Exhibit 4.8
MIKOHN GAMING CORPORATION
(as Issuer)
Casino Excitement, Inc.
Games of Nevada, Inc.
MGC, Inc.
Mikohn International, Inc.
Mikohn Nevada
Progressive Games, Inc.
(each a Guarantor)
$105,000,000
11.875% Senior Secured Notes due 2008
_____________
INDENTURE
Dated as of August 22, 2001
_____________
FIRSTAR BANK, N.A.
(as Trustee)
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE..................................................... 2
SECTION 1.1 DEFINITIONS .............................................................................. 2
SECTION 1.2 OTHER DEFINITIONS ........................................................................ 24
SECTION 1.3 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT ........................................ 25
SECTION 1.4 RULES OF CONSTRUCTION .................................................................... 25
SECTION 1.5 GAMING APPROVALS ......................................................................... 26
ARTICLE II THE NOTES..................................................................................... 26
SECTION 2.1 FORM AND DATING .......................................................................... 26
SECTION 2.2 EXECUTION AND AUTHENTICATION ............................................................. 27
SECTION 2.3 REGISTRAR, PAYING AGENT AND DEPOSITARY ................................................... 27
SECTION 2.4 PAYING AGENT TO HOLD MONEY IN TRUST ...................................................... 27
SECTION 2.5 HOLDER LISTS ............................................................................. 28
SECTION 2.6 TRANSFER AND EXCHANGE .................................................................... 28
SECTION 2.7 REPLACEMENT NOTES ........................................................................ 41
SECTION 2.8 OUTSTANDING NOTES ........................................................................ 41
SECTION 2.9 TREASURY NOTES ........................................................................... 41
SECTION 2.10 TEMPORARY NOTES .......................................................................... 42
SECTION 2.11 CANCELLATION ............................................................................. 42
SECTION 2.12 DEFAULTED INTEREST ....................................................................... 42
SECTION 2.13 CUSIP NUMBERS ............................................................................ 43
SECTION 2.14 ISSUANCE OF ADDITIONAL NOTES ............................................................. 43
ARTICLE III REDEMPTION................................................................................... 43
SECTION 3.1 NOTICES TO TRUSTEE ....................................................................... 43
SECTION 3.2 SELECTION OF NOTES TO BE REDEEMED ........................................................ 44
SECTION 3.3 NOTICE OF REDEMPTION ..................................................................... 44
SECTION 3.4 EFFECT OF NOTICE OF REDEMPTION ........................................................... 45
SECTION 3.5 DEPOSIT OF REDEMPTION PRICE .............................................................. 45
SECTION 3.6 NOTES REDEEMED IN PART ................................................................... 45
SECTION 3.7 OPTIONAL REDEMPTION ...................................................................... 46
SECTION 3.8 NO MANDATORY REDEMPTION .................................................................. 47
SECTION 3.9 REGULATORY REDEMPTION .................................................................... 47
ARTICLE IV COVENANTS..................................................................................... 47
SECTION 4.1 PAYMENT OF NOTES ......................................................................... 47
SECTION 4.2 MAINTENANCE OF OFFICE OR AGENCY .......................................................... 48
SECTION 4.3 SEC REPORTS AND REPORTS TO HOLDERS ....................................................... 48
SECTION 4.4 COMPLIANCE CERTIFICATE ................................................................... 49
SECTION 4.5 TAXES .................................................................................... 49
SECTION 4.6 STAY, EXTENSION AND USURY LAWS ........................................................... 49
SECTION 4.7 LIMITATION ON INCURRENCE OF ADDITIONAL INDEBTEDNESS
AND DISQUALIFIED CAPITAL STOCK ........................................................... 50
SECTION 4.8 LIMITATION ON LIENS ...................................................................... 51
SECTION 4.9 LIMITATION ON RESTRICTED PAYMENTS ........................................................ 51
i
SECTION 4.10 LIMITATION ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES ........... 53
SECTION 4.11 LIMITATION ON LINES OF BUSINESS .......................................................... 54
SECTION 4.12 LIMITATION ON TRANSACTIONS WITH AFFILIATES ............................................... 54
SECTION 4.13 LIMITATION ON SALE OF ASSETS AND SUBSIDIARY STOCK ........................................ 55
SECTION 4.14 LIMITATION ON SALE-LEASEBACK TRANSACTIONS ................................................ 57
SECTION 4.15 LIMITATION ON LAYERING INDEBTEDNESS ...................................................... 58
SECTION 4.16 REPURCHASE OF NOTES AT THE OPTION OF THE HOLDER UPON A CHANGE OF CONTROL ................. 58
SECTION 4.17 REPURCHASE OF NOTES AT THE OPTION OF THE HOLDER FROM EXCESS CASH FLOW .................... 59
SECTION 4.18 SUBSIDIARY GUARANTORS .................................................................... 60
SECTION 4.19 LIMITATION ON STATUS AS INVESTMENT COMPANY ............................................... 60
SECTION 4.20 MAINTENANCE OF PROPERTIES AND INSURANCE .................................................. 60
SECTION 4.21 CORPORATE EXISTENCE ...................................................................... 61
SECTION 4.22 MINIMUM LIQUIDITY ........................................................................ 61
ARTICLE V SUCCESSORS..................................................................................... 61
SECTION 5.1 MERGER, CONSOLIDATION OR SALE OF ASSETS .................................................. 61
SECTION 5.2 SUCCESSOR CORPORATION SUBSTITUTED ........................................................ 62
ARTICLE VI DEFAULTS AND REMEDIES......................................................................... 62
SECTION 6.1 EVENTS OF DEFAULT ........................................................................ 62
SECTION 6.2 ACCELERATION ............................................................................. 64
SECTION 6.3 OTHER REMEDIES ........................................................................... 65
SECTION 6.4 WAIVER OF PAST DEFAULTS .................................................................. 65
SECTION 6.5 CONTROL BY MAJORITY ...................................................................... 66
SECTION 6.6 LIMITATION ON SUITS ...................................................................... 66
SECTION 6.7 RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT ............................................ 67
SECTION 6.8 COLLECTION SUIT BY TRUSTEE ............................................................... 67
SECTION 6.9 TRUSTEE MAY FILE PROOFS OF CLAIM ......................................................... 67
SECTION 6.10 PRIORITIES ............................................................................... 68
SECTION 6.11 UNDERTAKING FOR COSTS .................................................................... 68
ARTICLE VII TRUSTEE...................................................................................... 68
SECTION 7.1 DUTIES OF TRUSTEE ........................................................................ 68
SECTION 7.2 RIGHTS OF TRUSTEE ........................................................................ 69
SECTION 7.3 INDIVIDUAL RIGHTS OF TRUSTEE ............................................................. 70
SECTION 7.4 TRUSTEE'S DISCLAIMER ..................................................................... 71
SECTION 7.5 NOTICE OF DEFAULTS ....................................................................... 71
SECTION 7.6 REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES ............................................... 71
SECTION 7.7 COMPENSATION AND INDEMNITY ............................................................... 71
SECTION 7.8 REPLACEMENT OF TRUSTEE ................................................................... 72
SECTION 7.9 SUCCESSOR TRUSTEE BY MERGER, ETC ......................................................... 73
SECTION 7.10 ELIGIBILITY; DISQUALIFICATION ............................................................ 73
SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY ........................................ 74
ARTICLE VIII LEGAL DEFEASANCE AND COVENANT DEFEASANCE.................................................... 74
SECTION 8.1 OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE ................................. 74
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SECTION 8.2 LEGAL DEFEASANCE AND DISCHARGE ........................................................... 74
SECTION 8.3 COVENANT DEFEASANCE ...................................................................... 74
SECTION 8.4 CONDITIONS TO LEGAL OR COVENANT DEFEASANCE ............................................... 75
SECTION 8.5 DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST; OTHER
MISCELLANEOUS PROVISIONS.................................................................. 76
SECTION 8.6 REPAYMENT TO COMPANY ..................................................................... 77
SECTION 8.7 REINSTATEMENT ............................................................................ 77
ARTICLE IX AMENDMENT, SUPPLEMENT AND WAIVER.............................................................. 78
SECTION 9.1 WITHOUT CONSENT OF HOLDERS OF NOTES ...................................................... 78
SECTION 9.2 WITH CONSENT OF HOLDERS OF NOTES ......................................................... 78
SECTION 9.3 COMPLIANCE WITH TRUST INDENTURE ACT ...................................................... 80
SECTION 9.4 REVOCATION AND EFFECT OF CONSENTS ........................................................ 80
SECTION 9.5 NOTATION ON OR EXCHANGE OF NOTES ......................................................... 81
SECTION 9.6 TRUSTEE TO SIGN AMENDMENTS, ETC .......................................................... 81
ARTICLE X COLLATERAL AND SECURITY AND GUARANTY........................................................... 81
SECTION 10.1 COLLATERAL AGREEMENTS; SECURITY INTERESTS ................................................ 81
SECTION 10.2 FURTHER ASSURANCES AND SECURITY .......................................................... 83
SECTION 10.3 OPINIONS ................................................................................. 84
SECTION 10.4 RELEASE OF COLLATERAL .................................................................... 84
SECTION 10.5 CERTIFICATES OF THE COMPANY .............................................................. 85
SECTION 10.6 AUTHORIZATION OF ACTIONS TO BE TAKEN BY THE TRUSTEE UNDER THE COLLATERAL
AGREEMENTS ............................................................................... 85
SECTION 10.7 AUTHORIZATION OF RECEIPT OF FUNDS BY THE TRUSTEE UNDER THE COLLATERAL AGREEMENTS ......... 85
SECTION 10.8 GUARANTEES ............................................................................... 86
SECTION 10.9 EXECUTION AND DELIVERY OF GUARANTEES ..................................................... 87
SECTION 10.10 GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS ....................................... 87
SECTION 10.11 RELEASE OF GUARANTORS..................................................................... 88
SECTION 10.12 LIMITATION OF GUARANTOR'S LIABILITY; CERTAIN BANKRUPTCY EVENTS ........................... 89
SECTION 10.13 APPLICATION OF CERTAIN TERMS AND PROVISIONS TO THE GUARANTORS ............................ 89
ARTICLE XI MISCELLANEOUS................................................................................. 90
SECTION 11.1 TRUST INDENTURE ACT CONTROLS.............................................................. 90
SECTION 11.2 NOTICES .................................................................................. 90
SECTION 11.3 COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES............................. 91
SECTION 11.4 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT........................................ 91
SECTION 11.5 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION............................................. 92
SECTION 11.6 RULES BY TRUSTEE AND AGENTS............................................................... 92
SECTION 11.7 NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS.................. 92
SECTION 11.8 GOVERNING LAW............................................................................. 92
SECTION 11.9 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS ............................................ 93
SECTION 11.10 SUCCESSORS................................................................................ 93
SECTION 11.11 SEVERABILITY ............................................................................. 93
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SECTION 11.12 COUNTERPART ORIGINALS .................................................................... 93
SECTION 11.13 TABLE OF CONTENTS, HEADINGS, ETC ......................................................... 93
EXHIBIT A [FORM OF NOTE]................................................................................. A-1
EXHIBIT B FORM OF UNIT CERTIFICATE....................................................................... B-1
EXHIBIT C FORM OF CERTIFICATE OF TRANSFER................................................................ C-1
EXHIBIT D FORM OF CERTIFICATE OF EXCHANGE................................................................ D-1
EXHIBIT E FORM OF CERTIFICATE FROM ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR........................... E-1
EXHIBIT F FORM OF SUPPLEMENTAL INDENTURE TO BE DELIVERED BY SUBSEQUENT GUARANTORS........................ F-1
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CROSS-REFERENCE TABLE*
TIA Section Indenture Section
----------- -----------------
310 (a)(1)...................................................................................... 7.10
(a)(2)...................................................................................... 7.10
(a)(3)...................................................................................... N.A.
(a)(4)...................................................................................... N.A.
(a)(5)...................................................................................... 7.8; 7.10
(b)......................................................................................... 7.8; 7.10; 11.2
(c)......................................................................................... N.A.
311 (a)......................................................................................... 7.11
(b)......................................................................................... 7.11
(c)......................................................................................... N.A.
312 (a)......................................................................................... 2.5
(b)......................................................................................... 11.3
(c)......................................................................................... 11.3
313 (a)......................................................................................... 7.6
(b)(1)...................................................................................... N.A.
(b)(2)...................................................................................... 7.6
(c)......................................................................................... 7.6; 11.2
(d)......................................................................................... 7.6
314 (a)......................................................................................... 4.3; 4.4; 11.2
(b)......................................................................................... N.A.
(c)(1)...................................................................................... 11.4
(c)(2)...................................................................................... 11.4
(c)(3)...................................................................................... N.A.
(d)......................................................................................... N.A.
(e)......................................................................................... 11.5
(f)......................................................................................... N.A.
315 (a)......................................................................................... 7.1(b)
(b)......................................................................................... 7.5; 11.2
(c)......................................................................................... 7.1(a)
(d)......................................................................................... 7.1(c)
(e)......................................................................................... 6.11
316 (a)(last sentence).......................................................................... 2.9
(a)(1)(A)................................................................................... 6.5
(a)(1)(B)................................................................................... 6.4
(a)(2)...................................................................................... N.A.
(b)......................................................................................... 6.7
(c)......................................................................................... 6.4
317 (a)(1)...................................................................................... 6.8
(a)(2)...................................................................................... 6.9
(b)......................................................................................... 2.4
318 (a)......................................................................................... 11.1
(c)......................................................................................... 11.1
_________________________________
N.A. means not applicable
*This Cross-Reference table shall not, for any purpose, be deemed to be part of
this Indenture.
1
INDENTURE, dated as of August 22, 2001, among Mikohn Gaming Corporation, a
Nevada corporation (the "Company"), the Guarantors (as defined), and Firstar
Bank, N.A., as trustee (the "Trustee").
Each party agrees as follows for the benefit of each other and for the
equal and ratable benefit of the Holders of the 11.875% Series A Senior Secured
Notes due 2008 (the "Series A Notes") and the 11.875% Series B Senior Secured
Notes due 2008 (the "Series B Notes" and, together with the Series A Notes, the
"Notes"):
ARTICLE I
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.1 DEFINITIONS
"144A Global Note" means one or more Global Notes bearing the Private
Placement Legend, that will be issued in an aggregate amount of denominations
equal in total to the outstanding principal amount of the Notes sold in reliance
on Rule 144A.
"Accrued Bankruptcy Interest" means, with respect to any Indebtedness, all
interest accruing thereon after the filing of a petition by or against the
Company or any of its Subsidiaries or any Parent under any Bankruptcy Law, in
accordance with and at the rate (including any rate applicable upon any default
or event of default, to the extent lawful) specified in the documents evidencing
or governing such Indebtedness, whether or not the claim for such interest is
allowed as a claim after such filing in any proceeding under such Bankruptcy
Law.
"Acquired Indebtedness" means Indebtedness (including 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.
"Additional Notes" means additional Notes which may be issued after the
Issue Date pursuant to this Indenture (other than pursuant to an Exchange Offer
or otherwise in exchange for or in replacement of outstanding Notes). All
references herein to "Notes" shall be deemed to include Additional Notes.
"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 possess control.
Notwithstanding the foregoing, "Affiliate" shall not include Wholly Owned
Subsidiaries.
2
"Agent" means any Registrar, Paying Agent or co-registrar.
"Applicable Procedures" means, with respect to any transfer or exchange of
or for beneficial interests in any Global Note, the rules and procedures of the
Depositary, Euroclear and Clearstream that apply to such transfer or exchange at
the relevant time.
"Attributable Indebtedness" in respect of a sale-leaseback transaction
means, at the time of determination, the present value of the obligation of the
lessee for net rental payments during the remaining term of the lease included
in such sale-leaseback transaction including any period for which such lease has
been extended or may, at the option of the lessor, be extended. Such present
value shall be calculated using a discount rate equal to the rate of interest
implicit in such transaction, determined in accordance with GAAP."
"Average Life" means, as of the date of determination, with respect to any
security or instrument, the quotient obtained by dividing (1) the sum of the
products (a) of 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 (2) the sum of all such principal (or redemption)
payments.
"Bankruptcy Code" means the United States Bankruptcy Code, codified at 11
U.S.C. (S)101-1330, as amended.
"Bankruptcy Law" means Title 11, U.S. Code, or any similar Federal, state
or foreign law for the relief of debtors.
"Beneficial Owner" or "beneficial owner" for purposes of the definition of
Change of Control and Affiliate 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 otherwise applicable.
"Board of Directors" means, with respect to any Person, the board of
directors (or, if such Person is not a corporation, the equivalent board of
managers or members or body performing similar functions for such Person) of
such Person or any committee of the Board of Directors of such Person
authorized, with respect to any particular matter, to exercise the power of the
board of directors of such Person.
"Broker-Dealer" means any broker-dealer that receives Exchange Notes for
its own account in the Exchange Offer in exchange for Notes that were acquired
by such broker-dealer as a result of market-making or other trading activities.
"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
3
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.
"Cash Equivalent" means:
(1) 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
(2) time deposits, certificates of deposit, bankers' acceptances and
commercial paper issued by the parent corporation of any domestic
commercial bank of recognized standing having capital and surplus in excess
of $500,000,000; or
(3) 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 Xxxxx'x Investors Service, Inc.;
(4) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in (1) and (2) above entered
into with any financial institution meeting the qualifications specified in
(2) above; or
(5) money market funds, substantially all of the assets of which
constitute Cash Equivalents of the kinds described in (1) through (4) of
this definition; and in the case of each of (1), (2), and (3) maturing
within one year after the date of acquisition.
"Change of Control" means: (A) any "person" (including any group that is
deemed to be a "person") is or becomes the "beneficial owner," directly or
indirectly, of more than 35% of the aggregate Voting Equity Interests of the
Company (including as a result of 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 Company's assets, on a
consolidated basis, in one transaction or a series of related transactions), (B)
the Continuing Directors cease for any reason to constitute a majority of the
Company's Board of Directors then in office, (C) the Company adopts a plan of
liquidation or (D) any merger or consolidation of the Company with or into
another Person or the merger of another Person with or into the Company, or the
sale of all or substantially all of the Company's assets to another Person, if
the Company's Voting Equity Interests that are outstanding immediately prior to
such transaction are changed into or exchanged for, cash, securities or
property, unless pursuant to such transaction such Voting Equity Interests are
changed into or exchanged for, in addition to any other consideration,
securities of the Surviving Person or transferee that represent, immediately
after such transaction, a majority of the aggregate voting power of the Voting
Equity Interests of the Surviving Person or transferee. As used in this
definition, "person" (including any group that is deemed to be a "person") has
the meaning given by Sections 13(d) of the Exchange Act, whether or not
applicable.
4
"Clearstream" means Clearstream Banking Luxembourg, or its successors.
"Collateral" means any assets of the Company or any Subsidiary of the
Company defined as "Collateral" in any of the Collateral Agreements and assets
from time to time on which a Lien exists as security for any of the Obligations
hereunder or under the Notes or the Collateral Agreements or the Note
Registration Rights Agreement; provided, that,
"Collateral" shall not included Excluded Assets (other than assets
described in clause (ii) of the definition of "Excluded Assets" to the extent
the Company and its Subsidiaries are required to secure the Notes with a Lien on
such assets pursuant to Section 10.1(c) hereof).
"Collateral Agent" means the collateral agent and/or trustee under the
Collateral Agreements.
"Collateral Agreements" means, collectively, that certain Pledge and
Security Agreement and any other agreements, instruments, financing statements
or other documents that evidence, set forth or limit the Lien of the Trustee in
the Collateral.
"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; provided, that "consolidation" will not include consolidation of the
accounts of any Unrestricted Subsidiary with the accounts of the Company. The
term "consolidated" has a correlative meaning to the foregoing.
"Consolidated Cash and Cash Equivalents" means, as of any Liquidity
Calculation Date, the cash and Cash Equivalents that would be shown on the
consolidated balance sheet of the Company prepared in accordance with GAAP as of
such Liquidity Calculation Date.
"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 revenues in determining Consolidated
Net Income), without duplication, the sum of
(1) Consolidated income tax expense;
(2) Consolidated depreciation and amortization expense;
(3) Consolidated Interest Expense; and
(4) all other non-cash charges attributable to the grant, exercise or
repurchase of options for or shares of Qualified Capital Stock to or from
employees of such Person and its Consolidated Subsidiaries; 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
5
than Wholly Owned Subsidiary shall only be added to the extent of the equity
interest of the Company in such Subsidiary.
"Consolidated Interest Expense" of any Person means, for any period, the
aggregate amount (without duplication and determined in each case in accordance
with GAAP) of:
(a) interest expensed or capitalized, paid, accrued, or scheduled to be
paid or accrued (including, in accordance with the following sentence, interest
attributable to Capitalized Lease Obligations) of such Person and its
Consolidated Subsidiaries during such period, including (1) original issue
discount and non-cash interest payments or accruals on any Indebtedness; (2) the
interest portion of all deferred payment obligations; and (3) all commissions,
discounts and other fees and charges owed with respect to bankers' acceptances
and letters of credit financings and currency and 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) by such
Person or any of its Consolidated Subsidiaries in respect of Preferred Stock
(other than by Subsidiaries of the Company to the Company or a Guarantor).
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.
"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 unusual and 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 capital stock);
(b) the net income, if positive, of any Person, other than a 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 Consolidated Subsidiary of such Person
during such period, but in any case not in excess of such Person's pro rata
share of such Person's net income for 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;
(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,
6
judgment, decree, order, statute, rule or governmental regulation applicable to
such Consolidated Subsidiary; and
(e) all dividends and distributions from any Unrestricted Subsidiary for
such period that are a net reduction in Investments of such Person made in such
Unrestricted Subsidiary.
"Consolidated Net Worth" of any Person at any date means the aggregate
consolidated stockholders' equity of such Person (plus amounts of equity
attributable to preferred stock) and its Consolidated Subsidiaries, as would be
shown on the consolidated balance sheet of such Person prepared in accordance
with GAAP, adjusted to exclude (to the extent included in calculating such
equity) (a) the amount of any such stockholders' equity attributable to
Disqualified Capital Stock or treasury stock of such Person and its Consolidated
Subsidiaries; (b) all upward revaluations and other write-ups in the book value
of any asset of such Person or a Consolidated Subsidiary of such Person
subsequent to the Issue Date; and (c) all investments in Subsidiaries that are
not Consolidated Subsidiaries and in Persons that are not Subsidiaries.
"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.
"Continuing Director" means 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).
"Credit Agreement" means any credit agreement entered into after the Issue
Date as a replacement of the credit agreement, dated August 28, 1998 by and
among the Company, certain of its Subsidiaries, certain financial institutions
and First Source Financial LLP, as agent (the "Existing Credit Agreement"),
including any related notes, guarantees, collateral documents, instruments and
agreements executed in connection therewith, as such replacement credit
agreement and/or related documents may be amended, restated, supplemented,
renewed, replaced or otherwise modified from time to time whether or not with
the same agent, trustee, representative lenders or holders, and, subject to the
proviso to the next succeeding sentence, irrespective of any changes in the
terms and conditions thereof. Without limiting the generality of the foregoing,
the term "Credit Agreement" shall include agreements in respect of Interest Swap
and Hedging Obligations with lenders (or Affiliates thereof) party to the Credit
Agreement and shall also include any amendment, amendment and restatement,
renewal, extension, restructuring, supplement or modification to any Credit
Agreement and all refundings, refinancings and replacements of any Credit
Agreement, including any credit agreement:
7
(1) extending the maturity of any Indebtedness incurred thereunder or
contemplated thereby;
(2) adding or deleting borrowers or guarantors thereunder, so long as
borrowers and issuers include one or more of the Company and its
Subsidiaries and their respective successors and assigns;
(3) increasing the amount of Indebtedness incurred thereunder or
available to be borrowed thereunder; provided, that on the date such
Indebtedness is incurred it would not be prohibited by Section 4.7; or
(4) otherwise altering the terms and conditions thereof in a manner
not prohibited by the terms of this Indenture.
"Default" means any event that is or with the passage of time or the giving
of notice or both would be an Event of Default.
"Definitive Note" means one or more certificated Notes registered in the
name of the Holder thereof and issued in accordance with Section 2.6 hereof, in
the form of Exhibit A hereto except that such Note shall not include the
information called for by footnotes 3, 4 and 9 thereof.
"Depositary" means, with respect to the Notes issuable or issued in whole
or in part in global form, the Person specified in Section 2.3 hereof as the
Depositary with respect to the Notes, until a successor will have been appointed
and become such pursuant to the applicable provisions of this Indenture, and
thereafter "Depositary" will mean or include such successor.
"Disqualified Capital Stock" means with respect to any Person, (a) 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 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 and (b) any
Equity Interests of any Subsidiary of such Person other than any common equity
with no preferences, privileges, and no redemption or repayment provisions.
Notwithstanding the foregoing, any Equity Interests that would constitute
Disqualified Capital Stock solely because the holders thereof have the right to
require the Company to repurchase such Equity Interests upon the occurrence of a
change of control or an asset sale shall not constitute Disqualified Capital
Stock if the terms of such Equity Interests provide that the Company may not
repurchase or redeem any such Equity Interests pursuant to such provisions prior
to the Company's purchase of the Notes as are required to be purchased pursuant
to Section 4.13 and Section 4.16.
"Distribution Compliance Period" means the 40-day restricted period as
defined in Regulation S.
"Eligible Revolving Facility" means, for any Liquidity Calculation Date,
any revolving loan agreement that makes credit available to the Company, which
loan agreement (1) was not, on such Liquidity Calculation Date, in default
(unless such default was cured or waived on or prior to the following Liquidity
Determination Date), and (2) does not, by its terms, expire or terminate on or
prior to the next Interest Payment Date.
8
"Equity Interests" means Capital Stock or partnership, participation or
membership interests and all warrants, options or other rights to acquire
Capital Stock or partnership, participation or membership interests (but
excluding any debt security that is convertible into, or exchangeable for,
Capital Stock or partnership, participation or membership interests).
"Euroclear" means Euroclear Bank S.A./N.V., or its successor, as operator
of the Euroclear system.
"Event of Loss" means, with respect to any property or asset, any (1) loss,
destruction or damage of such property or asset or (2) 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.
"Excess Cash Flow" means, with respect to the Company for any fiscal year,
the Consolidated EBITDA of the Company and its Consolidated Subsidiaries for
such period; minus (1) Consolidated Interest Expense of the Company and its
Consolidated Subsidiaries that is paid during such period; minus (2) up to
$2,000,000 in capital expenditures of the Company and its Consolidated
Subsidiaries that are actually paid during such period (excluding any capital
expenditures made with the proceeds from the sale of the Notes); minus (3)
capital expenditures that are actually paid during such period (excluding any
such capital expenditures made with the proceeds from the sale of the Notes) for
slot machines and table games leased to third parties together with signage
directly associated with such slot machines and table games; minus (4)
Consolidated income tax expense for such period, minus; (5) scheduled or
required principal payments on Indebtedness permitted to be incurred pursuant to
this Indenture; minus (6) the aggregate principal amount, premium and Liquidated
Damages, if any, paid in connection with an optional redemption of the Notes
made pursuant to Section 3.7 during the fiscal year preceding such Excess Cash
Flow Offer; minus (7) the aggregate principal amount, premium and Liquidated
Damages, if any, paid by the Company during the fiscal year preceding such
Excess Cash Flow Offer in connection with Notes repurchased pursuant to a Change
of Control Offer as described in Section 4.16; and minus (8) the aggregate
redemption price and Liquidated Damages, if any, paid in connection with a
Regulatory Redemption made pursuant to Section 3.9 during the fiscal year
preceding such Excess Cash Flow Offer.
"Exercise Price" has the meaning given to that term in the Warrant
Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Offer" means an offer that may be made by the Company pursuant to
the Note Registration Rights Agreement to Exchange Notes for Series A Notes.
"Exchange Offer Registration Statement" shall have the meaning set forth in
the Note Registration Rights Agreement.
"Excluded Assets" means (i) cash and deposit accounts; (ii) assets secured
by Purchase Money Obligations or Capitalized Lease Obligations permitted to be
incurred under this Indenture; (iii) all Gaming Licenses; and (iv) any assets,
agreements, leases, permits, licenses or other assets or property that cannot be
subjected to a Lien under the Collateral Agreements without the consent of third
parties, which consent has not been obtained (including from
9
applicable gaming authorities) including any of the Company's interests in
participating gaming device leases (other than to the extent that any term
requiring such consent under such assets, agreements, leases, permits, licenses
or other assets or property would be rendered ineffective pursuant to Sections
9-406 or 9-408 of the UCC (or any successor provision or provisions) of any
relevant jurisdiction or any other applicable law (including the Bankruptcy
Code) or principles of equity); provided, that Excluded Assets does not include
the proceeds of the assets under clauses (ii); (iii) or (iv) or of any other
Collateral to the extent such proceeds do not constitute Excluded Assets.
"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) dividends permitted under
Section 4.9 and payable, in form and amount, on a pro rata basis to all holders
of common stock of the Company; and (c) transactions solely between or among the
Company and any of its Consolidated Subsidiaries or solely among Consolidated
Subsidiaries of the Company.
"Existing Indebtedness" means the Indebtedness of the Company and its
Subsidiaries (other than Indebtedness under the Credit Agreement) in existence
on the Issue Date, including Indebtedness under the Existing Credit Agreement,
reduced to the extent such amounts are repaid, refinanced or retired.
"Foreign Subsidiary" means any Subsidiary of the Company which (i) is not
organized under the laws of the United States, any state thereof or the District
of Columbia and (ii) conducts substantially all of its business operations
outside the United States of America.
"fair market value" means the price that would be paid in an arm's-length
transaction between an informed and willing seller under no compulsion to sell
and an informed and willing buyer under no compulsion to buy, as determined in
good faith by the Company.
"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 at the time.
"Gaming Authorities" means the Nevada State Gaming Control Board, the
Nevada Gaming Commission, the Mississippi Gaming Commission and every other
state and local regulatory agency that has jurisdiction over the manufacturing
and distribution of gaming devices or the conduct of gaming operations of the
Company or any its Subsidiaries.
"Global Notes" means one or more Notes in the form of Exhibit A hereto that
includes the information referred to in footnotes 3, 4 and 9 to the form of
Note, attached hereto as Exhibit A, issued under this Indenture, that is
deposited with or on behalf of and registered in the name of the Depositary or
its nominee.
"Global Note Legend" means the legend set forth in Section 2.6(g)(ii)
hereof, which is required to be placed on all Global Notes issued under this
Indenture.
10
"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness. When used with respect to the Notes, a
"Guarantee" means a guarantee by the Guarantors of all or any part of the
Notes, in accordance with Article X hereof.
"Guarantor" means each of the Company's present and future subsidiaries
that at the time are guarantors of the Notes in accordance with this Indenture.
