease or otherwise, and (2) all of the terms and provisions of
this Shore Mortgage and the lien created hereby shall remain in full
force and effect and shall be extended automatically to such
possession, occupancy and interest of Grantor.
(viii) Grantor will from time to time, after demand of
Mortgagee, use reasonable efforts to obtain and deliver to Mortgagee a
written statement from lessor under the Lease, duly acknowledged, and
certifying to Mortgagee and the Holders (i) that the Lease is then in
full force and effect and has not been modified (or, if modified,
setting forth all modifications), (ii) the date to which the rent,
additional rent and other charges thereunder have been paid, (iii)
whether or not, to the best knowledge of lessor under the Lease,
Grantor is in default under the Lease, and, if Grantor is in default,
the specific nature of all such defaults and (iv) as to any other
matters reasonably requested by Mortgagee and reasonably related to the
Lease.
(ix) Prior to the recording in the public records of this
Shore Mortgage, Grantor will record or cause to be recorded that
certain Landlord's Consent to Lease Encumbrance, dated November __,
1998, between Capitol Lake Properties, Inc., as landlord, and Grantor,
setting forth Mortgagee's name and address and that Mortgagee is the
holder of this Shore Mortgage and establishing and preserving
Mortgagee's rights and the obligations of the lessor under the Lease to
Mortgagee as set forth therein.
(x) Grantor shall deliver to Mortgagee an original Non
Disturbance and Attornment Agreement from the holder of any mortgage
encumbering the real property affected by the Leasehold Interest, in a
form previously agreed to by Mortgagee.
(h) Each provision of this Shore Mortgage is subject to, and
shall be enforced in compliance with, the Gaming Laws (as defined in the
Indenture).
6. PERFORMANCE BY MORTGAGEE. All sums duly paid by Mortgagee
or any Holder in connection with the payment or performance of any act performed
by Mortgagee in connection with the Mortgaged Property shall be paid by Grantor
to Mortgagee in accordance with the Transaction Documents, as applicable, and,
if such payment by Mortgagee or any Holder occurs after the applicable grace or
cure period, then such payment shall be with interest, payable from and
including the date of disbursement or advance, to and including the
<PAGE>
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date of payment calculated at the Additional Interest Rate (as hereinafter
defined), and the same shall be deemed to be secured by this Shore Mortgage and
shall be a lien on the Mortgaged Property prior to any right, title to, interest
in or claim upon the Mortgaged Property attaching subsequent to the attachment
of the lien of this Shore Mortgage. For the purpose of so curing any such
default, Mortgagee may after any applicable cure period (but shall be under no
obligation to) do any act or execute any document necessary or desirable for
such purpose in the name of Grantor, and Grantor irrevocably appoints Mortgagee
as its true and lawful attorney-in-fact, which appointment is coupled with an
interest and is unconditional and irrevocable, for such purposes.
7. CONFLICTS WITH SECURITY AGREEMENT. In the event of a
conflict between the provisions of the Security Agreement (as defined in the
Indenture) and the provisions of this Shore Mortgage, the Shore Mortgage shall
govern in all matters relating to the validity and enforceability of the lien
created hereby on the Real Property and the Improvements and (except as
expressly set forth to the contrary herein or in the Security Agreement), the
Security Agreement shall govern in all other respects.
8. INSURANCE. (a) Unless such types of insurance are no longer
reasonably commercially available, Grantor shall maintain all insurance required
by the Lease and in addition, with respect to the Real Property and the
Improvements, as follows: (i) special causes of loss insurance (formerly known
as all-risk insurance), flood and sprinkler leakage, if applicable, in an amount
sufficient to prevent Grantor from being or becoming a co-insurer within the
terms of the policy or policies providing such insurance, and in any event for
not less than the full replacement value of the Improvements and the Equipment,
as reasonably determined by Mortgagee; (ii) business interruption insurance for
loss occasioned by the perils commonly insured in a special causes of loss
policy for a period ending no earlier than the Maturity Date (as defined in the
Indenture) and in an aggregate amount not less than the real estate taxes,
additional interest and other assessments for the Real Property and the
Improvements and all other continuing expenses of the Mortgaged Property,
including, without limitation, all payments required to be made by Grantor under
the Lease; (iii) commercial general liability insurance, including blanket
contractual liability, completed operations and personal injury coverage, with a
combined single limit for any one occurrence of at least FIVE MILLION DOLLARS
($5,000,000); (iv) worker's compensation and employer's
<PAGE>
-15-
liability insurance, subject to statutory limits or better, in respect of any
work or other operations on, about or in connection with the Real Property and
the Improvements; and (v) such other insurance with respect to the Real Property
and the Improvements in such amounts as Mortgagee, from time to time, may
reasonably request against such other insurable hazards which are commonly
insured against in respect of property similar to the Real Property and the
Improvements (and, with respect to clause (v) only, PROVIDED that such insurance
is available at commercially reasonable rates).
(b) The insurance maintained by Grantor under clauses (i),
(ii) and, if appropriate, (v) of subparagraph (a) of this Paragraph shall bear a
standard noncontributory first mortgagee endorsement in favor of Mortgagee. The
insurance maintained by Grantor under clause (iii) and, if appropriate, (v)
above shall name Mortgagee as an additional insured. All insurance maintained by
Grantor shall provide that no cancellation, material change or reduction in the
coverage or amounts thereof shall be effective until at least thirty (30) days
or, in the case of non-payment of premiums, ten (10) days, after written notice
to Mortgagee thereof.
(c) Grantor shall furnish Mortgagee with certificates
evidencing all such policies, endorsements and renewals and evidence of payment
of premiums therefor and, certified copies of all such policies, endorsements
and renewals certified by the insurance carrier. In this regard, Grantor further
covenants and agrees that, in any suit or action for damages arising from the
alleged negligence of Grantor in which action Mortgagee or any Holder is
included or made a defendant, Grantor agrees to assume all of the burden, cost
and expense of the defense or settlement of such action or claim and will pay
any judgment which may be obtained against Mortgagee or any Holder.
(d) Grantor shall not carry separate or additional insurance
concurrent in form or contributing, in the event of loss, with that required
hereunder unless endorsed in favor of Mortgagee as loss payee or additional
insured, as applicable, and designating that such insurance shall contain
endorsements providing coverage secondary to the insurance required to be
carried hereunder. Nothing contained herein shall prohibit Grantor from holding
or obtaining an owner's policy of title insurance covering the Real Property.
(e) Each policy of insurance required by this Shore Mortgage
(hereinafter collectively referred to as the "POLICIES") shall be carried with a
company which is licensed
<PAGE>
-16-
to do business in the state in which the Real Property is located and is rated
A-minus-12 or higher by Best's Rating Guide, or an equivalent rating, with such
other publication of a similar nature as shall be in current use, except that
Grantor may obtain such insurance from Lloyds of London or from a protection and
indemnity club which is comparable in financial strength to insurance companies
rated A-minus-12. All policies of insurance placed with a mutual company shall
be nonassessable. All policies of insurance at any time carried by Grantor on
the Mortgaged Property (whether carried pursuant to the requirements of this
Shore Mortgage or otherwise) shall name Mortgagee as joint payee for all
payments made by such insurance company. Grantor shall pay the premiums for the
Policies as the same become due and payable. Not later than thirty (30) days
prior to the expiration date of each of the Policies, Grantor will deliver to
Mortgagee a renewal policy or policies (or binder(s) evidencing-same) marked
"premium paid" or accompanied by other evidence of payment of premium
satisfactory to Mortgagee.
(f) In the event of any insured loss, Grantor hereby
authorizes and directs any insurance company concerned to make payment of such
loss (only with respect to the insurance policies described in subparagraphs
8(a)(i), 8(a)(ii) (PROVIDED, HOWEVER, in the case of 8(a)(ii) only, any such
payments shall be made to Mortgagee only after an Event of Default, as defined
in Paragraph 19 hereof which has not been waived in writing by the Holders under
the Indenture) and, as applicable, 8(a)(v)) directly and solely to Mortgagee to
be applied as hereinafter provided. Grantor, acting in its reasonable judgment,
shall make any necessary proof of loss and shall adjust and compromise all
claims under all policies and shall cause the applicable insurance company to
make payment thereof as herein provided; and Grantor shall sign all receipts,
vouchers, releases and other instruments which may be reasonably necessary or
desirable in aid of such payment. Any Insurance Proceeds paid to Mortgagee shall
be held as trust funds, and Mortgagee shall dispose of such proceeds, as
provided in Paragraph 13. In the event that any Insurance Proceeds are paid by
check to Grantor or to Grantor and Mortgagee as joint payees, Grantor agrees
that it shall endorse such check over to Mortgagee.
(g) In the event that Grantor fails to keep the Real Property
and the Improvements insured in compliance with this Paragraph, Mortgagee may,
but shall not be obligated to, obtain insurance and pay the premiums therefor,
and Grantor shall, on demand, reimburse Mortgagee for all sums advanced and
expenses incurred in connection therewith. Such sums and expenses,
<PAGE>
-17-
together with interest thereon at the Additional Interest Rate, shall be deemed
part of the Secured Obligations and secured by the lien of this Shore Mortgage.
(h) Subject to the provisions of Paragraph 13 hereof, nothing
contained in this Paragraph or elsewhere in this Shore Mortgage shall relieve
Grantor of its duty to maintain, repair, replace or restore the Improvements or
the Equipment or rebuild the Improvements, from time to time, in accordance with
the applicable provisions of the Transaction Documents, and nothing in this
Paragraph or elsewhere in this Shore Mortgage shall relieve Grantor of its duty
to pay the Secured Obligations, which shall be absolute, regardless of the
occurrence of damage to or destruction of or condemnation of all or any portion
of the Mortgaged Property.
9. PAYMENT OF TAXES, ETC. Except as otherwise provided in
Paragraph 16 hereof, Grantor shall pay, prior to the date upon which any fine,
penalty, interest or cost may be added thereto or imposed by law for the
nonpayment thereof, all taxes, assessments, water rates, sewer rents and other
charges, including vault charges and license fees for the use of vaults, chutes
and similar areas adjoining the Real Property or the Improvements, of any kind
or nature whatsoever, ordinary or extraordinary, now or hereafter levied,
assessed or imposed upon or which constitute a lien upon or against the Real
Property or the Improvements or any portion thereof (collectively, the "TAXES").
Grantor shall deliver to Mortgagee promptly after request therefor by Mortgagee,
receipted bills or cancelled checks evidencing the payment of prior taxes to the
date upon which any fine, penalty, interest or cost may be added thereto or
imposed by law for the nonpayment thereof. In the case of any assessment payable
in installments, each installment thereof shall be paid prior to or on the date
on which such installment becomes due and payable without imposition of any
fine, penalty, interest or cost. Grantor shall not be entitled to any credit on
the Notes or any other sums which may become payable under the terms thereof or
hereof, or otherwise, by reason of the payment of Taxes.
10. ESCROW FUND. (a) Grantor shall, following an Event of
Default which has not been waived in writing by the Holders in accordance with
the Indenture, pay to Mortgagee on the first day of each calendar month
one-twelfth of an amount (hereinafter referred to as the "ESCROW FUND") which
would be sufficient to pay the Taxes, all insurance premiums and all of
Grantor's monetary obligations under the Lease payable, or estimated by
Mortgagee to be payable, during the ensuing twelve
<PAGE>
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(12) months, which shall be invested as provided in Section 10(b) hereof, with
income earned thereon becoming a part of the Escrow Fund, PROVIDED that
Mortgagee shall bear no liability for any loss occasioned by investment of the
Escrow Fund as herein provided, by any delays in investing or reinvesting the
Escrow Fund or by any failure to achieve the maximum possible yield from the
Escrow Fund. Mortgagee will apply the Escrow Fund to the payment of Taxes and
insurance premiums which are required to be paid by Grantor pursuant to the
provisions of this Shore Mortgage. If the amount of the Escrow Fund shall exceed
such amounts payable by Grantor pursuant to the provisions of this Shore
Mortgage, Mortgagee shall at its election, (a) return any excess to Grantor, (b)
credit such excess against future payments to be made to the Escrow Fund or (c)
reimburse Mortgagee for any amount owed to it under this Shore Mortgage or under
any of the Transaction Documents. If the Escrow Fund is not sufficient to pay
such amounts as the same become payable, Grantor shall on demand pay to
Mortgagee an amount which shall be sufficient to make up the deficiency. Any
amounts in the Escrow Fund shall be kept separate and segregated from the
general funds of Mortgagee. If this Shore Mortgage is sold or assigned by
Mortgagee in whole, Mortgagee shall deduct any amount owing to it under this
Shore Mortgage or any Transaction Document and transfer to the assignee the
balance, if any, then held by Mortgagee under this Paragraph and, upon such
assignment and transfer, Mortgagee shall have no further obligation to Grantor
with respect to such amount. If at any time Grantor tenders to Mortgagee full
payment of the entire Secured Obligations, including any applicable premium or
penalty, and the lien of the Indenture or this Shore Mortgage shall have been
discharged, Mortgagee shall refund to Grantor any balance remaining in the
Escrow Fund.
(b) In the event that the Escrow Fund is created, Mortgagee
shall create an account denominated "Louisiana Casino Cruises, Inc. -- Shore
Mortgage Escrow Fund" (or some similar name) in which to hold all amounts in the
Escrow Fund. All amounts from time to time in the Escrow Fund shall be invested
in the First American Fund (or, if the First American Fund should become
unavailable for any reason, a comparable cash management fund). Mortgagee is
specifically authorized to implement its automated cash investment system to
assure that funds in the Escrow Fund are invested and to charge its normal cash
management fees, which may be deducted from income earned on investments.
11. SPACE LEASES, RENTS AND CASH COLLATERAL. (a) As additional
and collateral security for payment of the Secured Obligations, and as
cumulative of any and all rights
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and remedies herein provided, Grantor hereby bargains, sells, transfers, assigns
and sets over to Mortgagee for the benefit of the Holders, any and all Space
Leases and Rents and any and all cash collateral to be derived from the
Mortgaged Property, or the use and occupation thereof, or under any contract or
bond relating to the construction or reconstruction of the Mortgaged Property,
including all Rents, royalties, revenues rights, deposits (including security
deposits) and benefits accruing to Grantor under all Space Leases, and the right
to receive the same and apply them against the Secured Obligations or against
Grantor's other obligations hereunder or the Company's obligations under the
Transaction Documents, together with all Space Leases, contracts, bonds, leases
and other documents evidencing the same now or hereafter in effect and all right
of Grantor thereunder. Nothing contained in the preceding sentence shall be
construed to bind Mortgagee to the performance of any of the provisions of any
such Space Lease, contract, bond, lease or other documents or otherwise impose
any obligation upon Mortgagee, except that Mortgagee shall be accountable for
any money actually received pursuant to such assignment to the extent of its
disposition thereof in a manner inconsistent with this Shore Mortgage or the
Transaction Documents. Grantor shall deliver to Mortgagee upon Mortgagee's
request an executed counterpart of each such Space Lease, contract, bond or
other documents. The assignment of said Space Leases, Rents, income profits,
proceeds and cash collateral, and any of the aforesaid rights with respect
thereto and to the contracts, bonds, leases and other documents evidencing the
same, is intended to be and is an absolute present assignment from Grantor to
Mortgagee and not merely the passing of a security interest.