"Indebtedness" of any Person means, without duplication,
(a) all liabilities and obligations, contingent or otherwise, of such any
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, (1) 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); (2) evidenced by bonds, notes, debentures or similar instruments; (3)
representing the balance deferred and unpaid of the purchase price of any
property or services, except (other than accounts payable or other obligations
to trade creditors which have remained unpaid for greater than 90 days past
their original due date) those incurred in the ordinary course of its business
that would constitute ordinarily a trade payable to trade creditors;
(b) all liabilities and obligations, contingent or otherwise, of such
Person (1) evidenced by bankers' acceptances or similar instruments issued or
accepted by banks, (2) relating to any Capitalized Lease Obligation, or (3)
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 clauses (a), (b) or (c) that such Person has guaranteed or provided
credit support or that are otherwise its legal liability or which are secured by
any assets or property of such Person;
(e) any and all deferrals, renewals, extensions, refinancing 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; and
(f) 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).
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 this Indenture, and if such price
is based upon, or measured by, the Fair Market Value of such Disqualified
11
Capital Stock, such Fair Market Value shall 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.
The amount of any Indebtedness outstanding as of any date shall be (1) the
accreted value thereof, in the case of any Indebtedness issued with original
issue discount, but the accretion of original issue discount in accordance with
the original terms of Indebtedness issued with an original issue discount will
not be deemed to be an incurrence and (2) the principal amount thereof, together
with any interest thereon that is more than 30 days past due, in the case of any
other Indebtedness.
"Indenture" means this Indenture, as amended or supplemented from time to
time in accordance with the terms hereof.
"Indirect Participant" means an entity that, with respect to DTC, clears
through or maintains a direct or indirect, custodial relationship with a
Participant.
"Initial Purchasers" mean the initial purchasers of the Series A Notes
under the Purchase Agreement, dated August 15, 2001, with respect to the Series
A Notes.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, who is not also a QIB.
"Intercreditor Agreement" means that certain Intercreditor Agreement among
the Trustee and one or more lenders, substantially in the form attached hereto
as Exhibit G, which may be entered into after the Issue Date in accordance with
Section 7.1(f) hereof, including any amended or supplemented agreement or any
replacement or substitute agreement, in each case substantially in the form of
Exhibit G attached hereto.
"Interest 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 Interest Expense 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 Interest Expense would no longer be obligations contributing to
such Person's Consolidated Interest Expense subsequent to the Transaction Date)
during the Reference Period; provided, that for purposes of such calculation:
(1) 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 clause (c) of the definition of
"Consolidated Net Income;"
(2) transactions giving rise to the need to calculate the Interest
Coverage Ratio shall be assumed to have occurred on the first day of the
Reference Period without regard to the effect of clause (c) of the
definition of "Consolidated Net Income;"
12
(3) the incurrence of any Indebtedness (including 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) (other than Indebtedness incurred under any
revolving credit facility) shall be assumed to have occurred on the first
day of the Reference Period; and
(4) the Consolidated Interest Expense of such Person 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.
"Interest Payment Date" means the stated due date of an installment of
interest on the Notes.
"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, capital stock, bonds, notes, debentures,
partnership or other ownership interests or other securities, including any
options or warrants, of such other Person or any agreement to make any such
acquisition;
(b) the making by such Person of any deposit with, or advance, loan or
other extension of credit to, such other Person (including the purchase of
property from another Person subject to an understanding or agreement,
contingent or otherwise, to resell such property to such other Person) or any
commitment to make any such advance, loan or extension (but excluding accounts
receivable, endorsements for collection or deposits arising in the ordinary
course of business);
(c) other than guarantees of Indebtedness of the Company or any Guarantor
to the extent permitted by Section 4.7, the entering into by such Person of any
guarantee of, or other
13
credit support or contingent obligation with respect to, Indebtedness or other
liability of such other Person;
(d) the making of any capital contribution by such Person to such other
Person; and
(e) the designation by the Board of Directors of the Company of any Person
to be an Unrestricted Subsidiary.
The Company shall be deemed to make an Investment in an amount equal to the fair
market value of the net assets of any subsidiary (or, if neither the Company nor
any of its Subsidiaries has theretofore made an Investment in such subsidiary,
in an amount equal to the Investments being made), at the time that such
subsidiary is designated an Unrestricted Subsidiary, and any property
transferred to an Unrestricted Subsidiary from the Company or a Subsidiary of
the Company shall be deemed an Investment valued at its fair market value at the
time of such transfer. The Company or any of its Subsidiaries shall be deemed
to have made an Investment in a Person that is or was a Subsidiary if, upon the
issuance, sale or other disposition of any portion of the Company's or the
Subsidiary's ownership in the Capital Stock of such Person, such Person ceases
to be a Subsidiary. The fair market value of each Investment shall be measured
at the time made or returned, as applicable.
"Issue Date" means the date of first issuance of the Notes under this
Indenture.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York, or the city in which the principal
corporate trust office of the Trustee is located, or at a place of payment are
authorized by law, regulation or executive order to remain closed. If a payment
date is a Legal Holiday, payment may be made at that place on the next
succeeding day that is not a Legal Holiday, and no interest shall accrue for the
intervening period.
"Letter of Transmittal" means the letter of transmittal to be prepared by
the Company and sent to all Holders of the Notes for use by such Holders in
connection with the Exchange Offer.
"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.
"Liquidated Damages" means all liquidated damages then owing pursuant to
the Note Registration Rights Agreement.
"Liquidity Calculation Date" means each date that is the end of each fiscal
quarter for the Company.
"Liquidity Determination Date" means each date that is forty-five days
after a Liquidity Calculation Date.
"Moody's" means Xxxxx'x Investors Service, Inc. and its successors.
14
"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 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) 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.
"Non-U.S. Person" means any Person other than a U.S. Person.
"Notes Custodian" means the Trustee, as custodian with respect to the Notes
in global form, or any successor entity thereto.
"Note Registration Rights Agreement" means the Note Registration Rights
Agreement, dated as of the Issue Date, by and among the Company and the other
parties named on the signature pages thereof, as such agreement may be amended,
modified or supplemented from time to time.
"Obligation" means any principal, premium or interest payment, or monetary
penalty, or damages, due by the Company or any Guarantor under the terms of the
Notes, this Indenture or the Collateral Agreements, including any Liquidated
Damages due pursuant to the terms of the Note Registration Rights Agreement.
"Officer" means, with respect to any Person, the Chairman of the Board, the
Chief Executive Officer, the President, the Chief Operating Officer, the Chief
Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the
Secretary, any Assistant Secretary or any Vice President of such Person.
"Officers' Certificate" means the officers' certificate to be delivered
upon the occurrence of certain events as set forth in this Indenture.
"Opinion of Counsel" means an opinion from legal counsel who is reasonably
acceptable to the Trustee, that meets the requirements of Sections 11.4 and 11.5
hereof. The counsel may be an employee of or counsel to the Company or any
Subsidiary of the Company.
"Participant" means, with respect to the Depositary, Euroclear or
Clearstream, a Person who has an account with the Depositary, Euroclear or
Clearstream, respectively (and, with respect to The Depository Trust Company,
shall include Euroclear and Clearstream).
15
"Permitted Indebtedness" means that:
(a) the Company and the Guarantors may incur Indebtedness evidenced by the
Notes and the Guarantees issued pursuant to this Indenture up to the amounts
being issued on the original Issue Date less any amounts repaid or retired;
(b) the Company and the Guarantors, as applicable, may incur Refinancing
Indebtedness with respect to any Existing Indebtedness (other than Indebtedness
under the Existing Credit Agreement) or any Indebtedness (including Disqualified
Capital Stock) described in clause (a) or incurred pursuant to the Debt
Incurrence Ratio test of Section 4.7 hereof, or which was refinanced pursuant to
this clause (b);
(c) the Company and its Subsidiaries may incur Indebtedness solely in
respect of bankers acceptances, letters of credit and performance bonds (to the
extent that such incurrence does not result in the incurrence of any obligation
to repay any obligation relating to borrowed money or other Indebtedness), all
in the ordinary course of business in accordance with customary industry
practices, in amounts and for the purposes customary in the Company's industry;
provided, that the aggregate principal amount outstanding of such Indebtedness
(including Refinancing Indebtedness and any other Indebtedness issued to retire,
refund, defease, or replace such Indebtedness) shall at no time exceed $500,000;
(d) (i) the Company may incur Indebtedness owed to (borrowed from) any
Guarantor; (ii) any Guarantor may incur Indebtedness owed to (borrowed from) any
other Guarantor or the Company; and (iii) any Subsidiary may incur Indebtedness
owed to (borrowed from) any Guarantor or the Company; provided, that (x) in the
case of Indebtedness of the Company, such obligations shall be unsecured and
contractually subordinated in all respects to the Company's obligations pursuant
to the Notes and any event that causes such Guarantor no longer to be a
Guarantor (including by designation to be an Unrestricted Subsidiary) shall be
deemed to be a new incurrence by the Company of such Indebtedness and any
guarantor thereof subject to Section 4.7 hereof, (y) in the case of Indebtedness
of a Guarantor, such obligations shall be unsecured and contractually
subordinated in all respects to such Guarantor's obligations pursuant to such
Guarantor's Guarantee and any event that causes the Guarantor lender no longer
to be a Guarantor (including a designation as an Unrestricted Subsidiary) shall
be deemed to be a new incurrence by such Guarantor borrower of such Indebtedness
and any guarantor thereof subject to Section 4.7 hereof, and (z) in the case of
Indebtedness of a Subsidiary pursuant to clause (iii) such obligations shall be
unsecured and any event that causes the Guarantor lender no longer to be a
Guarantor (including a designation as an Unrestricted Subsidiary) shall be
deemed to be a new incurrence by such Subsidiary borrower of such Indebtedness
and any guarantor thereof subject to Section 4.7 hereof; and
(e) the Company and the Guarantors may incur Interest Swap and Hedging
Obligations that are incurred for the purpose of fixing or hedging interest rate
or currency risk with respect to any fixed or floating rate Indebtedness that is
permitted by this Indenture to be outstanding or any receivable or liability the
payment of which is determined by reference to a foreign currency; provided,
that the notional amount of any such Interest Swap and Hedging Obligation does
not exceed the principal amount of Indebtedness to which such Interest Swap and
Hedging Obligation relates.
16
"Permitted Investment" means:
(a) any Investment in any of the Notes;
(b) any Investment in Cash Equivalents;
(c) intercompany notes to the extent permitted under clause (i) or (ii) of
clause (d) of the definition of "Permitted Indebtedness";
(d) any Investment by the Company or any Guarantor in a Person in a Related
Business if as a result of such Investment such Person immediately becomes a
Subsidiary and a Guarantor or such Person is immediately merged with or into the
Company or a Guarantor; and
(e) other Investments in any Person or Persons, provided, that after giving
pro forma effect to each such Investment, the aggregate amount of all such
Investments made on and after the Issue Date pursuant to this clause (e) that
are outstanding (after giving effect to any such Investments or any portions
thereof that are returned to the Company or the Guarantor that made such prior
Investment, without restriction, in cash on or prior to the date of any such
calculation, but only up to the amount of the Investment made under this clause
(e)) in such Person at any time does not in the aggregate exceed $10,000,000
(measured by the value attributed to the Investment at the time made or
returned, as applicable);
(f) any Investment in any Person in exchange for the Company's Qualified
Capital Stock or the Net Cash Proceeds of any substantially concurrent sale of
the Company's Qualified Capital Stock.
"Permitted Lien" means:
(g) Liens existing on the Issue Date;
(x) Xxxxx 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 the books of the Company in accordance with GAAP;
(i) 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 (1) the underlying obligations are not
overdue for a period of more than 30 days, or (2) 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;
(j) 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;
(k) 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
17
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;
(l) pledges or deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other types of
social security legislation;
(m) Liens securing the Notes and the Guarantees;
(n) 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;
(o) Liens arising from Purchase Money Indebtedness; provided such Liens
relate solely to the property which is subject to such Purchase Money
Indebtedness;
(p) 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;
(q) 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;
(r) Liens securing Refinancing Indebtedness incurred to refinance any
Indebtedness (other than Indebtedness under the Existing Credit Agreement) 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; and
(s) Liens securing Indebtedness incurred under the Credit Agreement;
provided that the Company and its Subsidiaries shall have granted a Lien in
favor of the Collateral Agent on all assets secured by such Credit Agreement,
other than Excluded Assets (provided that if a lender under the Credit Agreement
takes a security interest in assets that secure Purchase Money Indebtedness or
Capitalized Lease Obligations, such assets will not be Excluded Assets); and
(t) Liens in favor of the Company or any Guarantor, which are assigned to
the Collateral Agent for the Notes or a Subsidiary Guarantee, as applicable.
"Person" or "person" means any corporation, individual, limited liability
company, joint stock company, joint venture, partnership, limited liability
partnership, unincorporated association, governmental regulatory entity,
country, state or political subdivision thereof, trust, municipality or other
entity.
18
"Pledge and Security Agreement" means that certain Pledge and Security
Agreement, dated as of the date hereof, among the Company, each of the
Subsidiaries of the Company party thereto and the Trustee as secured party.
"Preferred Stock" means any Equity Interest of any class or classes of a
Person (however designated) which is preferred as to payments of dividends, or
as to distributions upon any liquidation or dissolution, over Equity Interests
of any other class of such Person.
"Private Placement Legend" means the legend set forth in Section 2.6(g)(i)
hereof to be placed on all Notes issued under this Indenture except where
specifically stated otherwise by the provisions of this Indenture.
"Pro Forma" or "pro forma" shall have the meaning set forth in Regulation
S-X of the Securities Act, unless otherwise specifically stated herein.
"Public Equity Offering" means an underwritten public offering pursuant to
a registration statement filed with the Commission in accordance with the
Securities Act, of Qualified Capital Stock of the Company.
"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),
construction, installation or improvement 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 concurrently with such acquisition, construction,
installation or improvement and is secured only by the assets so financed.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Qualified Capital Stock" means any Capital Stock of the Company that is
not Disqualified Capital Stock.
"Qualified Exchange" means:
(1) any legal defeasance, redemption, retirement, repurchase or other
acquisition of Capital Stock 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 its Qualified Capital Stock
(other than to a Subsidiary); or
(2) any issuance of Qualified Capital Stock of the Company in exchange
for any Capital Stock or Indebtedness of the Company issued on or after the
Issue Date.
"Record Date" means a Record Date specified in the Notes, whether or not
such date is a Business Day.
"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
19
date upon which any determination is to be made pursuant to the terms of the
Notes or this Indenture.
"Refinancing Indebtedness" means Indebtedness (including 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 (including 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) the lesser of (1) the principal amount or, in
the case of Disqualified Capital Stock, liquidation preference, of the
Indebtedness (including Disqualified Capital Stock) so Refinanced and (2) 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 (including 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 (including Disqualified Capital Stock) to be so refinanced at the
time of such Refinancing and (y) in all respects, be no less contractually
subordinated or junior, if applicable, to the rights of Holders of the Notes
than was the Indebtedness (including 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 (including Disqualified
Capital Stock) to be so refinanced or, if sooner, 91 days after the Stated
Maturity of the Notes; 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.
"Reg S Permanent Global Note" means one or more permanent Global Notes
bearing the Private Placement Legend, that will be issued in an aggregate amount
of denominations equal in total to the outstanding principal amount of the Reg S
Temporary Global Note upon expiration of the Distribution Compliance Period.
"Reg S Temporary Global Note" means one or more temporary Global Notes
bearing the Private Placement Legend and the Reg S Temporary Global Note Legend,
issued in an aggregate amount of denominations equal in total to the outstanding
principal amount of the Notes initially sold in reliance on Rule 903 of
Regulation S.
"Reg S Temporary Global Note Legend" means the legend set forth in Section
2.6(g)(iii) hereof, which is required to be placed on all Reg S Temporary Global
Notes issued under this Indenture.
"Regulation S" means Regulation S promulgated under the Securities Act, as
it may be amended from time to time, and any successor provision thereto.
20
"Regulation S Global Note" means a Reg S Temporary Global Note or a Reg S
Permanent Global Note, as the case may be.
"Related Business" means the business 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.
"Restricted Definitive Note" means one or more Definitive Notes bearing the
Private Placement Legend, issued under this Indenture.
"Restricted Global Note" means one or more Global Notes bearing the Private
Placement Legend, issued under this Indenture; provided, that in no case shall
an Exchange Note issued in accordance with this Indenture and the terms of the
Note Registration Rights Agreement be a Restricted Global Note.
"Restricted Investment" means, in one or a series of related transactions,
any Investment, other than other Permitted Investments.
"Restricted Payment" means, with respect to any Person:
(a) the declaration or payment of any dividend or other distribution in
respect of Equity Interests of such Person;
(b) any payment (except to the extent with Qualified Capital Stock) on
account of the purchase, redemption or other acquisition or retirement for value
of Equity Interests of such Person;
(c) other than with the proceeds from the substantially concurrent sale of,
or in exchange for, Refinancing Indebtedness, 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 Subordinated Indebtedness directly or
indirectly, by such Person or a 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, however, that the term "Restricted Payment" does not include (1) 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, or (2) any dividend, distribution or other payment to the
Company, or to any of the Guarantors, by the Company or any of its Subsidiaries
and any Investment in any Guarantor by the Company or any Subsidiary.
"Rule 144" means Rule 144 promulgated under the Securities Act, as it may
be amended from time to time, and any successor provision thereto.
"Rule 144A" means Rule 144A promulgated under the Securities Act, as it may
be amended from time to time, and any successor provision thereto.
21
"SEC" means the United States Securities and Exchange Commission, or any
successor agency.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC thereunder.
"Separation Date" means the earliest to occur of (i) 180 days after the
Issue Date, (ii) the date on which the registration statement for a registered
exchange offer with respect to the Notes is declared effective under the
Securities Act, (iii) the date on which a shelf registration statement with
respect to the Notes or for the Warrants or the Warrant Shares is declared
effective under the Securities Act, (iv) the occurrence of a Change of Control
or an Event of Default with respect to the Notes, or (v) such date as the
Initial Purchasers in their sole discretion shall determine.
"Shelf Registration Statement" shall have the meaning set forth in the Note
Registration Rights Agreement.
"Significant Subsidiary" shall have the meaning provided under Regulation
S-X of the Securities Act, as in effect on the Issue Date.
"Special Record Date" means, for payment of any Defaulted Interest, a date
fixed by the Paying Agent pursuant to Section 2.12 hereof.
"S&P" means Standard & Poor's Ratings Services, a division of The XxXxxx-
Xxxx Companies, and its successors.
"Stated Maturity," when used with respect to any Note, means August 15,
2008.
"Subordinated Indebtedness" means Indebtedness of the Company or a
Guarantor that is subordinated in right of payment by its terms or the terms of
any document or instrument or instrument relating thereto ("contractually") to
the Notes or such Guarantee, as applicable, in any respect.
"Subsidiary," with respect to any Person, means (1) 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, and (2) 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 a majority ownership interest, or (3) 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 a majority ownership interest. Notwithstanding the
foregoing, an Unrestricted Subsidiary shall not be a Subsidiary of the Company
or of any Subsidiary of the Company for any purpose under this Indenture
(including the definitions therein). Unless the context requires otherwise,
Subsidiary means each direct and indirect Subsidiary of the Company.
22
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-77bbbb)
as in effect on the date on which this Indenture is qualified under the TIA.
"Transfer Restricted Notes" means Global Notes and Definitive Notes that
bear or are required to bear the Private Placement Legend, issued under this
Indenture.
"Trustee" means the party named as such above until a successor replaces it
in accordance with the applicable provisions of this Indenture and thereafter
means such successor serving hereunder.
"Unit" or "Units" means the units consisting of Notes and Warrants.
"Unrestricted Definitive Note" means one or more Definitive Notes that do
not bear and are not required to bear the Private Placement Legend, issued under
this Indenture.
"Unrestricted Global Note" means one or more permanent Global Notes
representing a series of Notes that does not bear and is not required to bear
the Private Placement Legend, issued under this Indenture.
"Unrestricted Subsidiary" means (1) any subsidiary of the Company that does
not own any Capital Stock of, or own or hold any Lien on any property of, the
Company or any other Subsidiary of the Company and that, at the time of
determination, shall be an Unrestricted Subsidiary (as designated by the Board
of Directors of the Company); provided, that such Subsidiary at the time of such
designation (a) is not party to any agreement, contract, arrangement or
understanding with the Company or any Subsidiary of the Company unless the terms
of any such agreement, contract, arrangement or understanding are no less
favorable to the Company or such Subsidiary than those that might be obtained at
the time from Persons who are not Affiliates of the Company; (b) is a Person
with respect to which neither the Company nor any of its Subsidiaries has any
direct or indirect obligation (x) to subscribe for additional Equity Interests
or (y) to maintain or preserve such Person's financial condition or to cause
such. Person to achieve any specified levels of operating results; and (c) has
not guaranteed or otherwise directly or indirectly provided credit support for
any Indebtedness of the Company or any of its Subsidiaries, and (2) any
subsidiary of any Unrestricted Subsidiary. The Board of Directors of the
Company may designate any Unrestricted Subsidiary to be a Subsidiary, provided,
that (1) no Default or Event of Default is existing or will occur as a
consequence thereof and (2) immediately after giving effect to such designation,
on a pro forma basis, the Company could incur at least $1.00 of Indebtedness
pursuant to the Debt Incurrence Ratio of Section 4.7. Each such designation
shall be evidenced by filing with the Trustee a certified copy of the resolution
giving effect to such designation and an Officers' Certificate certifying that
such designation complied with the foregoing conditions.
"Unused Availability" means, as of any Liquidity Calculation Date, the
aggregate amount of undrawn revolving loans available (after giving effect to
any financial ratios, borrowing base provisions or financial calculations
specified in the applicable Eligible Revolving Facility and subject to
satisfaction of all applicable conditions precedent contained therein) to the
Company on such date pursuant to any Eligible Revolving Facility.
23
"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.
"U.S. Person" means a U.S. person as defined in Rule 902(o) under the
Securities Act.
"Voting Equity Interests" means Equity Interests which at the time are
entitled to vote in the election of, as applicable, directors, members or
partners generally.
"Warrant Agreement" means the Warrant Agreement dated as of the date hereof
among the Company and Firstar Bank, N.A., as warrant agent, as such agreement
may be amended, modified and supplemented from time to time in accordance with
the terms thereof.
"Warrants" has the meaning given to such term in the Warrant Agreement.
"Warrant Shares" has the meaning given to such term in the Warrant
Agreement.
"Wholly Owned Subsidiary" means a Subsidiary all the Equity Interests of
which (other than directors' qualifying Shares) are owned by the Company or one
or more Wholly Owned Subsidiaries of the Company or a combination thereof.
SECTION 1.2 OTHER DEFINITIONS
Term Defined in Section
---- ------------------
"Affiliate Transaction" 4.12
"Asset Sale" 4.13
"Asset Sale Amount" 4.13
"Asset Sale Offer" 4.13
"Asset Sale Offer Amount" 4.13
"Asset Sale Offer Period" 4.13
"Authentication Order" 2.2
"Benefitted Party" 10.1
"Change of Control: 4.16
"Change of Control Offer" 4.16
"Change of Control Offer Period" 4.16
"Change of Control Purchase Date" 4.16
"Change of Control Purchase Price" 4.16
"Covenant Defeasance" 8.3
"Debt Incurrence Ratio" 4.7
"Defaulted Interest" 2.12
"DTC" 2.3
"Excess Cash Flow Offer" 4.17
"Excess Cash Flow Offer Amount" 4.17
"Excess Cash Flow Purchase Price" 4.17
"Excess Proceeds" 4.13
"Guarantee Obligations" 10.1
"incur" or "incurrence" 4.7
"Incurrence Date" 4.7
24
"Legal Defeasance" 8.2
"Paying Agent" 2.3
"Registrar" 2.3
"Regulatory Redemption" 3.9
SECTION 1.3 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT
Whenever this Indenture refers to a provision of the TIA, such provision is
incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission;
"obligor" on the Notes means the Company, each Guarantor and any successor
obligor upon the Notes.
All other terms used in this Indenture that are defined by the TIA, defined
by TIA reference to another statute or defined by SEC rule under the TIA have
the meanings so assigned to them.
SECTION 1.4 RULES OF CONSTRUCTION
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular;
(5) provisions apply to successive events and transactions;
(6) "herein," "hereof" and other words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or other
subdivision;
(7) references to sections of or rules under the Securities Act and
the Exchange Act shall be deemed to include substitute, replacement of
successor sections or rules adopted by the SEC from time to time; and
(8) reference to "subject to the terms of the Intercreditor Agreement"
shall mean if the Intercreditor Agreement is then in effect.
25
SECTION 1.5 GAMING APPROVALS
Any restrictions on the transfer of and any agreements not to encumber any
stock or equity security of Mikohn Nevada or MGC, Inc. shall not become
effective until approved by the applicable gaming authorities to the extent the
approval of such restrictions or agreements are required by any applicable
gaming statutes and regulations regarding the manufacturing and distribution of
gaming devices or the conduct of gaming operations.
ARTICLE II
THE NOTES
SECTION 2.1 FORM AND DATING
(a) General. The Notes and the Trustee's certificate of authentication
shall be substantially in the form of Exhibit A hereto and shall be issued
initially, together with the Warrants, as Units, substantially in the form of
Exhibit B hereto. On the Separation Date, the Notes and the Warrants shall
become separately transferable.
The Notes may have notations, legends or endorsements required by law,
stock exchange rule or usage. Each Note shall be dated the date of its
authentication. The Notes shall be in denominations of $1,000 and integral
multiples thereof.
The terms and provisions contained in the Notes shall constitute, and are
hereby expressly made, a part of this Indenture and the Company, the Guarantors
and the Trustee, by their execution and delivery of this Indenture, expressly
agree to such terms and provisions and to be bound thereby. However, to the
extent any provision of any Note conflicts with the express provisions of this
Indenture, the provisions of this Indenture shall govern and be controlling.
(b) Global Notes. Notes issued in global form shall be substantially in
the form of Exhibit A attached hereto (including the Global Note Legend thereon
and the "Schedule of Exchanges of Interests in the Global Note" attached
thereto). Notes issued in definitive form shall be substantially in the form of
Exhibit A attached hereto (but without the Global Note Legend thereon and
without the "Schedule of Exchanges of Interests in the Global Note" attached
thereto). Each Global Note shall represent such of the outstanding Notes as
shall be specified therein and each shall provide that it shall represent the
aggregate principal amount of outstanding Notes from time to time endorsed
thereon and that the aggregate principal amount of outstanding Notes represented
thereby may from time to time be reduced or increased, as appropriate, to
reflect exchanges and redemptions. Any endorsement of a Global Note to reflect
the amount of any increase or decrease in the aggregate principal amount of
outstanding Notes represented thereby shall be made by the Trustee or the Notes
Custodian, at the direction of the Trustee, in accordance with instructions
given by the Holder thereof as required by Section 2.6 hereof.
(c) Euroclear and Clearstream Procedures Applicable. The provisions of the
"Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of Clearstream
Banking Luxembourg" and "Customer Handbook" of Clearstream Banking Luxembourg in
effect at the relevant time shall
26
be applicable to transfers of beneficial interests in the Regulation S Global
Notes that are held by Participants through Euroclear or Clearstream Banking
Luxembourg.
SECTION 2.2 EXECUTION AND AUTHENTICATION
Two Officers shall sign the Notes for the Company by manual or facsimile
signature. In the case of Definitive Notes, such signatures may be imprinted or
otherwise reproduced on such Notes. If an Officer whose signature is on a Note
no longer holds that office at the time a Note is authenticated, the Note shall
nevertheless be valid. A Note shall not be valid until authenticated by the
manual signature of the Trustee. The signature shall be conclusive evidence
that the Note has been authenticated under this Indenture. The Trustee shall,
upon a written order of the Company signed by an Officer (an "Authentication
Order"), authenticate Notes for issuance up to the aggregate principal amount
stated in such Authentication Order; provided that Notes authenticated for
issuance on the Issue Date shall not exceed $105,000,000 in aggregate principal
amount. The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. An authenticating agent may authenticate Notes
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with Holders or an
Affiliate of the Company.
SECTION 2.3 REGISTRAR, PAYING AGENT AND DEPOSITARY
The Company shall maintain an office or agency in the Borough of Manhattan,
The City of New York, where Notes may be presented for registration of transfer
or for exchange ("Registrar") and an office or agency where Notes may be
presented for payment ("Paying Agent"). The Registrar shall keep a register of
the Notes and of their transfer and exchange. The Company may appoint one or
more co-registrars and one or more additional paying agents. The term
"Registrar" includes any co-registrar and the term "Paying Agent" includes any
additional paying agent. The Company may change any Paying Agent or Registrar
without notice to any Holder. The Company shall notify the Trustee in writing
of the name and address of any Agent not a party to this Indenture. If the
Company fails to appoint or maintain another entity as Registrar or Paying
Agent, the Trustee shall act as such. The Company or any of its Subsidiaries
may act as Paying Agent or Registrar. The Company initially appoints The
Depository Trust Company ("DTC") to act as Depositary with respect to the Global
Notes. The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Notes Custodian with respect to the Global Notes.
SECTION 2.4 PAYING AGENT TO HOLD MONEY IN TRUST
The Company shall require each Paying Agent other than the Trustee to agree
in writing that the Paying Agent will hold in trust for the benefit of Holders
or the Trustee all money held by the Paying Agent for the payment of principal,
premium or Liquidated Damages, if any, or interest on the Notes, and will notify
the Trustee of any default by the Company in making any such payment. While any
such default continues, the Trustee may require a Paying Agent to pay all money
held by it to the Trustee. The Company at any time may require a Paying Agent
to pay all money held by it to the Trustee. Upon payment over to the Trustee,
the Paying Agent (if other than the Company or a Subsidiary) shall have no
further liability for the money. If the
27
Company or a Subsidiary acts as Paying Agent, it shall segregate and hold in a
separate trust fund for the benefit of the Holders all money held by it as
Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the
Company, the Trustee shall serve as Paying Agent for the Notes.
SECTION 2.5 HOLDER LISTS
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA (S) 312(a). If the Trustee is
not the Registrar, the Company shall furnish, or shall cause the Registrar (if
other than the Company) to furnish, to the Trustee at least seven Business Days
before each Interest Payment Date and at such other times as the Trustee may
request in writing, a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of the Holders of Notes and the
Company shall otherwise comply with TIA (S) 312(a).