(b) So long as there shall exist no Event of Default hereunder
which has not been waived in writing by the Holders in accordance with the
Indenture, Grantor shall have the right and license to exercise all rights,
options and privileges extended to the lessor under the terms of the Space
Leases, including, without limitation, the right to collect all Rents. Grantor
agrees to hold the same in trust and to use the same, FIRST, in payment of the
Secured Obligations, SECOND, the Taxes and insurance premiums payable hereunder
and all other charges on or against the Mortgaged Property and, THIRD, to the
expenses of Grantor's business in or on the Mortgaged Property.
(c) In the event of any such Event of Default which has not
been so waived, the right and license set forth in subparagraph (c) of this
Paragraph shall be automatically revoked, and, thereafter, Mortgagee shall have
the right and authority to exercise any of the rights or remedies referred to
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or set forth herein. In addition, upon such an Event of Default, Grantor shall
promptly pay to Mortgagee (i) all rent prepayments and security or other
deposits paid to Grantor pursuant to any Space Leases and (ii) all charges for
services or facilities or for escalations which were paid pursuant to any Space
Leases to the extent allocable to any period from and after such Event of
Default and any such sums received by Mortgagee shall be applied by Mortgagee in
accordance with Section 506 of the Indenture.
(d) If Grantor is not required to surrender possession of the
Mortgaged Property hereunder in the event of any such Event of Default which has
not been so waived, Grantor will pay monthly in advance to Mortgagee, or to any
receiver appointed to collect same, the income, profits or proceeds received by
Grantor under any of the Space Leases.
(e) Grantor will upon Mortgagee's request execute, acknowledge
and deliver to Mortgagee, in form approved by Mortgagee, one or more general or
specific assignments of the lessor's interest under any Space Lease (which are
consistent with the foregoing provisions). Grantor will, on demand, pay to
Mortgagee, or reimburse Mortgagee for the payment of, any reasonable costs or
expenses incurred in connection with the preparation or recording of any such
assignment.
(f) Grantor will (i) perform or cause to be performed the
lessor's material obligations under any Space Lease, (ii) enforce the
performance by the lessee under its respective Space Lease of all of said
lessee's material obligations thereunder and (iii) give Mortgagee prompt notice
and a copy of any notice of default, event of default, termination or
cancellation sent or received by Grantor.
(g) Except to the extent expressly permitted herein or under
the other Transaction Documents, Grantor will not, without Mortgagee's consent,
(i) assign, mortgage, pledge or otherwise transfer, dispose of or encumber,
whether by operation of law or otherwise, any Space Lease or the Rents or other
income thereunder or therefrom, (ii) accept or permit the acceptance of a
prepayment of any Rents for more than one month in advance of the due dates
therefor, (iii) amend, modify or otherwise alter any Space Lease or (iv) cancel,
terminate or accept a surrender of any Space Lease.
(h) Grantor will from time to time, promptly upon Mortgagee's
request, prepare and deliver to Mortgagee such information concerning the Space
Leases as Mortgagee shall request.
<PAGE>
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12. MAINTENANCE OF THE PROPERTY; ALTERATIONS. Notwithstanding
Section 1006 of the Indenture, Grantor will cause the Mortgaged Property to be
maintained and kept in good condition, repair and working order (ordinary wear
and tear excepted) and supplied with all necessary Equipment and will cause to
be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the judgment of Grantor may be necessary so that
the business carried on in connection therewith may be conducted at all times,
except, in every case, as and to the extent that Grantor may be prevented by
fire, strikes, lockouts, acts of God, inability to obtain labor or materials,
governmental restrictions, enemy action, civil commotion or unavoidable casualty
or similar causes beyond the control of Grantor. Grantor further agrees to
permit Mortgagee (and its agents, employees and contractors) to enter upon and
inspect the Mortgaged Property at any time during normal business hours upon
reasonable notice and, at Mortgagee's option, after the giving of a notice of
default hereunder and the expiration of any applicable grace period, to make
such repairs, replacements, renewals or additions, or to otherwise protect and
maintain the same in good, safe, insurable condition, but nothing contained in
this Paragraph shall be deemed to impose any duty upon Mortgagee or affect in
any manner the obligations of Grantor hereunder or of the Company under the
Transaction Documents.
13. DAMAGE TO AND DESTRUCTION OF THE MORTGAGED PROPERTY. (a)
In the event that, at any time during the term of the Notes, the Real Property,
the Improvements or the Equipment shall be damaged or destroyed, in whole or in
part, by fire or other casualty covered by insurance, Grantor shall give prompt
written notice thereof to Mortgagee. At such time as such damage, destruction or
casualty shall occur, the Insurance Proceeds payable in connection therewith
shall be payable to Mortgagee in accordance with Paragraph 8 hereof and shall be
deposited in the Collateral Account (as defined in the Indenture) and shall be
released, applied and/or distributed in accordance with Sections 1018 and
1204(a) of the Indenture.
(b) Upon the occurrence of an Event of Default which has not
been waived in writing by the Holders in accordance with Section 513 of the
Indenture, Mortgagee shall have the right to apply such Insurance Proceeds in
accordance with Section 506 of the Indenture.
14. CONDEMNATION. (a) In the event that the Mortgaged
Property, or any part thereof, shall be taken in condemnation proceedings or by
exercise of the right of eminent domain, or by conveyance in lieu of
condemnation, or as a
<PAGE>
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result of the exercise by any governmental authority of any right or option to
purchase (hereinafter collectively called "PROCEEDINGS"), Mortgagee shall have
the right to participate in any such Proceedings at Grantor's expense, including
reasonable attorneys' fees and disbursements, and any Eminent Domain Awards that
may be made or any proceeds thereof shall be deposited with Mortgagee and held
in trust by Mortgagee and distributed in the manner herein set forth. The
parties agree to execute any and all further documents that may be required in
order to facilitate collection of any Eminent Domain Award and the making of any
such deposit.
(b) If, at any time during the term of the Notes, there occurs
a Proceeding, any Eminent Domain Awards payable in connection therewith shall be
deposited in the Collateral Account and shall be released, applied and/or
distributed in accordance with Sections 1018 and 1204(a) of the Indenture.
(c) Upon the occurrence of an Event of Default which has not
been waived in writing by the Holders in accordance with Section 513 of the
Indenture, Mortgagee shall have the right to apply such Eminent Domain Awards in
accordance with Section 506 of the Indenture.
15. COMPLIANCE WITH AGREEMENTS, LAWS, ETC. Subject to Section
16, Grantor agrees to perform and comply in all material respects with all
covenants, agreements and restrictions affecting the Mortgaged Property and with
all laws, ordinances, acts, rules, regulations and orders of any legislative,
executive, administrative or judicial body, commission or officer (whether
federal, state or local) exercising any power of regulation or supervision over
Grantor or any part of the Mortgaged Property, whether now or hereafter enacted
and in force, whether the same be directed to the erection, repair, manner of
use or structural alteration of the Improvements or otherwise. Grantor further
agrees (i) to comply with the terms of all insurance policies covering or
applicable to the Mortgaged Property, all requirements of the issuer of any such
policy, and all orders, rules, regulations and other requirements of or
standards recommended by the National and Regional Fire Protection Associations
(or any other body exercising similar functions) applicable to or affecting the
Mortgaged Property or any use or condition of the Mortgaged Property, and (ii)
to procure, maintain and comply with all permits, licenses, approvals or other
authorizations required for any use of the Mortgaged Property then being made,
and for the proper erection, installation, operation and maintenance of the
Improvements and the Equipment or any portion of any of the foregoing, subject
to the right to
<PAGE>
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contest the applicability or validity of any license, permit, approval or
authorization in accordance with the provisions of Paragraph 16 hereof. With
respect to the compliance obligations of Grantor in this Paragraph 15 other than
Grantor's obligation to comply with all environmental or hazardous materials
laws, ordinances, rules, regulations or orders, Grantor shall have no compliance
obligation under this Paragraph 15 where failure to comply would not have a
material adverse effect on (a) the use made by Grantor of, the value or
condition of, or the business conducted on the Mortgaged Property or (b) the
rights or interests of Mortgagee or any Holder.
16. CONTEST OF TAXES, ASSESSMENTS AND LIENS. Notwithstanding
anything to the contrary contained in this Shore Mortgage, Grantor shall have
the right to contest, at its own expense, by appropriate legal proceedings
conducted in good faith and with due diligence, the amount or validity of any
Taxes or encumbrance referred to herein (other than this Shore Mortgage or any
other document or instrument securing all or any portion of the Secured
Obligations), or any of the laws, ordinances, acts, rules, regulations orders,
licenses and authorizations referred to herein; PROVIDED that (a) Grantor gives
Mortgagee timely notice of its intention to contest the same, (b) the
commencement of such proceedings shall suspend the collection or enforcement of
the matter under contest, or, if the commencement of such proceedings does not
suspend such collection or enforcement, Grantor shall have made payment of any
item sought to be collected with or without protest, (c) there shall be no
impairment of the lien of this Shore Mortgage or undue interference with the
normal conduct of Grantor's riverboat gaming operation at the Mortgaged
Property, (d) neither the Mortgaged Property, nor any part thereof or interest
therein, would be in any immediate danger of being sold, forfeited or lost, (e)
neither Mortgagee nor any Holder would be potentially subjected to criminal, or
in imminent danger of civil, liability for failure to comply therewith pending
the outcome of such proceedings, (f) in the case of Taxes, assessments, charges
or other impositions, Grantor shall have either (i) paid the amount in dispute
prior to instituting such contest, in which event the notice requirement of
subparagraph (a) of this Paragraph shall be satisfied by giving notice prior to
initiating such contest rather than prior to making payment, or (ii) furnished
such security, if any, as may be required by Mortgagee during the pendency of
such proceedings, and (g) if such contest be finally resolved against Grantor,
Grantor shall promptly pay the amount required to be paid, together with all
interest and penalties accrued thereon, or comply with the applicable
requirement. Grantor
<PAGE>
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shall indemnify and save Mortgagee and each Holder harmless from and against any
liability, loss, damage, cost or expense of any kind that may be imposed upon
Mortgagee or such Holder in connection with any such contest and any
determination resulting therefrom.
17. CURE OF DEFAULTS BY MORTGAGEE. If Grantor shall default in
the payment of any Taxes or other assessments, charges or impositions as herein
required; shall fail or refuse to keep the Improvements and Equipment in good
repair; shall fail or refuse to insure the Mortgaged Property as herein
required; shall fail to pay and satisfy liens or encumbrances against the
Mortgaged Property as herein required in respect of which security shall not
have been given as herein permitted; shall fail to pay any other sum or make any
other deposit elsewhere in this Shore Mortgage required to be paid or deposited;
or shall otherwise fail to make any payment or perform any act required to be
made or performed hereunder within any applicable grace or cure period, if any,
then Mortgagee, without further demand upon Grantor, and without waiving or
releasing any obligation or default, may (provided, that one or more Holders
shall have deposited with Mortgagee sufficient funds in order to pay the same),
but shall not be obligated to: pay such Taxes or other assessments, charges or
impositions; redeem the Mortgaged Property from any tax sale or forfeiture;
purchase any tax title obtained, or which shall be obtained thereon, without
inquiring into the validity or invalidity of any such Taxes, tax deed, or
assessments; make reasonable repairs to the Mortgaged Property; procure such
insurance and pay such insurance premium charges; pay or settle any and all
suits or claims for such liens; satisfy any such encumbrances or any other
claims that may be made against the Mortgaged Property or any part thereof; pay
any other sum or make any other deposit herein required to be paid or made by
Grantor or perform any such act for the account and at the expense of Grantor,
and enter upon the Mortgaged Property for any such purpose and take all such
action thereon as Mortgagee or any of its duly appointed agents, may deem
necessary or appropriate therefor; and all monies paid for any of the purposes
authorized in this Paragraph or for similar purposes set forth elsewhere in this
Shore Mortgage and all expenses paid or incurred in connection therewith,
including reasonable attorneys' fees and disbursements and any other monies
disbursed or advanced by Mortgagee under any Transaction Document to protect the
lien of this Shore Mortgage, shall be due and payable upon demand, with interest
("ADDITIONAL INTEREST"), from and including the date of disbursement or advance
to and including the date of payment, at a per annum rate equal to the rate
borne by the Notes (the "ADDITIONAL
<PAGE>
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INTEREST RATE"). Any sum payable pursuant to this Shore Mortgage as Additional
Interest (A) shall be deemed a part of the Secured Obligations, (B) shall be a
lien on the Mortgaged Property equal in priority to the original indebtedness
secured by this Shore Mortgage, and (C) may be included in any decree
foreclosing this Shore Mortgage to be paid out of the proceeds of the sale of
the Mortgaged Property if not otherwise paid by Grantor. The maximum amount of
all Secured Obligations secured by this Shore Mortgage is Seventy-Five Million
Dollars ($75,000,000.00).
18. INDEMNITY. Grantor hereby agrees to indemnify, defend and
hold Mortgagee (and its directors, officers, agents and employees) and each
Holder harmless from and against any and all loss, liability, damage, claim,
judgment or expense (including attorneys' fees and expenses, bond expenses,
printing and automated document preparation and retention expenses and other
ordinary litigation expenses) incurred by it (or such director, officer, agent
or employee) in connection with the acceptance or administration of Mortgagee's
duties under this Shore Mortgage, any action or proceeding to foreclose this
Shore Mortgage or in or to which Mortgagee or any Holder may be made a party due
to the existence of this Shore Mortgage or the other Transaction Documents or to
which action or proceeding Mortgagee or any Holder may become a party for the
purpose of protecting the lien of this Shore Mortgage. All sums paid by
Mortgagee or any Holder to prosecute or defend the rights herein set forth shall
be deemed a part of the Secured Obligations and shall be paid by Grantor to
Mortgagee or such Holder within ten (10) days after written demand, and if not
paid within that period, shall accrue interest from and including the date of
disbursement or advance by Mortgagee or such Holder to and including the date of
payment by Grantor at the Additional Interest Rate.
19. EVENTS OF DEFAULT. If any one or more of the following
events (each an "EVENT OF DEFAULT") shall occur:
(a) if Grantor defaults in the payment of the principal of (or
premium, if any, on) the Notes at its maturity;
(b) if Grantor defaults in the payment of any interest on any
Note when it becomes due and payable, and such default continues for a
period of ten (10) days;
(c) if Grantor fails for thirty (30) days after the giving to
it by Mortgagee of written notice, or for such lesser time period as
may be specified in this Shore
<PAGE>
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Mortgage and with or without notice as may be specified, to comply with
any covenant made by it in this Shore mortgage; or if such default is
not capable of being cured in the sole and reasonable opinion of
Mortgagee within thirty (30) days or such lesser time as may be
specified in this Shore Mortgage, if Grantor shall fail to commence
such cure within ten (10) days following receipt of notice from
Mortgagee and thereafter, expeditiously, continuously and diligently
commences to prosecute the same to completion;
(d) if a default other than as referred to in Paragraph 19(a)
or (b) hereof shall occur under any of the Transaction Documents and
shall continue beyond any applicable grace period, if any, respectively
provided for therein; or
(e) if one or more judgments, orders or decrees are rendered
against Grantor which requires the payment in money, either
individually or in an aggregate amount, that is more than $1,000,000
and such judgment, order or decree shall not be discharged, waived or
enforcement thereof stayed for a period of 60 consecutive days;
then, in any such event, Mortgagee may, in accordance with Article 5 of the
Indenture and by written notice to Grantor, declare the entire unpaid balance of
the Secured Obligations or any portion thereof to be forthwith due and payable,
and thereupon such entire balance or portion thereof shall become so due and
payable without presentment, protest or further demand or notice of any kind,
all of which are hereby expressly waived, and Grantor will forthwith pay to
Mortgagee the entire Secured Obligations or portion thereof, as applicable, and,
to the extent permitted by law, the premiums and penalties, if any, provided in
this Shore Mortgage and each other Transaction Document, as applicable, and such
payment shall be applied in accordance with Section 506 of the Indenture.