SECTION 2.6 TRANSFER AND EXCHANGE
(a) Transfer and Exchange of Global Notes. A Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. All Global Notes will be exchanged
by the Company for Definitive Notes if (i) the Company delivers to the Trustee
notice from the Depositary that (x) the Depositary is unwilling or unable to
continue to act as Depositary for the Global Notes and the Company thereupon
fails to appoint a successor Depositary within 90 days or (y) the Depositary is
no longer a clearing agency registered under the Exchange Act, (ii) the Company
in its sole discretion determines that the Global Notes (in whole but not in
part) should be exchanged for Definitive Notes and delivers a written notice to
such effect to the Trustee or (iii) upon request of the Trustee or Holders of a
majority of the aggregate principal amount of outstanding Notes if there shall
have occurred and be continuing a Default or Event of Default with respect to
the Notes; provided that in no event shall the Reg S Temporary Global Note be
exchanged by the Company for Definitive Notes prior to (x) the expiration of the
Distribution Compliance Period and (y) the receipt by the Registrar of any
certificate identified by the Company and its counsel to be required pursuant to
Rule 903 or Rule 904 under the Securities Act. Upon the occurrence of any of
the preceding events in (i), (ii) or (iii) above, Definitive Notes shall be
issued in such names as the Depositary shall instruct the Trustee. Global Notes
also may be exchanged or replaced, in whole or in part, as provided in Sections
2.7 and 2.10 hereof. Every Note authenticated and delivered in exchange for, or
in lieu of, a Global Note or any portion thereof, pursuant to this Section 2.6
or Section 2.7 or 2.10 hereof, shall be authenticated and delivered in the form
of, and shall be, a Global Note. A Global Note may not be exchanged for another
Note other than as provided in this Section 2.6(a), however, beneficial
interests in a Global Note may be transferred and exchanged as provided in
Section 2.6(b), (c) or (f) hereof.
(b) Transfer and Exchange of Beneficial Interests in the Global Notes. The
transfer and exchange of beneficial interests in the Global Notes shall be
effected through the Depositary, in accordance with the provisions of this
Indenture and the Applicable Procedures. Beneficial interests in the Restricted
Global Notes shall be subject to restrictions on transfer comparable to
28
those set forth herein to the extent required by the Securities Act. Transfers
of beneficial interests in the Global Notes also shall require compliance with
either subparagraph (i) or (ii) below, as applicable, as well as one or more of
the other following subparagraphs, as applicable:
(i) Transfer of Beneficial Interests in the Same Global Note.
Beneficial interests in any Restricted Global Note may be transferred to Persons
who take delivery thereof in the form of a beneficial interest in the same
Restricted Global Note in accordance with the transfer restrictions set forth in
the Private Placement Legend; provided, however, that prior to the expiration of
the Distribution Compliance Period, transfers of beneficial interests in the Reg
S Temporary Global Note may not be made to a U.S. Person or for the account or
benefit of a U.S. Person (other than an Initial Purchaser). Beneficial
interests in any Unrestricted Global Note may be transferred to Persons who take
delivery thereof in the form of a beneficial interest in an Unrestricted Global
Note. No written orders or instructions shall be required to be delivered to
the Registrar to effect the transfers described in this Section 2.6(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial Interests in
Global Notes. In connection with all transfers and exchanges of beneficial
interests that are not subject to Section 2.6(b)(i) above, the transferor of
such beneficial interest must deliver to the Registrar either (A) (1) an order
from a Participant or an Indirect Participant given to the Depositary in
accordance with the Applicable Procedures directing the Depositary to credit or
cause to be credited a beneficial interest in another Global Note in an amount
equal to the beneficial interest to be transferred or exchanged and (2)
instructions given in accordance with the Applicable Procedures containing
information regarding the Participant account to be credited with such increase
or (B) (1) an order from a Participant or an Indirect Participant given to the
Depositary in accordance with the Applicable Procedures directing the Depositary
to cause to be issued a Definitive Note in an amount equal to the beneficial
interest to be transferred or exchanged and (2) instructions given by the
Depositary to the Registrar containing information regarding the Person in whose
name such Definitive Note shall be registered to effect the transfer or exchange
referred to in (B)(1) above; provided, that in no event shall Definitive Notes
be issued upon the transfer or exchange of beneficial interests in the Reg S
Temporary Global Note prior to (x) the expiration of the Distribution Compliance
Period and (y) the receipt by the Registrar of any certificates identified by
the Company or its counsel to be required pursuant to Rule 903 and Rule 904
under the Securities Act. Upon consummation of an Exchange Offer by the Company
in accordance with Section 2.6(f) hereof, the requirements of this Section
2.6(b)(ii) shall be deemed to have been satisfied upon receipt by the Registrar
of the instructions contained in the Letter of Transmittal delivered by the
Holder of such beneficial interests in the Restricted Global Notes. Upon
satisfaction of all of the requirements for transfer or exchange of beneficial
interests in Global Notes contained in this Indenture and the Notes or otherwise
applicable under the Securities Act, the Trustee shall adjust the principal
amount of the relevant Global Note(s) pursuant to Section 2.6(h) hereof.
(iii) Transfer of Beneficial Interests to Another Restricted Global
Note. A beneficial interest in any Restricted Global Note may be transferred to
a Person who takes delivery thereof in the form of a beneficial interest in
another Restricted Global Note if the transfer complies with the requirements of
Section 2.6(b)(ii) above and the Registrar receives the following:
29
(A) if the transferee will take delivery in the form of a
beneficial interest in the 144A Global Note, then the transferor must
deliver a certificate in the form of Exhibit C hereto, including the
certifications in item (1) thereof; and
(B) if the transferee will take delivery in the form of a
beneficial interest in the Reg S Temporary Global Note or the Reg S
Permanent Global Note, then the transferor must deliver a certificate in
the form of Exhibit C hereto, including the certifications in item (2)
thereof.
(iv) Transfer and Exchange of Beneficial Interests in a Restricted
Global Note for Beneficial Interests in the Unrestricted Global Note. A
beneficial interest in any Restricted Global Note may be exchanged by any holder
thereof for a beneficial interest in an Unrestricted Global Note or transferred
to a Person who takes delivery thereof in the form of a beneficial interest in
an Unrestricted Global Note if the exchange or transfer complies with the
requirements of Section 2.6(b)(ii) above and:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Note Registration Rights Agreement
and Section 2.6(f) hereof, and the holder of the beneficial interest to be
transferred, in the case of an exchange, or the transferee, in the case of
a transfer, certifies in the applicable Letter of Transmittal that it is
not (1) a Broker-Dealer, (2) a Person participating in the distribution of
the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule
144) of the Company;
(B) such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Note Registration Rights Agreement;
(C)such transfer is effected by a Broker-Dealer pursuant to the
Exchange Offer Registration Statement in accordance with the Note
Registration Rights Agreement; or
(D) the Registrar receives the following: (1) if the holder of
such beneficial interest in a Restricted Global Note proposes to exchange
such beneficial interest for a beneficial interest in an Unrestricted
Global Note, a certificate from such holder in the form of Exhibit D
hereto, including the certifications in item (1)(a) thereof; or (2) if the
holder of such beneficial interest in a Restricted Global Note proposes to
transfer such beneficial interest to a Person who shall take delivery
thereof in the form of a beneficial interest in an Unrestricted Global
Note, a certificate from such holder in the form of Exhibit C hereto,
including the certifications in item (4) thereof; and, in each such case
set forth in this subparagraph (D), an Opinion of Counsel in form, and from
legal counsel, reasonably acceptable to the Registrar and the Company to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein and
in the Private Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or (D) above
at a time when an Unrestricted Global Note has not yet been issued, the Company
shall issue and, upon receipt
30
of an Authentication Order in accordance with Section 2.2 hereof, the Trustee
shall authenticate one or more Unrestricted Global Notes in an aggregate
principal amount equal to the aggregate principal amount of beneficial interests
transferred pursuant to subparagraph (B) or (D) above. Beneficial interests in
an Unrestricted Global Note cannot be exchanged for, or transferred to Persons
who take delivery thereof in the form of, a beneficial interest in a Restricted
Global Note.
(c) Transfer or Exchange of Beneficial Interests for Definitive Notes.
(i) Beneficial Interests in Restricted Global Notes to Restricted
Definitive Notes. If any holder of a beneficial interest in a Restricted Global
Note proposes to exchange such beneficial interest for a Restricted Definitive
Note or to transfer such beneficial interest to a Person who takes delivery
thereof in the form of a Restricted Definitive Note, then, upon receipt by the
Registrar of the following documentation:
(A) if the holder of such beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a Restricted
Definitive Note, a certificate from such holder in the form of Exhibit D
hereto, including the certifications in item (2)(a) thereof;
(B) if such beneficial interest is being transferred to a QIB in
accordance with Rule 144A, a certificate to the effect set forth in Exhibit
C hereto, including the certifications in item (1) thereof;
(C) if such beneficial interest is being transferred to a Non-
U.S. Person in an offshore transaction in accordance with Rule 903 or Rule
904 under the Securities Act, a certificate to the effect set forth in
Exhibit C hereto, including the certifications in item (2) thereof;
(D) if such beneficial interest is being transferred pursuant to
an exemption from the registration requirements of the Securities Act in
accordance with Rule 144, a certificate to the effect set forth in Exhibit
C hereto, including the certifications in item (3)(a) thereof;
(E) if such beneficial interest is being transferred to an
Institutional Accredited Investor in reliance on an exemption from the
registration requirements of the Securities Act other than those listed in
subparagraphs (B) through (D) above, a certificate to the effect set forth
in Exhibit C hereto, including the certifications, certificates and Opinion
of Counsel required by item (3) thereof, if applicable;
(F) if such beneficial interest is being transferred to the
Company or any of its Subsidiaries, a certificate to the effect set forth
in Exhibit C hereto, including the certifications in item (3)(b) thereof;
or
(G) if such beneficial interest is being transferred pursuant to
an effective registration statement under the Securities Act, a certificate
to the effect set forth in Exhibit C hereto, including the certifications
in item (3)(c) thereof,
31
the Trustee shall cause the aggregate principal amount of the applicable
Restricted Global Note to be reduced accordingly pursuant to Section 2.6(h)
hereof, and the Company shall execute and, upon receipt of an Authentication
Order pursuant to Section 2.2 hereof, the Trustee shall authenticate and deliver
to the Person designated in the instructions a Restricted Definitive Note in the
appropriate principal amount. Any Restricted Definitive Note issued in exchange
for a beneficial interest in a Restricted Global Note pursuant to this Section
2.6(c) shall be registered in such name or names and in such authorized
denomination or denominations as the holder of such beneficial interest shall
instruct the Registrar through instructions from the Depositary and the
Participant or Indirect Participant. The Trustee shall deliver such Restricted
Definitive Notes to the Persons in whose names such Notes are so registered.
Any Restricted Definitive Note issued in exchange for a beneficial interest in a
Restricted Global Note pursuant to this Section 2.6(c)(i) shall bear the Private
Placement Legend and shall be subject to all restrictions on transfer contained
therein.
(ii) Beneficial Interests in Restricted Global Notes to Unrestricted
Definitive Notes. A holder of a beneficial interest in a Restricted Global Note
may exchange such beneficial interest for an Unrestricted Definitive Note or may
transfer such beneficial interest to a Person who takes delivery thereof in the
form of an Unrestricted Definitive Note only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Note Registration Rights Agreement
and Section 2.6(f) hereof, and the holder of such beneficial interest, in
the case of an exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that it is not (1) a
Broker-Dealer, (2) a Person participating in the distribution of the
Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144)
of the Company;
(B) such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Note Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to the
Exchange Offer Registration Statement in accordance with the Note
Registration Rights Agreement; or
(D) the Registrar receives the following: (1) if the holder of
such beneficial interest in a Restricted Global Note proposes to exchange
such beneficial interest for a Definitive Note that does not bear the
Private Placement Legend, a certificate from such holder in the form of
Exhibit D hereto, including the certifications in item (1)(b) thereof; or
(2) if the holder of such beneficial interest in a Restricted Global Note
proposes to transfer such beneficial interest to a Person who shall take
delivery thereof in the form of a Definitive Note that does not bear the
Private Placement Legend, a certificate from such holder in the form of
Exhibit C hereto, including the certifications in item (4) thereof; and, in
each such case set forth in this subparagraph (D), an Opinion of Counsel in
form, and from legal counsel, reasonably acceptable to the Registrar and
the Company to the effect that such exchange or transfer is in compliance
with the Securities Act and that the restrictions on transfer contained
herein and in the Private Placement Legend are no longer required in order
to maintain compliance with the Securities Act.
32
(iii) Beneficial Interests in Unrestricted Global Notes to
Unrestricted Definitive Notes. If any holder of a beneficial interest in an
Unrestricted Global Note proposes to exchange such beneficial interest for an
Unrestricted Definitive Note or to transfer such beneficial interest to a Person
who takes delivery thereof in the form of an Unrestricted Definitive Note, then,
upon satisfaction of the conditions set forth in Section 2.6(b)(ii) hereof, the
Trustee shall cause the aggregate principal amount of the applicable
Unrestricted Global Note to be reduced accordingly pursuant to Section 2.6(h)
hereof, and the Company shall execute and, upon receipt of an Authentication
Order pursuant to Section 2.2 hereof, the Trustee shall authenticate and deliver
to the Person designated in the instructions an Unrestricted Definitive Note in
the appropriate principal amount. Any Unrestricted Definitive Note issued in
exchange for a beneficial interest pursuant to this Section 2.6(c)(iii) shall be
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the Participant or
Indirect Participant. The Trustee shall deliver such Unrestricted Definitive
Notes to the Persons in whose names such Notes are so registered. Any
Unrestricted Definitive Note issued in exchange for a beneficial interest
pursuant to this Section 2.6(c)(iii) shall not bear the Private Placement
Legend.
(iv) Transfer or Exchange of Reg S Temporary Global Notes.
Notwithstanding the other provisions of this Section 2.6, a beneficial interest
in the Reg S Temporary Global Note may not be (A) exchanged for a Definitive
Note prior to (x) the expiration of the Distribution Compliance Period (unless
such exchange is effected by the Company, does not require an investment
decision on the part of the holder thereof and does not violate the provisions
of Regulation S) and (y) the receipt by the Registrar of any certificates
identified by the Company or its counsel to be required pursuant to Rule
903(c)(3)(B) under the Securities Act or (B) transferred to a Person who takes
delivery thereof in the form of a Definitive Note prior to the events set forth
in clause (A) above or unless the transfer is pursuant to an exemption from the
registration requirements of the Securities Act other than Rule 903 or Rule 904.
(d) Transfer and Exchange of Definitive Notes for Beneficial Interests.
(i) Restricted Definitive Notes to Beneficial Interests in
Restricted Global Notes. If any Holder of a Restricted Definitive Note proposes
to exchange such Note for a beneficial interest in a Restricted Global Note or
to transfer such Restricted Definitive Notes to a Person who takes delivery
thereof in the form of a beneficial interest in a Restricted Global Note, then,
upon receipt by the Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive Note proposes
to exchange such Note for a beneficial interest in a Restricted Global
Note, a certificate from such Holder in the form of Exhibit D hereto,
including the certifications in item (2)(b) thereof;
(B) if such Restricted Definitive Note is being transferred
to a QIB in accordance with Rule 144A, a certificate to the effect set
forth in Exhibit C hereto, including the certifications in item (1)
thereof; or
33
(C) if such Restricted Definitive Note is being transferred
to a Non-U.S. Person in an offshore transaction in accordance with Rule 903
or Rule 904 under the Securities Act, a certificate to the effect set forth
in Exhibit C hereto, including the certifications in item (2) thereof,
the Trustee shall cancel the Restricted Definitive Note, increase or cause to be
increased the aggregate principal amount of, in the case of clause (A) above,
the appropriate Restricted Global Note, in the case of clause (B) above, the
144A Global Note, and in the case of clause (C) above, the Regulation S Global
Note.
(ii) Restricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of a Restricted Definitive Note may exchange
such Note for a beneficial interest in an Unrestricted Global Note or transfer
such Restricted Definitive Note to a Person who takes delivery thereof in the
form of a beneficial interest in an Unrestricted Global Note only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Note Registration Rights Agreement
and Section 2.6(f) hereof, and the Holder, in the case of an exchange, or
the transferee, in the case of a transfer, certifies in the applicable
Letter of Transmittal that it is not (1) a Broker-Dealer, (2) a Person
participating in the distribution of the Exchange Notes or (3) a Person who
is an affiliate (as defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Note Registration Rights
Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to
the Exchange Offer Registration Statement in accordance with the Note
Registration Rights Agreement; or
(D) the Registrar receives the following: (1) if the Holder
of such Restricted Definitive Notes proposes to exchange such Notes for a
beneficial interest in the Unrestricted Global Note, a certificate from
such Holder in the form of Exhibit D hereto, including the certifications
in item (1)(c) thereof; or (2) if the Holder of such Restricted Definitive
Notes proposes to transfer such Notes to a Person who shall take delivery
thereof in the form of a beneficial interest in the Unrestricted Global
Note, a certificate from such Holder in the form of Exhibit C hereto,
including the certifications in item (4) thereof; and, in each such case
set forth in this subparagraph (D), an Opinion of Counsel in form, and from
legal counsel, reasonably acceptable to the Registrar and the Company to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein and
in the Private Placement Legend are no longer required in order to maintain
compliance with the Securities Act. Upon satisfaction of the conditions of
any of the subparagraphs in this Section 2.6(d)(ii), the Trustee shall
cancel the Restricted Definitive Notes so transferred or exchanged and
increase or cause to be increased the aggregate principal amount of the
Unrestricted Global Note.
34
(iii) Unrestricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global Note or
transfer such Definitive Notes to a Person who takes delivery thereof in the
form of a beneficial interest in an Unrestricted Global Note at any time. Upon
receipt of a request for such an exchange or transfer, the Trustee shall cancel
the applicable Unrestricted Definitive Note and increase or cause to be
increased the aggregate principal amount of one of the Unrestricted Global
Notes. If any such exchange or transfer from a Definitive Note to a beneficial
interest is effected pursuant to subparagraphs (ii)(B), (ii)(D) or (iii) of this
Section 2.6(d) at a time when an Unrestricted Global Note has not yet been
issued, the Company shall issue and, upon receipt of an Authentication Order in
accordance with Section 2.2 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of Definitive Notes so transferred.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes. Upon
request by a Holder of Definitive Notes and such Holder's compliance with the
provisions of this Section 2.6(e), the Registrar shall register the transfer or
exchange of Definitive Notes. Prior to such registration of transfer or
exchange, the requesting Holder shall present or surrender to the Registrar the
Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by its attorney, duly authorized in writing. In addition, the requesting Holder
shall provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.6(e).
(i) Restricted Definitive Notes to Restricted Definitive Notes. Any
Restricted Definitive Note may be transferred to and registered in the name of
Persons who take delivery thereof in the form of a Restricted Definitive Note if
the Registrar receives the following:
(A) if the transfer will be made pursuant to Rule 144A, then
the transferor must deliver a certificate in the form of Exhibit C hereto,
including the certifications in item (1) thereof;
(B) if the transfer will be made pursuant to Rule 903 or Rule
904 under the Securities Act, then the transferor must deliver a
certificate in the form of Exhibit C hereto, including the certifications
in item (2) thereof; and
(C) if the transfer will be made pursuant to any other
exemption from the registration requirements of the Securities Act, then
the transferor must deliver a certificate in the form of Exhibit C hereto,
including the certifications, certificates and Opinion of Counsel required
by item (3) thereof, if applicable.
(ii) Restricted Definitive Notes to Unrestricted Definitive Notes.
Any Restricted Definitive Note may be exchanged by the Holder thereof for an
Unrestricted Definitive Note or transferred to a Person or Persons who take
delivery thereof in the form of an Unrestricted Definitive Note if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Note Registration Rights Agreement
and Section 2.6(f)
35
hereof, and the Holder, in the case of an exchange, or the transferee, in
the case of a transfer, certifies in the applicable Letter of Transmittal
that it is not (1) a Broker-Dealer, (2) a Person participating in the
distribution of the Exchange Notes or (3) a Person who is an affiliate (as
defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Note Registration Rights
Agreement;
(C) any such transfer is effected by a Broker-Dealer pursuant
to the Exchange Offer Registration Statement in accordance with the Note
Registration Rights Agreement; or
(D) the Registrar receives the following: (1) if the Holder
of such Restricted Definitive Notes proposes to exchange such Notes for an
Unrestricted Definitive Note, a certificate from such Holder in the form of
Exhibit D hereto, including the certifications in item (1)(d) thereof; or
(2) if the Holder of such Restricted Definitive Notes proposes to transfer
such Notes to a Person who shall take delivery thereof in the form of an
Unrestricted Definitive Note, a certificate from such Holder in the form of
Exhibit C hereto, including the certifications in item (4) thereof; and, in
each such case set forth in this subparagraph (D), an Opinion of Counsel in
form, and from legal counsel, reasonably acceptable to the Registrar and
the Company to the effect that such exchange or transfer is in compliance
with the Securities Act and that the restrictions on transfer contained
herein and in the Private Placement Legend are no longer required in order
to maintain compliance with the Securities Act.
(iii) Unrestricted Definitive Notes to Unrestricted Definitive Notes.
A Holder of Unrestricted Definitive Notes may transfer such Notes to a Person
who takes delivery thereof in the form of an Unrestricted Definitive Note. Upon
receipt of a request to register such a transfer, the Registrar shall register
the Unrestricted Definitive Notes pursuant to the instructions from the Holder
thereof.
(f) Exchange Offer. Upon the occurrence of the Exchange Offer in
accordance with the Note Registration Rights Agreement, the Company shall issue
and, upon receipt of an Authentication Order in accordance with Section 2.2
hereof and an Opinion of Counsel for the Company as to certain matters discussed
in this Section 2.6(f), the Trustee shall authenticate (i) one or more
Unrestricted Global Notes in an aggregate principal amount equal to the sum of
(A) the principal amount of the beneficial interests in the Restricted Global
Notes tendered for acceptance by Persons that certify in the applicable Letters
of Transmittal that (x) they are not Broker-Dealers, (y) they are not
participating in a distribution of the Exchange Notes and (z) they are not
affiliates (as defined in Rule 144) of the Company, and accepted for exchange in
the Exchange Offer and (B) the principal amount of Definitive Notes exchanged or
transferred for beneficial interests in Unrestricted Global Notes in connection
with the Exchange Offer pursuant to Section 2.6(d)(ii) hereof and (ii)
Definitive Notes in an aggregate principal amount equal to the principal amount
of the Restricted Definitive Notes accepted for exchange in the Exchange Offer
(other than Definitive Notes described in clause (i)(B) immediately above).
Concurrently with the issuance of such Notes, the Trustee shall cause the
aggregate principal amount of the applicable Restricted Global Notes to be
reduced accordingly, and the Company shall execute
36
and, upon receipt of an Authentication Order pursuant to Section 2.2 hereof, the
Trustee shall authenticate and deliver to the Persons designated by the Holders
of Definitive Notes so accepted Definitive Notes in the appropriate principal
amount.
The Opinion of Counsel for the Company referenced above shall state, in
form and substance satisfactory to the Trustee, that:
(1) the issuance and sale of the Exchange Notes by the Company have
been duly authorized and, when executed and authenticated in accordance
with the provisions of this Indenture and delivered in exchange for Series
A Notes in accordance with this Indenture and the Exchange Offer, will be
entitled to the benefits of this Indenture and will be valid and binding
obligations of the Company, enforceable against the Company in accordance
with their terms except as the enforceability thereof may be limited by (x)
bankruptcy, fraudulent transfer, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally and (y) equitable
principles of general applicability (regardless of whether enforceability
is considered at equity or in law); and
(2) when the Exchange Notes are executed and authenticated in
accordance with the provisions of this Indenture and delivered in exchange
for Series A Notes in accordance with this Indenture and the Exchange
Offer, the Guarantees by the Guarantors endorsed thereon will be entitled
to the benefits of this Indenture and will be valid and binding obligations
of the Guarantors, enforceable against the Guarantors in accordance with
their terms except as the enforceability thereof may be limited by (x)
bankruptcy, fraudulent transfer, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally and (y) equitable
principles of general applicability (regardless of whether enforceability
is considered at equity or in law).
(g) Legends. The following legends shall appear on the face of all Global
Notes and Definitive Notes issued under this Indenture unless specifically
stated otherwise in the applicable provisions of this Indenture.
(i) Private Placement Legend.
(A) Except as permitted by subparagraph (B) below, each
Global Note and each Definitive Note (and all Notes issued in exchange
therefor or substitution thereof) shall bear the legend in substantially
the following form:
"THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS NOTE NOR ANY
INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION
OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION. THE
HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF AGREES NOT TO OFFER, SELL OR
OTHERWISE TRANSFER SUCH NOTE PRIOR TO THE DATE THAT IS TWO YEARS (OR SUCH
SHORTER PERIOD THAT MAY HEREAFTER BE PROVIDED UNDER RULE 144(k) AS PERMITTING
RESALES BY NON-AFFILIATES OF RESTRICTED
37
SECURITIES WITHOUT RESTRICTION) AFTER THE LATER OF THE ORIGINAL ISSUE DATE
HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY
WAS THE OWNER OF THIS NOTE (OR ANY PREDECESSOR OF SUCH NOTE) (THE "RESALE
RESTRICTION TERMINATION DATE") EXCEPT (A) TO THE COMPANY, (B) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE
144A UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A) THAT PURCHASES FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE
IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT
TO OFFERS AND SALES TO FOREIGN PERSONS THAT OCCUR IN OFFSHORE TRANSACTIONS AND
WITHOUT DIRECTED SELLING EFFORTS WITHIN THE MEANINGS OF SUCH TERMS AS DEFINED IN
REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE
SECURITIES ACT THAT IS PURCHASING THE NOTE FOR ITS OWN ACCOUNT, OR FOR THE
ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES
AND NOT WITH A VIEW TO, OR FOR OFFER OF SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO ANOTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE
OR TRANSFER TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS
AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE
FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS NOTE IS
COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE AND IN EACH CASE IN
ACCORDANCE WITH APPLICABLE SECURITIES LAWS OF ANY U.S. STATE OR ANY OTHER
APPLICABLE JURISDICTION. THE HOLDER OF THIS NOTE AGREES THAT IT WILL DELIVER TO
EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE
HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE."
(B) Notwithstanding the foregoing, any Global Note or
Definitive Note issued pursuant to subparagraphs (b)(iv), (c)(ii),
(c)(iii), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) to this Section 2.6
(and all Notes issued in exchange therefor or substitution thereof) shall
not bear the Private Placement Legend.
(ii) Global Note Legend. To the extent required by the Depositary,
each Global Note shall bear legends in substantially the following forms:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (I) THE TRUSTEE MAY
38
MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.6 OF THE
INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART
PURSUANT TO SECTION 2.6(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE
DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE
INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY
WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY."
"UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (00 XXXXX XXXXXX, XXX XXXX, XXX XXXX) ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN."
(iii) Reg S Temporary Global Note Legend. To the extent required by
the Depositary, each Reg S Temporary Global Note shall bear a legend in
substantially the following form:
"THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR DEFINITIVE NOTES, ARE AS
SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE
BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED
TO RECEIVE CASH PAYMENTS OF INTEREST DURING THE PERIOD WHICH SUCH HOLDER HOLDS
THIS NOTE. NOTHING IN THIS LEGEND SHALL BE DEEMED TO PREVENT INTEREST FROM
ACCRUING ON THIS NOTE."
(h) Cancellation and/or Adjustment of Global Notes. At such time as all
beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
cancelled in whole and not in part, each such Global Note shall be returned to
or retained and cancelled by the Trustee in accordance with Section 2.11 hereof.
At any time prior to such cancellation, if any beneficial interest in a Global
Note is exchanged for or transferred to a Person who will take delivery thereof
in the form of a beneficial interest in another Global Note or for Definitive
Notes, the principal amount of Notes represented by such Global Note shall be
reduced accordingly and an endorsement may be made on such Global Note by the
Trustee or by the Depositary at the direction of the Trustee to reflect
39
such reduction; and if the beneficial interest is being exchanged for or
transferred to a Person who will take delivery thereof in the form of a
beneficial interest in another Global Note, such other Global Note shall be
increased accordingly and an endorsement may be made on such Global Note by the
Trustee or by the Depositary at the direction of the Trustee to reflect such
increase.
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the Company
shall execute and the Trustee shall authenticate Global Notes and Definitive
Notes upon receipt of an Authentication Order.
(ii) No service charge shall be made to a holder of a beneficial
interest in a Global Note or to a Holder of a Definitive Note for any
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any transfer tax or similar governmental charge payable
in connection therewith (other than any such transfer taxes or similar
governmental charge payable upon exchange or transfer pursuant to Sections 2.10,
3.6, 4.13, 4.16 and 4.17 hereof).
(iii) The Registrar shall not be required to register the transfer of
or exchange any Note selected for redemption in whole or in part, except the
unredeemed portion of any Note being redeemed in part.
(iv) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive Notes shall
be the valid obligations of the Company, evidencing the same Indebtedness, and
entitled to the same benefits under this Indenture, as the Global Notes or
Definitive Notes surrendered upon such registration of transfer or exchange.
(v) The Company shall not be required (A) to issue, to register the
transfer of or to exchange any Notes during a period beginning at the opening of
business 15 days before the day of any selection of Notes for redemption under
Section 3.2 hereof and ending at the close of business on the day of selection,
(B) to register the transfer of or to exchange any Note so selected for
redemption in whole or in part, except the unredeemed portion of any Note being
redeemed in part or (C) to register the transfer of or to exchange a Note
between a Record Date and the next succeeding Interest Payment Date.
(vi) Prior to due presentment for the registration of a transfer of
any Note, the Trustee, any Agent and the Company may deem and treat the Person
in whose name any Note is registered as the absolute owner of such Note for the
purpose of receiving payment of principal of and interest on such Notes and for
all other purposes, and none of the Trustee, any Agent or the Company shall be
affected by notice to the contrary.
(vii) The Trustee shall authenticate Global Notes and Definitive
Notes in accordance with the provisions of Section 2.2 hereof.
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(viii) All certifications, certificates and Opinions of Counsel
required to be submitted to the Registrar pursuant to this Section 2.6 to effect
a registration of transfer or exchange may be submitted by facsimile.
Notwithstanding anything herein to the contrary, as to any certifications
and certificates delivered to the Registrar pursuant to this Section 2.6, the
Registrar's duties shall be limited to confirming that any such certifications
and certificates delivered to it are in the form of Exhibits A, B, C and D
attached hereto. The Registrar shall not be responsible for confirming the truth
or accuracy of representations made in any such certifications or certificates.
SECTION 2.7 REPLACEMENT NOTES
If any mutilated Note is surrendered to the Trustee or the Company and the
Trustee and the Company receive evidence (which evidence may be from the
Trustee) to their satisfaction of the destruction, loss or theft of any Note,
the Company shall issue and the Trustee, upon receipt of an Authentication
Order, shall authenticate a replacement Note if the Trustee's requirements are
met. If required by the Trustee or the Company, an indemnity bond must be
supplied by the Holder that is sufficient in the judgment of the Trustee and the
Company to protect the Company, the Trustee, any Agent and any authenticating
agent from any loss that any of them may suffer if a Note is replaced. The
Company may charge for its expenses in replacing a Note. Every replacement Note
is an additional obligation of the Company and shall be entitled to all of the
benefits of this Indenture equally and proportionately with all other Notes duly
issued hereunder.