20. ADDITIONAL REMEDIES. If any one or more Events of Default
which has not been waived in writing by the Holders in accordance with the
Indenture shall occur, then, and in any such event, Mortgagee shall have the
following rights, in addition to the right of acceleration provided in this
Shore Mortgage or otherwise provided in any Transaction Document, by law or in
equity, all of which rights and remedies shall be, to the fullest extent
permitted by law, cumulative:
(a) POSSESSION. Mortgagee and its agents may enter upon the
Mortgaged Property, and exclude Grantor and its
<PAGE>
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agents and servants wholly therefrom, without liability for trespass,
damages or otherwise, and take possession of all books, records and
accounts relating thereto and all other Mortgaged Property, and Grantor
agrees to surrender possession of the Mortgaged Property and of such
books, records and accounts to Mortgagee or its agents on demand after
the happening of any Event of Default; and having and holding the same,
may use, operate, managel, preserve, control and otherwise deal
therewith and conduct the business thereof, either personally or by its
superintendents, managers, agents, servants, attorneys or receivers,
without interference from Grantor; and upon each such entry and from
time to time thereafter may, at the expense of Grantor and the
Mortgaged Property, without interference by Grantor and as Mortgagee
may deem advisable, (i) insure or reinsure the Mortgaged Property, (ii)
make all necessary or proper repairs, renewals, replacements,
alterations, additions, betterments and improvements thereto and
thereon and (iii) in every such case in connection with the foregoing,
have the right to exercise all rights and powers of Grantor with
respect to the Mortgaged Property, either in Grantor's name or
otherwise;
(b) FORECLOSURE. Mortgagee may, at its option, foreclose this
Shore Mortgage for any portion of the Secured Obligations which is then
due and payable, whether by acceleration or otherwise;
(c) SUITS. Mortgagee may, either with or without first taking
possession, proceed by suit or suits in equity or at law, or by any
other appropriate remedy or proceeding, to protect and enforce its
rights hereunder whether for the specific performance of any covenant
or agreement contained herein or in any other Transaction Document or
for an injunction against the violation of any of the terms hereof or
thereof or in aid of the exercise of any right, power or remedy granted
to Mortgagee herein or therein, or to enforce the payment of all or any
part of the Secured Obligations, or to foreclose the lien and security
interest of this Shore Mortgage against the Mortgaged Property or any
part thereof, and to have all of the Mortgaged Property or any part
thereof sold in one or more sales (as an entirety or in parcels) under
the judgment or decree of a court of competent jurisdiction or
otherwise. All rights of action under this Shore Mortgage may be
enforced by Mortgagee without the possession of the Notes and without
the production thereof at any trial or other proceeding relative
thereto;
<PAGE>
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(d) RECEIVER. Mortgagee, in any action to foreclose the lien
of this Shore Mortgage, to the extent permitted by law, shall be
entitled as a matter of right, and without notice, to the appointment
of a receiver of the Mortgaged Property or any part thereof, pending
such proceedings, with such powers as the court, making such
appointment, shall confer, and Grantor hereby consents to the
appointment of such receiver and will not oppose any such appointment;
or
(e) SECURITY INTEREST. In addition to the rights and remedies
of Mortgagee hereinabove set forth and not in lieu thereof, upon the
occurrence of an Event of Default, Mortgagee shall have all of the
rights and remedies of a holder of a security interest under the Code
with respect to the Security Interest Property (provided that Mortgagee
shall give Grantor fifteen (15) days' notice of any public or private
sale of all or any portion of the Security Interest Property) and under
any other applicable law, and all rights provided or referred to herein
and in each other Transaction Document, all of which rights and
remedies shall, to the fullest extent permitted by law, be cumulative.
21. AUTHORIZATION TO EXECUTE DEEDS, APPOINTMENT OF KEEPER,
ETC. (a) Upon the occurrence of an Event of Default which has not been waived in
writing by the Holders in accordance with the Indenture, Grantor irrevocably
appoints Mortgagee as its true and lawful attorney-in-fact, which appointment is
coupled with an interest and is unconditional and irrevocable, in Grantor's name
and stead and on its behalf, for the purpose of effectuating any sale,
assignment, transfer or delivery of the Mortgaged Property or any part thereof
or any interest therein for the enforcement of this Shore Mortgage as Mortgagee
may reasonably consider necessary or appropriate, with full power of
substitution, Grantor hereby ratifying and confirming all that such attorney
shall lawfully do by virtue hereof. If so requested by Mortgagee or any other
purchaser, Grantor shall ratify and confirm any such sale, assignment, transfer
or delivery by executing and delivering to Mortgagee, or such other purchaser,
all proper deeds, bills of sale, assignments, releases and other instruments as
may be designated in any such request. Mortgagee shall use reasonable efforts to
deliver to Grantor, promptly after the execution or filing thereof, copies of
any document executed by Mortgagee on behalf of Grantor pursuant to this
Paragraph or Paragraph 28 hereof; PROVIDED that the failure of Mortgagee to so
deliver any such document to Grantor shall not affect the validity or
enforceability of such document.
<PAGE>
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(b) In the event the Mortgaged Property, or any part thereof,
is seized as an incident to an action for the recognition or enforcement of this
Shore Mortgage by executory process, ordinary process, sequestration, writ of
fieri facias or otherwise, Grantor and Mortgagee agree that the court issuing
any such order shall, if petitioned for by Mortgagee, direct the applicable
sheriff to appoint as a keeper of the Mortgaged Property, the Mortgagee or any
agent designated by Mortgagee or any person named by the Mortgagee at the time
such seizure is effected. This designation is pursuant to Louisiana Revised
Statutes 9:5136 through 5140.2, inclusive, as the same may be amended, and
Mortgagee shall be entitled to all the rights and benefits afforded thereunder.
It is hereby agreed that the keeper shall be entitled to receive as
compensation, in excess of its reasonable costs and expenses incurred in the
administration or preservation of the Mortgaged Property, an amount equal to
$500 per day. The designation of keeper made herein shall not be deemed to
require Mortgagee to provoke the appointment of such a keeper.
22. PROCEEDS OF FORECLOSURE SALE. In any foreclosure of this
Shore Mortgage there shall be allowed and included in the decree of sale to be
paid, in the following order, out of the proceeds of such sale:
First: All reasonable fees and costs owed to or incurred by
Mortgagee and its agents and consultants hereunder or under the
Transaction Documents;
Second: All court costs, allowances authorized or permitted by
statute or a court, fees of receivers, attorneys' fees and
disbursements, reasonable appraisers' fees, expenditures for
documentary and expert evidence, stenographers' charges, publication
costs and reasonable costs (which may be estimated as to items to be
expended after the entry of the decree) of procuring all abstracts of
title, title searches and examinations, title policies and similar data
with respect to title which Mortgagee may deem reasonably necessary and
any other expenses of the foreclosure proceeding. All such expenses
shall become additional indebtedness secured hereby and immediately due
and payable, with interest computed at the Additional Interest Rate,
from and including the date of payment to and including the date of
repayment to Mortgagee;
Third: Any lien prior to the lien and security interest of
this Shore Mortgage which Mortgagee may consider necessary or desirable
to discharge;
<PAGE>
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Fourth: All other items advanced or paid by Mortgagee pursuant
to this Shore Mortgage from any other Transaction Document, with
interest (to the extent permitted by law), from and including the date
of any such advance to and including the date of payment computed at
the Additional Interest Rate; and
Fifth: In accordance with Section 506 of the Indenture.
23. PURCHASE OF THE PROPERTY BY MORTGAGEE. Mortgagee may for
its own account be a purchaser of the Mortgaged Property or any part thereof or
any interest therein at any sale thereof, whether pursuant to foreclosure or
otherwise, and may apply the amount of the Secured Obligations outstanding
toward the purchase price thereof.
24. WAIVER OF RIGHT TO BRING COUNTERCLAIM IN FORECLOSURE
ACTION. In any action to foreclose the lien or liens of this Shore Mortgage,
including a partial foreclosure, no defense, counterclaim or setoff shall be
available to Grantor other than one which denies the existence or sufficiency of
the facts upon which the action is grounded or which raises an issue concerning
the priority of liens or the statute of limitations or other bar to an action
based on the passage of time. If any defense, counterclaim or setoff, other than
one permitted by the preceding sentence, is timely raised in such foreclosure
action, such defense, counterclaim or setoff shall be dismissed; PROVIDED,
HOWEVER, that, if such defense, counterclaim or setoff is based on a claim that
could be tried in an action for money damages, such claim may be brought in a
separate action which shall not thereafter be consolidated with such foreclosure
action. Nothing contained herein, however, shall limit Grantor's right to bring
a separate action, at law or in equity, to adjudicate the issues that are the
basis for any purported defense, claim or setoff. The bringing of such separate
action for money damages shall not be deemed to afford any grounds for staying
the foreclosure action.
25. UNIFORM COMMERCIAL CODE. This Shore Mortgage constitutes a
security agreement under the Code and a fixture filing for the purposes of
Article 9 of the Code and a security interest shall attach to the Security
Interest Property for the benefit of Mortgagee as additional security for the
Secured Obligations. Pursuant to Section 32 hereof, Grantor is obligated to make
certain filings and re-filings. Grantor also hereby authorizes Mortgagee to file
financing and continuation statements with respect to the Security Interest
Property
<PAGE>
-31-
without the signature of Grantor and, upon request, Grantor shall promptly
execute financing and continuation statements in form satisfactory to Mortgagee
to further evidence and secure Mortgagee's interest in the Security Interest
Property. Mortgagee shall deliver to Grantor a copy of each such filing promptly
after making the same. Upon the occurrence of any Event of Default, Mortgagee
shall have all of the rights and remedies of a secured party under the Code,
with respect to the Security Interest Property, or other applicable law, and all
rights and remedies provided for herein and in each other Transaction Document,
all of which rights and remedies are cumulative to those provided elsewhere in
this Shore Mortgage or otherwise available to Mortgagee. Following the
occurrence of any Event of Default, Mortgagee, pursuant to Section 9-501(4) of
the Code, shall have the option of proceeding as to both real and personal
property in accordance with its rights and remedies in respect of the real
property, in which event the default provisions of the Code shall not apply. The
parties agree that, in the event Mortgagee elects to proceed with respect to the
Equipment separately from the Real Property, Grantor will assemble the Equipment
(other than those items of Equipment which are affixed to the Improvements and
not removable without material damage to such items or the Improvements) and
make the Equipment available to Mortgagee at a place or places reasonably
convenient to Mortgagee. Any notice of sale, disposition or other intended
action by Mortgagee, sent to Grantor at the address of Grantor specified for
notices herein at least fifteen (15) days prior to such action, shall constitute
reasonable notice to Grantor. All replacements, renewals and additions to the
Equipment shall become and be immediately subject to the security interest
herein of Mortgagee and be covered by this Shore Mortgage as part of the
Mortgaged Property. Grantor shall, from time to time, on request of Mortgagee,
deliver to Mortgagee an inventory of the Equipment in reasonable detail. Grantor
warrants and represents that all Equipment now is, and that all replacements
thereof, substitutions therefor and additions thereto, will be, owned by Grantor
free and clear of liens, encumbrances or security interests of others prior to
or on a parity with the interest herein of Mortgagee other than security
interests or leases given to providers of Equipment to finance the purchase of
the same and Permitted Encumbrances and Permitted Liens (as defined in the
Indenture). Neither the provisions of this Paragraph nor the filing of any
separate security agreement or financing statement with respect to Mortgagee's
security interest in the Security Interest Property shall be construed as in any
way derogating or impairing the intention of Grantor and Mortgagee hereto that
the Security Interest Property shall, at all times and for all purposes and
<PAGE>
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in all proceedings, both legal and equitable, be regarded as a part of the
Mortgaged Property.
26. CERTIFICATE AS TO NO DEFAULT, ETC.; INFORMATION. At any
time, and from time to time, but in no event less than annually, Grantor will
deliver to Mortgagee, within ten (10) days after receipt of a request or if no
such request has been made by Mortgage within the previous 365 days, Grantor
shall in any event deliver to Mortgagee, a written statement duly acknowledged
by an authorized representative of Grantor stating (i) the outstanding amount of
the Secured Obligations and the components thereof, (ii) whether, to the best
knowledge of Grantor, any offsets or defenses exist against the Secured
Obligations and (iii) that such officer has reviewed this Shore Mortgage and
each other Transaction Document and that, to the best of Grantor's knowledge,
there exists no default, condition or event which, with the giving of notice or
lapse of time or both, would constitute a default in the performance or
observance of any of the terms of this Shore Mortgage or any other Transaction
Document or, if any such default exists, specifying the nature and period of
existence thereof and what action Grantor is taking or proposes to take with
respect thereto. Grantor will also furnish to Mortgagee any such information
with respect to the Mortgaged Property as may, from time to time, be reasonably
requested by Mortgagee.
27. TERMS SUBJECT TO APPLICABLE LAW; SEVERABILITY. All rights,
powers and remedies provided herein are intended to be limited to the extent
necessary so that they will not render this Shore Mortgage invalid,
unenforceable or not entitled to be recorded, registered or filed under any
applicable law. If any term of this Shore Mortgage shall be held to be invalid,
illegal or unenforceable, the validity, legality and enforceability of the other
terms hereof shall in no way be affected thereby.
28. MODIFICATIONS BY MORTGAGEE. Grantor agrees that, without
affecting the liability of Grantor or any other person or entity (except any
person or entity expressly released in writing) liable for payment of the
Secured Obligations or for performance of any obligation contained herein or
affecting the lien and security interest of this Shore Mortgage upon the
Mortgaged Property or any part thereof, Mortgagee may, at any time and from time
to time, without notice to or the consent of any person or entity, release any
person or entity liable for payment of any debt or for performance of any
obligation, extend the time or agree to alter the terms of payment of any such
indebtedness or performance of any such obligation, modify or waive any
<PAGE>
-33-
obligation, subordinate, modify or otherwise deal with the lien and security
interest hereof, accept additional security of any kind, consent to the making
of any map or plat of the Mortgaged Property, the creating of any easements
thereon on or any covenants restricting use or occupancy thereof, or exercise or
refrain from exercising or waive any right Mortgagee may have.
29. CHANGE IN LAWS REGARDING TAXATION. In the event of the
passage after the date of this Shore Mortgage of any Federal law or law of the
state in which the Real Property is located deducting from the value of real
property for the purposes of taxation any lien or encumbrance thereon or
changing in any way the laws for the taxation of mortgages or debts secured by
mortgages for state or local purposes or the manner of the collection of any
such taxes, and imposing a tax, either directly or indirectly, on this Shore
Mortgage or all or any part of the Secured Obligations, or upon Mortgagee or any
Holder or any by reason of or as holder of any of the foregoing (excepting
therefrom any income tax on interest payments made to Mortgagee or any Holder
with respect to the Secured Obligations), Grantor shall, if permitted by law,
pay any tax imposed as a result of any such law within the statutory period or
within thirty (30) days after demand by Mortgagee, whichever is less.
30. DOCUMENTARY STAMPS. If at any time the United States of
America, any state thereof or any governmental subdivision of any such state
shall require revenue or other stamps to be affixed to this Shore Mortgage,
Grantor will pay for the same, with interest and penalties thereon, if any.
31. CUMULATIVE REMEDIES OF MORTGAGEE; NO WAIVER. No legal,
equitable or contractual right, power or remedy of Mortgagee or any Holder
hereunder or under any other Transaction Document shall be exclusive of any
other but, rather, each right, power or remedy shall be separate, cumulative and
concurrent and shall be in addition to every right, power or remedy now or
hereafter existing at law or in equity. No delay in the exercise of, or omission
to exercise, any right, power or remedy accruing on any default shall impair any
such right, power or remedy or be construed to be a waiver of any such default
or acquiescence therein, nor shall it affect any subsequent default of the same
or a different nature. Every such right, power or remedy may be exercised
concurrently or independently, and when and as often as may be deemed expedient,
by Mortgagee or any Holder, as applicable. Mortgagee may resort for the payment
of the Secured Obligations to the Mortgaged Property and to any other security
held by Mortgagee in such order and manner as Mortgagee, in its
<PAGE>
-34-
discretion, may elect. Mortgagee or any Holder may take action to recover the
Secured Obligations or any portion thereof or to enforce any covenant herein or
in any other Transaction Document without prejudice to the right of Mortgagee
thereafter to foreclose this Shore Mortgage. No act of Mortgagee or any Holder
shall be construed as an election to proceed under any one provision herein to
the exclusion of any other provision.
32. FILING OF SHORE MORTGAGE, ETC. Grantor, forthwith upon the
execution and delivery of this Shore Mortgage and thereafter, from time to time,
as required, will cause this Shore Mortgage and any security instrument or
Transaction Document creating a lien or evidencing the lien hereof upon the
Mortgaged Property and each instrument of further assurance, and each supplement
to any of the foregoing and each modification to any of the foregoing, to be
filed, registered or recorded in such manner and in such places as may be
required by any present or future law in order to publish notice of and fully to
protect the lien hereof upon, and the interest of Mortgagee in, the Mortgaged
Property. Grantor will pay all filing, registration or recording fees and all
reasonable expenses incident to the preparation, execution and acknowledgment of
this Shore Mortgage, any mortgage supplemental hereto, any security instrument
with respect to the Mortgaged Property and any instrument of further assurance,
and all federal, state, county and municipal taxes, duties, imposts, assessments
and charges arising out of or in connection with the execution and delivery of
this Shore Mortgage, any mortgage supplemental hereto, any security instrument
with respect to the Mortgaged Property or any instrument of further assurance
and shall furnish to Mortgagee evidence satisfactory to it that all recordings
and re-recordings, registrations and re-registrations, filings and re-filings
have been effectively made. Grantor shall hold harmless and indemnify Mortgagee
and each Holder and its successors and assigns against any liability incurred by
reason of the imposition of any tax on the making and recording of this Shore
Mortgage.
33. MARSHALLING. Grantor waives and releases any right to have
the Mortgaged Property marshalled.
34. WAIVER OF NOTICE. Grantor shall not be entitled to any
notices of any nature whatsoever from Mortgagee except with respect to matters
for which this Shore Mortgage specifically and expressly provides for the giving
of notices by Mortgagee to Grantor, and Grantor hereby expressly waives the
right to receive any notice from Mortgagee with respect to any matter for which
this Shore Mortgage does not specifically
<PAGE>
-35-
and expressly provide for the giving of notice by Mortgagee to Grantor.
35. RECOVERY OF SUMS REQUIRED TO BE PAID. Mortgagee shall have
the right, from time to time, to take action to recover any sum or sums which
constitute a part of the Secured Obligations as the same become due, without
regard to whether or not the balance of the Secured Obligations shall be due and
without prejudice to the right of Mortgagee thereafter to bring an action of
foreclosure, or any other action, for a default or defaults by Grantor existing
at the time such earlier action was commenced.
36. FURTHER ASSURANCES. Grantor covenants that it will, at
Grantor's sole cost and expense and at the request of Mortgagee, (i) promptly
correct any defect or error which may be discovered in the Transaction
Documents, (ii) promptly do, execute, acknowledge and deliver, and record and
re-record, file and re-file and register and re-register, any and all such acts
and instruments as Mortgagee may require from time to time in order to carry out
more effectively the purposes of this Mortgage and the other Transaction
Documents and to effectuate, complete or perfect, or to continue and preserve,
the liens and security interests created by this Mortgage and the other
Transaction Documents as first and prior liens and security interests, subject
only to the Permitted Encumbrances and Permitted Liens (as defined in the
Indenture) and such other matters as may be expressly permitted under the
Transaction Documents, upon all of the Mortgaged Property, whether now owned or
hereafter acquired by Grantor, (iii) promptly furnish Mortgagee with evidence
satisfactory to Mortgagee of every such recording, filing or registration and
(iv) promptly execute and deliver to Mortgagee such other documents and
instruments and take such other actions as Mortgagee may from time to time
require in order to evidence, preserve, protect and effectuate Mortgagee's
rights hereunder.
37. NOTICES. All notices and other communications provided for
hereunder shall be in writing (including telecopier, telegraphic, telex or cable
communication) and mailed, telecopied, telegraphed, telexed, cabled or
delivered, if to Mortgagee at its address at 180 East 5th Street, St. Paul,
Minnesota 55101, Attention: Corporate Trust Administration; if to Grantor at its
address at 1717 River Road North, Baton Rouge, Louisiana 70802; or, as to each
party, at such other address as shall be designated by such party in a written
notice to the other parties. All such notices and communications shall be
effective when received (with respect
<PAGE>
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to notices given by Grantor to Mortgagee) and when given (with respect to
notices given by Mortgagee to Grantor).
38. LIABILITY. If Grantor consists of more than one person or
entity, the obligations and liabilities of each such person or entity hereunder
shall be joint and several and solidary.
39. HEADINGS, ETC. The headings and captions of the paragraphs
of this Shore Mortgage are for convenience of reference only and are not to be
construed as defining or limiting, in any way, the scope or intent of the
provisions hereof.
40. SUCCESSORS AND ASSIGNS. The provisions of this Shore
Mortgage shall be binding upon Grantor, its successors and assigns, and all
persons and entities claiming under or through Grantor or any such successor or
assign, and, subject to the terms of the Transaction Documents, shall inure to
the benefit of Mortgagee and each Holder and their respective successors and
assigns.
41. DISCHARGE OF LIEN. Upon the observance and performance of
each and every covenant and condition set forth herein and in the Transaction
Documents and payment in full of the Secured Obligations, Mortgagee shall
promptly deliver to Grantor a confirmatory certification evidencing the same and
a satisfaction or other instruments, in recordable form, as may be reasonably
necessary to evidence such discharge and to satisfy the same of record.
42. SURVIVAL OF ASSIGNMENT. Notwithstanding anything to the
contrary contained in this Shore Mortgage, the assignment, pledge and mortgaging
of the Space Leases, Construction Documents, Rents, Eminent Domain Awards and
the Insurance Proceeds, and any cash collateral derived from the Mortgaged
Property and the right to apply any of the foregoing in accordance with the
terms of this Shore Mortgage, shall survive any foreclosure of the lien of this
Shore Mortgage.
43. MISCELLANEOUS. Unless the context clearly indicates a
contrary intent or unless otherwise specifically provided herein, words used in
this Shore Mortgage shall be used interchangeably in singular or plural form and
the word "Grantor" shall mean each Grantor and any subsequent owners of the
Mortgaged Property or any part thereof or interest therein, the word "Mortgagee"
shall mean Mortgagee or any successor thereto, and the word "Mortgagee" shall
include an individual, corporation, partnership, trust, unincorporated
association,
<PAGE>
-37-
government, governmental authority or other entity. References to "this
paragraph" shall mean the paragraph commencing with an Arabic numeral in which
the affected phrase or sentence is contained. Whenever the context may require,
any pronouns used herein shall include the corresponding masculine, feminine or
neuter forms and the singular form of nouns and pronouns shall include the
plural and vice versa. The terms "herein," "hereof" or "hereunder" or similar
terms used in this Shore Mortgage refer to this entire Shore Mortgage and not to
the particular provision in which the term is used. This Shore Mortgage may be
executed in any number of duplicate originals and each such duplicate original
shall be deemed to constitute but one and the same instrument. The terms of this
Shore Mortgage supersede the terms of any and all prior instruments consolidated
herein.
44. GOVERNING LAW; INTERPRETATION. This Shore Mortgage is to
be construed in accordance with and governed by the internal laws of the state
in which the Real Property is located, without regard to principles of conflicts
of law. It is acknowledged and agreed that, in the preparation of this Shore
Mortgage and each other Transaction Document, indistinguishable contributions
were made by representatives of both Grantor and Mortgagee and that Grantor and
Mortgagee each waives any and all rights, both in law or in equity, to have the
provisions of this Shore Mortgage or any part thereof or the provisions of any
other Transaction Document interpreted in favor of one over the other based on a
claim that representatives of one or the other were the principal draftsmen of
any such document.
45. TRUE COPY. Grantor acknowledges having received a true
copy of this Shore Mortgage without charge.
46. EXPENSES OF ENFORCEMENT. All costs and expenses paid by
Mortgagee in the performance and the enforcement of any right or remedy afforded
Mortgagee pursuant to this Shore Mortgage or any other Transaction Document
(including reasonable attorneys' fees, expenses and disbursements) shall be paid
by Grantor upon demand by Mortgagee, shall bear interest, to the extent
permitted by law, at the Additional Interest Rate from the date of demand until
the date of payment and shall be deemed a part of the Secured Obligations and
secured by this Shore Mortgage.
47. WAIVER. (a) Grantor hereby covenants and agrees that it
will not at any time: (i) insist upon or plead, or in any manner whatever claim
or take any advantage of, any stay, exemption or extension law or any so-called
"moratorium law"
<PAGE>
-38-
now or at any time hereafter in force; or (ii) claim, take or insist upon any
benefit or advantage of or from any law now or hereafter in force providing for
the valuation or appraisal of the Mortgaged Property, or any part thereof, prior
to any sale or sales thereof to be made pursuant to any provisions herein
contained, or to decree, judgment or order of any court of competent
jurisdiction. Grantor hereby expressly waives any and all rights of redemption
from sale under any order or decree of foreclosure of this Shore Mortgage, on
its own behalf and on behalf of each and every person, it being the intent
hereof that any and all such rights of redemption of the Grantor and of all
other persons are and shall be deemed to be hereby waived to the full extent
permitted by the law of the state in which the Real Property is located.
(b) Grantor waives in favor of Mortgagee any and all homestead
exemptions and other exemptions of seizure or otherwise to which Grantor is or
may be entitled under the constitution and statutes of the State of Louisiana
insofar as the Mortgaged Property is concerned. The Grantor further waives: (i)
the benefit of appraisement as provided in Louisiana Code of Civil Procedure
Articles 2332, 2336, 2723 and 2724, and all other laws conferring same; (ii) the
demand and three (3) days delay accorded by Louisiana Code of Civil Procedure
Articles 2639 and 2721; (iii) the notice of seizure required by Louisiana Code
of Civil Procedure Articles 2293 and 2721; (iv) the three days delay provided by
Louisiana Code of Civil Procedure Articles 2331 and 2722; and (v) the benefit of
the other provisions of Louisiana Code of Civil Procedure Articles 2331, 2722
and 2723, not specifically mentioned above.
48. CONSTRUCTION MORTGAGE. This Shore Mortgage secures in part
an obligation incurred for the construction of Improvements on the Real Property
and constitutes a "construction mortgage" within the meaning of Section 9-313 of
the Code.
49. THE MORTGAGEE'S DUTIES. The rights, authority to approve,
or to consent to, disapprove, withhold consent, exercise judgment or discretion
and such other powers (collectively the "POWERS") conferred on Mortgagee
hereunder are solely to protect its interest in the Mortgaged Property, and
Mortgagee shall be under no obligation to exercise any such Powers. Except for
accounting for moneys actually received by it hereunder, and the safe custody of
any collateral in its possession (subject to the standards of care governing the
Mortgagee hereunder), Mortgagee shall not have any duty as to any matters
relating to any Mortgaged Property or as to ascertaining or taking action with
respect to any Mortgaged
<PAGE>
-39-
Property whether or not Mortgagee or any Holder has or is deemed to have
knowledge of such matters, or as to the taking of any necessary steps to
preserve rights against any parties or any other rights pertaining to any
Mortgaged Property. Nothing herein shall affect any obligation of Mortgagee or
any Holder to the Holders under the Indenture or under applicable law.
50. SHORE MORTGAGE ABSOLUTE. The obligations of Grantor under
this Shore Mortgage are independent of the obligations of Grantor under the
other Transaction Documents, and a separate action or actions may be brought and
prosecuted against Grantor to enforce this Shore Mortgage, irrespective of
whether any action is brought against Grantor under such other Transaction
Documents. All rights of Mortgagee and the mortgage, assignment and security
interest hereunder, and all obligations of Grantor hereunder, shall be absolute
and unconditional, irrespective of:
(a) any lack of validity or enforceability of any other
Transaction Document or any other agreement or instrument relating
thereto;
(b) any change in the time, manner or place of payment of, or
in any other term of, all or any of the obligations of Grantor under
the other Transaction Documents or any other amendment or waiver of or
any consent to any departure from the other Transaction Documents,
including, without limitation, any increase in such obligations
resulting from the extension of additional credit to Grantor or
otherwise;
(c) any taking, exchange, release or non-perfection of any
other collateral, or any taking, release or amendment or waiver of or
consent to departure from any guaranty, for all or any other of the
obligations of Grantor under the other Transaction Documents;
(d) any manner of application of collateral, or proceeds
thereof, to all or any of the obligations of Grantor under the other
Transaction Documents, or any manner of sale or other disposition of
any collateral for all or any of such obligations or any other assets
of Grantor;
(e) any change, restructuring or termination of the corporate
restructure or existence of Grantor; or
<PAGE>
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(f) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, Grantor or a third party
grantor of a security interest or mortgage.
51. AUTHENTIC EVIDENCE. Any and all declarations of facts made
by authentic act before a notary public in the presence of two witnesses by a
person declaring that such facts lie within his knowledge, shall constitute
authentic evidence of such facts for the purpose of executory process.
52. CONFESSION OF JUDGMENT. For purposes of foreclosure under
Louisiana executory process procedures, Grantor hereby acknowledges and
confesses judgment in favor of Mortgagee for the full amount of the Secured
Obligations.