SECTION 2.8 OUTSTANDING NOTES
The Notes outstanding at any time are all the Notes authenticated by the
Trustee (including any Note represented by a Global Note) except for those
cancelled by it or at its direction, those delivered to it for cancellation,
those reductions in the interest in a Global Note effected by the Trustee in
accordance with the provisions hereof, and those described in this Section 2.8
as not outstanding. Except as set forth in Section 2.9 hereof, a Note does not
cease to be outstanding because the Company or an Affiliate of the Company holds
the Note. If a Note is replaced pursuant to Section 2.7 hereof, such Note,
together with the Guarantee of that particular Note endorsed thereon, ceases to
be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser. If the principal amount of any
Note is considered paid under Section 4.1 hereof, it ceases to be outstanding
and interest on it ceases to accrue. If the Paying Agent (other than the
Company, a Subsidiary or an Affiliate of any thereof) holds, on a redemption
date or the maturity date, money sufficient to pay Notes payable on that date,
then on and after that date such Notes shall be deemed to be no longer
outstanding and shall cease to accrue interest.
SECTION 2.9 TREASURY NOTES
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
41
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 2.10 TEMPORARY NOTES
Until certificates representing Notes are ready for delivery, the Company
may prepare and the Trustee, upon receipt of an Authentication Order, 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 and as shall be reasonably acceptable to the
Trustee. Without unreasonable delay, the Company shall prepare and the Trustee
shall authenticate Definitive Notes in exchange for temporary Notes. Holders of
temporary Notes shall be entitled to all of the benefits of this Indenture.
SECTION 2.11 CANCELLATION
The Company at any time may deliver Notes to the Trustee for cancellation.
The Registrar and Paying Agent shall forward to the Trustee any Notes
surrendered to them for registration of transfer, exchange or payment. The
Trustee, or at the direction of the Trustee, the Registrar or the Paying Agent
(other than the Company or an Affiliate of the Company), and no one else shall
cancel all Notes surrendered for registration of transfer, exchange, payment,
replacement or cancellation and shall destroy cancelled Notes (subject to the
record retention requirement of the Exchange Act). Certification of the
destruction of all cancelled Notes shall be delivered to the Company. The
Company may not issue new Notes to replace Notes that it has paid or that have
been delivered to the Trustee for cancellation.
SECTION 2.12 DEFAULTED INTEREST
Any interest on any Note which is payable, but is not punctually paid or
duly provided for, on any Interest Payment Date plus, to the extent lawful, any
interest payable on the defaulted interest at the rate and in the manner
provided in Section 4.1 hereof and in the Note (herein called "Defaulted
Interest") shall forthwith cease to be payable to the registered holder on the
relevant Record Date, and such 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 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 and the Paying Agent in writing of the amount of
Defaulted Interest proposed to be paid on each Note and the date of the
proposed payment, and at the same time the Company shall deposit with the
Paying Agent an amount of cash equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall make arrangements
reasonably satisfactory to the Paying Agent for such deposit prior to the
date of the proposed payment, such cash when deposited to be held in trust
for the benefit of the Persons entitled to such Defaulted Interest as
provided in this clause (1). Thereupon the Paying Agent 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
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10 days after the receipt by the Paying Agent of the notice of the proposed
payment. The Paying Agent shall promptly notify the Company and the Trustee
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 mailed, first-class
postage prepaid, to each Holder at its address as it appears in the Note
register maintained by the Registrar 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 mailed as
aforesaid, such Defaulted Interest shall be paid to the persons in whose
names the Notes (or their respective predecessor Notes) are registered 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 and the Paying Agent of the proposed payment pursuant to
this clause, such manner shall be deemed practicable by the Trustee and the
Paying Agent.
Subject to the foregoing provisions of this Section 2.12, 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 2.13 CUSIP NUMBERS
The Company in issuing the Notes may use "CUSIP" numbers (if then generally
in use), and, if so, the Trustee shall use "CUSIP" numbers in notices of
redemption as a convenience to Holders; provided that any such notice may state
that no representation is made as to the correctness of such numbers either as
printed on the Notes or as contained in any notice of a redemption and that
reliance may be placed only on the other identification numbers printed on the
Notes, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Company will promptly notify the Trustee of any
change in the "CUSIP" numbers.
SECTION 2.14 ISSUANCE OF ADDITIONAL NOTES
The company may, subject to section 4.7 hereof and applicable law, issue
additional notes under this indenture. The Notes issued on the Closing Date and
any additional Notes subsequently issued shall be treated as a single class for
all purposes under this Indenture.
ARTICLE III
REDEMPTION
SECTION 3.1 NOTICES TO TRUSTEE
If the Company elects to redeem Notes pursuant to the optional redemption
provisions of Section 3.7 hereof, it shall furnish to the Trustee, at least 30
days (unless a shorter period is
43
acceptable to the Trustee) but not more than 60 days (unless a longer period is
acceptable to the Trustee) before a redemption date, an Officers' Certificate
setting forth (i) the clause of this Indenture pursuant to which the redemption
shall occur, (ii) the redemption date, (iii) the principal amount of Notes to be
redeemed and (iv) the redemption price.
SECTION 3.2 SELECTION OF NOTES TO BE REDEEMED
If less than all of the Notes are to be redeemed at any time, the Trustee
shall select the Notes or portions thereof to be redeemed among the Holders of
the Notes in compliance with the requirements of the principal national
securities exchange, if any, on which the Notes are listed or, if the Notes are
not so listed, on a pro rata basis, by lot or in accordance with any other
method the Trustee considers fair and appropriate. In the event of partial
redemption by lot, the particular Notes to be redeemed shall be selected, unless
otherwise provided herein, not less than 30 nor more than 60 days prior to the
redemption date by the Trustee from the outstanding Notes not previously called
for redemption.
The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes in denominations of larger than $1,000 selected shall be in amounts of
$1,000 or integral multiples of $1,000; except that if all of the Notes of a
Holder are to be redeemed, the entire outstanding amount of Notes held by such
Holder, even if not an integral multiple of $1,000, shall be redeemed. Except as
provided in the preceding sentence, provisions of this Indenture that apply to
Notes called for redemption also apply to portions of Notes called for
redemption.
SECTION 3.3 NOTICE OF REDEMPTION
Subject to the provisions of Section 3.7 hereof, at least 30 days but not
more than 60 days before a redemption date, the Company shall mail or cause to
be mailed, by first class mail, a notice of redemption to each Holder whose
Notes are to be redeemed at its registered address.
The notice shall identify the Notes to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is being redeemed in part, the portion of the principal
amount of such Note to be redeemed and that, on or after the redemption date
upon surrender of such Note, a new Note or Notes in principal amount equal to
the unredeemed portion shall be issued upon cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the Paying
Agent to collect the redemption price;
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(f) that, unless the Company defaults in making such redemption payment,
interest on Notes called for redemption ceases to accrue on and after the
redemption date;
(g) the paragraph of the Notes and/or Section of this Indenture pursuant
to which the Notes called for redemption are being redeemed; and
(h) that no representation is made as to the correctness or accuracy of
the CUSIP number, if any, listed in such notice or printed on the Notes.
At the Company's request, the Trustee shall give the notice of redemption
in the Company's name and at its expense; provided, however, that the Company
shall have delivered to the Trustee, at least 45 days prior to the redemption
date (unless a shorter period shall be acceptable to the Trustee), an Officers'
Certificate requesting that the Trustee give such notice and setting forth the
information to be stated in such notice as provided in the preceding paragraph.
SECTION 3.4 EFFECT OF NOTICE OF REDEMPTION
Once notice of redemption is mailed in accordance with Section 3.3 hereof,
Notes called for redemption become irrevocably due and payable on the redemption
date at the redemption price. A notice of redemption may not be conditional.
SECTION 3.5 DEPOSIT OF REDEMPTION PRICE
On the Business Day immediately prior to the redemption date, the Company
shall deposit with the Trustee or with the Paying Agent immediately available
funds sufficient to pay the redemption price of and accrued and unpaid interest
(and Liquidated Damages, if any) on all Notes to be redeemed on that date. The
Trustee or the Paying Agent shall promptly return to the Company any money
deposited with the Trustee or the Paying Agent by the Company in excess of the
amounts necessary to pay the redemption price of, and accrued and unpaid
interest (and Liquidated Damages, if any) on, all Notes to be redeemed.
If the Company complies with the provisions of the preceding paragraph, on
and after the redemption date, interest shall cease to accrue on the Notes or
the portions of Notes called for redemption. If a Note is redeemed on or after
an interest Record Date but on or prior to the related Interest Payment Date,
then any accrued and unpaid interest (and Liquidated Damages, if any) shall be
paid to the Person in whose name such Note was registered at the close of
business on such Record Date. If any Note called for redemption shall not be so
paid upon surrender for redemption because of the failure of the Company to
comply with the preceding paragraph, interest shall be paid on the unpaid
principal, from the redemption date until such principal is paid, and to the
extent lawful on any interest not paid on such unpaid principal, in each case at
the rate provided in the Notes and in Section 4.1 hereof.
SECTION 3.6 NOTES REDEEMED IN PART
Upon surrender of a Note that is redeemed in part, the Company shall issue
and, upon receipt of an Authentication Order, the Trustee shall authenticate for
the Holder at the expense of
45
the Company a new Note equal in principal amount to the unredeemed portion of
the Note surrendered.
SECTION 3.7 OPTIONAL REDEMPTION
(a) Except as set forth in clause (b) of this Section 3.7, the Company
shall not have the right to redeem any Notes pursuant to this Section 3.7 prior
to August 15, 2005. The Notes will be redeemable for cash at the option of the
Company, in whole or in part, at any time on or after August 15, 2005, upon not
less than 30 days nor more than 60 days prior notice mailed by first class mail
to each Holder at its last registered address, at the following redemption
prices (expressed as percentages of the principal amount) if redeemed during the
12-month period commencing August 15 of the years indicated below, in each case
(subject to the right of Holders of record on a Record Date to receive the
corresponding interest due (and the corresponding Liquidated Damages, if any) on
the corresponding Interest Payment Date that is on or prior to such redemption
date) together with accrued and unpaid interest and Liquidated Damages, if any,
thereon to the redemption date:
Year Percentage
---- ----------
2005..................................... 105.938%
2006..................................... 102.969%
2007 and thereafter...................... 100.000%
(b) Notwithstanding the provisions of clause (a) of this Section 3.7, at
any time on or prior to August 15, 2004, upon a Public Equity Offering of the
Company's common stock for cash, up to 35% of the aggregate principal amount of
the Notes may be redeemed at the Company's option within 90 days of such Public
Equity Offering, on not less than 30 days, but not more than 60 days, notice to
each Holder of the Notes to be redeemed, with cash received by the Company from
the Net Cash Proceeds of such Public Equity Offering, at a redemption price
equal to 111.875% of principal amount thereof (subject to the right of Holders
of record on a Record Date to receive the corresponding interest (and the
corresponding Liquidated Damages, if any) due on the Interest Payment Date that
is on or prior to such redemption date), together with accrued and unpaid
interest and Liquidated Damages, if any, thereon to the redemption date;
provided, however, that immediately following such redemption not less than 65%
of the aggregate principal amount of the Notes originally issued on the Issue
Date remain outstanding.
If the redemption date hereunder is on or after an interest record date
("Record Date") on which the Holders of record have a right to receive the
corresponding Interest due and Liquidated Damages, if any, and on or before the
associated Interest Payment Date, any accrued and unpaid interest and Liquidated
Damages, if any, due on such Interest Payment Date will be paid to the Person in
whose name a Note is registered at the close of business on such Record Date.
(c) Any redemption pursuant to this Section 3.7 shall be made pursuant to
the provisions of Sections 3.1 through 3.6 hereof.
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SECTION 3.8 NO MANDATORY REDEMPTION
The Company shall not be required to make mandatory redemption payments
with respect to the Notes (however, the Company is required to offer to
repurchase Notes in accordance with the provisions of Sections 4.13, 416 and
4.17 below). The Notes shall not have the benefit of any sinking fund.
SECTION 3.9 REGULATORY REDEMPTION
If any Gaming Authority requires that a Holder or beneficial owner of Notes
must be licensed, qualified or found suitable under any applicable gaming law
and such Holder or beneficial owner fails to apply for a license, qualification
or a finding of suitability within 30 days after being requested to do so by the
Gaming Authority (or such lesser period that may be required by such Gaming
Authority), or if such Holder or such beneficial owner is not so licensed,
qualified or found suitable, the Company shall have the right, at its option,
(1) to require such Holder or beneficial owner to dispose of such Holder's or
beneficial owner's Notes within 30 days of receipt of notice of such finding by
the applicable Gaming Authority or such earlier date as may be ordered by such
Gaming Authority or (2) to call for the redemption (a "Regulatory Redemption")
of the Notes of such Holder or beneficial owner at the principal amount thereof
or, if required by such Gaming Authority, the lesser of the price at which such
Holder or beneficial owner acquired the Notes, or the fair market value of such
Notes on the date of redemption, together with, in either case, accrued and
unpaid interest and, if permitted by such Gaming Authority, Liquidated Damages,
to the earlier of the date of redemption or such earlier date as may be required
by such Gaming Authority or the date of the finding of unsuitability by such
Gaming Authority, which may be less than 30 days following the notice of
redemption, if so ordered by such Gaming Authority. The Company shall notify the
Trustee in writing of any such redemption as soon as practicable and the
redemption price of each Note to be redeemed.
The Holder or beneficial owner applying for a license, qualification or a
finding of suitability must pay all costs of the licensure and investigation for
such qualification or finding of suitability. The Company shall not be required
to pay or reimburse any Holder of the Notes or beneficial owner who is required
to apply for such license, qualification or finding of suitability for the costs
of the licensure and investigation for such qualification or finding of
suitability.
ARTICLE IV
COVENANTS
SECTION 4.1 PAYMENT OF NOTES
The Company shall pay or cause to be paid the principal of, premium, if
any, and interest on the Notes on the dates and in the manner provided in the
Notes. Principal, premium, if any, and interest shall be considered paid on the
date due if the Paying Agent, if other than the Company or a Subsidiary thereof,
holds as of 12:00 noon Eastern time on the due date money deposited by the
Company in immediately available funds and designated for and sufficient to pay
all principal, premium, if any, and interest then due. The Company shall pay all
Liquidated Damages, if any, in the same manner on the dates and in the amounts
set forth in the Note Registration Rights Agreement and herein.
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The Company shall pay interest (including Accrued Bankruptcy Interest in
any proceeding under any Bankruptcy Law) on overdue principal at the then
applicable interest rate on the Notes to the extent lawful; it shall pay
interest (including Accrued Bankruptcy Interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest and Liquidated Damages, if
any, (without regard to any applicable grace period) at the same rate to the
extent lawful.
SECTION 4.2 MAINTENANCE OF OFFICE OR AGENCY
The Company and the Guarantors shall maintain in the Borough of Manhattan,
The City of New York, an office or agency (which may be an office of the Trustee
or an affiliate of the Trustee, Registrar or co-registrar) where Notes may be
surrendered for registration of transfer or for exchange and where notices and
demands to or upon the Company and the Guarantors in respect of the Notes and
this Indenture may be served. The Company and the Guarantors shall give prompt
written notice to the Trustee of the location, and any change in the location,
of such office or agency. If at any time the Company and the Guarantors shall
fail to maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office.
The Company and the Guarantors may also from time to time designate one or
more other offices or agencies where the Notes may be presented or surrendered
for any or all such purposes and may from time to time rescind such additional
designations; provided that no such designation or rescission shall in any
manner relieve the Company and the Guarantors of their obligation to maintain an
office or agency in the Borough of Manhattan, The City of New York. The Company
and the Guarantors shall give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of any such other
office or agency.
The Company hereby designates the Corporate Trust Office as one such office
or agency of the Company in accordance with Section 2.3 hereof.
SECTION 4.3 SEC REPORTS AND REPORTS TO HOLDERS
Whether or not the Company is subject to the reporting requirements of
Section 13 or 15 of the Exchange Act, the Company will deliver to the Trustee
and to each Holder of Notes, within 5 days after the Company is or would have
been (if the Company was subject to such reporting obligations) required to file
such with the Commission, (i) annual and quarterly financial statements
substantially equivalent to financial statements that would have been included
in reports on Forms 10-K or 10-Q and (ii) all information that would have been
included in current reports on Form 8-K filed with the Commission, if the
Company were subject to the requirements of Section 13 or 15(d) of the Exchange
Act, including, with respect to annual information only, a report thereon by the
Company's 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 and, unless the Commission will not accept such reports,
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
and the Guarantors agree that, prior to
48
consummation of the Exchange Offer, they will make available to the holders and
to securities analysts and prospective investors, upon their request, the
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act.
SECTION 4.4 COMPLIANCE CERTIFICATE
(a) The Company shall deliver to the Trustee, within 120 days after the
end of each fiscal year, an Officers' Certificate stating that a review of the
activities of the Company and its Subsidiaries during the preceding fiscal year
has been made under the supervision of the signing Officers with a view to
determining whether the Company and its Subsidiaries have kept, observed,
performed and fulfilled their obligations under this Indenture, and further
stating, as to each such Officer signing such certificate, that to his or her
knowledge the Company and its Subsidiaries are not in default in the performance
or observance of any of the terms, provisions and conditions of this Indenture
(or, if a Default or Event of Default shall have occurred and be continuing,
describing all such Defaults or Events of Default of which he or she may have
knowledge and what action the Company is taking or proposes to take with respect
thereto) and that to his or her knowledge no event has occurred and remains in
existence by reason of which payments on account of the principal of or
interest, if any, on the Notes is prohibited or if such event has occurred, a
description of the event and what action the Company is taking or proposes to
take with respect thereto. The Company shall provide the Trustee with timely
written notice of any change in its fiscal year end, which is currently December
31.
(b) The Company shall, so long as any of the Notes are outstanding,
deliver to the Trustee, within five Business Days of any Officer becoming aware
of any Default or Event of Default, an Officers' Certificate specifying such
Default or Event of Default and what action the Company is taking or proposes to
take with respect thereto. On each Liquidity Determination Date, the Company
shall deliver to the Trustee an Officers' Certificate stating whether during the
previous fiscal quarter the Company and the Guarantors failed to maintain
Consolidated Cash and Cash Equivalents and Unused Availability equal to $5.0
million. If the Company fails to deliver such an Officers' Certificate to the
Trustee on any Liquidity Determination Date, for purposes of Section 4.22
hereof, the Company shall be deemed to have delivered an Officers' Certificate
to the Trustee on such Liquidity Determination Date stating that the Company and
the Guarantors failed to maintain Consolidated Cash and Cash Equivalents and
Unused Availability equal to $5.0 million during the previous fiscal quarter.
SECTION 4.5 TAXES
The Company shall pay, and shall cause each of its Subsidiaries to pay,
prior to delinquency, all material taxes, assessments, and governmental levies
except such as are contested in good faith and by appropriate proceedings or
where the failure to effect such payment would not have a material adverse
effect on the ability of the Company and the Guarantors to satisfy their
obligations under the Notes, the Guarantees and this Indenture.
SECTION 4.6 STAY, EXTENSION AND USURY LAWS
The Company covenants (to the extent that it may lawfully do so) that it
shall not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of,
49
any stay, extension or usury law wherever enacted, now or at any time hereafter
in force, that 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 shall
not, by resort to any such law, hinder, delay or impede the execution of any
power herein granted to the Trustee, but shall suffer and permit the execution
of every such power as though no such law has been enacted.
SECTION 4.7 LIMITATION ON INCURRENCE OF ADDITIONAL INDEBTEDNESS AND
DISQUALIFIED CAPITAL STOCK
Except as set forth in this Section 4.7, the Company and the Guarantors
shall not, and shall not permit any of their 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 (including
Disqualified Capital Stock and Acquired Indebtedness), other than Permitted
Indebtedness.
Notwithstanding the foregoing, if:
(1) 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; and
(2) on the date of such incurrence (the "Incurrence Date"), the
Company's Interest Coverage Ratio for the Reference Period immediately
preceding the Incurrence Date, after giving effect on a pro forma basis to
such incurrence of such Indebtedness and, to the extent set forth in the
definition of Interest Coverage Ratio, the use of proceeds thereof, would
be at least 2.0 to 1.0 (the "Debt Incurrence Ratio"); then the Company and
the Guarantors may incur such Indebtedness (including Disqualified Capital
Stock).
In addition, the foregoing limitations of the first paragraph of this
Section 4.7 shall not prohibit the Company's incurrence or the incurrence by any
Guarantor of Indebtedness pursuant to the Credit Agreement in an aggregate
amount incurred and outstanding at any time pursuant to this paragraph (plus any
Refinancing Indebtedness incurred to retire, defease, refinance, replace or
refund such Indebtedness) of up to $22,500,000 minus the amount of any such
Indebtedness (1) retired with the Net Cash Proceeds from any Asset Sale applied
to permanently reduce the outstanding amounts or the commitments with respect to
such Indebtedness pursuant to clause (a) of the second paragraph of Section 4.13
hereof or (2) assumed by a transferee in an Asset Sale so long as neither the
Company nor such Guarantor continues to be an obligor under such Indebtedness.
Indebtedness (including Disqualified Capital Stock) of any Person which is
outstanding at the time such Person becomes one of the Company's Subsidiaries
(including upon designation of any subsidiary or other Person as a Subsidiary)
or is merged with or into or consolidated with the Company or one of its
Subsidiaries shall be deemed to have been incurred at the time such
50
Person becomes or is designated one of the Company's Subsidiaries or is merged
with or into or consolidated with the Company or one of its Subsidiaries as
applicable.
Notwithstanding any other provision of this Section 4.7, but only to avoid
duplication, a guarantee by a Guarantor of the Company's Indebtedness or of the
Indebtedness of another Guarantor incurred in accordance with the terms of this
Indenture (other than Indebtedness incurred pursuant to clause (b) of the
definition of Permitted Indebtedness) issued at the time such Indebtedness was
incurred or if later at the time the guarantor thereof became a Guarantor will
not constitute a separate incurrence, or amount outstanding, of Indebtedness.
Upon each incurrence, the Company may designate pursuant to which provision of
this Section 4.7 such Indebtedness is being incurred and the Company may
subdivide an amount of Indebtedness and such Indebtedness shall not be deemed to
have been incurred or outstanding under any other provision of this Section 4.7,
except as stated otherwise in the foregoing provisions.
Notwithstanding anything contained herein to the contrary, the Company and
the Guarantors shall not, and shall not permit any of their Subsidiaries to,
incur any Indebtedness that is contractually subordinate in right of payment to
any of the Company's other Indebtedness or the other Indebtedness of any
Guarantor unless such Indebtedness is at least as contractually subordinate in
right of payment to the Notes and the Guarantees, as applicable.
SECTION 4.8 LIMITATION ON LIENS
The Company and the Guarantors shall not, and shall not permit any of their
Subsidiaries to, create, incur, assume or suffer to exist any Lien of any kind,
other than Permitted Liens, securing any Indebtedness, upon any of their
respective assets now owned or acquired on or after the date of this Indenture
or upon any income or profits therefrom.
SECTION 4.9 LIMITATION ON RESTRICTED PAYMENTS
The Company and the Guarantors shall not, and shall not permit any of their
Subsidiaries to, directly or indirectly, make any Restricted Payment if, after
giving effect to such Restricted Payment on a pro forma basis:
(1) a Default or an Event of Default shall have occurred and be
continuing;
(2) the Company is not permitted to incur at least $1.00 of
additional Indebtedness pursuant to the Debt Incurrence Ratio in Section
4.7 hereof; or
(3) the aggregate amount of all Restricted Payments made by the
Company and its Subsidiaries, including after giving effect to such
proposed Restricted Payment, on and after the Issue Date, would exceed,
without duplication, the sum of:
(a) 50% of the Company's aggregate Consolidated Net Income for the
period (taken as one accounting period), commencing on the first day of the
fiscal quarter in which the Issue Date occurs, to and including the last
day of the fiscal quarter ended immediately prior to the date of each such
calculation for which the Company's consolidated financial statements are
required to be delivered to the Trustee or, if sooner, filed with the
Securities and Exchange Commission (the "Commission") (or, in the event
51
Consolidated Net Income for such period is a deficit, then minus 100% of
such deficit), plus
(b) the aggregate Net Cash Proceeds received by the Company from
the sale of the Company's Qualified Capital Stock, (other than (i) to one
of the Company's Subsidiaries, (ii) to the extent applied in connection
with a Qualified Exchange or, to avoid duplication, otherwise given credit
for in any provision of this or the following paragraph and (iii) or used
as consideration to make a Permitted Investment), after the Issue Date,
plus
(c) except in each case, in order to avoid duplication, to the
extent any such payment or proceeds have been included in the calculation
of Consolidated Net Income, an amount equal to the net reduction in
Investments (other than returns of or from Permitted Investments) in any
Person (including an Unrestricted Subsidiary) resulting from cash
distributions on or cash repayments of any Investments, including payments
of interest on Indebtedness, dividends, repayments of loans or advances, or
other distributions or other transfers of assets, in each case to the
Company or any Subsidiary or from the Net Cash Proceeds from the sale of
any such Investment or from redesignations of Unrestricted Subsidiaries as
Subsidiaries (valued in each case as provided in the definition of
"Investments"), not to exceed, in each case, the amount of Investments
previously made by the Company or any Subsidiary in such Person, including,
if applicable, such Unrestricted Subsidiary, less the cost of disposition.
The foregoing clauses (2) and (3) of the immediately preceding paragraph of
this Section 4.9, however, shall not prohibit:
(w) repurchases, redemptions, or other retirements or acquisitions
of Capital Stock from the Company's employees, directors or managers (or
their heirs or estates) or employees, directors or managers (or their heirs
or estates) of the Company's Subsidiaries upon the death, disability or
termination of employment or pursuant to the terms of any subscription,
stockholder or other agreement or plan in effect on the Issue Date in an
aggregate amount pursuant to this clause (w) to all employees, directors or
managers (or their heirs or estates) not to exceed (i) $500,000 per year on
and after the Issue Date, or (ii) $2,000,000 in the aggregate pursuant to
this clause (w);
and the provisions of the immediately preceding paragraph shall not
prohibit
(x) any dividend, distribution or other payments by any of the
Company's Subsidiaries on the Company's Equity Interests that is paid pro
rata to all holders of such Equity Interests;
(y) a Qualified Exchange; or
(z) the payment of any dividend on Qualified Capital Stock within
60 days after the date of its declaration if such dividend could have been
made on the date of such declaration in compliance with the foregoing
provisions.
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The full amount of any Restricted Payment made pursuant to the foregoing
clauses (w), (x) and (z) (but not pursuant to clause (y)) of the immediately
preceding sentence, however, shall be counted as Restricted Payments made for
purposes of the calculation of the aggregate amount of Restricted Payments
available to be made referred to in clause (3) of the first paragraph of this
Section 4.9.
For purposes of this Section 4.9, the amount of any Restricted Payment made
or returned, if other than in cash, shall be the fair market value thereof, as
determined in the good faith reasonable judgment of the Company's Board of
Directors, unless stated otherwise, at the time made or returned, as applicable.
Additionally, within 5 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 of this Indenture pursuant
to which such Restricted Payment was made and certifying that such Restricted
Payment was made in compliance with the terms of this Indenture.
SECTION 4.10 LIMITATION ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS AFFECTING
SUBSIDIARIES
The Company and the Guarantors shall not, and shall not permit any of their
Subsidiaries to, directly or indirectly, create, assume or suffer to exist any
consensual restriction on the ability of any of their Subsidiaries 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,
the Guarantors or any of their Subsidiaries, except:
(1) restrictions imposed by the Notes or this Indenture or by the
Company's other Indebtedness (which may also be guaranteed by the
Guarantors) ranking pari passu with the Notes or the Guarantees, as
applicable; provided, that such restrictions are no more restrictive in any
material respect than those imposed by this Indenture and the Notes;
(2) restrictions imposed by applicable law;
(3) existing restrictions under Existing Indebtedness;
(4) restrictions under any Acquired Indebtedness not incurred in
violation of this Indenture or any agreement (including any Equity
Interest) relating to any property, asset, or business acquired by the
Company, the Guarantors or any of their 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;
(5) any restriction imposed by Indebtedness incurred under the Credit
Agreement pursuant to Section 4.7 hereof; provided, that such restriction
or requirement is no more restrictive in any material respect than that
imposed by the Existing Credit Agreement;
53
(6) restrictions with respect solely to any of the Company's
Subsidiaries imposed pursuant to a binding agreement which has been entered
into for the sale or disposition of 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;
(7) restrictions on transfer contained in Purchase Money Indebtedness
incurred pursuant to Section 4.7 hereof; provided, that such restrictions
relate only to the transfer of the property acquired with the proceeds of
such Purchase Money Indebtedness; and
(8) in connection with and pursuant to permitted Refinancings,
replacements of restrictions imposed pursuant to clauses (1), (3), (4) or
(7) or this clause (8) of this paragraph that are not more restrictive in
any material respect than those being replaced and do not apply to any
other Person or assets than those that would have been covered by the
restrictions in the Indebtedness so refinanced.
Notwithstanding the foregoing, (a) customary provisions restricting
subletting or assignment of any lease entered into in the ordinary course of
business, consistent with industry practice and (b) any asset subject to a Lien
which is not prohibited to exist with respect to such asset pursuant to the
terms of this Indenture, may be subject to customary restrictions on the
transfer or disposition thereof pursuant to such Lien.
SECTION 4.11 LIMITATION ON LINES OF BUSINESS
Neither the Company nor any of its Subsidiaries will 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 Company's Board of
Directors, is a Related Business.
SECTION 4.12 LIMITATION ON TRANSACTIONS WITH AFFILIATES
Neither the Company nor any of its Subsidiaries shall 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) (1) 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 (2) if involving consideration to either party of $2,000,000 or
more, unless such Affiliate Transaction(s) has been approved by a majority of
the members of the Company's Board of Directors that are disinterested in such
transaction, and (3) if involving consideration to either party of $5,000,000 or
more, unless, in addition the Company and/or its applicable Subsidiaries, prior
to the consummation thereof, obtain 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 in the United
States 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 in the United States. Within 5 days of any Affiliate Transaction(s)
involving consideration to either party of $2,000,000 or more, the Company shall
deliver to the Trustee an
54
Officers' Certificate addressed to the Trustee certifying that such Affiliate
Transaction (or Transactions) complied with clause (1), (2), and (3), as
applicable.
SECTION 4.13 LIMITATION ON SALE OF ASSETS AND SUBSIDIARY STOCK
(a) The Company and the Guarantors shall not, and shall not permit any of
the Company's Subsidiaries to, in one or a series of related transactions,
convey, sell, transfer, assign or otherwise dispose of, directly or indirectly,
any of their property, business or assets, including by merger or consolidation
(in the case of a Guarantor or a Subsidiary or Unrestricted Subsidiary of the
Company), and including any sale or other transfer or issuance of any Equity
Interests of any of the Company's Subsidiaries or Unrestricted Subsidiaries,
whether by the Company or one of its Subsidiaries or Unrestricted Subsidiaries
or through the issuance, sale or transfer of Equity Interests by one of the
Company's Subsidiaries or Unrestricted Subsidiaries and including any sale-
leaseback transaction (any of the foregoing, an "Asset Sale"), unless, with
respect to any Asset Sale or related series of Asset Sales involving securities,
property or assets with an aggregate fair market value in excess of $5,000,000,
(a) at least 75% of the total consideration for such Asset Sale or series of
related Asset Sales consists of cash or Cash Equivalents, (b) 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 (c) the
Company's Board of Directors determines in good faith that the Company will be
receiving or such Subsidiary will be receiving, as applicable, fair market value
for such Asset Sale. For purposes of the preceding sentence, total
consideration received means the total consideration received for such Asset
Sale minus the amount of (a) Purchase Money Indebtedness secured solely by the
assets sold and assumed by a transferee; provided, that the Company and its
Subsidiaries are fully released from obligations in connection therewith and (b)
property that within 30 days of such Asset Sale is converted into cash or Cash
Equivalents; and further provided, that such cash and Cash Equivalents shall be
treated as Net Cash Proceeds attributable to the original Asset Sale for which
such property was received).
(b) Within 360 days following such Asset Sale, Net Cash Proceeds therefrom
(the "Asset Sale Amount") shall be:
(1) used (i) to retire Purchase Money Indebtedness secured by the
asset which was the subject of the Asset Sale; or (ii) to retire and
permanently reduce Indebtedness incurred under the Credit Facility;
provided, that in the case of a revolver or similar arrangement that makes
credit available, such commitment is permanently reduced by such amount; or
(2) invested in assets and property (except in connection with the
acquisition of a Subsidiary which is a Guarantor in a Related Business,
other than notes, bonds, obligations and securities) which in the good
faith reasonable judgment of the Company's 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.
(c) The accumulated Net Cash Proceeds from Asset Sales and from any Event
of Loss not applied as set forth in the preceding paragraph shall constitute
"Excess Proceeds."
55
Pending the final application of any Net Cash Proceeds, the Company may
temporarily reduce revolving credit borrowings or otherwise invest or use for
general corporate purposes (other than Restricted Payments that are not solely
Restricted Investments) the Net Cash Proceeds in any manner that is not
prohibited by this Indenture.
(d) When the Excess Proceeds equal or exceed $10,000,000, the Company shall
offer to repurchase the Notes, together with any other Indebtedness ranking on a
parity with the Notes and with similar provisions requiring the Company to make
an offer to purchase such Indebtedness with the proceeds from such Asset Sale
pursuant to a cash offer (subject only to conditions required by applicable law,
if any), pro rata in proportion to the respective principal amounts of such
Indebtedness (or accreted values in the case of Indebtedness issued with an
original issue discount) and the Notes, (the "Asset Sale Offer") at a purchase
price of 100% of the principal amount (or accreted value in the case of
Indebtedness issued with an original issue discount) (the "Asset Sale Offer
Price") together with accrued and unpaid interest and Liquidated Damages, if
any, to the date of payment. The Asset Sale Offer shall remain open for 20
Business Days following its commencement (the "Asset Sale Offer Period").
(e) Upon expiration of the Asset Sale Offer Period, the Company shall apply
an amount equal to the Excess Proceeds (the "Asset Sale Offer Amount") plus an
amount equal to accrued and unpaid interest and Liquidated Damages, if any, to
the purchase of all Indebtedness properly tendered in accordance with the
provisions hereof (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 Liquidated Damages, if any). To the
extent that the aggregate amount of Notes and such other pari passu Indebtedness
tendered pursuant to an Asset Sale Offer is less than the Asset Sale Offer
Amount, the Company may use any remaining Net Cash Proceeds as otherwise
permitted by this Indenture and following the consummation of each Asset Sale
Offer the Excess Proceeds amount shall be reset to zero.
(f) Notwithstanding, and without complying with, the provisions of this
Section 4.13:
(1) the Company may and its Subsidiaries may, in the ordinary course
of business, (a) convey, sell, transfer, assign or otherwise dispose of
inventory and other assets acquired and held for resale in the ordinary
course of business and (b) liquidate Cash Equivalents;
(2) the Company may and its Subsidiaries may convey, sell, transfer,
assign or otherwise dispose of assets pursuant to and in accordance with
Section 5.1;
(3) the Company may and its Subsidiaries may sell or 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 Company's business or the business of such
Subsidiary, as applicable;
(4) the Company may and its Subsidiaries may convey, sell, transfer,
assign or otherwise dispose of assets to the Company or any of the
Guarantors;
56
(5) the Company may and each of its Subsidiaries may settle, release
or surrender tort or other litigation claims in the ordinary course of
business or grant Liens not prohibited by this Indenture;
(6) Foreign Subsidiaries may convey, sell, transfer, assign or
otherwise dispose of assets to the Company, any of the Guarantors, or any
other Foreign Subsidiary; and
(7) the Company and its Subsidiaries may make Permitted Investments
pursuant to clause (e) in the definition thereof and Restricted Investments
that are not prohibited by Section 4.9 hereof.
(g) All Net Cash Proceeds from an Event of Loss shall be reinvested or used
as otherwise provided above in clauses (a) or (b) of the first paragraph of this
Section 4.13.
(h) 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 Section
4.13, the Company's compliance or the compliance of any of its subsidiaries with
such laws and regulations shall not in and of itself cause a breach of the
Company's obligations under such Section 4.13.
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 Liquidated Damages,
if any, due on such Interest Payment Date) will be paid to the Person in whose
name a Note is registered at the close of business on such Record Date.
SECTION 4.14 LIMITATION ON SALE-LEASEBACK TRANSACTIONS
The Company will not, and will not permit any of its Subsidiaries to, enter
into any sale-leaseback transaction; provided that the Company and its
Subsidiaries may enter into a sale-leaseback transaction if:
(1) the Company or such Subsidiary could have (a) incurred
Indebtedness in an amount equal to the Attributable Indebtedness relating
to such sale-leaseback transaction under the Debt Incurrence Ratio in the
second paragraph of Section 4.7 hereof and (b) incurred a Lien to secure
such Indebtedness pursuant to Section 4.8 hereof;
(2) the gross cash proceeds of such sale-leaseback transaction are at
least equal to the fair market value, as determined in good faith by the
Board of Directors and set forth in an Officers' Certificate delivered to
the Trustee, of the property that is the subject of such sale-leaseback
transaction; and
(3) the transfer of assets in such sale-leaseback transaction is
permitted by, and the Company applies the proceeds of such transaction in
compliance with, Section 4.13 hereof.
57
SECTION 4.15 LIMITATION ON LAYERING INDEBTEDNESS
The Company and the Guarantors will not, directly or indirectly, incur any
Indebtedness that is contractually subordinated in right of payment to any of
the Company's Indebtedness or the Indebtedness of any Guarantor unless such
Indebtedness is as contractually subordinated in right of payment to the Notes
or such Guarantor's Guarantee, as applicable, at least to the same extent as it
is to such other Indebtedness.
SECTION 4.16 REPURCHASE OF NOTES AT THE OPTION OF THE HOLDER UPON A CHANGE OF
CONTROL
In the event that a Change of Control (as defined below) has occurred, each
Holder of Notes will have the right, at such Holder's option, pursuant to an
offer (subject only to conditions required by applicable law, if any) by the
Company (the "Change of Control Offer"), to require the Company to repurchase
all or any part of such Holder's Notes (provided, that the principal amount of
such Notes must be $1,000 or an integral multiple thereof) on a date (the
"Change of Control Purchase Date") that is no later than 30 Business Days after
the occurrence of such Change of Control, at a cash price equal to 101% of the
principal amount thereof (the "Change of Control Purchase Price"), together with
accrued and unpaid interest and Liquidated Damages, if any, to the Change of
Control Purchase Date.
The Change of Control Offer shall be made within 10 Business Days following
a Change of Control and shall remain open for 20 Business Days following its
commencement (the "Change of Control Offer Period"). Upon expiration of the
Change of Control Offer Period, the Company promptly shall purchase all Notes
properly tendered in response to the Change of Control Offer.
On or before the Change of Control Purchase Date, the Company will:
(1) accept for payment Notes or portions thereof properly tendered
pursuant to the Change of Control Offer;
(2) deposit with the paying agent for the Company (the "Paying Agent")
cash sufficient to pay the Change of Control Purchase Price (together with
accrued and unpaid interest and Liquidated Damages, if any,) of all Notes
so tendered; and
(3) deliver to the Trustee the Notes so accepted together with an
Officers' Certificate listing the Notes or portions thereof being purchased
by the Company.
The Paying Agent promptly will pay the Holders of Notes so accepted an
amount equal to the Change of Control Purchase Price (together with accrued and
unpaid interest and Liquidated Damages, if any,) and the Trustee promptly will
authenticate and deliver to such Holders a new Note equal in principal amount to
any unpurchased portion of the Note surrendered. Any Notes not so accepted will
be delivered promptly by the Company to the Holder thereof. The Company
publicly will announce the results of the Change of Control Offer on or as soon
as practicable after the Change of Control Purchase Date.
58
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 Section 4.16, the Company's
compliance with such laws and regulations shall not in and of itself cause a
breach of its obligations under such Section 4.16.
If the Change of Control Purchase Date 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 Liquidated Damages, if any) due on such
Interest Payment Date will be paid to the Person in whose name a Note is
registered at the close of business on such Record Date.
SECTION 4.17 REPURCHASE OF NOTES AT THE OPTION OF THE HOLDER FROM EXCESS CASH
FLOW
Not later than 120 days following the end of each fiscal year, the Company
will make an offer to all Holders (the "Excess Cash Flow Offer") to purchase the
maximum principal amount of Notes that is an integral multiple of $1,000 with
50% of the Company's Excess Cash Flow from such fiscal year (the "Excess Cash
Flow Offer Amount"), at a purchase price in cash equal to 100% of the principal
amount of the Notes to be purchased (the "Excess Cash Flow Purchase Price"),
together with accrued and unpaid interest and Liquidated Damages, if any,
thereon to the date fixed for the purchase of the Notes pursuant to such Excess
Cash Flow Offer. The Excess Cash Flow Offer will be required to remain open for
20 Business Days following its commencement. Upon the expiration of that
period, the Company promptly (and in any case, within 3 Business Days following
such expiration) will apply the Excess Cash Flow Offer Amount plus accrued and
unpaid interest and Liquidated Damages, if any, thereon to the purchase of all
Notes validly tendered pursuant to an Excess Cash Flow Offer for the Excess Cash
Purchase Price. If the aggregate principal amount of Notes tendered pursuant to
an Excess Cash Flow Offer exceeds the Excess Cash Flow Offer Amount with respect
thereto, the Company will purchase Notes or portions thereof tendered pro rata
or by such other method as may be required by law. If the aggregate amount of
Notes tendered pursuant to any Excess Cash Flow Offer is less than the Excess
Cash Flow Offer Amount, the Company may use any remaining Excess Cash Flow
Amount for any purposes not prohibited by this Indenture. The Company will not
be required to make an Excess Cash Flow Offer to purchase Notes pursuant to this
Section 4.17 if the available cumulative Excess Cash Flow is less than
$10,000,000; provided, that any such lesser amount of Excess Cash Flow (if
positive) will be added to the Excess Cash Flow for each subsequent fiscal year
until an Excess Cash Flow Offer is made.
Any Excess Cash Flow 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 Section 4.17, the Company's
compliance with such laws and regulations shall not in and of itself cause a
breach of the Company's obligations under this Section 4.17.
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SECTION 4.18 SUBSIDIARY GUARANTORS
All of the Company's present and future Subsidiaries (other than Foreign
Subsidiaries) jointly and severally will guaranty all principal, premium, if
any, and interest on the Notes on a senior basis, grant a security interest in
and/or pledge all personal property owned by such Subsidiary to secure such
Obligations on the terms and to the extent set forth in the Collateral
Agreements, and deliver to the Trustee an opinion of counsel that such guaranty
and Collateral Agreements have been duly authorized, executed and delivered.
Notwithstanding anything herein or in this Indenture to the contrary, if
any of the Company's Subsidiaries (including Foreign Subsidiaries) that is not a
Guarantor guarantees any of the Company's other Indebtedness or any other
Indebtedness of any Guarantor, or the Company or any of the Guarantors,
individually or collectively, pledges more than 65% of the Voting Equity
Interests of a Subsidiary (including Foreign Subsidiaries) that is not a
Guarantor to a lender to secure the Company's Indebtedness or any Indebtedness
of any Guarantor, then such Subsidiary must become a Guarantor and grant the
security interest as provided in this Section 4.18.
SECTION 4.19 LIMITATION ON STATUS AS INVESTMENT COMPANY
The Company and its Subsidiaries shall be prohibited from being required to
register as an "investment company" (as that term is defined in the Investment
Company Act of 1940, as amended (the "Investment Company Act")), or from
otherwise becoming subject to regulation under the Investment Company Act.
SECTION 4.20 MAINTENANCE OF PROPERTIES AND INSURANCE
The Company and the Guarantors shall cause all material properties used or
useful to the conduct of their business and the business of each of their
Subsidiaries to be maintained and kept in good condition, repair and working
order (reasonable wear and tear excepted) and supplied with all necessary
equipment and shall cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in their reasonable
judgment may be necessary, so that the business carried on in connection
therewith may be properly conducted at all times; provided, however, that
nothing in this Section 4.20 shall prevent the Company or any Guarantor from
discontinuing any operation or maintenance of any of such properties, or
disposing of any of them, if such discontinuance or disposal is (a) (i) in the
judgment of the Board of Directors of the Company, desirable in the conduct of
the business of such entity and (ii) would not have a material adverse effect on
the ability of the Company and the Guarantors to satisfy their obligations under
the Notes, the Guarantees and this Indenture, and, to the extent applicable, (b)
as otherwise permitted under Section 4.13 hereof.
The Company and Guarantors shall provide, or cause to be provided, for
themselves and each of their Subsidiaries, insurance (including appropriate
self-insurance) against loss or damage of the kinds that, in the reasonable,
good faith opinion of the Board of Directors of the Company is adequate and
appropriate for the conduct of the business of the Company, the Guarantors and
such Subsidiaries.
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SECTION 4.21 CORPORATE EXISTENCE
Subject to Article V hereof, the Company shall do or cause to be done all
things necessary to preserve and keep in full force and effect (i) its corporate
existence, and the corporate, partnership or other existence of each of its
Subsidiaries, in accordance with the respective organizational documents (as the
same may be amended from time to time) of the Company or any such Subsidiary and
(ii) the rights (charter and statutory), licenses and franchises of the Company
and its Subsidiaries; provided, however, that the Company shall not be required
to preserve any such right, license or franchise, or the corporate, partnership
or other existence of any of its Subsidiaries, 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, taken as a whole, and that the
loss thereof would not have a material adverse effect on the ability of the
Company and the Guarantors to satisfy their obligations under the Notes, the
Guarantees and this Indenture.
SECTION 4.22 MINIMUM LIQUIDITY
The Company and its Subsidiaries shall not purchase any gaming devices,
including slot machines (other than pursuant to a binding commitment existing
prior to the applicable Liquidity Determination Date and not entered into in
contemplation of a failure to satisfy this covenant), during any quarter if
during the previous fiscal quarter the Company and the Guarantors failed to
maintain Consolidated Cash and Cash Equivalents and Unused Availability equal to
$5.0 million, unless and until the time that the Company is able to certify to
the Trustee that the Company and the Guarantors have Consolidated Cash and Cash
Equivalents and Unused Availability equal to $5.0 million.
ARTICLE V
SUCCESSORS
SECTION 5.1 MERGER, CONSOLIDATION OR SALE OF ASSETS
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 (such amounts to be 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:
(1) 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
Company's obligations in connection with the Notes, this Indenture and the
Collateral Agreements;
(2) no Default or Event of Default shall exist or shall occur
immediately after giving effect on a pro forma basis to such transaction;
(3) unless such transaction is solely the merger of the Company and
one of its previously existing Wholly Owned Subsidiaries which is also a
Guarantor for the purpose of reincorporation into another jurisdiction and
which transaction is not for the purpose of
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evading this provision and not in connection with any other transaction,
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
(4) unless such transaction is solely the merger of the Company and
one of its previously existing Wholly Owned Subsidiaries which is also a
Guarantor for the purpose of reincorporation into another jurisdiction and
which transaction is not for the purpose of evading this provision and not
in connection with any other transaction, 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 4.7; and
(5) each Guarantor, shall have, if required by the terms of this
Indenture or the Collateral Agreements, confirmed in writing that its
Guarantee shall apply to the obligations of the Company or the surviving
entity in accordance with the Notes, this Indenture and the Collateral
Agreements.
SECTION 5.2 SUCCESSOR CORPORATION SUBSTITUTED
Upon any consolidation or merger in accordance with Section 5.1 hereof, the
successor corporation formed by such consolidation or into which the Company is
merged shall succeed to and (except in the case of a lease or any transfer of
all or substantially all of the Company's assets) be substituted for, and may
exercise every right and power of, the Company under this Indenture with the
same effect as if such successor corporation had been named therein as the
Company, and the Trustee may require any such Person to ensure, by executing and
delivering appropriate instruments and opinions of counsel, that the Trustee
continues to hold a Lien, having the same relative priority as was the case
immediately prior to such transactions, on all Collateral for the benefit of the
Holders.
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 Company's properties and assets, shall be deemed to be
the transfer of all or substantially all of the Company's properties and assets.
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.1 EVENTS OF DEFAULT
"Event of Default," wherever used herein, means any one of the following
events:
(a) the failure of the Company to pay any installment of interest (or
Liquidated Damages, if any) on the Notes as and when the same becomes due and
payable and the continuance of any such failure for 30 days;
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(b) the failure of 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, by acceleration or otherwise, including, without
limitation, payment of the Excess Cash Flow Purchase price, the Change of
Control Purchase Price or the Asset Sale Offer Price, on Notes validly tendered
and not properly withdrawn pursuant to an Excess Cash Flow Offer, a Change of
Control Offer or Asset Sale Offer, as applicable;
(c) the failure of the Company or the failure by any of the Company's
Subsidiaries to observe or perform any other covenant, condition or agreement
contained in the Notes or this Indenture and, except for the provisions
described under Section 4.13, 4.16, 4.17 and the first sentence of Section
4.4(b) and Article V hereof, which failure continues for a period of 30 days
after 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;
(d) a default occurs (after giving effect to any waivers, amendments,
applicable grace periods or any extension of any maturity date) under the
Indebtedness of the Company or the Indebtedness of any the Company's
Subsidiaries with an aggregate amount outstanding in excess of $5,000,000 (i)
which is caused by a failure to pay principal of or interest on such
Indebtedness; or (ii) if as a result of such default, the maturity of such
Indebtedness has been accelerated prior to its stated maturity;
(e) final unsatisfied judgments not covered by insurance aggregating in
excess of $5,000,000, at any one time rendered against the Company or any of its
Subsidiaries and not stayed, bonded or discharged within 60 days;
(f) any Guarantee of a Guarantor ceases to be in full force and effect or
becomes unenforceable or invalid or is declared null and void (other than in
accordance with the terms of the Guarantee and this Indenture) or any Guarantor
denies or disaffirms its Obligations under its Guarantee or the Collateral
Agreements;
(g) any failure to comply with any material agreement or covenant in, or
material provision of, any of the Collateral Agreements, or any breach of a
representation under, the Collateral Agreements;
(h) the Collateral Agreements cease to create a valid Lien on the assets
purported to be pledged or secured thereunder;
(i) a court having jurisdiction in the premises enters a decree or order
for (A) relief in respect of the Company or any Significant Subsidiary in an
involuntary case under any applicable Bankruptcy Law now or hereafter in effect,
(B) appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Company or any Significant Subsidiary or
for all or substantially all of the property and assets of the Company or any
Significant Subsidiary or (C) the winding up or liquidation of the affairs of
the Company or any Significant Subsidiary and, in each case, such decree or
order shall remain unstayed and in effect for a period of 60 consecutive days;
or
(j) the Company or any Significant Subsidiary (A) commences a voluntary
case under any applicable Bankruptcy Law now or hereafter in effect, or consents
to the entry of an
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order for relief in an involuntary case under any such law, (B) consents to the
appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Company or any
Significant Subsidiary or for all or substantially all of the property and
assets of the Company or any Significant Subsidiary or (C) effects any general
assignment for the benefit of creditors.
If a Default occurs and is continuing, the Trustee must, within 90 days
after the occurrence of such Default, give to the Holders notice of such Event
of Default.
SECTION 6.2 ACCELERATION
(a) If an Event of Default (other than an Event of Default specified in
clause (i) or (j) of Section 6.1 that occurs with respect to the Company or any
of its Significant Subsidiaries) occurs and is continuing under this Indenture,
then in every such case, unless the principal of all of the Notes shall have
already become due and payable, either the Trustee or the Holders of at least
25% in aggregate principal amount of the Notes, then outstanding, by written
notice to the Company (and to the Trustee if such notice is given by the
Holders), may, and the Trustee at the request of such Holders shall, declare the
principal of, premium, if any, and accrued interest (and Liquidated Damages, if
any) on the Notes to be due and payable immediately. Upon a declaration of
acceleration, such principal of, premium, if any, and accrued interest (and
Liquidated Damages, if any) shall be immediately due and payable. If an Event
of Default specified in clause (i) or (j) of Section 6.1, relating to the
Company or any of its Significant Subsidiaries occurs, all principal and accrued
interest (and Liquidated Damages, if any) thereon will be immediately due and
payable on all outstanding Notes without any declaration or other act on the
part of the Trustee or the Holders.
(b) Prior to the declaration of acceleration of the maturity of the Notes,
the Holders of a majority in aggregate principal amount of the Notes at the time
outstanding may waive on behalf of all the Holders any Default, except a Default
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 of this Indenture relating to the duties of the Trustee, the Trustee
will be under no obligation to exercise any of its rights or powers under this
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 this 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.
(c) At any time after such a declaration of acceleration being made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter provided in this Article VI, the Holders of not less
than a majority in aggregate principal amount of then outstanding Notes, by
written notice to the Company and the Trustee, may rescind, on behalf of all
Holders, any such declaration of acceleration if:
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(1) the Company has paid or deposited with the Trustee cash sufficient
to pay: (a) all overdue interest and Liquidated Damages, if any, on all Notes;
(b) the principal of (and premium, if any, applicable to) any Notes which would
become due other than by reason of such declaration of acceleration, and
interest thereon at the rate borne by the Notes; (c) to the extent that payment
of such interest is lawful, interest upon overdue interest at the rate borne by
the Notes; and (d) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the Trustee and
its agents and counsel, and all other amounts due the Trustee under Section 7.7
hereof; and
(2) all Events of Default, other than the non-payment of the principal
of, premium, if any, and interest (and Liquidated Damages, if any) on the Notes
which have become due solely by such declaration of acceleration, have been
cured or waived as provided in Section 6.4 hereof.
(d) Notwithstanding clause (c)(2) of this Section 6.2, no waiver shall be
effective against any Holder for any Event of Default or event which with notice
or lapse of time or both would be an Event of 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 thereby, unless all such affected
Holders agree, in writing, to waive such Event of Default or other event. No
such waiver shall cure or waive any subsequent default or impair any right
consequent thereon.
SECTION 6.3 OTHER REMEDIES
If an Event of Default occurs and is continuing, subject to the terms of
the Intercreditor Agreement, the Trustee may pursue any available remedy to
collect the payment of principal, premium, if any, Liquidated Damages, if any,
and interest on the Notes or to enforce the performance of any provision of the
Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies
are cumulative to the extent permitted by law.
SECTION 6.4 WAIVER OF PAST DEFAULTS
Subject to Section 6.7 hereof, the Holders of a majority in principal
amount of the outstanding Notes by written notice to the Company and to the
Trustee, may, on behalf of all Holders, waive any existing or past Default or
Event of Default hereunder and its consequences under this Indenture, except a
default:
(1) in the payment of principal of, premium, if any, Liquidated
Damages, if any, or interest on any Note not yet cured as specified in
clauses (a) and (b) of Section 6.1 hereof;
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(2) in respect of a covenant or provision hereof which, under Article
IX, cannot be modified or amended without the consent of the Holder of each
outstanding Note affected, unless all such affected Holders agree, in
writing, to waive such default; or
(3) the rescission of which would conflict with any judgment or decree
of a court of competent jurisdiction.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right arising therefrom.
SECTION 6.5 CONTROL BY MAJORITY
Holders of a majority in aggregate principal amount of the then outstanding
Notes may direct the time, method and place of conducting any proceeding for
exercising any remedy available to the Trustee or exercising any trust or power
conferred on it. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture, that the Trustee determines in good faith
may be unduly prejudicial to the rights of other Holders of Notes not joining in
the giving of such direction or that may involve the Trustee in personal
liability and the Trustee may take any other action it deems proper that is not
inconsistent with any such direction received from Holders of the Notes.
SECTION 6.6 LIMITATION ON SUITS
A Holder of a Note may pursue a remedy with respect to this Indenture or
the Notes only if:
(a) the Holder of a Note gives to the Trustee written notice of a
continuing Event of Default;
(b) the Holders of at least 25% in aggregate principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the remedy;
(c) such Holder of a Note or Holders of Notes offer and, if requested,
provide to the Trustee indemnity satisfactory to the Trustee against any costs,
liability or expense;
(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and
(e) during such 60-day period the Holders of a majority in principal amount
of the then outstanding Notes do not give the Trustee a direction inconsistent
with the request.
A Holder of a Note may not use this Indenture to prejudice the rights of another
Holder of a Note or to obtain a preference or priority over another Holder of a
Note.
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SECTION 6.7 RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT
Notwithstanding any other provision of this Indenture, except as permitted
by Section 9.2 hereof, the right of any Holder of a Note to receive payment of
the principal of, premium and Liquidated Damages, if any, and interest on the
Note, on or after the respective due dates expressed in the Note (including in
connection with an offer to purchase) or to bring suit for the enforcement of
any such payment on or after such respective dates, shall not be impaired or
affected without the consent of such Holder.
SECTION 6.8 COLLECTION SUIT BY TRUSTEE
If an Event of Default specified in Section 6.1 hereof occurs and is
continuing, the Trustee is authorized to recover judgment in its own name and as
trustee of an express trust against the Company for the whole amount of
principal of, premium and Liquidated Damages, if any, and interest remaining
unpaid on the Notes and interest on overdue principal and, to the extent lawful,
interest and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
SECTION 6.9 TRUSTEE MAY FILE PROOFS OF CLAIM
The Trustee is authorized to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), its creditors or its property and shall
be entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.7 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.7 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall
be secured by a Lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties that the Holders may be
entitled to receive in such proceeding whether in liquidation or under any plan
of reorganization or arrangement or otherwise. Nothing herein contained shall
be deemed to authorize the Trustee to authorize or consent to or accept or adopt
on behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding;
provided, however that the Trustee may, on behalf of the Holders, vote for the
election of a trustee in bankruptcy or similar official and may be a member of
the creditor's committee.
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SECTION 6.10 PRIORITIES
Subject to the terms of the Intercreditor Agreement, if the Trustee
collects any money pursuant to this Article, it shall pay out the money in the
following order:
First: to the Trustee, its agents and attorneys for amounts due under
Section 7.7 hereof, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs and
expenses of collection (including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel);
Second: to Holders of Notes for amounts due and unpaid on the Notes for
principal and Liquidated Damages, if any, and interest, ratably, without
preference or priority of any kind, according to the amounts due and payable on
the Notes for principal, premium and Liquidated Damages, if any, and interest,
respectively; and
Third: without duplication, to the Holders for any other Obligations owing
to the Holders under the Notes or this Indenture; and
Fourth: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a Record Date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.
SECTION 6.11 UNDERTAKING FOR COSTS
In any suit for the enforcement of any right or remedy under this Indenture
or in any suit against the Trustee for any action taken or omitted by it as a
Trustee, a court in its discretion may require the filing by any party litigant
in the suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section 6.11
does not apply to a suit by the Trustee, a suit by a Holder of a Note pursuant
to Section 6.7 hereof, or a suit by Holders of more than 10% in principal amount
of the then outstanding Notes.
ARTICLE VII
TRUSTEE
SECTION 7.1 DUTIES OF TRUSTEE
(a) If an Event of Default of which the Trustee has knowledge 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 its
exercise, as a prudent man would exercise or use under the circumstances in the
conduct of its own affairs.
(b) Except during the continuance of an Event of Default of which the
Trustee has knowledge:
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(i) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Trustee need perform only those
duties that are specifically set forth in this Indenture and no others, and no
implied covenants or obligations shall be read into this Indenture against the
Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture. However, the
Trustee shall examine the certificates and opinions to determine whether or not
they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(i) this paragraph (c) does not limit the effect of paragraph (b) of
this Section 7.1;
(ii) the Trustee shall not be liable for any error of judgment made in
good faith by an Officer of the Trustee, unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction received by
it pursuant to Section 6.5 hereof.
(d) Whether or not therein expressly so provided, every provision of this
Indenture that in any way relates to the Trustee is subject to Sections 7.1 and
7.2 hereof.
(e) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or incur any liability. The Trustee shall be under no
obligation to exercise any of its rights and powers under this Indenture at the
request of any Holders, unless such Holder shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.
(f) Upon request from the Company, the Trustee is hereby authorized to and
shall enter into the Intercreditor Agreement in connection with the Credit
Agreement or any amendment, restatement, supplement, renewal, replacement or
other modification thereof, entered into in accordance with the terms of this
Indenture, including Section 4.7 hereof.
(g) The Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
SECTION 7.2 RIGHTS OF TRUSTEE
(a) In connection with the Trustee's rights and duties under this
Indenture, the Trustee may conclusively rely upon any document believed by it to
be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
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(b) Before the Trustee acts or refrains from acting under this Indenture,
it may require an Officers' Certificate or an Opinion of Counsel or both. The
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on such Officers' Certificate or Opinion of Counsel. The
Trustee may consult with counsel and the written advice of such counsel or any
Opinion of Counsel shall be full and complete authorization and protection from
liability in respect of any action taken, suffered or omitted by it hereunder in
good faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any demand,
request, direction or notice from the Company shall be sufficient if signed by
an Officer of the Company.