<PAGE>
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THUS DONE AND PASSED on the day and in the month and year
hereinabove first written, in the presence of the undersigned witnesses who
hereunto sign their names with Grantor and me, Notary, after due reading of the
whole.
WITNESSES AS TO ALL SIGNATURES: LOUISIANA CASINO CRUISES, INC.
By:
Name: Dan S. Meadows
Title: President
___________________________________
NOTARY PUBLIC
My commission expires:
EXHIBIT 10.04
- --------------------------------------------------------------------------------
FIRST PREFERRED SHIP MORTGAGE
ON THE WHOLE OF THE CASINO ROUGE
(Official Number 1027353 )
$50,000,000
- --------------------------------------------------------------------------------
LOUISIANA CASINO CRUISES, INC.
1717 River Road North
Baton Rouge, Louisiana 70802
Owner and Mortgagor
In Favor of
U.S. BANK TRUST NATIONAL ASSOCIATION
in its capacity as Trustee under
that certain Indenture dated as of
November __, 1998 between {Trustee] and
Louisiana Casino Cruises, Inc.
180 East 5th Street
St. Paul, Minnesota 55101
Attention: Corporate Trust Administration
- --------------------------------------------------------------------------------
Dated November __, 1998
- --------------------------------------------------------------------------------
Discharge Amount: $50,000,000 Together
With Interest, Expenses, Fees
and Performance of Mortgage Covenants
<PAGE>
FIRST PREFERRED SHIP MORTGAGE
FIRST PREFERRED SHIP MORTGAGE (the "MORTGAGE") made the __th
day of November, 1998, by:
LOUISIANA CASINO CRUISES, INC.
1717 River Road North
Baton Rouge, Louisiana 70802
a corporation organized and existing under the laws of Louisiana (the
"SHIPOWNER") in favor of
U.S. BANK TRUST NATIONAL ASSOCIATION AS TRUSTEE
180 East 5th Street
St. Paul, Minnesota 55101
Attention: Corporate Trust Administration
a national banking association, as Trustee (the "MORTGAGEE") under that certain
Indenture (the "INDENTURE") dated as of November __, 1998, between the Mortgagee
and the Shipowner. Capitalized terms not otherwise defined herein shall have the
meanings set forth for such terms in the Indenture.
WHEREAS:
1. The Shipowner is the sole owner of the Vessel, Casino
Rouge, having its home port at the Port of Baton Rouge, Louisiana. The Vessel is
documented under the laws and flag of the United States, with official Number
1027353.
2. The Shipowner has duly authorized the creation of an issue
of Senior Secured Interest Rates Notes Due 2001 (the "NOTES") more fully
described in the Indenture.
3. In order to induce Initial Purchaser to purchase the
Notes, and in order to secure (i) the due and punctual payment of the principal
of, and interest on, the Notes and the payment of any fees, expenses and all
other amounts at any time and from time to time payable by the Shipowner with
respect to the Notes, or under the Indenture, or any of the Security Documents
(the "TRANSACTION DOCUMENTS") and (ii) all the obligations of the Shipowner
under this Mortgage (all such obligations recited in subsections (i) and (ii) of
this Recital 3 being the "SECURED OBLIGATIONS", the Shipowner has duly
authorized the execution and delivery of this First Preferred Mortgage under and
pursuant to 46 United States Code, Sections 31301 through 31343, as amended from
time to time (the "SHIP MORTGAGE ACT").
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<PAGE>
4. For purposes of this Mortgage and in order to comply with
Section 31321(b)(3) of the Ship Mortgage Act, the parties to this Mortgage
hereby declare that the maximum amount of Indebtedness that is now or will in
the future be owed under the Secured Obligations at any one time is $50,000,000,
plus interest (including, without limitation, interest after the filing of a
petition initiating a proceeding referred to in Section 501(7) and (8) of the
Indenture, whether or not such interest constitutes an allowed claim for
purposes of such proceeding), expenses and fees incurred by the Trustee and/or
the Holders and performance of the covenants of this Mortgage and the
Transaction Documents.
5. The interest of the Shipowner in the Vessel (as defined
below) and the interest mortgaged by this Mortgage is that of one-hundred
percent (100%) absolute and sole ownership.
NOW, THEREFORE, in consideration of the premises and the
purchase of the Notes and in order to secure the payment of the Secured
Obligations and the performance and observance of all of the agreements,
covenants and provisions contained in this Mortgage and in each other
Transaction Document, THE SHIPOWNER HAS GRANTED, CONVEYED, MORTGAGED, PLEDGED,
CONFIRMED, ASSIGNED, TRANSFERRED AND SET OVER, AND BY THESE PRESENTS DOES GRANT,
CONVEY, MORTGAGE, PLEDGE, CONFIRM, ASSIGN, TRANSFER AND SET OVER, UNTO THE
MORTGAGEE in its capacity as the Trustee for the benefit of the Holders the
WHOLE of the vessel described in Recital 1 above, together with all of its
boilers, engines, machinery, masts, spars, sails, boats, anchors, cables,
chains, rigging, tackle, apparel, furniture, fittings, equipment (other than any
FF&E that was or will be acquired by FF&E Financing and subject to a perfected
security interest in such FF&E) and all other appurtenances thereunto
appertaining or belonging, and also any and all additions, improvements and
replacements hereafter made in or to such Vessel, or any part thereof, or in or
to her equipment and appurtenances aforesaid (each of the foregoing,
individually, a "Vessel" and, collectively, the "VESSEL");
TO HAVE AND TO HOLD all and singular the above mortgaged and
described property unto the Mortgagee and its successors and assigns, to its and
its successors and assigns own use, benefit and behoof forever;
IT IS HEREBY COVENANTED, DECLARED AND AGREED that the property
above described is to be held subject to the further covenants, conditions,
provisions, terms and uses set forth in the attached Annex I;
PROVIDED, HOWEVER, and these presents are upon the condition
that, if the Shipowner or any of its successors or
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<PAGE>
assigns shall pay or cause to be paid the Secured Obligations in accordance with
the terms hereof and of the other Transaction Documents, and shall perform and
observe all of the agreements, covenants and provisions contained herein and in
the other Transaction Documents, this Mortgage and the estate and rights hereby
granted shall cease to be binding and be void, otherwise to remain in full force
and effect.
IN WITNESS WHEREOF, the Shipowner has executed this Mortgage
on the day and year first above written.
LOUISIANA CASINO CRUISES, INC.
By:
------------------------------------------
Name: Dan S. Meadows
Title: President
[SEAL]
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ACKNOWLEDGMENT
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On November ___, 1998 before me personally came Dan S. Meadows
to me known, who being by me duly sworn, did depose and say, that he resides at
____________________________ that he is the President of LOUISIANA CASINO
CRUISES, INC. the corporation described in and which executed the above
instrument; that he knows the seal of said corporation; that the seal affixed to
said instrument is such corporate seal; that it was so affixed by order of the
Board of Directors of said corporation, that he signed his name thereto by like
order.
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EXHIBIT 10.05
SECURITY AGREEMENT
Dated as of November __, 1998
By and Between
LOUISIANA CASINO CRUISES, INC.
and
U.S. BANK TRUST NATIONAL ASSOCIATION
AS TRUSTEE
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TABLE OF CONTENTS
SECTION PAGE
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1. Grant of Security.................................................1
2. Security for Obligations..........................................4
3. Company Remains Liable............................................4
4. Delivery of Security Collateral and Account Collateral............5
5. Maintaining the Collateral Account................................5
6. Intentionally Omitted.............................................6
7. Investing of Amounts in the Collateral Account and the
Construction Account.............................................6
8. Release of Amounts................................................6
9. Representations and Warranties....................................6
10. Certain Covenants.................................................9
11. Insurance........................................................12
12. Place of Perfection; Records; Collection of Receivables..........12
13. Voting Rights; Dividends; Etc....................................14
14. As to the Assigned Agreements....................................15
15. Payments Under the Assigned Agreements...........................16
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16. Transfers and Other Liens; Pledged Shares........................17
17. Trustee Appointed Attorney-in-Fact...............................17
18. Trustee May Perform..............................................18
19. The Trustee's Duties.............................................18
20. Remedies.........................................................18
21. Registration Rights..............................................21
22. Regulatory Matters...............................................22
23. Indemnity and Expenses...........................................23
24. Security Interest Absolute.......................................24
25. Amendments; Waivers; Etc.........................................25
26. Addresses for Notices............................................25
27. Continuing Security Interest; Assignment Under the Indenture.....26
28. Release and Termination..........................................26
29. Gaming Laws......................................................26
30. The Mortgages....................................................26
31. Governing Law; Terms.............................................27
32. Execution in Counterparts........................................27
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Schedule I - Assigned Agreements
Schedule II - Locations of Equipment and Inventory
Schedule III - Trade Names
Schedule IV - Deposit Accounts
Exhibit A - Form of Deposit Account Letter
Exhibit B - Form of Consent and Agreement
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SECURITY AGREEMENT
SECURITY AGREEMENT dated as of November __, 1998 made by and
between LOUISIANA CASINO CRUISES, INC., a Louisiana corporation, with an office
at 1717 River Road North, Baton Rouge, Louisiana 70802 (the "COMPANY") and U.S.
BANK TRUST NATIONAL ASSOCIATION, as trustee (in such capacity, together with any
successor appointed pursuant to Sections 608 and 609 of the Indenture, the
"TRUSTEE") for the holders (the "Holders") under an Indenture dated as of
November __, 1998 (such Indenture, as it may be amended, supplemented or
otherwise modified from time to time in accordance with its terms, the
"Indenture"). Capitalized terms not otherwise defined in this Agreement shall
have the meanings set forth in the Indenture.
PRELIMINARY STATEMENTS:
(1) The Company has entered into the Indenture pursuant to
which the Company will issue up to $50,000,000 of Senior Secured Increasing Rate
Notes Due 2001 (the "Notes").
(2) The Company has opened a collateral account (the
"COLLATERAL ACCOUNT") with U.S. Bank Trust National Association, Account No.
33-37074-1, in the name of Louisiana Casino Cruises, Inc. but under the sole
dominion and control of
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the Trustee and subject to the terms of this Agreement (on the date hereof, the
balance in the Collateral Account is $0).
(3) It is a condition precedent to the execution of the
Indenture by the Trustee and the purchase of the Notes by the Holders that the
Company shall have granted to the Trustee the assignment and security interest
and made the pledge and assignment contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises, the Company
hereby agrees with the Trustee for its benefit and the ratable benefit of the
Holders as follows:
SECTION 1. GRANT OF SECURITY. The Company hereby assigns and
pledges to the Trustee for its benefit and the ratable benefit of the Holders,
and hereby grants to the Trustee for its benefit and the ratable benefit of the
Holders a security interest in, the collateral described in paragraphs (a), (b),
(c), (d), (e), (f) and (g) of this Section 1 (collectively, the "COLLATERAL"):
(a) all of the Company's right, title and interest, whether
now owned or hereafter acquired, in and to (i) all equipment in all of
its forms, wherever located (other than any equipment that is or was
acquired with the proceeds of Indebtedness provided by one or more
lenders that are not Affiliates of the Company and any equipment
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that is or becomes subject to a perfected security interest in such
equipment or equipment securing any obligations under the Revolving
Credit Facility (the "EXCLUDED GAMING EQUIPMENT")), now or hereafter
existing (including, but not limited to, security and surveillance
equipment, cash registers, telephone, facsimile and other
communications equipment, chairs, desks, cabinets and other furniture),
all furniture, fixtures and all parts thereof and all accessions
thereto and (ii) the vessel (Official Number 1027353), together with
all boilers, engines, machinery, masts, spars, sails, boats, anchors,
cables, chains, rigging, tackle, apparel and fittings relating thereto
(any and all such equipment, furniture, fixtures, parts and accessions
being the "EQUIPMENT");
(b) all of the Company's right, title and interest, whether
now owned or hereafter acquired, in and to all inventory in all of its
forms, wherever located, now or hereafter existing (including, but not
limited to, (i) all food, beverages, linens and other hotel supplies,
glasses, china and other restaurant supplies and all raw materials and
work in process therefor, finished goods thereof and materials used or
consumed in the manufacture or production thereof, (ii) goods in which
the Company has an interest in mass or a joint or other interest or
right of
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any kind (including, without limitation, goods in which the Company has
an interest or right as consignee) and (iii) goods that are returned to
or repossessed by the Company), and all accessions thereto and products
thereof and documents therefor (any and all such inventory, accessions,
products and documents being the "INVENTORY");
(c) all of the Company's right, title and interest, whether
now owned or hereafter acquired, in and to all accounts, contract
rights, chattel paper, instruments, deposit accounts (including the
deposit accounts listed on Schedule IV hereto), general intangibles and
other obligations of any kind, now or hereafter existing, whether or
not arising out of or in connection with the sale or lease of goods or
the rendering of services, and all rights now or hereafter existing in
and to all security agreements, leases and other contracts securing or
otherwise relating to any such accounts, contract rights, chattel
paper, instruments, deposit accounts, general intangibles or
obligations, but excluding any gaming license issued by the State of
Louisiana or any subdivision or agency thereof to the extent granting
of a security interest in such gaming license would violate applicable
governing law (any and all such accounts, contract rights, chattel
paper, instruments, deposit
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accounts, general intangibles and obligations, to the extent not
referred to in paragraph (e) or (f) of this Section 1, being the
"RECEIVABLES", and any and all such leases, security agreements and
other contracts being the "RELATED CONTRACTS");
(d) all of the Company's right, title and interest in and to
each of the agreements listed on Schedule I hereto, as such agreements
may be amended, supplemented or otherwise modified from time to time
(collectively, the "ASSIGNED AGREEMENTS"), including, without
limitation, (i) all rights of the Company to receive moneys due and to
become due under or pursuant to the Assigned Agreements, (ii) all
rights of the Company to receive proceeds of any insurance, indemnity,
warranty or guaranty with respect to the Assigned Agreements, (iii) any
claims of the Company for damages arising out of or for breach of or
default under one or more of the Assigned Agreements and (iv) all
rights of the Company to terminate the Assigned Agreements, to perform
thereunder and to compel performance and otherwise exercise all
remedies thereunder (all such Collateral being the "AGREEMENT
COLLATERAL");
(e) all of the following (collectively, the "ACCOUNT
COLLATERAL"):
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(i) the Collateral Account, all funds held therein
and all certificates and instruments, if any, from time to
time representing or evidencing the Collateral Account;
(ii) Collateral Investments (as hereinafter defined)
from time to time and all certificates and instruments, if
any, from time to time representing or evidencing the
Collateral Investments;
(iii) all notes, certificates of deposit, deposit
accounts, checks and other instruments from time to time
hereafter delivered to or otherwise possessed by the Trustee
for or on behalf of the Company, in substitution for or in
addition to any or all of the then existing Account
Collateral; and
(iv) all interest, dividends, cash, instruments and
other property and assets from time to time received,
receivable or otherwise distributed in respect of or in
exchange for any or all of the then existing Account
Collateral; and
(f) any and all shares of stock of, or other equity interests
in, any Restricted Subsidiary or any other Person owned, as of the date
hereof, or from time to time acquired by the Company in any manner
after the date
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hereof (the "PLEDGED SHARES"), the certificates representing the
Pledged Shares, and all dividends, cash, instruments and other property
from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Pledged Shares (the
"SECURITY COLLATERAL");
(g) all proceeds of any and all of the foregoing Collateral
(including, without limitation, proceeds that constitute property of
the types described in paragraphs (a) - (f) of this Section 1) and, to
the extent not otherwise included, all (i) payments under insurance
(whether or not the Trustee is the loss payee thereof), or any
indemnity, warranty or guaranty payable by reason of loss or damage to
or otherwise with respect to any of the foregoing Collateral and (ii)
cash.