(f) The Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders unless such Holders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities that might be
incurred by it in compliance with such request or direction.
(g) Except with respect to Section 4.1 hereof, the Trustee shall have no
duty to inquire as to the performance of the Company's covenants in Article IV
hereof. In addition, the Trustee shall not be deemed to have knowledge of any
Default or Event of Default except (i) any Event of Default occurring pursuant
to Sections 6.1(a), 6.1(b) and 4.1 hereof or (ii) any Default or Event of
Default of which the Trustee shall have received written notification in the
manner set forth in this Indenture or an officer in the corporate trust
administration of the Trustee shall have obtained actual knowledge. Delivery of
reports, information and documents to the Trustee under Section 4.3 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 thereunder (as to which the Trustee is
entitled to rely exclusively on an Officer's Certificate).
(h) 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
may, in its discretion, make such further inquiry or investigation into such
facts or matters as it may see fit.
SECTION 7.3 INDIVIDUAL RIGHTS OF TRUSTEE
The Trustee in its individual or any other capacity may become the owner or
pledgee of Notes and may otherwise deal with the Company or any Affiliate of the
Company with the same rights it would have if it were not Trustee. However, in
the event that the Trustee acquires any conflicting interest (as defined in the
TIA) it must eliminate such conflict within 90 days, apply
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to the SEC for permission to continue as trustee or resign. Any Agent may do the
same with like rights and duties. The Trustee is also subject to Sections 7.10
and 7.11 hereof.
SECTION 7.4 TRUSTEE'S DISCLAIMER
The Trustee shall not be responsible for and makes no representation as to
the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Company's use of the proceeds from the Notes or any money
paid to the Company or upon the Company's direction under any provision of this
Indenture, it shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the Notes or
any other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.
SECTION 7.5 NOTICE OF DEFAULTS
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to Holders of Notes a notice in the
manner and to the extent provided by Section 313(c) of the TIA of the Default or
Event of Default within 90 days after it occurs. Except in the case of a
Default or Event of Default in payment of principal of, premium, if any,
Liquidated Damages, if any, or interest on any Note, the Trustee may withhold
the notice if and so long as a committee of its Officers in good faith
determines that withholding the notice is in the interests of the Holders of the
Notes.
SECTION 7.6 REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES
Within 60 days after each May 15 beginning with the May 15 following the
date of this Indenture, and for so long as Notes remain outstanding, the Trustee
shall mail to the Holders of the Notes a brief report dated as of such reporting
date that complies with TIA (S) 313(a) (but if no event described in TIA (S)
313(a) has occurred within the 12 months preceding the reporting date, no report
need be transmitted). The Trustee also shall comply with TIA (S) 313(b)(2).
The Trustee shall also transmit by mail all reports as required by XXX (S)
313(c).
A copy of each report at the time of its mailing to the Holders of Notes
shall be mailed to the Company and filed with the SEC and each stock exchange on
which the Notes are listed in accordance with TIA (S) 313(d). The Company shall
promptly notify the Trustee when the Notes are listed on any stock exchange.
SECTION 7.7 COMPENSATION AND INDEMNITY
The Company shall pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee promptly
upon request for all reasonable disbursements, advances and expenses incurred or
made by it in addition to the compensation for its services. Such expenses
shall include the reasonable compensation, disbursements and expenses of the
Trustee's agents and counsel.
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The Company shall indemnify the Trustee against any and all losses,
liabilities or expenses (including reasonable attorneys' fees) incurred by it
arising out of or in connection with the acceptance or administration of its
duties under this Indenture, including the costs and expenses of enforcing this
Indenture against the Company (including this Section 7.7) and defending itself
against any claim (whether asserted by the Company or any Holder or any other
Person) or liability in connection with the exercise or performance of any of
its powers or duties hereunder, except to the extent any such loss, liability or
expense may be attributable to its negligence, bad faith or willful misconduct.
The Trustee shall notify the Company promptly of any claim for which it may seek
indemnity. Failure by the Trustee to so notify the Company shall not relieve
the Company of its obligations hereunder. The Company shall defend the claim
and the Trustee shall cooperate in the defense. The Trustee may have separate
counsel and the Company shall pay the reasonable fees and expenses of such
counsel. The Company need not pay for any settlement made without its consent,
which consent shall not be unreasonably withheld.
The obligations of the Company under this Section 7.7 shall survive the
satisfaction and discharge of this Indenture.
To secure the Company's payment obligations in this Section 7.7, the
Trustee shall have a Lien prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal and
interest on particular Notes. Such Lien shall survive the satisfaction and
discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Sections 6.1(i) or 6.1(j) hereof occurs, the expenses and
the compensation for the services (including the fees and expenses of its agents
and counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
The Trustee shall comply with the provisions of TIA (S) 313(b)(2) to the
extent applicable.
SECTION 7.8 REPLACEMENT OF TRUSTEE
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 7.8.
The Trustee may resign in writing at any time and be discharged from the
trust hereby created by so notifying the Company. The Holders of Notes of a
majority in principal amount of the then outstanding Notes may remove the
Trustee by so notifying the Trustee and the Company in writing. The Company may
remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Trustee or its
property; or
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(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Xxxxxxx does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of Notes of at least 10% in principal amount of the then outstanding
Notes may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee, after written request by any Holder of a Note who has been
a Holder of a Note for at least six months, fails to comply with Section 7.10
hereof, such Holder of a Note may petition any court of competent jurisdiction
for the removal of the Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Thereupon, the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its succession to
Holders of the Notes. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee; provided all sums owing to the
Trustee hereunder have been paid and subject to the Lien provided for in Section
7.7 hereof. Notwithstanding replacement of the Trustee pursuant to this Section
7.8, the Company's obligations under Section 7.7 hereof shall continue for the
benefit of the retiring Trustee.
SECTION 7.9 SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or transfers all or
substantially all of its corporate trust business to, another corporation, the
successor corporation without any further act shall be the successor Trustee.
SECTION 7.10 ELIGIBILITY; DISQUALIFICATION
There shall at all times be a Trustee hereunder that is a corporation or
trust company (or a member of a bank holding company) organized and doing
business under the laws of the United States of America or of any state thereof
that is authorized under such laws to exercise corporate trustee power, that is
subject to supervision or examination by federal or state authorities and that
has (or the bank holding company of which it is a member has) a combined capital
and surplus of at least $50,000,000 as set forth in its most recent published
annual report of condition.
This Indenture shall always have a Trustee who satisfies the requirements
of TIA (S) 310(a)(1), (2) and (5). The Trustee is subject to TIA (S) 310(b).
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SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY
The Trustee is subject to TIA (S) 311(a), excluding any creditor
relationship listed in TIA (S) 311(b). A Trustee who has resigned or been
removed shall be subject to TIA (S) 311(a) to the extent indicated therein.
ARTICLE VIII
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.1 OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE
The Company may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officers' Certificate, elect to have either Section
8.2 or 8.3 hereof be applied to all outstanding Notes upon compliance with the
conditions set forth below in this Article VIII.
SECTION 8.2 LEGAL DEFEASANCE AND DISCHARGE
Upon the Company's exercise under Section 8.1 hereof of the option
applicable to this Section 8.2, each of the Company and the Guarantors, as
applicable, shall, subject to the satisfaction of the applicable conditions set
forth in Section 8.4 hereof, be deemed to have been discharged from its
obligations with respect to all outstanding Notes and Guarantees, as applicable,
on the date the conditions set forth below are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, Legal Defeasance means that the Company shall be
deemed to have paid and discharged all amounts owed under the outstanding Notes
and the Guarantors shall be deemed to have paid and discharged the entire
Indebtedness represented by the outstanding Guarantees, which shall thereafter
be deemed to be "outstanding" only for the purposes of Section 8.5 hereof 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, such Guarantees and
this Indenture (and the Trustee, on demand of and at the expense of the Company,
shall execute proper instruments acknowledging the same), except for the
following provisions 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 8.4 hereof, and as more fully
set forth in Section 8.4, payments in respect of the principal of, premium, if
any, and interest and Liquidated Damages, if any, on such Notes when such
payments are due, (b) the Company's obligations with respect to such Notes under
Article II and Section 4.2 hereof, (c) the rights, powers, trusts, duties and
immunities of the Trustee hereunder and the Company's obligations in connection
therewith and (d) this Article VIII. Subject to compliance with this Article
VIII, the Company may exercise its option under this Section 8.2 notwithstanding
the prior exercise of its option under Section 8.3 hereof.
SECTION 8.3 COVENANT DEFEASANCE
Upon the Company's exercise under Section 8.1 hereof of the option
applicable to this Section 8.3, subject to the satisfaction of the applicable
conditions set forth in Section 8.4 hereof, the Company and the Guarantors shall
be released from their respective obligations under Sections 4.3, 4.4, 4.5, 4.7,
4.8, 4.9, 4.10, 4.11, 4.12, 4.13, 4.14, 4.16, 4.17, 4.18, 4.20 and 4.22 hereof
on and after the date the conditions set forth below are satisfied (hereinafter,
"Covenant
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Defeasance"), and the Notes and the Guarantees shall thereafter be deemed not
"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 (it being understood that such Notes shall not be deemed outstanding
for accounting purposes). For this purpose, Covenant Defeasance means that, with
respect to the outstanding Notes, the Company and the Guarantors 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 6.1 hereof, but, except as specified above, the
remainder of this Indenture and such Notes shall be unaffected thereby. In
addition, upon the Company's exercise under Section 8.1 hereof of the option
applicable to this Section 8.3, subject to the satisfaction of the applicable
conditions set forth in Section 8.4 hereof, (x) Sections 6.1(c) through 6.1(e)
hereof shall not constitute Events of Default to the extent such events occur
thereafter and (y) Sections 6.1(i) and 6.1(j) hereof shall not constitute an
Event of Default to the extent they occur after the 91st day following the
occurrence of the Company's exercise of Covenant Defeasance; provided, however
that for all other purposes as set forth herein, such Covenant Defeasance
provisions shall be effective.
SECTION 8.4 CONDITIONS TO LEGAL OR COVENANT DEFEASANCE
The following shall be the conditions to the application of either Section
8.2 or 8.3 hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in trust, for
the benefit of the Holders, cash in United States legal tender, U.S. Government
Obligations, or a combination thereof, in amounts that will be sufficient, in
the opinion of a nationally recognized firm of independent public accountants,
to pay the principal of, premium, if any, and Liquidated Damages, if any, and
interest on the outstanding Notes on the stated date for payment thereof or on
the applicable redemption date, as the case may be, and the Trustee must have,
for the benefit of Holders of the Notes, a valid, perfected exclusive security
interest in such trust;
(b) in the case of an election under Section 8.2 hereof, the Company must
deliver to the Trustee an Opinion of Counsel reasonably acceptable to the
Trustee from United States legal counsel confirming that (A) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling or (B) since the date of this Indenture, there has been a change in the
applicable federal income tax law, in either case 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 Legal 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 Legal Defeasance had not
occurred;
(c) in the case of an election under Section 8.3 hereof, the Company must
deliver to the Trustee an Opinion of Counsel reasonably acceptable to the
Trustee from United States legal
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counsel confirming that 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;
(d) in the case of an election under Section 8.2 or 8.3 hereof, (x) no
Default or Event of Default shall have occurred and be continuing on the date of
the deposit, and (y) no Event of Default specified in Section 6.1(d), (e) or (f)
hereof shall have occurred at any time from the date of the deposit to the 91st
calendar day thereafter (it being understood that this condition to Legal
Defeasance or Covenant Defeasance may not be satisfied until such 91st calendar
day after the date of deposit);
(e) the Defeasance may 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 the Company or any of its Subsidiaries is bound;
(f) the Company must deliver to the Trustee an Officers' Certificate
stating that the deposit was not made by the Company with the intent to hinder,
delay or defraud any other of the Company's creditors;
(g) the Company shall have delivered to the Trustee an Opinion of Counsel
to the effect that after the 91st day following the deposit, the trust funds
(except as to trust funds that would be payable to holders of Notes who are
"Insiders" as that term is defined by the Bankruptcy Code) will not be subject
to Section 547 of the Bankruptcy Code; and
(h) the Company must deliver to the Trustee an Officers' Certificate
confirming the satisfaction of the conditions in clauses (a) through (g) above,
and an Opinion of Counsel, confirming the satisfaction of the conditions in
clauses (a) (with respect to the validity and perfection of the security
interest) (b), (c) and (e).
Legal Defeasance and Covenant Defeasance shall be deemed to occur on the
date all of the applicable conditions set forth in this Section 8.4 are
satisfied.
SECTION 8.5 DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS
Subject to Section 8.6 hereof, 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 8.5, the "Trustee") pursuant
to Section 8.4 hereof 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 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, premium, if any, and interest (and Liquidated Damages, if any),
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 cash or U.S. Government
Obligations deposited pursuant to
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Section 8.4 hereof 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 VIII to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon the request of the
Company any money or U.S. Government Obligations held by it as provided in
Section 8.4 hereof which, in the opinion of a firm of independent public
accountants nationally recognized in the United States expressed in a written
certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 8.4(a) hereof), are in excess of the amount thereof that
would then be required to be deposited to effect an equivalent Legal Defeasance
or Covenant Defeasance.
SECTION 8.6 REPAYMENT TO COMPANY
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, premium, if any,
Liquidated Damages, if any, or interest on any Note and remaining unclaimed for
two years after such principal, and premium, if any, Liquidated Damages, if any,
or interest has become due and payable shall be paid to the Company on its
written request or (if then held by the Company) shall be discharged from such
trust; and the Holder of such Note shall thereafter, as a 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 the New York Times and The
Wall Street Journal (national edition), 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 notification or publication, any unclaimed balance of such
money then remaining will be repaid to the Company.
SECTION 8.7 REINSTATEMENT
If the Trustee or Paying Agent is unable to apply any United States legal
tender or U.S. Government Obligations in accordance with Section 8.2 or 8.3
hereof, as the case may be, by reason of any order directing the repayment of
the deposited money to the Company or otherwise making the deposit unavailable
to make payments under the Notes when due, or if any court enters an order
avoiding the deposit of money with the Trustee or Paying Agent or otherwise
requires the payment of the money so deposited to the Company or to a fund for
the benefit of its creditors, then (so long as the insufficiency exists or the
order remains in effect) the Company's and the Guarantors' obligations under
this Indenture and the Notes shall be revived and reinstated as though no
deposit had occurred pursuant to Section 8.3 or 8.4 hereof until such time as
the Trustee or Paying Agent is permitted to apply all such money in accordance
with Section 8.3 or 8.4 hereof, as the case may be; provided, however, that, if
the Company makes any payment of principal of, premium, if any, Liquidated
Damages, if any, 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 IX
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.1 WITHOUT CONSENT OF HOLDERS OF NOTES
Notwithstanding Section 9.2 hereof, the Company, the Guarantors and the
Trustee may amend or supplement this Indenture, the Notes, any Guarantee or the
Collateral Agreements, without the consent of any Holder of a Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in place of
certificated Notes;
(c) to provide for the assumption of the Company's obligations to the
Holders of the Notes in the case of a merger or consolidation pursuant to
Article V hereof;
(d) to provide for additional Guarantors as set forth in Section 4.18
hereof or for the release or assumption of a Guarantee in compliance with this
Indenture;
(e) to make any change that would provide any additional rights or benefits
to the Holders of the Notes or that does not adversely affect the rights
hereunder of any Holder of the Note;
(f) to comply with the provisions of the Depositary, Euroclear or
Clearstream or the Trustee with respect to the provisions of this Indenture or
the Notes relating to transfers and exchanges of Notes or beneficial interests
therein;
(g) to comply with requirements of the SEC in order to effect or maintain
the qualification of this Indenture under the TIA; or
(h) to provide for the issuance of Additional Notes in accordance with the
limitations set forth in this Indenture as of the date hereof.
Upon the request of the Company accompanied by a resolution of its Board of
Directors authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in Section
9.6 hereof, the Trustee shall join with the Company in the execution of any
amended or supplemental Indenture authorized or permitted by the terms of this
Indenture and to make any further appropriate agreements and stipulations that
may be therein contained, but the Trustee shall not be obligated to enter into
such amended or supplemental Indenture that adversely affects its own rights,
duties or immunities under this Indenture or otherwise.
SECTION 9.2 WITH CONSENT OF HOLDERS OF NOTES
Except as expressly stated otherwise in this Section 9.2, and subject to
Sections 6.4 and 6.7 hereof, the Company, the Guarantors and the Trustee may
amend or supplement this Indenture, the Notes and the Guarantees, with the
consent of the Holders of a majority in aggregate principal amount of the Notes
then outstanding (including, without limitation, consents
78
obtained in connection with a purchase of, or tender offer or exchange offer
for, the Notes), and, subject to Sections 6.4 and 6.7 hereof, any existing
Default or Event of Default (other than a Default or Event of Default in the
payment of the principal of, premium, if any, or interest on the Notes, except a
payment default resulting from an acceleration that has been rescinded) or
compliance with any provision of this Indenture or the Notes may be waived with
the consent of the Holders of a majority in aggregate principal amount of the
then outstanding Notes (including consents obtained in connection with a
purchase of, or tender offer or exchange offer for, the Notes).
Subject to Sections 6.4 and 6.7 hereof, and except as stated otherwise in
this Section 9.2, the Holders of a majority in aggregate principal amount of the
Notes then outstanding may waive compliance in a particular instance by the
Company or any Subsidiary with any provision of this Indenture or the Notes.
Notwithstanding the foregoing, without the consent of the Holders of not
less than two-thirds in aggregate principal amount of the Notes at the time
outstanding, the Company, the Guarantors and the Trustee may not amend or
supplement the Collateral Agreements, or waive or modify the rights of the
Holders thereunder.
It being understood that, except as expressly stated otherwise in
paragraphs (a) through (e) below, Sections 4.13, 4.16 and 4.17 hereof may be
amended, waived or modified in accordance with the first two paragraphs of this
Section 9.2, without the consent of each Holder affected, an amendment or waiver
may not with respect to any Notes held by a non-consenting Holder:
(a) change the Stated Maturity on any Note, or reduce the principal amount
thereof or the rate (or extend the time for payment) of interest thereon or any
premium payable upon the redemption thereof at the option of the Company, or
change the city of payment where, or 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 on or after the Stated Maturity
thereof (or, in the case of redemption at the option of the Company, on or after
the Redemption Date), or reduce the Excess Cash Flow Purchase Price, the Change
of Control Purchase Price or the Asset Sale Offer Price after the corresponding
Asset Sale or Change of Control has occurred or the Excess Cash Flow has been
produced or alter the provisions (including the defined terms used therein)
regarding the Company's right to redeem the Notes in a manner adverse to the
Holders; or
(b) reduce the percentage in principal amount of the outstanding Notes, the
consent of whose Holders is required for any such amendment, supplemental
indenture or waiver provided for in this Indenture; or
(c) modify any of the waiver provisions, 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
(d) cause the Notes or any Guarantee to become contractually subordinate in
right of payment to any other Indebtedness; or
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(e) make any changes in the foregoing clauses (a) through (d) or this
clause (e) hereof, in a manner adverse to the Holders of the Notes.
In connection with any amendment, supplement or waiver under this Article
IX, the Company may, but shall not be obligated to, offer to any Holder who
consents to such amendment, supplement or waiver, or to all Holders,
consideration for such Holder's consent to such amendment, supplement or waiver.
Upon the request of the Company accompanied by a resolution of its Board of
Directors authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of the documents described in Section 9.6 hereof, the Trustee shall
join with the Company in the execution of such amended or supplemental Indenture
unless such amended or supplemental Indenture adversely affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion, but shall not be obligated to, enter
into such amended or supplemental Indenture.
It shall not be necessary for the consent of the Holders of Notes under
this Section 9.2 to approve the particular form of any proposed amendment or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section 9.2 becomes
effective, the Company shall mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amended or supplemental
Indenture or waiver.
SECTION 9.3 COMPLIANCE WITH TRUST INDENTURE ACT
Every amendment or supplement to this Indenture or the Notes shall be set
forth in an amended or supplemental Indenture that complies with the TIA as then
in effect.
SECTION 9.4 REVOCATION AND EFFECT OF CONSENTS
Until an amendment, supplement or waiver becomes effective (as determined
by the Company and which may be prior to any such amendment, supplement or
waiver becoming operative), a consent to it by a Holder of a Note is a
continuing consent by the Holder of a Note and every subsequent Holder of a Note
or portion of a Note that evidences the same Indebtedness as the consenting
Holder's Note, even if notation of the consent is not made on any Note. However,
any such Holder of a Note or subsequent Holder of a Note may revoke the consent
as to its Note if the Trustee receives written notice of revocation before the
date the waiver, supplement or amendment becomes effective (as determined by the
Company and which may be prior to any such amendment, supplement or waiver
becoming operative).
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver, which record date shall be the date so fixed by the
Company notwithstanding the provisions of the TIA. If a record date is fixed,
then notwithstanding the last sentence of the immediately preceding
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paragraph, those Persons who were Holders at such record date, and only those
Persons (or their duly designated proxies), shall be entitled to revoke any
consent previously given, whether or not such Persons continue to be Holders
after such record date.
After an amendment, supplement or waiver becomes effective, it shall bind
every Holder unless it makes a change described in any of clauses (a) through
(e) of Section 9.2 hereof, in which case, the amendment, supplement or waiver
shall bind only each Holder of a Note who has consented to it and every
subsequent Holder of a Note or portion of a Note that evidences the same debt as
the consenting Holder's Note; provided, that any such waiver shall not impair or
affect the right of any Holder to receive payment of principal and premium of
and interest (and Liquidated Damages, if any) on a Note, on or after the
respective dates set for such amounts to become due and payable expressed in
such Note, or to bring suit for the enforcement of any such payment on or after
such respective dates.
SECTION 9.5 NOTATION ON OR EXCHANGE OF NOTES
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall authenticate new Notes
that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.
SECTION 9.6 TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amended or supplemental Indenture authorized
pursuant to this Article IX if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. The Company
may not sign an amended or supplemental Indenture until the Board of Directors
approves it. In executing any amended or supplemental Indenture, the Trustee
shall be entitled to receive indemnity reasonably satisfactory to it and to
receive and (subject to Section 7.1 hereof) shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel stating that the
execution of such amended or supplemental Indenture is authorized or permitted
by this Indenture.
ARTICLE X
COLLATERAL AND SECURITY AND GUARANTY
SECTION 10.1 COLLATERAL AGREEMENTS; SECURITY INTERESTS.
(a) The due and punctual payment of the principal and premium, if any, of,
and interest on, the Notes when and as the same shall be due and payable,
whether on an interest payment date, at maturity, by acceleration, repurchase,
redemption or otherwise, interest on the overdue principal of and interest (to
the extent permitted by law), if any, on the Notes and performance of all other
Obligations under this Indenture, the Notes, the Collateral Agreements and the
Note Registration Rights Agreement, shall be secured as provided in the
Collateral Agreements.
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(b) After the Issue Date, the Company shall, and shall cause each of its
Subsidiaries (other than Foreign Subsidiaries) to, use commercially reasonable
efforts (which will be deemed not to include any obligation to pay money to any
third parties other than filing fees, reasonable fees and expenses of the third
party or other de minimus payments) to grant a perfected security interest in
all of the Company's and its Subsidiaries' (other than Foreign Subsidiaries but
including Capital Stock of Foreign Subsidiaries owned by Subsidiaries that are
not Foreign Subsidiaries, to the extent required by law) assets (including the
stock of Mikohn Nevada and MGC, Inc.) including assets acquired after the Issue
Date, but in any event excluding the Excluded Assets; provided, that, the
Company and such Subsidiaries shall (1) only pledge the lesser of (x) all of the
Capital Stock of Foreign Subsidiaries owned by the Company and its Subsidiaries
that are not Foreign Subsidiaries and (y) 66% of the Capital Stock of each of
the Company's Foreign Subsidiaries, provided that notwithstanding the foregoing,
the Company and its Subsidiaries shall only be required to pledge (A) 49.85% of
the outstanding Capital Stock of Mikohn South America, S.A. and (B) 50% of the
outstanding Capital Stock of Mikohn Australasia Pty. Ltd., and (2) take all
commercially reasonable efforts to provide that the Lien on such Capital Stock
of the Company's Foreign Subsidiaries is valid and perfected in each applicable
jurisdiction, including the jurisdiction of the issuer of such Capital Stock.
(c) Notwithstanding any provision in this Indenture or the Collateral
Agreements to the contrary, in the event that the Company or any of its
Subsidiaries grants a Lien on any of the Company's or any of its Subsidiaries'
assets in connection with the Credit Agreement, the Company will be required to,
and will be required to cause its Subsidiaries to, secure the Notes with a Lien
on such assets (other than Excluded Assets (provided that if a lender under the
Credit Agreement takes a security interest in assets that secure Purchase Money
Indebtedness or Capitalized Lease Obligations, such assets will not be Excluded
Assets)) that is subordinated to such Lender, except in circumstances where the
Trustee cannot perfect such a Lien by means other than a Lien filing.
(d) The Company shall, and shall cause each of its Subsidiaries to, do or
cause to be done all such acts and things as may be necessary or proper, or as
may be required by the provisions of the Collateral Agreements, to assure and
confirm to the Trustee the security interest in the Collateral contemplated
hereby and by the Collateral Agreements, as from time to time constituted, so as
to render the same available for the security and benefit of this Indenture and
of the Notes secured hereby, according to the intent and purposes herein and
therein expressed, including (1) using all commercially reasonable efforts to
obtain customary consents and waivers from landlords of premises where any of
the Collateral is located, and (2) taking all commercially reasonable efforts
to grant a perfected Lien on all real property owned by the Company and its
Subsidiaries (other than Foreign Subsidiaries) and to provide customary title
insurance for the benefit of the Trustee with respect thereto; including,
without limitation, commercially reasonable efforts to cause the removal of
record of all existing monetary encumbrances such that the Collateral Agreements
shall constitute a first priority Lien on all such real property. The Company
shall, and shall cause each of its Subsidiaries to, take, upon request of the
Trustee, any and all actions required to cause the Collateral Agreements to
create and maintain, as security for the Obligations under this Indenture, the
Notes, the Collateral Agreements and the Note Registration Rights Agreement,
valid and enforceable, perfected (except as expressly provided herein or
therein) Liens in and on all the Collateral, in favor of the Trustee, superior
to and prior to the rights of all third Persons (other than holders of Purchase
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Money Indebtedness or Capitalized Lease Obligations that was incurred in
accordance with the provisions of Section 4.7 hereof), and subject to no other
Liens, other than as provided herein and therein provided, that the Trustee's
Lien securing the Collateral may be subordinated pursuant to the terms of the
Intercreditor Agreement to a Lien securing Indebtedness outstanding pursuant to
Section 4.7 hereof, but only to the extent provided in the Intercreditor
Agreement.
(e) The Company represents and warrants and covenants that it (or its
Subsidiaries) 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 Collateral Agreements. The Company (or
its Subsidiaries) shall 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 interests created by the Collateral
Agreements and shall pay all filing, recording, mortgage or other taxes or fees
incidental thereto.
(f) The security interests in the Collateral created by the Collateral
Agreements as now or hereafter in effect shall be held by the Trustee 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.
(g) Each Holder of Notes, by its acceptance thereof, consents and agrees to
the terms of the Collateral Agreements and the Intercreditor Agreement
(including, without limitation, the provisions providing for foreclosure and
release of the Collateral) as the same may be in effect or may be amended from
time to time in accordance with their terms and authorizes and directs the
Collateral Agent to enter into the Collateral Agreements and to perform its
obligations and exercise its rights thereunder in accordance therewith. The
Company initially appoints the Trustee as Collateral Agent and/or Trustee under
the Collateral Agreements. Any successor Trustee will act as Collateral Agent
and/or Trustee under the Collateral Agreements or appoint another Person to act
in such capacity.
SECTION 10.2 FURTHER ASSURANCES AND SECURITY.
The Company represents and warrants that at the time the Collateral
Agreements and this Indenture are executed, the Company (or its Subsidiaries)
(a) 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 Collateral Agreements, free and clear of all Liens, except for Permitted
Liens, and will forever warrant and defend the title to the same against the
claims of all Persons whatsoever; (b) 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 Collateral Agreements; and (c) 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 Collateral
Agreements.
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SECTION 10.3 OPINIONS.
(a) The Company shall furnish to the Trustee (i) promptly after the
recording or filing, or re-recording or re-filing of the Collateral Agreements
and other security filings, an Opinion of Counsel (who may be counsel for the
Company) stating that in the opinion of such counsel the Collateral Agreements
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.
(b) The Company shall furnish to the Trustee within three months after each
anniversary of the Issue Date, an Opinion of Counsel, dated as of such date,
stating either that (i) in the opinion of such counsel, all action has been
taken with respect to the recording, registering, filing, re-recording, re-
registering and refiling of all supplemental indentures, financing statements,
continuation statements or other instruments of further assurance as is
necessary to maintain the Liens of the Collateral Agreements and reciting the
details of such action, subject to customary assumptions and exclusions or (ii)
in the opinion of such Counsel, no such action is necessary to maintain such
Liens, which Opinion of Counsel also shall state what actions it then believes
are necessary to maintain the effectiveness of such Liens during the next year,
subject to customary assumptions and exclusions.
SECTION 10.4 RELEASE OF COLLATERAL.
(a) Collateral shall be released from the Liens created by the Collateral
Agreements from time to time at the sole cost and expense of the Company:
(i) upon payment in full of the Notes and all other Obligations under
this Indenture, the Notes, the Collateral Agreements and the Notes Registration
Rights Agreement then due and owing,
(ii) unless an Event of Default shall have occurred and be continuing,
upon sale or other disposition of Collateral pursuant to an Asset Sale made in
accordance with Section 4.13 hereof (without giving effect to the provisions of
clause (f) of Section 4.13); provided that the Collateral Agent has received all
documentation required by the TIA in connection therewith; and provided further
that only the Collateral subject to such Asset Sale shall be released,
(iii) upon release of a Guarantor in accordance with Section 10.11
hereof; the Collateral owned by such Guarantor shall be released;
(iv) upon the written consent of the holders not less than two-thirds
of the aggregate principal amount of the then outstanding Notes (including
consents obtained in connection with a tender offer or exchange offer for
Notes),
(v) as required pursuant to the terms of the Intercreditor Agreement,
or
(vi) upon a Legal Defeasance;
provided, that the Trustee shall not release any Lien on any Collateral unless
--------
and until it shall have received an Officers' Certificate certifying that all
conditions precedent hereunder have
84
been met and such other documents required by Section 8.4 hereof. Upon
compliance with the above provisions, the Trustee shall execute, deliver or
acknowledge any necessary or proper instruments of termination, satisfaction or
release to evidence the release of any Collateral permitted to be released
pursuant to this Indenture or the Collateral Agreements.