SECTION 2. SECURITY FOR OBLIGATIONS. This Agreement secures
the payment of all obligations of the Company now or hereafter existing under or
with respect to the Notes, the Indenture or any of the Security Documents,
whether for principal, premium, interest, fees, expenses or otherwise (all such
obligations being the "SECURED OBLIGATIONS"). Without limiting the generality of
the foregoing, this Agreement secures the payment of all amounts that constitute
part of the Secured Obligations and would be owed by the Company to the
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Trustee or the Holders under or with respect to the Notes, the Indenture or the
Security Documents but for the fact that they are unenforceable or not allowable
due to the existence of a bankruptcy, reorganization or similar proceeding
involving the Company.
SECTION 3. COMPANY REMAINS LIABLE. Anything herein to the
contrary notwithstanding, (a) the Company shall remain liable under the
contracts and agreements included in the Collateral to the extent set forth
therein to perform all of its duties and obligations thereunder to the same
extent as if this Agreement had not been executed, (b) the exercise by the
Trustee of any of the rights hereunder shall not release the Company from any of
its duties or obligations under the contracts and agreements included in the
Collateral and (c) neither the Trustee nor any Holder shall have any obligation
or liability under the contracts and agreements included in the Collateral by
reason of this Agreement, nor shall the Trustee or any Holder be obligated to
perform any of the obligations or duties of the Company thereunder or to take
any action to collect or enforce any claim for payment assigned hereunder.
SECTION 4. DELIVERY OF SECURITY COLLATERAL AND ACCOUNT
COLLATERAL. All certificates or instruments representing or evidencing Security
Collateral or Account Collateral shall be delivered to and held by or on behalf
of
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the Trustee pursuant hereto and shall be in suitable form for transfer by
delivery or shall be accompanied by duly executed instruments of transfer or
assignment in blank, all in form and substance satisfactory to the Trustee. The
Trustee shall have the right, at any time and without notice to the Company, to
transfer to or to register in the name of the Trustee or any of its nominees any
or all of the Security Collateral and Account Collateral, subject only to the
revocable rights specified in Section 13(a) hereof. In addition, the Trustee
shall have the right at any time to exchange certificates or instruments
representing or evidencing Account Collateral for certificates or instruments of
smaller or larger denominations.
SECTION 5. MAINTAINING THE COLLATERAL ACCOUNT. So long as any
Secured Obligation shall remain unpaid and until such time as the Indenture
shall have been satisfied and discharged in accordance with Section 401 thereof:
(a) The Company will maintain the Collateral Account with the
Trustee.
(b) It shall be a term and condition of the Collateral
Account, notwithstanding any term or condition to the contrary in any
other agreement relating to the Collateral Account and except as
otherwise provided in Sections 8 and 20 hereof, that no amount
(including
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interest on Collateral Investments, as hereinafter defined) shall be
paid or released to or for the account of, or withdrawn by or for the
account of, the Company or any other Person from the Collateral
Account.
The Collateral Account shall be subject to such applicable laws, and such
applicable regulations of the Board of Governors of the Federal Reserve System
and of any other appropriate banking or governmental authority, as may now or
hereafter be in effect.
SECTION 6. INTENTIONALLY OMITTED.
SECTION 7. INVESTING OF AMOUNTS IN THE COLLATERAL ACCOUNT. The
Trustee will upon receipt of the written instructions of the Company from time
to time, subject to Sections 8 and 20 hereof, (a) invest amounts on deposit in
the Collateral Account in such Marketable Securities in the name of the Trustee
as the Company may select and (b) invest interest paid on the Marketable
Securities referred to in clause (a) above, and reinvest other proceeds of any
such Marketable Securities that may mature or be sold in the name of the Trustee
as the Company may select (the Marketable Securities referred to in clauses (a)
and (b) above being, collectively, "COLLATERAL INVESTMENTS"). Interest and
proceeds that are not invested or reinvested in Collateral Investments as
provided in
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the immediately preceding sentence shall be deposited and held in the Collateral
Account.
SECTION 8. RELEASE OF AMOUNTS. Subject to Section 20 hereof,
amounts held in the Collateral Account shall be released only in accordance with
the terms and conditions of Section 1204(a) of the Indenture.
SECTION 9. REPRESENTATIONS AND WARRANTIES. The Company
represents, warrants and agrees for itself and its Collateral as follows:
(a) LOCATION OF COMPANY AND COLLATERAL, ETC. All of the
Equipment and Inventory is located at one or more of the places
specified in Schedule II hereto. The principal place of business of the
Company or, if the Company has more than one place of business, the
chief executive office of the Company and the office where the Company
keeps its records concerning its Receivables, copies of each Assigned
Agreement to which it is a party and copies of all chattel paper that
evidence Receivables, are located, in each case, at the address listed
below the name of the Company on the signature pages hereof. Copies of
each Assigned Agreement (certified by the Secretary of the Company to
be true and complete) and originals of all chattel paper that evidence
Receivables have been
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delivered to the Trustee. None of the Receivables or the Agreement
Collateral is evidenced by a promissory note, chattel paper or other
instrument, except for promissory notes, chattel paper or other
instruments that have been delivered to the Trustee pursuant to the
terms of this Agreement.
(b) OWNERSHIP OF COLLATERAL. The Company is the legal and
beneficial owner of the Collateral in which it is granting a security
interest free and clear of any Lien, except for (i) Liens created
hereunder in favor of the Trustee and (ii) Permitted Liens. No
effective financing statement or other instrument similar in effect
covering all or any part of the Collateral is on file in any recording
office, except such as may have been filed in favor of the Trustee
relating to this Agreement. The Company has exclusive possession and
control of the Equipment and Inventory. All of the trade names of the
Company are listed below its name on Schedule III hereto.
(c) AGREEMENT COLLATERAL. The Assigned Agreements, copies of
which (certified by the Secretary of the Company to be true and
complete) have been furnished to the Trustee, have been duly
authorized, executed and delivered by (i) the Company and (ii) to the
knowledge of the officers and directors of the Company, each other
party
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thereto, have not been amended, supplemented or otherwise modified
except as set forth on Schedule I hereto, are in full force and effect
and are binding upon and enforceable against all parties thereto in
accordance with their terms, subject, as to enforcement of remedies, to
applicable bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), moratorium or other laws
affecting enforcement of creditors' rights generally from time to time
in effect and except as enforcement thereof is subject to general
principles of equity (regardless of whether enforcement is considered
in a proceeding in equity or at law). There exists no default under any
Assigned Agreement by (i) the Company and (ii) to the knowledge of the
officers and directors of the Company, each other party thereto. Each
Party to each Assigned Agreement other than the Company has executed
and delivered to the Company a consent, in substantially the form of
Exhibit B hereto, to the assignment of the Agreement Collateral to the
Trustee pursuant to this Agreement.
(d) VALID AND PERFECTED PRIORITY SECURITY INTEREST. This
Agreement and the pledge and assignment of the Collateral pursuant
hereto create, a valid and perfected first priority security interest
in the Collateral,
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enforceable against all third parties and securing the payment of the
Secured Obligations, and all filings and other actions necessary or
desirable and requested by the Trustee prior to the date hereof to
create, perfect and protect such security interest have been duly made
or taken or will be duly made or taken on or immediately after the
Issue Date.
(e) THIRD PARTY AUTHORIZATIONS. No authorization, approval or
other action by, and no notice to or filing with, any governmental
authority or regulatory body or other third party is required for
(i) the grant by the Company of the assignment and
security interest granted hereby, for the pledge by the
Company of the Security Collateral pursuant hereto or for the
execution, delivery or performance of this Agreement by the
Company, or
(ii) the perfection or maintenance of the pledge,
assignment and security interest created hereby (including the
first priority nature thereof), except for the filing of
financing and continuation statements under the Uniform
Commercial Code, which financing statements have been duly
filed, and
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(iii) the exercise by the Trustee of its voting or
other rights provided for in this Agreement or the remedies in
respect of the Collateral pursuant to this Agreement, except
as may be required in connection with the disposition of any
portion of the Security Collateral by laws affecting the
offering and sale of securities generally.
(f) INVENTORY. All Inventory produced by the Company has been
produced by the Company in compliance with all requirements of the Fair
Labor Standards Act.
(g) ASSETS INCLUDED IN COLLATERAL. The Collateral (together
with the property and assets of the Company subject to other Security
Documents) consists of all of the property and assets owned by the
Company or any of its Subsidiaries other than Excluded Gaming
Equipment. The Collateral includes all property and assets other than
Excluded Gaming Equipment necessary to operate the business of the
Company and its Subsidiaries in the same manner as such business is
conducted on the date hereof and as such business is intended to be
conducted.
(h) FEDERAL IDENTIFICATION NUMBER. The Company's federal tax
identification number is 72-1196619 and the Company shall not change
such number, except upon at least
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30 days' prior written notice to the Trustee and upon the taking or
causing to be taken at the Company's expense such actions as may be
reasonably requested by the Trustee.
SECTION 10. CERTAIN COVENANTS. So long as any Secured
Obligation shall remain unpaid and until such time as the Indenture shall have
been satisfied and discharged in accordance with Section 401 thereof, the
Company will:
(a) COMPLIANCE WITH LAWS, ETC. Comply, and cause each of its
Subsidiaries to comply, in all material respects, with all applicable
laws, rules, regulations and orders, such compliance to include,
without limitation, compliance with the Employment Retirement Income
Security Act of 1974, as amended, and the Racketeer Influenced and
Corrupt Organizations Chapter of the Organized Crime Control Act Of
1970.
(b) PAYMENT OF TAXES, ETC. To the extent required under,
Section 1005 of the Indenture pay and discharge, and cause each of its
Subsidiaries to pay and discharge, before the same shall become
delinquent (i) all taxes, assessments and governmental charges or
levies imposed upon it or upon the Collateral and (ii) all lawful
claims
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that, if unpaid, might by law become a Lien upon the Collateral.
(c) LOCATION OF EQUIPMENT AND INVENTORY. Keep all Equipment
and Inventory (other than Inventory sold in the ordinary course of
business) at the places therefor specified in Section 9(a) hereof or,
upon 30 days' prior written notice to the Trustee, at such other places
in a jurisdiction where all action required by Section 10(h) hereof
shall have been taken with respect to such Equipment and Inventory.
(d) MAINTENANCE OF Equipment. Maintain and preserve, and cause
each of its Subsidiaries to maintain and preserve, all Equipment in
which the Company is granting a security interest in accordance with,
and to the extent required under, Section 1006 of the Indenture.
(e) PRODUCTION OF INVENTORY. Produce, and cause each of its
Subsidiaries to produce, all Inventory in compliance with all
requirements of the Fair Labor Standards Act.
(f) VISITATION RIGHTS. Permit the Trustee (at the Company's
expense) or any agents or representatives thereof at any reasonable
time and from time to time to examine and make copies of and abstracts
from the records
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and books of account of, and visit the properties of, the Company and
any of its Subsidiaries, and to discuss the affairs, finances and
accounts of the Company and any of its Subsidiaries with any of their
officers or directors and with their independent public accountants.
(g) LIMITATION ON ACCOUNTS. Not maintain, or permit any of its
Subsidiaries to maintain, any deposit accounts other than the
Collateral Account, the deposit accounts set forth on Schedule IV
hereto or such other accounts to the extent that the bank maintaining
any such account shall have delivered to the Trustee a deposit account
letter substantially in the form of Exhibit A hereto.
(h) FURTHER ASSURANCES. From time to time at the sole expense
of the Company,
(i) promptly execute and deliver all further
instruments and documents, and take all further action, that
may be necessary or desirable, or that the Trustee may
request, in order to perfect and protect any pledge,
assignment or security interest granted or purported to be
granted hereby or to enable the Trustee to exercise and
enforce its rights and remedies hereunder with respect to any
Collateral, including, without limitation:
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(A) marking conspicuously each document
included in the Inventory, each chattel paper
included in the Receivables, each Related Contract,
each Assigned Agreement and, at the request of the
Trustee, each of its records pertaining to the
Collateral with a legend, in form and substance
satisfactory to the Trustee, indicating that such
document, chattel paper, Related Contract or Assigned
Agreement is subject to the security interest granted
hereby;
(B) if any Collateral shall be evidenced by
a promissory note or other instrument (other than a
draft or check received in the ordinary course of
business) or chattel paper, delivering and pledging
to the Trustee hereunder such note or instrument or
chattel paper duly indorsed and accompanied by duly
executed instruments of transfer or assignment, all
in form and substance satisfactory to the Trustee;
(C) executing and filing such financing or
continuation statements, or amendments thereto, and
such other instruments or notices, as may be
necessary or desirable, or as the Trustee may
request, in order to perfect and preserve the
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pledge, assignment and security interest granted or
purported to be granted hereby; and
(D) causing each Restricted Subsidiary (each
a "COLLATERAL GRANTOR" and, collectively, the
"COLLATERAL GRANTORS") to enter into a supplement to
this Agreement or a security agreement (either of
which shall become a part of this Agreement upon its
execution), in either case substantially in the form
of this Agreement and providing the Trustee with a
security interest in the assets of such Collateral
Grantor substantially similar to the security
interest in the Collateral granted herein by the
Company to the Trustee; and
(ii) furnish to the Trustee statements and schedules
further identifying and describing the Collateral and such
other reports in connection with the Collateral as the Trustee
may reasonably request, all in reasonable detail.
The Company hereby authorizes the Trustee (at the Company's
expense) to file one or more financing or continuation statements, and
amendments thereto, relating to all or any part of the Collateral without the
signature of the
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Company where permitted by law. A photocopy or other reproduction of this
Agreement or any financing statement covering the Collateral or any part thereof
shall be sufficient as a financing statement where permitted by law.
SECTION 11. INSURANCE. (a) The Company shall, at its own
expense, maintain insurance with respect to any Equipment and Inventory in which
it is granting a security interest with responsible and reputable insurance
companies or associations in such amounts and covering such risks as is usually
carried by companies engaged in similar businesses and owning similar properties
in the same general areas in which the Company operates. Each policy for
liability insurance shall provide for all losses to be paid on behalf of the
Trustee and the Company as their interests may appear, and each policy for
property damage insurance shall provide for all losses (except for losses of
less than $100,000 per occurrence) to be paid directly to the Trustee; it is
acknowledged that any such payments received by the Trustee that are not related
to an Event of Loss will be promptly endorsed or otherwise paid by the Trustee
to the Company. Each such policy shall in addition (i) the Company and the
Trustee as insured parties thereunder (without any representation or warranty by
or obligation upon the Trustee) as their interests may appear, (ii) provide that
there shall be no recourse against the Trustee for payment of
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premiums or other amounts with respect thereto and (iii) provide that at least
30 days' prior written notice of cancellation or of lapse shall be given to the
Trustee by the Insurer. The Company shall, if so requested by the Trustee,
deliver to the Trustee original or duplicate policies of such insurance and, as
often as the Trustee may reasonably request, a report of a reputable insurance
broker with respect to such insurance. Furthermore, the Company shall, at the
request of the Trustee, duly exercise and deliver instruments of assignment of
such insurance policies to comply with the requirements of Section 10(h) hereof
and cause the insurers to acknowledge notice of such assignment.