(b) The release of any Collateral from the terms of the Collateral
Agreements shall not be deemed to impair the security under this Indenture and
of the Liens in favor of the Collateral Agent on the remaining collateral in
contravention of the provisions hereof and of the Collateral Agreements if and
to the extent such Collateral is released pursuant to the terms of this
Indenture and the Collateral Agreements.
SECTION 10.5 CERTIFICATES OF THE COMPANY.
The Company shall furnish to the Trustee, prior to each proposed release of
Collateral, all documents required by TIA (S) 314(d). The Trustee may, to the
extent permitted by Sections 7.1 and 7.2 hereof, accept as conclusive evidence
of compliance with the foregoing provisions the appropriate statements contained
in such instruments. Any certificate or opinion required by XXX (S) 314(d) may
be made by an Officer of the Company, except in cases where XXX (S) 314(d)
requires that such certificate or opinion be made by an independent engineer,
appraiser or other expert within the meaning of TIA (S) 314(d).
SECTION 10.6 AUTHORIZATION OF ACTIONS TO BE TAKEN BY THE TRUSTEE UNDER THE
COLLATERAL AGREEMENTS.
Subject to the terms of the Intercreditor Agreement, the Trustee may, in
its sole discretion and without the consent of the Holders, on behalf of the
Holders, take all actions it deems necessary or appropriate in order to (a)
enforce any of the terms of the Collateral Agreements and (b) collect and
receive any and all amounts payable in respect of the Obligations of the Company
and the Guarantors hereunder and under the Notes, the Collateral Agreements and
the Note Registration Rights Agreement. Subject to the terms of the
Intercreditor Agreement, the Trustee shall have the power to institute and to
maintain such suits and proceedings as it may deem expedient to prevent any
impairment of the Collateral by any acts that may be unlawful or in violation of
the Collateral Agreements or this Indenture, and such suits and proceedings as
the Trustee may deem expedient to preserve or protect its interest and the
interests of the Holders in the Collateral (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 hereunder or be
prejudicial to the interests of the Holders or the Trustee).
SECTION 10.7 AUTHORIZATION OF RECEIPT OF FUNDS BY THE TRUSTEE UNDER THE
COLLATERAL AGREEMENTS.
The Trustee is authorized to receive any funds for the benefit of the
Holders distributed under the Collateral Agreements, and to make further
distributions of such funds to the Holders according to the provisions of this
Indenture and the Collateral Agreements.
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SECTION 10.8 GUARANTEES
By its execution hereof, each of the Guarantors acknowledges and agrees
that it receives substantial benefits from the Company and that such party is
providing its Guarantee for good and valuable consideration, including, without
limitation, such substantial benefits and services. Accordingly, subject to the
provisions of this Article X, each Guarantor, jointly and severally, hereby
unconditionally guarantees on a senior secured basis to each Holder of a Note
authenticated and delivered by the Trustee and its successors and assigns that:
(i) the principal of, premium, if any, and interest and Liquidated Damages, if
any, on the Notes shall be duly and punctually paid in full when due, whether at
maturity, by acceleration, call for redemption, upon a Change of Control Offer,
an Asset Sale Offer, an Excess Cash Flow Offer, or otherwise, and interest on
overdue principal, premium, if any, Liquidated Damages, if any, and (to the
extent permitted by law) interest on any interest, if any, on the Notes and all
other obligations of the Company to the Holders or the Trustee under the Notes,
this Indenture, the Collateral Agreements and the Note Registration Rights
Agreement (including fees, expenses or other) shall be promptly paid in full or
performed, all in accordance with the terms hereof; and (ii) in case of any
extension of time of payment or renewal of any Notes or any of such other
obligations or under the Notes, the Collateral Agreements or the Note
Registration Rights Agreement, the same shall 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, call for redemption, upon a Change of
Control, an Asset Sale Offer, an Excess Cash Flow Offer, or otherwise, subject,
however, in the case of clauses (i) and (ii) above, to the limitations set forth
in Section 10.12 hereof (collectively, the "Guarantee Obligations").
Subject to the provisions of this Article X, each Guarantor hereby agrees
that its Guarantee hereunder shall be unconditional, irrespective of the
validity, regularity or enforceability of the Notes, this Indenture, the
Collateral Agreements, the Note Registration Rights Agreement or the absence of
any action to enforce the same, any waiver or consent by any Holder of the Notes
with respect to any thereof, any releases of the Collateral, the entry of any
judgment against the Company, any action to enforce the same or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of a Guarantor. Each Guarantor hereby waives and relinquishes: (a) any
right to require the Trustee, the Holders or the Company (each, a "Benefitted
Party") to proceed against the Company, the Subsidiaries or any other Person or
to proceed against or exhaust any security held by a Benefitted Party at any
time or to pursue any other remedy in any secured party's power before
proceeding against the Guarantors; (b) any defense that may arise by reason of
the incapacity, lack of authority, death or disability of any other Person or
Persons or the failure of a Benefitted Party to file or enforce a claim against
the estate (in administration, bankruptcy or any other proceeding) of any other
Person or Persons; (c) demand, protest and notice of any kind (except as
expressly required by this Indenture), including but not limited to notice of
the existence, creation or incurring of any new or additional Indebtedness or
obligation or of any action or non-action on the part of the Guarantors, the
Company, the Subsidiaries, any Benefitted Party, any creditor of the Guarantors,
the Company or the Subsidiaries or on the part of any other Person whomsoever in
connection with any obligations the performance of which are hereby guaranteed;
(d) any defense based upon an election of remedies by a Benefitted Party,
including but not limited to an election to proceed against the Guarantors for
reimbursement; (e) any defense based upon any statute or rule of law which
provides that the obligation of a surety must be neither larger in amount nor in
86
other respects more burdensome than that of the principal; (f) any defense
arising because of a Benefitted Party's election, in any proceeding instituted
under the Bankruptcy Law, of the application of Section 1111(b)(2) of the
Bankruptcy Code; and (g) any defense based on any borrowing or grant of a
security interest under Section 364 of the Bankruptcy Code. The Guarantors
hereby covenant that, except as otherwise provided therein, the Guarantees shall
not be discharged except by payment in full of all Guarantee Obligations,
including the principal, premium, if any, and interest on the Notes and all
other costs provided for under this Indenture or as provided in Article VIII.
If any Holder or the Trustee is required by any court or otherwise to
return to either the Company or the Guarantors, or any trustee or similar
official acting in relation to either the Company or the Guarantors, any amount
paid by the Company or the Guarantors to the Trustee or such Holder, the
Guarantees, to the extent theretofore discharged, shall be reinstated in full
force and effect. Each of the Guarantors agrees that it shall not be entitled to
any right of subrogation in relation to the Holders in respect of any Guarantee
Obligations hereby until payment in full of all such obligations guaranteed
hereby. Each Guarantor agrees that, as between it, on the one hand, and the
Holders of Notes and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article VI
hereof for the purposes hereof, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the Guarantee
Obligations, and (y) in the event of any acceleration of such obligations as
provided in Article VI hereof, such Guarantee Obligations (whether or not due
and payable) shall forthwith become due and payable by such Guarantor for the
purpose of the Guarantee.
SECTION 10.9 EXECUTION AND DELIVERY OF GUARANTEES
To evidence the Guarantees set forth in Section 10.8 hereof, each of the
Guarantors agrees that a notation of the Guarantees substantially in the form
included in Exhibit A hereto shall be endorsed on each Note authenticated and
delivered by the Trustee and that this Indenture shall be executed on behalf of
each of the Guarantors by an Officer of each of the Guarantors.
Each of the Guarantors agree that the Guarantees set forth in this Article
X shall remain in full force and effect and apply to all the Notes
notwithstanding any failure to endorse on each Note a notation of the
Guarantees.
If an Officer whose facsimile signature is on a Note or a notation of
Guarantee no longer holds that office at the time the Trustee authenticates the
Note on which the Guarantees are endorsed, the Guarantees shall be valid
nevertheless.
The delivery of any Note by the Trustee, after the authentication thereof
hereunder, shall constitute due delivery of the Guarantees set forth in this
Indenture on behalf of the Guarantors.
SECTION 10.10 GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS
(a) Nothing contained in this Indenture or in the Notes shall prevent any
consolidation or merger of any Guarantor with or into each other or with or into
the Company. Upon any such consolidation or merger, the Guarantee of the
Guarantor that does not survive the consolidation or merger shall no longer be
of any force or effect.
87
(b) Except for a merger or consolidation in which a Guarantor is sold and
its Guarantee is released in compliance with the provisions of Section 10.11
hereof, no Guarantor shall consolidate or merge with or into (whether or not
such Guarantor is the surviving Person) another Person unless, subject to the
provisions of the following paragraph and the other provisions of this
Indenture, (i) the Person formed by or surviving any such consolidation or
merger (if other than such Guarantor) assumes all the obligations of such
Guarantor pursuant to a supplemental indenture in form reasonably satisfactory
to the Trustee, pursuant to which such Person shall guarantee, on a senior
secured basis, all of such Guarantor's obligations under such Guarantor's
Guarantee on the terms set forth in this Indenture, grant a security interest in
and/or pledge the collateral owned by such Subsidiary to secure such Obligations
on the terms set forth in the Collateral Agreements, and deliver to the Trustee
an opinion of counsel that such guaranty and Collateral Agreements have been
duly authorized, executed and delivered; and (ii) immediately before and
immediately after giving effect to such transaction on a pro forma basis, no
Default or Event of Default shall have occurred or be continuing. The provisions
of the covenant shall not apply to the merger of any Guarantors with and into
each other or with or into the Company. In case of any such consolidation or
merger and upon the assumption by the successor corporation, by supplemental
indenture, executed and delivered to the Trustee and reasonably satisfactory in
form to the Trustee, of the Guarantees endorsed upon the Notes and the due and
punctual performance of all of the covenants and conditions of this Indenture to
be performed by such Guarantor, such successor corporation shall succeed to and
be substituted for such Guarantor with the same effect as if it had been named
herein as a Guarantor. Such successor corporation thereupon may cause to be
signed any or all of the Guarantees to be endorsed upon all of the Notes
issuable hereunder which theretofore shall not have been signed by the Company
and delivered to the Trustee. All the Guarantees so issued shall in all respects
have the same legal rank and benefit under this Indenture as the Guarantees
theretofore and thereafter issued in accordance with the terms of this Indenture
as though all of such Guarantees had been issued at the date of the execution
hereof.
(c) The Trustee, subject to the provisions of Section 11.4 hereof, shall be
entitled to receive an Officers' Certificate as conclusive evidence that any
such consolidation or merger, and any such assumption of Guarantee Obligations,
comply with the provisions of this Section 10.10. Such Officers' Certificate
shall comply with the provisions of Section 11.5 hereof.
SECTION 10.11 RELEASE OF GUARANTORS
Notwithstanding Section 10.9(b) hereof, upon the sale or disposition
(including by merger or stock purchase) of a Guarantor (as an entirety) to an
entity which is not and is not required to become a Guarantor, or the
designation of a Subsidiary as an Unrestricted Subsidiary, which transaction is
otherwise in compliance with this Indenture (including, without limitation,
Section 4.13), such Guarantor will be deemed released from its Obligations under
its Guarantee of the Notes and the Collateral Agreements; provided, however,
that any such termination shall occur only to the extent that all obligations of
such Guarantor under all of its guarantees of, and under all of its pledges of
assets or other security interests which secure, any of the Company's
Indebtedness or any Indebtedness of any other of its Subsidiaries shall also
terminate upon such release, sale or transfer and none of its Equity Interests
are pledged for the benefit of any holder of any of the Company's Indebtedness
or any Indebtedness of any of its Subsidiaries.
88
Upon delivery by the Company to the Trustee of an Officer's Certificate, to
the effect that such sale or other disposition or that such designation was made
by the Company in accordance with the provisions of this Indenture, the Trustee
shall execute any documents reasonably required in order to evidence the release
of any such Guarantor from its obligations under its Guarantee. Except as
provided in Section 10.9(a) hereof, any Guarantor not released from its
obligations under its Guarantee shall remain liable for the full amount of
principal of and interest on the Notes and for the other obligations of any
Guarantor under this Indenture as provided in this Article X.
Notwithstanding the foregoing provisions of this Article X, (i) any
Guarantor whose Guarantee would otherwise be released pursuant to the provisions
of this Section 10.11 may elect, at its sole discretion, by written notice to
the Trustee, to maintain such Guarantee in effect notwithstanding the event or
events that otherwise would cause the release of such Guarantee (which election
to maintain such Guarantee in effect may be conditional or for a limited period
of time), and (ii) any Subsidiary of the Company which is not a Guarantor may
elect, at its sole discretion, by written notice to the Trustee, to become a
Guarantor (which election may be conditional or for a limited period of time).
SECTION 10.12 LIMITATION OF GUARANTOR'S LIABILITY; CERTAIN BANKRUPTCY EVENTS
(a) Each Guarantor, and by its acceptance hereof each Holder, hereby
confirms that it is the intention of all such parties that the Guarantee
Obligation of such Guarantor pursuant to its Guarantee not constitute a
fraudulent transfer or conveyance for purposes of any Bankruptcy Law, the
Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any
similar federal or state law. To effectuate the foregoing intention, the Holders
and such Guarantor hereby irrevocably agree that the Guarantee Obligations of
such Guarantor under this Article X shall be 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 Guarantee Obligations of such
other Guarantor under this Article X, result in the Guarantee Obligations of
such Guarantor under the Guarantee of such Guarantor not constituting a
fraudulent transfer or conveyance.
(b) Each Guarantor hereby covenants and agrees, to the fullest extent that
it may do so under applicable law, that in the event of the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Company, such
Guarantor shall not file (or join in any filing of), or otherwise seek to
participate in the filing of, any motion or request seeking to stay or to
prohibit (even temporarily) execution on the Guarantee and hereby waives and
agrees not to take the benefit of any such stay of execution, whether under
Section 362 or 105 of the Bankruptcy Law or otherwise.
SECTION 10.13 APPLICATION OF CERTAIN TERMS AND PROVISIONS TO THE GUARANTORS
(a) For purposes of any provision of this Indenture which provides for the
delivery by any Guarantor of an Officers' Certificate and/or an Opinion of
Counsel, the definitions of such
89
terms in Section 1.1 hereof shall apply to such Guarantor as if references
therein to the Company were references to such Guarantor.
(b) Any request, direction, order or demand which by any provision of this
Indenture is to be made by any Guarantor, shall be sufficient if evidenced as
described in Section 11.2 hereof as if references therein to the Company were
references to such Guarantor.
(c) Any notice or demand which by any provision of this Indenture is
required or permitted to be given or served by the Trustee or by the holders of
Notes to or on any Guarantor may be given or served as described in Section 11.2
hereof as if references therein to the Company were references to such
Guarantor.
(d) Upon any demand, request or application by any Guarantor to the Trustee
to take any action under this Indenture, such Guarantor shall furnish to the
Trustee such certificates and opinions as are required in Section 11.4 hereof as
if all references therein to the Company were references to such Guarantor.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 TRUST INDENTURE ACT CONTROLS
If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by the TIA, the imposed duties shall control.
SECTION 11.2 NOTICES
Any notice or communication by the Company or the Trustee to the other is
duly given if in writing and delivered in Person or mailed by first class mail
(registered or certified, return receipt requested), telecopier or overnight air
courier guaranteeing next day delivery, to the others' address:
If to the Company
or the Guarantors: Mikohn Gaming Corporation
000 Xxxxx Xxxx
Xxx Xxxxx, XX 00000
Attention: Xxxxxxx X. XxXxxx
with copies (which
shall not constitute
notice) to: Xxxxxxxxx Xxxxxxx, LLP
0000 Xxxxxxxx Xxx., #000X
Xxxxx Xxxxxx, XX 00000
Attention: Xxxx Xxxxxxxxx, Esq.
Telecopier No.: (000) 000-0000
90
If to the Trustee: Firstar Bank, N.A.
000 Xxxx 0xx Xxxxxx
Xx. Xxxx, XX 00000
Attention: Corporate Trust Department
Telecopier No.: (000) 000-0000
The Company or the Trustee, by notice to the others may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders) shall be
deemed to have been duly given: (i) at the time delivered by hand, if personally
delivered; (ii) when answered back, if telexed; (iii) when receipt acknowledged,
if telecopied; and (iv) the next Business Day after timely delivery to the
courier, if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the Registrar. Any notice or communication shall also be so mailed to any
Person described in TIA (S) 313(c), to the extent required by the TIA. Failure
to mail a notice or communication to a Holder or any defect in it shall not
affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives it.
If the Company mails a notice or communication to Holders, it shall mail a
copy to the Trustee and each Agent at the same time.
SECTION 11.3 COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES
Holders may communicate pursuant to TIA (S) 312(b) with other Holders with
respect to their rights under this Indenture or the Notes. The Company, the
Trustee, the Registrar and anyone else shall have the protection of TIA (S)
312(c).
SECTION 11.4 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT
Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably satisfactory
to the Trustee (which shall include the statements set forth in Section 11.5
hereof) stating that, in the opinion of the signers, all conditions precedent
and covenants, if any, provided for in this Indenture relating to the proposed
action have been satisfied; and
91
(b) an Opinion of Counsel in form and substance reasonably satisfactory to
the Trustee (which shall include the statements set forth in Section 11.5
hereof) stating that, in the opinion of such counsel, all such conditions
precedent and covenants have been satisfied.
SECTION 11.5 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA (S) 314(a)(4)) shall comply with the provisions of TIA (S)
314(e) and shall include:
(a) a statement that the Person making such certificate or opinion has read
such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she 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
satisfied; and
(d) a statement as to whether or not, in the opinion of such Person, such
condition or covenant has been satisfied; provided, however, that with respect
to matters of fact, an Opinion of Counsel may rely on an Officers' Certificate
or certificate of public officials.
SECTION 11.6 RULES BY TRUSTEE AND AGENTS
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
SECTION 11.7 NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
STOCKHOLDERS
No past, present or future director, officer, employee, incorporator or
stockholder (direct or indirect) of the Company or the Guarantors (or any such
successor entity), as such, shall have any liability for any Obligations of the
Company or the Guarantors under the Notes, the Guarantees or this Indenture or
for any claim based on, in respect of, or by reason of, such Obligations or
their creation, except in their capacity as an obligor or Guarantor of the Notes
in accordance with this Indenture. Each Holder by accepting a Note waives and
releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes.
SECTION 11.8 GOVERNING LAW
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE NOTES AND THE GUARANTEES, INCLUDING, WITHOUT
LIMITATION, SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW
AND NEW YORK CIVIL PRACTICE LAWS AND RULES 327(b).
92
SECTION 11.9 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS
This Indenture may not be used to interpret any other indenture, loan or
debt agreement of the Company or its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
SECTION 11.10 SUCCESSORS
All agreements of the Company and the Guarantors in this Indenture and the
Notes shall bind their successors. All agreements of the Trustee in this
Indenture shall bind its successors.
SECTION 11.11 SEVERABILITY
In case any one or more of the provisions of this Indenture or in the Notes
or in the Guarantees shall be held invalid, illegal or unenforceable, in any
respect for any reason, the validity, legality and enforceability of any such
provision in every other respect and of the remaining provisions shall not in
any way be affected or impaired thereby, it being intended that all of the
provisions hereof shall be enforceable to the full extent permitted by law.
SECTION 11.12 COUNTERPART ORIGINALS
The parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together represent the same
agreement.
SECTION 11.13 TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not to be
considered a part of this Indenture and shall in no way modify or restrict any
of the terms or provisions hereof.
[Signatures on following page]
93
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have executed this Indenture as of
the date first written above.
THE COMPANY:
MIKOHN GAMING CORPORATION
By: ________________________________
Name:
Title:
THE GUARANTORS:
CASINO EXCITEMENT, INC.
By: ________________________________
Name:
Title:
GAMES OF NEVADA, INC.
By: ________________________________
Name:
Title:
MGC, INC.
By: ________________________________
Name:
Title:
MIKOHN INTERNATIONAL, INC.
By: ________________________________
Name:
Title:
MIKOHN NEVADA
By: ________________________________
Name:
Title:
94
PROGRESSIVE GAMES, INC.
By: ________________________________
Name:
Title:
THE TRUSTEE:
FIRSTAR BANK, N.A.
By: ________________________________
Name:
Title:
95
EXHIBIT A
[FORM OF NOTE]
MIKOHN GAMING CORPORATION
11.875% [SERIES A] [SERIES B]/1/ SENIOR SECURED NOTE
DUE 2008
CUSIP: ________
No. $_________________
Mikohn Gaming Corporation, a Nevada corporation (hereinafter called the
"Company" which term includes any successors under the Indenture hereinafter
referred to), for value received, hereby promises to pay to __________, or
registered assigns, the principal sum of __________ Dollars, on August 22, 2008.
Interest Payment Dates: May 1 and November 1, commencing November 1, 2001.
Record Dates: April 15 and October 15
Reference is made to the further provisions of this Note on the reverse
side, which will, for all purposes, have the same effect as if set forth at this
place.
This Note has been issued with original issue discount for Federal income
tax purposes. Upon request, the Company will promptly make available to a
holder of this Note information regarding the issue price, the amount of
original issue discount, the issue date, and the yield to maturity of this Note.
Holders should contact Mikohn Gaming Corporation, 000 Xxxxx Xxxx, Xxx Xxxxx, XX
00000, Attention: Xxx Xxxxxxx, Chief Financial Officer.
___________________
/1/ Series A should be replaced with Series B in the Exchange Notes.
A-1
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
MIKOHN GAMING CORPORATION,
a Nevada corporation
By: ______________________________
Name:
Title:
By: ______________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes described in the within-mentioned Indenture.
FIRSTAR BANK, N.A.
By: ______________________________
Authorized Signatory
Dated: _____________
A-2
(Reverse of Note)
11.875% [Series A] [Series B]/2/ Senior Secured Note due 2008
[THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.6 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED
IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.6(a) OF THE INDENTURE, (III) THIS
GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION
2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A
SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.]/3/
[UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY, OR BY A NOMINEE OF THE DEPOSITARY, TO THE DEPOSITARY
OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO
A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (00 XXXXX XXXXXX, XXX XXXX, XXX XXXX) ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]/4/
[THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR DEFINITIVE NOTES, ARE AS
SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE
BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED
TO RECEIVE CASH PAYMENTS OF INTEREST DURING THE PERIOD WHICH SUCH HOLDER HOLDS
THIS NOTE. NOTHING IN THIS LEGEND SHALL BE DEEMED TO PREVENT INTEREST FROM
ACCRUING ON THIS NOTE.]/5/
_________________________
/2/ Series A should be replaced with Series B in the Exchange Notes.
/3/ To be included only on Global Notes deposited with DTC as Depositary.
/4/ To be included only on Global Notes deposited with DTC as Depositary.
/5/ To be included only on Reg S Temporary Global Notes.
A-3
[THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS NOTE NOR ANY
INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION
OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION. THE
HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF AGREES NOT TO OFFER, SELL OR
OTHERWISE TRANSFER SUCH NOTE PRIOR TO THE DATE THAT IS TWO YEARS (OR SUCH
SHORTER PERIOD THAT MAY HEREAFTER BE PROVIDED UNDER RULE 144(k) AS PERMITTING
RESALES BY NON-AFFILIATES OF RESTRICTED SECURITIES WITHOUT RESTRICTION) AFTER
THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE
COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS NOTE (OR ANY
PREDECESSOR OF SUCH NOTE) (THE "RESALE RESTRICTION TERMINATION DATE") EXCEPT (A)
TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON
IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE
144A) THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO FOREIGN PERSONS THAT
OCCUR IN OFFSHORE TRANSACTIONS AND WITHOUT DIRECTED SELLING EFFORTS WITHIN THE
MEANINGS OF SUCH TERMS AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT, (E)
TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(a)(1),
(2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS PURCHASING THE NOTE FOR ITS OWN
ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR," FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OF SALE IN CONNECTION
WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER,
SALE OR TRANSFER TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN
EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON
THIS NOTE IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE AND IN
EACH CASE IN ACCORDANCE WITH APPLICABLE SECURITIES LAWS OF ANY U.S. STATE OR ANY
OTHER APPLICABLE JURISDICTION. THE HOLDER OF THIS NOTE AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY
TO THE EFFECT OF THIS LEGEND. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF
THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.]/6/
__________________
/6/ To be included only on Transfer Restricted Notes.
A-4
Capitalized terms used herein shall have the meanings assigned to them in
the Indenture referred to below unless otherwise indicated.
1. Interest. Mikohn Gaming Corporation, a Nevada corporation (the
"Company"), promises to pay interest on the principal amount of this Note at
11.875% per annum from the Issue Date until maturity and shall pay the
Liquidated Damages, if any, payable pursuant to Section 4 of the Note
Registration Rights Agreement referred to below. The Company will pay interest
and Liquidated Damages, if any, semi-annually on May 1 and November 1 of each
year, or if any such day is not a Business Day, on the next succeeding Business
Day (each an "Interest Payment Date"). The first Interest Payment Date shall be
November 1, 2001. Interest on the Notes will accrue from the most recent date
to which interest has been paid or, if no interest has been paid, from the Issue
Date; provided that if there is no existing Default in the payment of interest,
and if this Note is authenticated between a Record Date (defined below) referred
to on the face hereof and the next succeeding Interest Payment Date, interest
shall accrue from such next succeeding Interest Payment Date. The Company shall
pay interest (including Accrued Bankruptcy Interest in any proceeding under any
Bankruptcy Law) on overdue principal and premium, if any, from time to time on
demand at the rate then in effect; it shall pay interest (including Accrued
Bankruptcy Interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest and Liquidated Damages, if any, (without regard to any
applicable grace periods) from time to time on demand at the same rate to the
extent lawful. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
2. Method of Payment. The Company will pay interest on the Notes and
Liquidated Damages, if any, to the Persons who are registered Holders of Notes
at the close of business on the April 15 or October 15 next preceding the
Interest Payment Date (each a "Record Date"), even if such Notes are cancelled
after such Record Date and on or before such Interest Payment Date, except as
provided in Section 2.12 of the Indenture (as defined below) with respect to
defaulted interest. The Notes will be payable as to principal, interest,
premium, if any, and Liquidated Damages, if any, at the office or agency of the
Company maintained within the City and State of New York for such purpose, or,
at the option of the Company, payment of interest and Liquidated Damages, if
any, may be made by check mailed to the Holders at their addresses set forth in
the register of Holders, and provided that payment by wire transfer of
immediately available funds to an account within the United States will be
required with respect to principal of and interest, premium, if any, and
Liquidated Damages, if any, on all Global Notes. Such payment shall be in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts.
3. Paying Agent and Registrar. Initially, Firstar Bank, N.A., the
Trustee under the Indenture, will act as Paying Agent and Registrar. The
Company may change any Paying Agent or Registrar without notice to any Holder.
The Company or any of its Subsidiaries may act in any such capacity.
4. Indenture. The Company issued the Notes under an Indenture, dated as
of the Issue Date ("Indenture"), by and among the Company, the Guarantors party
thereto and the Trustee. The terms of the Notes include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended (15 U.S. Code (S)(S) 77aaa-
A-5
77bbbb). The Notes are subject to all such terms, and Holders are referred to
the Indenture and such Act for a statement of such terms.
The Obligations under the Indenture, the Intercreditor Agreement, the Notes
and the Guarantees thereof are secured by the Collateral described in the
Collateral Agreements, subject to the provisions of such agreements. Holders
are referred to the Collateral Agreements for a statement of such terms.
5. Optional Redemption.
(a) Except as set forth in clause (b) of this Section, the Company
shall not have the option to redeem the Notes pursuant to this Section 5 prior
to August 15, 2005. The Notes will be redeemable for cash at the option of the
Company, in whole or in part, at any time on or after August 15, 2005, upon not
less than 30 days nor more than 60 days prior notice mailed by first class mail
to each Holder at its last registered address, at the following redemption
prices (expressed as percentages of the principal amount) if redeemed during the
12-month period commencing August 15 of the years indicated below, in each case
(subject to the right of Holders of record on a Record Date to receive the
corresponding interest due (and the corresponding Liquidated Damages, if any) on
the corresponding Interest Payment Date that is on or prior to such redemption
date) together with accrued and unpaid interest and Liquidated Damages, if any,
thereon to the redemption date:
Year Percentage
---- ----------
2005........................................... 105.938%
2006........................................... 102.969%
2007 and thereafter............................ 100.000%
(b) Notwithstanding the provisions of clause (a) of this Section, at
any time on or prior to August 15, 2004, upon a Public Equity Offering of the
Company's common stock for cash, up to 35% of the aggregate principal amount of
the Notes issued pursuant to the Indenture may be redeemed at the Company's
option within 90 days of such Public Equity Offering, on not less than 30 days,
but not more than 60 days, notice to each Holder of the Notes to be redeemed,
with cash received by the Company from the Net Cash Proceeds of such Public
Equity Offering, at a redemption price equal to 111.875% of the principal amount
thereof (subject to the right of Holders of record on a Record Date to receive
the corresponding interest due (and the corresponding Liquidated Damages, if
any) on the corresponding Interest Payment Date that is on or prior to such
redemption date), together with accrued and unpaid interest and Liquidated
Damages, if any, thereon to the redemption date; provided, however, that
immediately following such redemption not less than 65% of the aggregate
principal amount of the Notes originally issued pursuant to the Indenture on the
Issue Date remain outstanding.
(c) Notice of redemption will be mailed by first class mail at least
30 days but not more than 60 days before the redemption date to each Holder
whose Notes are to be redeemed at its registered address. Notes in
denominations larger than $1,000 may be redeemed in part but only in integral
multiples of $1,000, unless all of the Notes held by a Holder are to be
redeemed. On and after the redemption date, interest ceases to accrue on Notes
or portions
A-6
thereof called for redemption unless the Company defaults in such payments due
on the redemption date.
6. Regulatory Redemption. If any Gaming Authority requires that a Holder
or beneficial owner of Notes must be licensed, qualified or found suitable under
any applicable gaming law and such Holder or beneficial owner fails to apply for
a license, qualification or a finding of suitability within 30 days after being
requested to do so by the Gaming Authority (or such lesser period that may be
required by such Gaming Authority), or if such Holder or such beneficial owner
is not so licensed, qualified or found suitable, the Company shall have the
right, at its option, (a) to require such Holder or beneficial owner to dispose
of such Holder's or beneficial owner's Notes within 30 days of receipt of notice
of such finding by the applicable Gaming Authority or such earlier date as may
be ordered by such Gaming Authority or (b) to call for the redemption (a
"Regulatory Redemption") of the Notes of such Holder or beneficial owner at the
principal amount thereof or, if required by such Gaming Authority, the lesser of
(i) the price at which such Holder or beneficial owner acquired the Notes and
(ii) the fair market value of such Notes on the date of redemption, together
with, in either case, accrued and unpaid interest and, if permitted by such
Gaming Authority, Liquidated Damages, if any, to the earliest of the date of
redemption, (y) such earlier date as may be required by such Gaming Authority
and (z) the date of the finding of unsuitability by such Gaming Authority, any
of which dates may be less than 30 days following the notice of redemption, if
so ordered by such Gaming Authority. The Company shall notify the Trustee in
writing of any such redemption as soon as practicable and of the redemption
price of each Note to be redeemed. The Holder or beneficial owner applying for a
license, qualification or a finding of suitability must pay all costs of the
licensure and investigation for such qualification or finding of suitability.