(b) Reimbursement under any liability insurance maintained by
the Company pursuant to this Section 11 may be paid directly to the Person who
shall have incurred liability covered by such insurance. In case of any loss
involving damage to Equipment or Inventory, the Company shall make or cause to
be made the necessary repairs to or replacements of such Equipment or Inventory
to the extent required by Section 1006 of the Indenture, and any proceeds of
insurance maintained by the Company pursuant to this Section 11 shall be paid to
the Company as reimbursement for the costs of such repairs or replacements
pursuant to Section 1204 of the Indenture.
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SECTION 12. PLACE OF PERFECTION; RECORDS; COLLECTION OF
RECEIVABLES. (a) The Company shall keep its principal place of business and
chief executive office and the office where it keeps its records concerning the
Collateral, and copies of any Assigned Agreements and copies of all chattel
paper that evidence Receivables, at the location therefor specified in Section
9(a) hereof, or upon 30 days' prior written notice to the Trustee, at such other
locations in a jurisdiction where all actions required by Section 10(h) hereof
shall have been taken with respect to the Collateral. The Company will hold and
preserve such records, Assigned Agreements and chattel paper and will permit
representatives of the Trustee (at the Company's expense) at any time during
normal business hours to inspect and make copies of and abstracts from such
records and chattel paper.
(b) Except as otherwise provided in this subsection (b), the
Company shall continue to collect, at its own expense, all amounts due or to
become due the Company under the Receivables. In connection with such
collections, the Company may take (and, at the Trustee's direction, shall take)
such action as the Company or the Trustee may deem reasonable, necessary or
advisable to enforce collection of the Receivables; PROVIDED, HOWEVER, that the
Trustee shall have the right at any time, upon the occurrence and during the
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continuance of an Event of Default and upon written notice to the Company of its
intention to do so, to notify the obligors under any Receivables of the
assignment of such Receivables to the Trustee and to direct such obligors to
make payment of all amounts due or to become due to the Company thereunder
directly to the Trustee and, upon such notification and at the expense of the
Company, to enforce collection of any such Receivables, and to adjust, settle or
compromise (on reasonable terms) the amount or payment thereof, in the same
manner and to the same extent as the Company might have done. After receipt by
the Company of the notice from the Trustee referred to in the PROVISO to the
immediately preceding sentence, (i) all amounts and proceeds (including
instruments) received by the Company in respect of the Receivables shall be
received in trust for the benefit of the Trustee hereunder, shall be segregated
from other property and funds of the Company and shall be forthwith paid over to
the Trustee in the same form as so received (with any necessary indorsement) and
shall be deposited in the Collateral Account and, thereafter, applied in
accordance with Section 20(b) hereof and (ii) the Company shall not adjust,
settle or compromise the amount or payment of any Receivable, release wholly or
partly any obligor thereof, or allow any credit or discount thereon.
<PAGE>
-25-
SECTION 13. VOTING RIGHTS; DIVIDENDS; ETC. (a) So long as no
Event of Default shall have occurred and be continuing:
(i) The Company shall be entitled to exercise or refrain from
exercising any and all voting and other consensual rights pertaining to
the Security Collateral or any part thereof for any purpose not
inconsistent with the terms of this Agreement; PROVIDED, HOWEVER, that
the Company shall not exercise or refrain from exercising any such
right if such action would have a material adverse effect on the value
of the Security Collateral or any part thereof.
(ii) The Company shall be entitled to receive and retain any
and all dividends, distributions and interest paid in respect of the
Security Collateral; PROVIDED, HOWEVER, that any and all
(A) dividends and interest paid or payable other than
in cash in respect of, and instruments and other property
received, receivable or otherwise distributed in respect of or
in exchange for any Security Collateral,
(B) dividends and other distributions paid or payable
in cash in respect of any Security Collateral
<PAGE>
-26-
in connection with a partial or total liquidation or
dissolution or in connection with a reduction of capital,
capital surplus or paid-in-surplus, and
(C) cash paid, payable or otherwise distributed in
respect of principal of, or in redemption of or in exchange
for, any Security Collateral shall be, and shall be forthwith
delivered to the Trustee to hold as, Security Collateral and
shall, if received by the Company, be received in trust for
the benefit of the Trustee, be segregated from the other
property or funds of the Company and be forthwith delivered to
the Trustee as Security Collateral in the same form as so
received (with any necessary endorsement). The Company shall,
upon request of the Trustee, promptly execute such documents
and do such acts as may be necessary or advisable to give
effect to this paragraph (ii).
(iii) Upon not less than ten Business Days' prior notice,
accompanied by an Officer's Certificate to the effect that any and all
conditions under this Agreement have been met, the Trustee shall
execute and deliver (or cause to be executed and delivered) to the
Company all such proxies and other instruments as the Company may
reasonably request for the purpose of enabling the Company
<PAGE>
-27-
to exercise the voting and other consensual rights that it is entitled
to exercise pursuant to paragraph (i) above and to receive the
dividends, distributions or interest payments that it is authorized to
receive and retain pursuant to paragraph (ii) above.
(b) Upon the occurrence and during the continuance of an Event
of Default:
(i) All rights of the Company (A) to exercise or refrain from
exercising the voting and other consensual rights that it would
otherwise be entitled to exercise pursuant to Section 13(a)(i) hereto
shall, upon notice to the Company by the Trustee, cease and (B) to
receive the dividends, distributions and interest payments that it
would otherwise be authorized to receive and retain pursuant to Section
13(a)(ii) hereto shall automatically cease, and all such rights shall
thereupon become vested in the Trustee, which shall thereupon have the
sole right to exercise or refrain from exercising such voting and other
consensual rights and to receive and hold as Security Collateral such
dividends, distributions and interest payments.
(ii) All dividends, distributions and interest payments that
are received by the Company contrary to the
<PAGE>
-28-
provisions of Section 13(b)(i) shall be received in trust for the
benefit of the Trustee, shall be segregated from other property and
funds of the Company and shall be forthwith paid over to the Trustee as
Security Collateral in the same form as so received (with any necessary
endorsement).
SECTION 14. AS TO THE ASSIGNED AGREEMENTS. (a) The Company
shall, at its own expense:
(i) perform and observe all the terms and provisions of each
Assigned Agreement to be performed or observed by it, maintain each
such Assigned Agreement in full force and effect on its part, enforce
each such Assigned Agreement in accordance with its terms and take all
such action to such end as may be from time to time reasonably
requested by the Trustee; and
(ii) furnish to the Trustee promptly upon the Trustee's request
therefor copies of all notices, requests and other documents received
by the Company under or pursuant to the Assigned Agreements, and from
time to time (A) furnish to the Trustee such information and reports
regarding the Collateral as the Trustee may reasonably request and (B)
upon request of the Trustee make to each other party to any Assigned
Agreement such demands and
<PAGE>
-29-
requests for information and reports or for action as the Company is
entitled to make thereunder.
(b) Except as otherwise expressly permitted pursuant to the
Indenture, the Company shall not cancel or terminate, or consent or accept any
cancellation or termination of, any Assigned Agreement, or enter into any
amendment to any Assigned Agreement to which it is a party, or grant any consent
or waiver from any of the terms thereof, except amendments, waivers or consents
for certain specified purposes, including, among other things, (i) curing
ambiguities, defects or inconsistencies, (ii) making any change that does not
adversely affect the rights of any Holder or (iii) mortgaging, pledging or
granting a security interest in favor of the Company as additional security for
the payment and performance of the Secured Obligations in any property or assets
(including any additional collateral that is required to be mortgaged, pledged
or hypothecated, or in which a security interest is required to be granted,
pursuant to such Assigned Agreement or otherwise).
SECTION 15. PAYMENTS UNDER THE ASSIGNED AGREEMENTS.
Notwithstanding that all payments under the Assigned Agreements shall be made in
accordance with their terms so long as no Event of Default has occurred and is
continuing, the Company agrees, and has effectively so instructed each other
party to each Assigned Agreement that, upon the occurrence and during
<PAGE>
-30-
the continuation of an Event of Default, all payments due or to become due under
or in connection with such Assigned Agreement shall be received in trust for the
benefit of the Trustee hereunder, shall be segregated from other property and
funds of the Company and shall be forthwith paid over to the Trustee in the same
form as so received (with any necessary indorsement) to be deposited in the
Collateral Account and, thereafter, applied by the Trustee in accordance with
Section 20(b) hereof.
SECTION 16. TRANSFERS AND OTHER LIENS; PLEDGED SHARES. (a)
Except as otherwise expressly permitted pursuant to the Indenture, the Company
shall not (i) sell, assign (by operation of law or otherwise) or otherwise
dispose of, or grant any option with respect to, any of the Collateral, or (ii)
create or suffer to exist any Lien upon or with respect to any of the
Collateral, except for the pledge, assignment and security interest created by
this Agreement and Permitted Liens.
(b) The Company shall (i) cause each of its Restricted
Subsidiaries not to issue any stock or other equity securities, except to the
Company or as otherwise permitted under the Indenture, and (ii) pledge
hereunder, immediately upon its acquisition (directly or indirectly) thereof,
any and all shares of stock or other equity securities of each of its
<PAGE>
-31-
Subsidiaries or any other Person to the Trustee, except as otherwise permitted
under the Indenture.
SECTION 17. TRUSTEE APPOINTED ATTORNEY-IN-FACT. The Company
hereby irrevocably appoints the Trustee its attorney-in-fact, with full
authority in the place and stead of the Company and in the name of the Company
or otherwise, from time to time, to take any action and to execute any
instrument necessary to accomplish the purposes of this Agreement (subsequent to
an Event of Default subject to the rights of the Company under Section 12
hereof), including, without limitation:
(a) to obtain and adjust insurance required to be paid to the
Trustee pursuant to Section 11 hereof,
(b) to ask for, demand, collect, sue for, recover, compromise
(on reasonable terms), receive and give acquittance and receipts for
moneys due and to become due under or in respect of any of the
Collateral,
(c) to receive, indorse and collect any drafts or other
instruments, documents and chattel paper, in connection with clause (a)
or (b) above, and
(d) to file any claims or take any action or institute any
proceedings necessary for the collection of
<PAGE>
-32-
any of the Collateral or otherwise to enforce compliance with the terms
and conditions of any Assigned Agreement or any other agreements that
are part of the Collateral, or the rights of the Trustee with respect
to any of the Collateral.
SECTION 18. TRUSTEE MAY PERFORM. If the Company fails to
perform any agreement contained herein, the Trustee may itself perform, or cause
performance of, such agreement, and the expenses of the Trustee incurred in
connection therewith shall be payable by the Company under Section 23(b) hereof.
SECTION 19. THE TRUSTEE'S DUTIES. The powers conferred on the
Trustee hereunder are solely to protect its interest in the Collateral and shall
not impose any duty upon it to exercise any such powers. Except for the safe
custody of any Collateral in its possession and the accounting for moneys
actually received by it hereunder, the Trustee shall have no duty as to any
Collateral, as to ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative to any
Security Collateral, whether or not the Trustee or any Holder has or is deemed
to have knowledge of such matters, or as to the taking of any necessary steps to
preserve rights against any parties or any other rights pertaining to any
Collateral.
<PAGE>
-33-
SECTION 20. REMEDIES. If any Event of Default under the
Indenture shall have occurred and be continuing:
(a) The Trustee may exercise in respect of the collateral, in
addition to other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party upon
default under the Uniform Commercial Code in effect in the State of
Louisiana at such time (the "LOUISIANA UNIFORM COMMERCIAL CODE")
(whether or not the Louisiana Uniform Commercial Code applies to the
affected collateral) and also may (i) require the Company to, and the
Company hereby agrees that it will at its expense and upon request of
the Trustee forthwith, assemble all or part of the Collateral as
directed by the Trustee and make it available to the Trustee at a place
to be designated by the Trustee that is reasonably convenient to both
parties and (ii) without notice except as specified below, sell the
Collateral or any part thereof in one or more parcels at public or
private sale, at any of the Trustee's offices or elsewhere, for cash,
on credit or for future delivery, and upon such other terms as the
Trustee may deem commercially reasonable. The Company agrees that, to
the extent notice of sale shall be required by law, at least ten days'
notice to the Company of the time and place of any public
<PAGE>
-34-
sale or the time after which any private sale is to be made shall
constitute reasonable notification. The Trustee shall not be obligated
to make any sale of Collateral regardless of notice of sale having been
given. The Trustee may adjourn any public or private sale from time to
time by announcement at the time and place fixed therefor, and such
sale may, without further notice, be made at the time and place to
which it was so adjourned.
(b) Any cash held by the Trustee as Collateral and all cash
proceeds received by the Trustee in respect of any sale of, collection
from, or other realization upon all or any part of the Collateral may
be held by the Trustee as collateral for, and/or then or at any time
thereafter applied (after payment of any amounts payable to the Trustee
pursuant to Section 23(b) hereof), in whole or in part, by the Trustee
for the ratable benefit of the Holders against, all or any part of the
Secured Obligations in such order as is set forth in Section 506 of the
Indenture. Any surplus of such cash or cash proceeds held by the
Trustee and remaining after payment in full of all the Secured
Obligations shall be paid over to the Company or to whomsoever may be
lawfully entitled to receive such surplus.
<PAGE>
-35-
(c) The Trustee may exercise any and all rights and remedies
of the Company under or in connection with the Assigned Agreements or
otherwise in respect of the Collateral, including, without limitation,
any and all rights of the Company to demand or otherwise require
payment of any amount under, or performance of any provision of, any
Assigned Agreement.
(d) All payments received by the Company under or in
connection with any Assigned Agreement or otherwise in respect of the
Collateral shall be received in trust for the benefit of the Trustee,
shall be segregated from other property and funds of the Company and
shall be forthwith paid over to the Trustee in the same form as so
received (with any necessary indorsement).
(e) The Trustee may, without notice to the Company except as
required by law and at any time or from time to time, charge, set off
and otherwise apply all or any part of the Secured Obligations against
the Collateral Account or any part thereof.