7. Mandatory Redemption. The Company shall not be required to make
mandatory redemption payments with respect to the Notes. The Notes shall not
have the benefit of any sinking fund.
8. Offers to Purchase.
(a) Excess Cash Flow. Not later than 120 days following the end of each
fiscal year, the Company will make an offer to all Holders (the "Excess Cash
Flow Offer") to purchase the maximum principal amount of Notes that is an
integral multiple of $1,000 with 50% of the Excess Cash Flow of the Company from
such fiscal year (the "Excess Cash Flow Offer Amount"), at a purchase price in
cash equal to 100% of the principal amount of the Notes to be purchased (the
"Excess Cash Flow Purchase Price"), together with accrued and unpaid interest
and Liquidated Damages, if any, thereon to the date fixed for the purchase of
the Notes pursuant to such Excess Cash Flow Offer, in accordance with the
Indenture. The Excess Cash Flow Offer will be required to remain open for 20
Business Days following its commencement. Upon the expiration of that period,
the Company promptly (and in any case, within 3 Business Days following such
expiration) will apply the Excess Cash Flow Offer Amount plus accrued and unpaid
interest and Liquidated Damages, if any, thereon to the purchase for the Excess
Cash Purchase Price of all Notes validly tendered pursuant to the Excess Cash
Flow Offer, plus accrued interest and Liquidated Damages, if any. If the
aggregate principal amount of Notes tendered pursuant to an Excess Cash Flow
Offer exceeds the Excess Cash Flow Offer Amount with respect thereto, the
Company will purchase Notes or portions thereof tendered, pro rata or
A-7
by such other method as may be required by law. If the aggregate amount of Notes
tendered pursuant to any Excess Cash Flow Offer is less than the Excess Cash
Flow Offer Amount, the Company may use any remaining Excess Cash Flow Amount for
any purposes not prohibited by the Indenture. The Company will not be required
to make an Excess Cash Flow Offer to purchase Notes pursuant to this Section if
the available cumulative Excess Cash Flow is less than $10,000,000; provided,
that any such lesser amount of Excess Cash Flow (if positive) will be added to
the Excess Cash Flow for each subsequent fiscal year until an Excess Cash Flow
Offer is made. Any Excess Cash Flow 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 Section, the Company's
compliance with such laws and regulations shall not in and of itself cause a
breach of the Company's obligations under such Section.
(b) Change of Control. In the event that a Change of Control has
occurred, each Holder of Notes will have the right, at such Holder's option,
pursuant to an offer (subject only to conditions required by applicable law, if
any) by the Company (the "Change of Control Offer"), to require the Company to
repurchase all or any part of such Holder's Notes (provided, that the principal
amount of such Notes must be $1,000 or an integral multiple thereof) on a date
(the "Change of Control Purchase Date") that is no later than 30 Business Days
after the occurrence of such Change of Control, at a cash price equal to 101% of
the principal amount thereof (the "Change of Control Purchase Price"), together
with accrued and unpaid interest and Liquidated Damages, if any, to the Change
of Control Purchase Date. The Change of Control Offer shall be made within 10
Business Days following a Change of Control and shall remain open for 20
Business Days following its commencement (the "Change of Control Offer Period").
Upon expiration of the Change of Control Offer Period, the Company shall
promptly purchase all Notes properly tendered pursuant to the Change of Control
Offer.
On or before the Change of Control Purchase Date, the Company shall: (i)
accept for payment Notes or portions thereof properly tendered pursuant to the
Change of Control Offer, (ii) deposit with the Paying Agent an amount in cash
sufficient to pay the Change of Control Purchase Price (together with accrued
and unpaid interest and Liquidated Damages, if any) of all Notes so tendered,
and (iii) deliver to the Trustee the Notes so accepted together with an
Officers' Certificate listing the Notes or portions thereof being purchased by
the Company. The Paying Agent promptly will pay the Holders of Notes so
accepted an amount equal to the Change of Control Purchase Price (together with
accrued and unpaid interest and Liquidated Damages, if any), and the Trustee
promptly will authenticate and deliver to such Holders a new Note equal in
principal amount to any unpurchased portion of the Note surrendered. Any Notes
not so accepted will be delivered promptly by the Company to the Holder thereof.
The Company publicly will announce the results of the Change of Control Offer on
or as soon as practicable after the Change of Control Purchase Date.
(c) Asset Sale. Subject to certain exceptions set forth in the
Indenture, the Company and the Guarantors shall not, and shall not permit any of
their 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 Guarantor or a one or more Subsidiaries or Unrestricted Subsidiaries of the
Company),
A-8
and including any sale or other transfer or issuance of any Equity Interests of
any Subsidiary or Unrestricted Subsidiary of the Company, whether by the Company
or a Subsidiary or Unrestricted Subsidiary of the Company or through the
issuance, sale or transfer of Equity Interests by a Subsidiary or Unrestricted
Subsidiary of the Company, and including any sale and leaseback transaction (any
of the foregoing, an "Asset Sale"), unless, with respect to any Asset Sale or
related series of Asset Sales involving securities, property or assets with an
aggregate fair market value in excess of $5,000,000, (i) at least 75% of the
total consideration received by the Company or the applicable Subsidiary or
Unrestricted Subsidiary for such Asset Sale or related series of Asset Sales is
in the form of cash or Cash Equivalents, (ii) 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 (iii) the Board of
Directors of the Company determines in good faith that the Company or such
applicable Subsidiary or Unrestricted Subsidiary will be receiving fair market
value for such Asset Sale. For purposes of the preceding sentence, total
consideration received means the total consideration received for such Asset
Sale or related series of Asset Sales minus the amount of (a) Purchase Money
Indebtedness secured solely by the assets sold and assumed by a transferee;
provided, that the Company and its Subsidiaries are fully released from
obligations in connection therewith, and (b) property that within 30-days of
such Asset Sale is converted into cash or Cash Equivalents; provided, that such
cash and Cash Equivalents shall be treated as Net Cash Proceeds attributable to
the original Asset Sale for which such property was received).
Within 360 days following such Asset Sale, Net Cash Proceeds therefrom (the
"Asset Sale Amount") shall be: (i)(x) used to retire Purchase Money Indebtedness
secured by the asset which was the subject of the Asset Sale, or (y) used to
retire and permanently reduce Indebtedness incurred under the Credit Facility;
provided, that in the case of a revolver or similar arrangement that makes
credit available, such commitment is permanently reduced by such amount, or (ii)
invested in assets and property (except in connection with the acquisition of a
Subsidiary which is a Guarantor in a Related Business, other than notes, bonds,
obligations and securities) which in the good faith reasonable judgment of the
Board of Directors of the Company 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.
The accumulated Net Cash Proceeds from Asset Sales and from any Event of
Loss not applied as set forth in the preceding paragraph shall constitute
"Excess Proceeds." Pending the final application of any Net Cash Proceeds, the
Company may temporarily reduce revolving credit borrowings or otherwise invest
or use for general corporate purposes (other than Restricted Payments that are
not solely Restricted Investments) the Net Cash Proceeds in any manner that is
not prohibited by the Indenture. When the Excess Proceeds equal or exceed
$10,000,000, the Company shall offer to repurchase the Notes, together with any
other Indebtedness ranking on a parity with the Notes and with similar
provisions requiring the Company to make an offer to purchase such Indebtedness
with the proceeds from such Asset Sale pursuant to a cash offer (subject only to
conditions required by applicable law, if any), pro rata in proportion to the
respective principal amounts of such Indebtedness (or accreted values in the
case of Indebtedness issued with an original issue discount) and the Notes (the
"Asset Sale Offer") at a purchase price of 100% of the principal amount (or
accreted value in the case of Indebtedness issued with an original issue
discount) (the "Asset Sale Offer Price") together with accrued and unpaid
interest and Liquidated Damages, if any, to the date of payment. The Asset Sale
Offer shall remain open
A-10
for 20 Business Days following its commencement (the "Asset Sale Offer Period").
Upon expiration of the Asset Sale Offer Period, the Company shall apply an
amount equal to the Excess Proceeds (the "Asset Sale Offer Amount") plus an
amount equal to accrued and unpaid interest and Liquidated Damages, if any, to
the purchase of all Indebtedness properly tendered in accordance with the
provisions hereof (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 Liquidated Damages, if any). To the
extent that the aggregate amount of Notes and such other pari passu Indebtedness
tendered pursuant to an Asset Sale Offer is less than the Asset Sale Offer
Amount, the Company may use any remaining Net Cash Proceeds as otherwise
permitted by the Indenture, and following the consummation of each Asset Sale
Offer the Excess Proceeds amount shall be reset to zero.
9. Denominations, Transfer, Exchange. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000.
The transfer of Notes may be registered and Notes may be exchanged as provided
in the Indenture. The Registrar and the Trustee may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents, and
the Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, it need not
exchange or register the transfer of any Notes for a period of 15 days before a
selection of Notes to be redeemed or during the period between a Record Date and
the corresponding Interest Payment Date.
10. Persons Deemed Owners. The registered Holder of a Note may be treated
as its owner for all purposes.
11. Amendment, Supplement and Waiver. Subject to certain exceptions, the
Indenture, the Notes or the Guarantees may be amended or supplemented with the
consent of the Holders of a majority in principal amount of the then outstanding
Notes, and any existing Default or compliance with any provision of the
Indenture, the Notes or the Guarantees may be waived with the consent of the
Holders of a majority in principal amount of the then outstanding Notes.
Notwithstanding the foregoing, without the consent of the Holders of not less
than two-thirds in aggregate principal amount of the Notes at the time
outstanding, the Company, the Guarantors and the Trustee may not amend or
supplement the Collateral Agreements, or waive or modify the rights of the
Holders thereunder. Without the consent of any Holder of a Note, the Indenture,
the Notes, the Guarantees or the Collateral Agreements may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of certificated Notes, to
provide for the assumption of the Company's obligations to Holders of the Notes
in case of a merger or consolidation, to provide for additional Guarantees as
set forth in the Indenture or for the release or assumption of Guarantees in
compliance with the Indenture, to make any change that would provide any
additional rights or benefits to the Holders of the Notes (including the
addition of any Guarantor) or that does not adversely affect the rights under
the Indenture of any such Holder, to comply with the provisions of the
Depositary, Euroclear or Clearstream or the Trustee with respect to the
provisions of the Indenture or the Notes relating to transfers and exchanges of
Notes or beneficial interests therein, to comply with the requirements of the
SEC in order to effect or maintain the qualification of the Indenture
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under the TIA, or to provide for the issuance of Additional Notes in accordance
with the limitations set forth in the Indenture.
12. Defaults and Remedies. The Indenture provides that each of the
following constitutes an Event of Default: (a) the failure of the Company to pay
any installment of interest (or Liquidated Damages, if any) on the Notes as and
when the same becomes due and payable and the continuance of any such failure
for 30 days; (b) the failure of 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, by acceleration or otherwise, including,
without limitation, payment of the Excess Cash Flow Purchase Price, the Change
of Control Purchase Price or the Asset Sale Offer Price, on Notes validly
tendered and not properly withdrawn pursuant to an Excess Cash Flow Offer, a
Change of Control Offer or an Asset Sale Offer, as applicable; (c) the failure
of the Company or the failure by any Subsidiary of the Company to observe or
perform any covenant, condition or agreement contained in the Notes or the
Indenture and, except for the provisions described under Section 4.13, 4.16,
4.17, and Article V of the Indenture, which failure continues for a period of 30
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; (d) a default under the Indebtedness of the
Company or the Indebtedness of any the Company's Subsidiaries with an aggregate
amount outstanding in excess of $5,000,000 (1) caused by a failure to pay
principal of or premium, if any, on such Indebtedness when due (after giving
effect to any waivers, amendments, applicable grace period or any extension of
any maturity date) or (2) as a result of which the maturity of such Indebtedness
has been accelerated prior to its stated maturity; (e) final unsatisfied
judgments not covered by insurance aggregating in excess of $5,000,000, at any
one time rendered against the Company or any of its Subsidiaries and not stayed,
bonded or discharged within 60 days; (f) any Guarantee of a Guarantor ceases to
be in full force and effect or becomes unenforceable or invalid or is declared
null and void (other than in accordance with the terms of the Guarantee and
Indenture) or any Guarantor denies or disaffirms its Obligations under its
Guarantee; (g) any failure to comply with any material agreement or covenant in,
or material provision of, or any breach of a representation under, the
Collateral Agreements; (h) the Collateral Agreements cease to create a valid
Lien on the assets purported to be pledged or secured thereunder; (i) a court
having jurisdiction in the premises enters a decree or order for (1) relief in
respect of the Company or any Significant Subsidiary in an involuntary case
under any applicable Bankruptcy Law now or hereafter in effect, (2) appointment
of a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official of the Company or any Significant Subsidiary or for all or
substantially all of the property and assets of the Company or any Significant
Subsidiary or (3) the winding up or liquidation of the affairs of the Company or
any Significant Subsidiary and, in each case, such decree or order shall remain
unstayed and in effect for a period of 60 consecutive days; or (j) the Company
or any Significant Subsidiary (1) commences a voluntary case under any
applicable Bankruptcy Law now or hereafter in effect, or consents to the entry
of an order for relief in an involuntary case under any such law, (2) consents
to the appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Company or any
Significant Subsidiary or for all or substantially all of the property and
assets of the Company or any Significant Subsidiary or (3) effects any general
assignment for the benefit of creditors.
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If a Default occurs and is continuing, the Trustee must, within 90 days
after the occurrence of such Default, give to the Holders notice of such
Default.
13. Trustee Dealings with Company. The Trustee, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services
for the Company or its Affiliates, and may otherwise deal with the Company or
its Affiliates, as if it were not the Trustee.
14. No Recourse Against Others. No past, present or future director,
officer, employee, incorporator or stockholder (direct or indirect) of the
Company or the Guarantors (or any such successor entity), as such, shall have
any liability for any Obligations of the Company or the Guarantors under the
Notes, the Guarantees or this Indenture or for any claim based on, in respect
of, or by reason of, such Obligations or their creation, except in their
capacity as an obligor or Guarantor of the Notes in accordance with this
Indenture. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for issuance of
the Notes.
15. Authentication. This Note shall not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent.
16. Abbreviations. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
17. Additional Rights of Holders of Transfer Restricted Notes./7/ In
addition to the rights provided to Holders of Notes under the Indenture, Holders
of Transfer Restricted Notes shall have all the rights set forth in the Note
Registration Rights Agreement dated as of the date of the Indenture, by and
among the Company, the Guarantors and the Initial Purchasers (the "Note
Registration Rights Agreement").
18. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon, and any such redemption shall not
be affected by any defect in or omission of such numbers.
19. Notation of Guarantee. As more fully set forth in the Indenture, to
the extent permitted by law, each of the Guarantors from time to time, in
accordance with Article X of the Indenture, unconditionally and jointly and
severally guarantees, to each Holder of a Note authenticated and delivered by
the Trustee and to the Trustee and its successors and assigns, that:
By its execution of its Guarantee, each of the Guarantors acknowledges and
agrees that it receives substantial benefits from the Company and that such
party is providing its Guarantee for
_________________________
/7/ To be included only on Transfer Restricted Notes.
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good and valuable consideration, including, without limitation, such substantial
benefits and services. Accordingly, subject to the provisions of Article X of
the Indenture, each Guarantor, jointly and severally, unconditionally guarantees
on a senior secured basis to each Holder of a Note authenticated and delivered
by the Trustee and its successors and assigns that: (i) the principal of,
interest, premium, if any, and Liquidated Damages, if any, on the Notes shall be
duly and punctually paid in full when due, whether at maturity, by acceleration,
call for redemption, upon an Excess Cash Flow Offer, a Change of Control Offer,
an Asset Sale Offer or otherwise, and interest on overdue principal, premium, if
any, Liquidated Damages, if any, and (to the extent permitted by law) interest
on any interest, if any, on the Notes and all other obligations of the Company
to the Holders or the Trustee under the Indenture or under the Notes (including
fees, expenses or other) shall be promptly paid in full or performed, all in
accordance with the terms of the Indenture; and (ii) in case of any extension of
time of payment or renewal of any Notes or any of such other obligations, the
same shall 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,
call for redemption, upon an Excess Cash Flow Offer, a Change of Control, an
Asset Sale Offer or otherwise, subject, however, in the case of clauses (i) and
(ii) above, to the limitations set forth in Section 10.8 of the Indenture.
When a successor assumes all the obligations of its predecessor under the
Notes and the Indenture, the predecessor may be released from those obligations.
20. Governing Law. THE INDENTURE AND THE NOTES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING,
WITHOUT LIMITATION, SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL
OBLIGATIONS LAW AND NEW YORK CIVIL LAWS AND RULES 327(B).
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture [and/or the Note Registration Rights
Agreement]/8/. Requests may be made to:
MIKOHN GAMING CORPORATION
000 Xxxxx Xxxx
Xxx Xxxxx, XX 00000
Attention: _______________________.
_________________________
/8/ To be included only on Transfer Restricted Notes.
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Assignment Form
To assign this Note, fill in the form below: (I) or (We) assign and transfer
this Note to
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for it.
________________________________________________________________________________
Date: ___________________
Your Signature:_____________________________
(Sign exactly as your name appears on the face of this Note)
Signature Guarantee*
________________________________________________________________________________
*NOTICE: The Signature must be guaranteed by an Institution which is a member of
one of the following recognized signature Guarantee Programs: (i) The Securities
Transfer Agent Medallion Program (STAMP); (ii) The New York Stock Exchange
Medallion Program (MNSP); (iii) The Stock Exchange Medallion Program (SEMP); or
(iv) such other guarantee program acceptable to the Trustee.
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Option of Holder to Elect Purchase
If you want to elect to have this Note purchased by the Company pursuant to
Section 4.13, Section 4.16 or Section 4.17 of the Indenture, check the box
below:
[_] Section 4.13 [_] Section 4.16 [_] Section 4.17
If you want to elect to have only part of the Note purchased by the Company
pursuant to Section 4.13, Section 4.16 or Section 4.17 of the Indenture, state
the amount you elect to have purchased (in denominations of $1,000 only, except
if you have elected to have all of your Notes purchased): $___________
Date: ___________________
Your Signature:_____________________________
(Sign exactly as your name appears on the face of this Note)
Social Security or Tax Identification No.:______________
Signature Guarantee*
________________________________________________________________________________
*NOTICE: The Signature must be guaranteed by an Institution which is a member of
one of the following recognized signature Guarantee Programs: (i) The Securities
Transfer Agent Medallion Program (STAMP); (ii) The New York Stock Exchange
Medallion Program (MNSP); (iii) The Stock Exchange Medallion Program (SEMP); or
(iv) such other guarantee program acceptable to the Trustee.
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SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE/9/
The following exchanges of an interest in this Global Note for an interest
in another Global Notes or for a Definitive Note, or exchanges of an interest in
another Global Note or a Definitive Note for an interest in this Global Note,
have been made:
Principal
Amount of Amount of Amount of Signature of
Decrease in Increase in this Global Note Authorized
Principal Principal Following Such Officer of
Date of Amount of Amount of Decrease Trustee or Note
Exchange this Global Note this Global Note or Increase Custodian
-------- ---------------- ---------------- ----------- ---------
___________________________________
/9/ This should be included only if the Note is issued in global form.
A-16
GUARANTEE
The Guarantors listed below (hereinafter referred to as the "Guarantors,"
which term includes any successors or assigns under the Indenture, dated the
date hereof, among the Guarantors, the Company (defined below) and Firstar Bank,
N.A., as trustee (the "Indenture") and any additional Guarantors), have
irrevocably and unconditionally guaranteed on a senior secured basis the
Guarantee Obligations (as defined in Section 10.8 of the Indenture), which
include (i) the due and punctual payment of the principal of, premium, if any,
and interest and Liquidated Damages, if any, on the 11.875% Senior Secured Notes
due 2008 (the "Notes") of Mikohn Gaming Corporation, a Nevada corporation (the
"Company"), whether at maturity, by acceleration, call for redemption, upon a
Change of Control Offer, an Asset Sale Offer, an Excess Cash Flow Offer, or
otherwise, the due and punctual payment of interest on the overdue principal and
premium, if any, and (to the extent permitted by law) interest on any interest
on the Notes, and the due and punctual performance of all other obligations of
the Company, to the Holders or the Trustee all in accordance with the terms set
forth in Article X of the Indenture, and (ii) in case of any extension of time
of payment or renewal of any Notes or any 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, call
for redemption, upon a Change of Control Offer, an Asset Sale Offer, an Excess
Cash Flow Offer, or otherwise.
The obligations of each Guarantor to the Holders and to the Trustee
pursuant to this Guarantee and the Indenture are expressly set forth in Article
X of the Indenture and reference is hereby made to such Indenture for the
precise terms of this Guarantee.
No past, present or future director, officer, employee, incorporator or
stockholder (direct or indirect) of the Guarantors (or any such successor
entity), as such, shall have any liability for any obligations of the Guarantors
under this Guarantee or the Indenture or for any claim based on, in respect of,
or by reason of, such obligations or their creation, except in their capacity as
an obligor or Guarantor of the Notes in accordance with the Indenture.
This is a continuing Guarantee and shall remain in full force and effect
and shall be binding upon each Guarantor and its successors and assigns until
full and final payment of all of the Company's obligations under the Notes and
Indenture or until released or legally defeased in accordance with the Indenture
and shall inure to the benefit of the successors and assigns of the Trustee and
the Holders, and, in the event of any transfer or assignment of rights by any
Holder or the Trustee, the rights and privileges herein conferred upon that
party shall automatically extend to and be vested in such transferee or
assignee, all subject to the terms and conditions hereof. This is a Guarantee
of payment and performance and not of collectibility.
This Guarantee shall not be valid or obligatory for any purpose until the
certificate of authentication on the Note upon which this Guarantee is noted
shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized officers.
The obligations of each Guarantor under this Guarantee shall be limited to
the extent necessary to insure that it does not constitute a fraudulent
conveyance under applicable law.
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THE TERMS OF ARTICLE X OF THE INDENTURE ARE INCORPORATED HEREIN BY
REFERENCE.
Capitalized terms used herein have the same meanings given in the Indenture
unless otherwise indicated.
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IN WITNESS WHEREOF, each of the Guarantors has caused this instrument to be
duly executed.
Dated: _____________
[NAME OF XXXXXXXXX]
By: ____________________________
Name:
Title:
[NAME OF XXXXXXXXX]
By: ____________________________
Name:
Title:
[NAME OF XXXXXXXXX]
By: ____________________________
Name:
Title:
A-19
EXHIBIT B
FORM OF UNIT CERTIFICATE
NO. CUSIP NO.
MIKOHN GAMING CORPORATION
105,000 UNITS
THIS GLOBAL UNIT IS COMPOSED OF THE ATTACHED GLOBAL SENIOR SECURED NOTE AND
GLOBAL WARRANT CERTIFICATE. THE GLOBAL UNIT, THE GLOBAL SENIOR SECURED NOTE AND
THE GLOBAL WARRANT CERTIFICATE ARE COLLECTIVELY REFERRED TO HEREIN AS THE
"SECURITIES."
THE SECURITIES ARE INITIALLY ISSUED AS PART OF AN ISSUANCE OF 105,000 UNITS
(THE "UNITS"), EACH OF WHICH CONSISTS OF $1,000 PRINCIPAL AMOUNT AT MATURITY OF
THE 11.875% SENIOR SECURED NOTES DUE 2008, SERIES A, OF MIKOHN GAMING
CORPORATION (THE "COMPANY" AND, SUCH NOTES, THE "NOTES") AND ONE WARRANT
(COLLECTIVELY, THE "WAR-RANTS") INITIALLY ENTITLING THE HOLDER THEREOF TO
PURCHASE FOUR SHARES OF COMMON STOCK, PAR VALUE $.10 PER SHARE, OF THE COMPANY
(SUCH SHARES, THE "WARRANT SHARES").
THE SECURITIES ARE GLOBAL SECURITIES WITHIN THE MEANING OF THE INDENTURE
GOVERNING THE NOTES, WHICH ARE REPRESENTED BY THE GLOBAL SENIOR NOTE CERTIFICATE
(THE "INDENTURE"), AND THE WAR-RANT AGREEMENT GOVERNING THE WARRANTS, WHICH ARE
REPRESENTED BY THE GLOBAL WARRANT CERTIFICATE (THE "WARRANT AGREEMENT"), AND ARE
REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY OR A
SUCCESSOR DEPOSITARY. THE SECURITIES ARE NOT EXCHANGEABLE FOR SECURITIES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE
EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND THE WARRANT
AGREEMENT, AND NO TRANSFER OF THE SECURITIES (OTHER THAN A TRANSFER OF THE
SECURITIES AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY, OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY
OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND THE WARRANT AGREEMENT.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUERS OR
THEIR AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS
B-1
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUIRED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
PRIOR TO THE EARLIEST OF (I) 180 DAYS AFTER THE CLOSING OF THE OFFERING OF
THE UNITS, (II) THE DATE ON WHICH A REGISTRATION STATEMENT WITH RESPECT TO A
REGISTERED EXCHANGE OFFER FOR THE NOTES IS DECLARED EFFECTIVE UNDER THE ACT,
(III) THE DATE ON WHICH A SHELF REGISTRATION STATEMENT WITH RESPECT TO THE NOTES
OR THE WAR-RANTS AND WARRANT SHARES IS DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (IV) NOTIFICATION OF THE OCCURRENCE OF A CHANGE OF CONTROL OR AN EVENT OF
DEFAULT (AS DEFINED IN THE INDENTURE), WITH RESPECT TO THE NOTES, AND (V) SUCH
DATE AS THE INITIAL PURCHASERS (AS DEFINED IN THE INDENTURE) (OR THEIR
RESPECTIVE SUCCESSORS OR ASSIGNS) IN THEIR SOLE DISCRETION SHALL DETERMINE, THE
NOTES AND THE WARRANTS MAY BE TRANSFERRED OR EXCHANGED ONLY TOGETHER AS A UNIT,
AND NOT SEPARATELY.
THIS UNIT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS UNIT
NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
REGISTRATION. THE HOLDER OF THIS UNIT BY ITS ACCEPTANCE HEREOF AGREES NOT TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH UNIT PRIOR TO THE DATE THAT IS TWO YEARS
(OR SUCH SHORTER PERIOD THAT MAY HEREAFTER BE PROVIDED UNDER RULE 144(k) AS
PERMITTING RESALES BY NON-AFFILIATES OF RESTRICTED SECURITIES WITHOUT
RESTRICTION) AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE
ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS UNIT
(OR ANY PREDECESSOR OF SUCH UNIT) (THE "RESALE RESTRICTION TERMINATION DATE")
EXCEPT (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS
BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE
SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES
ACT, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A) THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTION BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO FOREIGN
PERSONS THAT OCCUR IN OFFSHORE TRANSACTIONS AND WITHOUT DIRECTED SELLING EFFORTS
WITHIN THE MEANINGS OF SUCH TERMS AS DEFINED IN REGULATION S UNDER THE
SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING
OF RULE
B-2
501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS PURCHASING THE UNIT
FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED
INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OF SALE
IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (F)
PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO
ANY SUCH OFFER, SALE OR TRANSFER TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM,
AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM
APPEARING ON THIS UNIT IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE
TRUSTEE AND IN EACH CASE IN ACCORDANCE WITH APPLICABLE SECURITIES LAWS OF ANY
U.S. STATE OR ANY OTHER APPLICABLE JURISDICTION. THE HOLDER OF THIS UNIT AGREES
THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS UNIT IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. THIS LEGEND WILL BE REMOVED UPON THE
REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
MIKOHN GAMING CORPORATION
By: ____________________________
Name:
Title:
Date: _________________
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EXHIBIT C
FORM OF CERTIFICATE OF TRANSFER
Mikohn Gaming Corporation
000 Xxxxx Xxxx
Xxx Xxxxx, XX 00000
Firstar Bank, N.A.
000 0xx Xxxxxx 00000
Xx. Xxxx, Xxxxxxxxx 00000
Re: 11.875% Senior Secured Notes due 2008
Dear Sirs:
Reference is xxxxxx made to the Indenture, dated as of August 22, 2001 (the
"Indenture"), among Mikohn Gaming Corporation, as issuer (the "Company"), the
Guarantors party thereto and Firstar Bank, N.A., as trustee. Capitalized terms
used but not defined herein shall have the meanings given to them in the
Indenture. ______________, (the "Transferor") owns and proposes to transfer the
Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of $___________ in such Note[s] or interests (the "Transfer"),
to __________ (the "Transferee"), as further specified in Annex A hereto. In
connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. [_] Check if Transferee will take delivery of a beneficial interest in
the 144A Global Note or a Definitive Note Pursuant to Rule 144A. The Transfer
is being effected pursuant to and in accordance with Rule 144A under the United
States Securities Act of 1933, as amended (the "Securities Act"), and,
accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Note is being transferred to a Person that the Transferor
reasonably believed and believes is purchasing the beneficial interest or
Definitive Note for its own account, or for one or more accounts with respect to
which such Person exercises sole investment discretion, and such Person and each
such account is a "qualified institutional buyer" within the meaning of Rule
144A in a transaction meeting the requirements of Rule 144A and such Transfer is
in compliance with any applicable blue sky securities laws of any State of the
United States. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the 144A Global Note and/or the Definitive Note and
in the Indenture and the Securities Act.
2. [_] Check if Transferee will take delivery of a beneficial interest in
the Regulation S Global Note or a Definitive Note pursuant to Regulation S. The
Transfer is being effected pursuant to and in accordance with Rule 903 or Rule
904 under the Securities Act and, accordingly, the Transferor hereby further
certifies that (i) the Transfer is not being made to a person in the United
States and (x) at the time the buy order was originated, the Transferee was
outside the United States or such Transferor and any Person acting on its behalf
reasonably believed and believes that the Transferee was outside the United
States or (y) the transaction was
C-1
executed in, on or through the facilities of a designated offshore securities
market and neither such Transferor nor any Person acting on its behalf knows
that the transaction was prearranged with a buyer in the United States, (ii) no
directed selling efforts have been made in contravention of the requirements of
Rule 903(b) or Rule 904(b) of