(f) The following provisions shall apply if the remedies
indicated are governed by the laws of Louisiana. The Trustee shall have
the right to cause the Collateral to be seized and sold under Louisiana
executory or
<PAGE>
-36-
ordinary process, at the Trustee's sole option, without appraisement,
appraisement being hereby expressly waived, as an entirety or in
portions as the Trustee may determine, to the highest bidder for cash,
and otherwise exercise the rights, powers and remedies afforded herein
and under applicable Louisiana law. For purposes of Louisiana executory
process procedures, the Company acknowledges the Secured Obligations
and does hereby confess judgment in favor of the Trustee and the
Holders for the full amount of the Secured Obligations. Any and all
declarations of fact made by authentic act before a notary public in
the presence of two witnesses by a person declaring that such facts lie
within his knowledge shall constitute authentic evidence of such facts
for the purpose of executory process. The Company hereby waives: (a)
the benefit of appraisement as provided in Louisiana Code of Civil
Procedure Articles 2332, 2336, 2723 and 2724, and all other laws
conferring the same; (b) the demand and three days' delay accorded by
Louisiana Code of Civil Procedure Articles 2639 and 2721; (c) the
notice of seizure required by Louisiana Code of Civil Procedure
Articles 2293 and 2721; (d) the three days' delay provided by Louisiana
Code of Civil Procedure Articles 2331 and 2722; and (e) the benefit of
the other provisions of Louisiana Code of Civil Procedure Articles
2331, 2722 and
<PAGE>
-37-
2723, not specifically mentioned above. In the event the Collateral or
any part thereof is seized as an incident to an action for the
recognition or enforcement of this Agreement by executory process,
ordinary process, sequestration, writ of fieri facias, or otherwise,
the Company and the Trustee agree that the court issuing any such order
shall, if petitioned for by the Trustee, direct the applicable sheriff
to appoint as a keeper of the Collateral, the Trustee or any agent
designated by the Trustee or any person named by the Trustee at the
time such seizure is effected. This designation is pursuant to
Louisiana Revised Statutes 9:5136-9:5140.2 and the Trustee shall be
entitled to all the rights and benefits afforded thereunder as the same
may be amended. The designation of keeper made herein shall not be
deemed to require the Trustee to provoke the appointment of such a
keeper.
SECTION 21. REGISTRATION RIGHTS. If the Trustee shall
determine to exercise its right to sell all or any of the Security Collateral
pursuant to Section 20 hereof, the Company agrees that, upon request of the
Trustee, it will, at its own expense:
(a) execute and deliver, and cause each issuer of the Security
Collateral contemplated to be sold and the directors and officers
thereof to execute and deliver, all
<PAGE>
-38-
such instruments and documents, and do or cause to be done all such
other acts and things, as may be necessary to: (i) register such
Security Collateral under the provisions of the Securities Act of 1933,
as from time to time amended (the "SECURITIES ACT"), (ii) cause the
registration statement relating thereto to become effective and to
remain effective for such period as prospectuses are required by law to
be furnished and (iii) make all amendments and supplements thereto and
to the related prospectus that are necessary or advisable, all in
conformity with the requirements of the Securities Act and the rules
and regulations of the Commission applicable thereto;
(b) use its best efforts to qualify the Security Collateral
under the state securities or "blue sky" laws and to obtain all
necessary governmental approvals for the sale of the Security
Collateral, as requested by the Trustee;
(c) cause each such issuer to make available to its security
holders, as soon as practicable, an earnings statement that will
satisfy the provisions of Section 11(a) of the Securities Act and the
rules and regulations thereunder;
<PAGE>
-39-
(d) provide the Trustee with such other information and
projections as may be reasonably necessary or advisable to enable the
Trustee to effect the sale of such Security Collateral; and
(e) do or cause to be done all such other acts and things as
may be necessary to make such sale of the Security Collateral or any
part thereof valid and binding and in compliance with applicable law.
The Trustee is authorized, in connection with any sale of the Security
Collateral pursuant to Section 20 hereof, to deliver or otherwise disclose to
any prospective purchaser of the Security Collateral (i) any registration
statement or prospectus, and all supplements and amendments thereto, prepared
pursuant to clause (a) above, (ii) any information and projections provided to
it pursuant to clause (d) above and (iii) any other material information in its
possession relating to the Security Collateral.
The Company acknowledges the impossibility of ascertaining the
amount of damages that would be suffered by the Trustee or the Holders by reason
of the failure by the Company to perform any of the covenants contained in this
Section 21 and, consequently, agrees that, if the Company shall fail to perform
any of such covenants, it shall pay, as
<PAGE>
-40-
liquidated damages and not as a penalty, an amount equal to the value of the
Security Collateral on the date the Trustee shall demand compliance with this
Section 21.
SECTION 22. REGULATORY MATTERS. (a) The Company shall take,
and shall cause each issuer of any of the Pledged Shares to take, all action
that the Trustee may request in the exercise of its rights and remedies
hereunder, which includes the right to require the Company or any issuer of any
of the Pledged Shares to transfer or assign the Pledged Shares to any party or
parties. In furtherance of this right, the Company shall, and shall cause each
issuer of the Pledged Shares, (i) to cooperate fully with the Trustee in
obtaining all approvals and consents from each Governmental Authority that the
Trustee may deem necessary or advisable to accomplish any such transfer or
assignment of any part of the Pledged Shares and (ii) to prepare, execute and
file with any Governmental Authority any application, request for consent,
certificate or instrument that the Trustee may deem necessary or advisable to
accomplish any such transfer or assignment of any part of the Pledged Shares;
PROVIDED, HOWEVER, that the Company shall not be obligated to file any general
consent to service of process or to qualify as a foreign corporation or as a
dealer in securities in any jurisdiction in which it is not otherwise so
subject. If the Company fails to execute, or fails to cause
<PAGE>
-41-
each issuer or owner of the Pledged Shares to execute, such applications,
requests for consent, certificates or instruments, the clerk of any court that
has jurisdiction over the Security Documents may execute and file the same on
behalf of the Company.
(b) To enforce the provisions of this Section 22, the Trustee
is authorized to request the consent or approval of any Governmental Authority
to a voluntary or an involuntary transfer of control of any issuer of any of the
Pledged Shares. In connection with the exercise of its remedies under this
Agreement, the Trustee may obtain the appointment of a trustee or receiver to
assume, upon receipt of all necessary judicial or other Governmental Authority
consents or approvals, control of any issuer of any of the Pledged Shares. Such
trustee or receiver shall have all rights and powers provided to it by law or by
court order or provided to the Trustee under this Agreement.
(c) Notwithstanding anything to the contrary contained in this
Agreement:
(i) the Trustee will not take any action hereunder that would
constitute or result in any transfer of control of any issuer of any of
the Pledged Shares without obtaining all necessary Governmental
Authority approvals;
<PAGE>
-42-
PROVIDED that the Trustee and the Holders shall be entitled to rely on
the advice of regulatory counsel selected by the Trustee to determine
whether approvals of any Governmental Authority are required; and
(ii) the Trustee shall not foreclose on, sell, transfer or
otherwise dispose of, or exercise any right to vote or consent with
respect to, any of the Pledged Shares as provided herein or take any
other action that would affect the operational, voting or other control
of the issuer of any Pledged Shares, unless such action is taken in
accordance with the applicable provisions of the Gaming Laws; PROVIDED
that the Trustee and the Holders shall be entitled to rely on the
advice of regulatory counsel selected by the Trustee to determine
compliance with applicable provision of the Gaming Laws.
(d) The Company acknowledges that the approval of each
appropriate Governmental Authority to the transfer of control of an issuer of
Pledged Shares may be required, that the ownership thereof is integral to the
Trustee's realization of the value of such Pledged Shares, that there is no
adequate remedy at law for failure by the Company to comply with the provisions
of this Section 22 and that such failure could not be adequately compensable in
damages and, therefore, the
<PAGE>
-43-
Company agrees that the provisions of this Section 22 may be specifically
enforced.
SECTION 23. INDEMNITY AND EXPENSES. (a) The Company agrees to
indemnify the Trustee from and against any and all claims, losses and
liabilities growing out of or resulting from this Agreement (including, without
limitation, enforcement of this Agreement), except claims, losses or liabilities
resulting from the Trustee's gross negligence or bad faith as determined by a
final judgment of a court of competent jurisdiction. The indemnification of the
Trustee set forth in the immediately preceding sentence is cumulative and not
exclusive of any indemnity of the Trustee set forth in the Indenture or provided
for under the TIA.
(b) The Company will pay upon demand to the Trustee the amount
of any and all reasonable expenses, including the reasonable fees and expenses
of its counsel and of any experts and agents, that the Trustee may incur in
connection with (i) the administration of this Agreement, (ii) the custody,
preservation, use or operation of, or the sale of, collection from or other
realization upon, any of the Collateral, (iii) the exercise or enforcement of
any of the rights of the Trustee or the Holders hereunder or (iv) the failure by
the Company to perform or observe any of the provisions hereof, and all
<PAGE>
-44-
amounts so incurred by the Trustee shall be entitled to the benefits of Section
606 of the Indenture.
SECTION 24. SECURITY INTEREST ABSOLUTE. The obligations of any
Collateral Grantor under this Agreement are independent of the Secured
Obligations, and a separate action or actions may be brought and prosecuted
against any Collateral Grantor to enforce this Agreement irrespective of whether
any action is brought against the Company or whether the Company is joined in
any such action or actions. All rights of the Trustee and the pledge, assignment
and security interest hereunder, and all obligations of each Collateral Grantor
hereunder, shall be absolute and unconditional, irrespective of:
(a) any lack of validity or enforceability of the Indenture or
any other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Secured Obligations or any
other amendment or waiver of or any consent to any departure from the
Indenture, including, without limitation, any increase in the Secured
Obligations resulting from the issuance of additional
<PAGE>
-45-
Notes by the Company or any of its subsidiaries or otherwise;
(c) any taking, exchange, release or nonperfection of any
other collateral, or any taking, release or amendment or waiver of or
consent to departure from any guaranty, for all or any of the Secured
Obligations;
(d) any manner of application of Collateral, or proceeds
thereof, to all or any of the Secured Obligations, or any manner of
sale or other disposition of any collateral for all or any of the
Secured Obligations or any other assets of the Company or any of its
subsidiaries;
(e) any change, restructuring or termination of the corporate
structure or existence of the Company or any of its subsidiaries; or
(f) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, the Company or a third party
grantor of a security interest.
SECTION 25. AMENDMENTS; WAIVERS; ETC. No amendment or waiver
of any provision of this Agreement, and no consent to any departure by the
Company herefrom, shall in any event be effective unless the same shall be in
writing and signed by the
<PAGE>
-46-
Trustee, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given. No failure on the part of
the Trustee to exercise, and no delay in exercising any right hereunder, shall
operate as a waiver thereof or consent thereto, nor shall any single or partial
exercise of any such right preclude any other or further exercise thereof or the
exercise of any other right.
SECTION 26. ADDRESSES FOR NOTICES. All notices and other
communications provided for hereunder shall be in writing (including telecopier,
telegraphic, telex or cable communication) and, mailed (first class, postage
prepaid), telegraphed, telecopied, telexed, cabled or delivered to the Company
or to the Trustee, as the case may be, addressed to it at its address specified
in the Indenture or below its signature line on the signature pages hereof or,
as to any party, at such other address as shall be designated by such party in a
written notice to each other party complying as to delivery with the terms of
this Section 26. All such notices and other communications shall, when mailed
(first class, postage prepaid), telecopied, telegraphed, telexed or cabled,
respectively, be effective when deposited in the mails, telecopied, delivered to
the telegraph company confirmed by telex answerback or delivered to the cable
company, respectively, addressed as aforesaid.
<PAGE>
-47-
SECTION 27. CONTINUING SECURITY INTEREST; ASSIGNMENT UNDER THE
INDENTURE. This Agreement shall create a continuing security interest in the
Collateral and shall (a) remain in full force and effect until the date on which
the Secured Obligations shall have been paid in full and the Indenture shall
have been satisfied and discharged in accordance with Section 401 thereof, (b)
be binding upon the Company, its successors and assigns and (c) inure, together
with the rights and remedies of the Trustee hereunder, to the benefit of the
Trustee, the Holders and their respective successors, transferees and assigns.
Without limiting the generality of the foregoing clause (c), any Holder may
assign or otherwise transfer all or any portion of its rights and obligations
under the Notes held by it to any other Person, and such other Person shall
thereupon become vested with all the benefits in respect thereof granted to such
Holder herein or otherwise.
SECTION 28. RELEASE AND TERMINATION. (a) On the date on which
the Secured Obligations shall have been paid in full and the Indenture shall
have been satisfied and discharged in accordance with Section 401 thereof, the
pledge, assignment and security interest granted hereby shall terminate and all
rights to the Collateral shall revert to the Company. Upon any such termination,
the Trustee, at the Company's expense, will return to the Company such of the
Collateral in its possession
<PAGE>
-48-
as shall not have been sold, transferred or otherwise applied pursuant to the
terms of the Notes, the Indenture and the Security Documents, and will execute
and deliver to the Company such documents prepared by the Company and delivered
to the Trustee as the Company shall reasonably request to evidence such
termination.
(b) Upon satisfaction of the applicable conditions set forth
in Article 12 of the Indenture, the Trustee will take the applicable action
specified therein regarding the release of any Collateral.
SECTION 29. GAMING LAWS. Each of the provisions of this
Agreement is subject to and shall be enforced in compliance with, the provisions
of the Gaming Laws.
SECTION 30. THE MORTGAGES. In the event that any of the
Collateral hereunder is also subject to a valid and enforceable Lien under the
terms of any Mortgage and the terms of such Mortgage are inconsistent with the
terms of this Agreement, then with respect to such Collateral, the terms of such
Mortgage shall be controlling in the case of fixtures and leases, letting and
licenses of, and contracts and agreements relating to real property or leases of
real property, and the terms of this Agreement shall be controlling in the case
of all other Collateral.
<PAGE>
-49-
SECTION 31. GOVERNING LAW; TERMS. This Agreement shall be
governed by, and construed in accordance with, the laws of the State of
Louisiana, except to the extent that the validity or perfection of the security
interest hereunder, or remedies hereunder, in respect of any particular
Collateral are governed by the laws of a jurisdiction other than the State of
Louisiana. Unless otherwise defined herein or in the Indenture, terms used in
Article 9 of the Uniform Commercial Code adopted by the State of Louisiana are
used herein as therein defined.
SECTION 32. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page of this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
<PAGE>
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their
<PAGE>
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officers thereunto duly authorized as of the date first above written.
LOUISIANA CASINO CRUISES, INC.
By:
---------------------------------------------
Name: Dan S. Meadows
Title: President
Address: 1717 River Road North
Baton Rouge, Louisiana 70802
U.S. BANK TRUST NATIONAL ASSOCIATION
By:
---------------------------------------------
Name:
Title:
Address: 180 East 5th Street
St. Paul Minnesota 55101
Attention: Corporate Trust Administration
EXHIBIT 99.01
PRESS RELEASE
WEDNESDAY, NOVEMBER 25, 1998
LOUISIANA CASINO CRUISES, INC. CLOSES $50 MILLION NOTE OFFERING
Louisiana Casino Cruises, Inc. (the "Company") announced today that it has sold
$50 million in senior secured increasing notes due in 2001. The notes have an
interest rate initially equal to 12.25% and increase by 0.25% on March 1, 1999
and every quarter thereafter. The notes are secured by substantially all of the
assets of the Company and will rank senior in right of payment to any
subordinated indebtedness of the Company and equal to any senior indebtedness.
The notes were sold in a private placement with registration rights.
The proceeds from the offering will be used to repay the Company's outstanding
11-1/2% notes due December 1, 1998, redeem the Company's outstanding Preferred
Stock and related accrued non-cash dividends, satisfy obligations with respect
to the Company's redeemable Common Stock warrants and to pay related offering
costs.
The Company owns and operates Casino Rouge, the leading riverboat gaming
facility in Baton Rouge, Louisiana. The Company's executive offices are located
1717 North River Road, Baton Rouge, Louisiana, 70802 and its telephone number is
(504) 381-7777.
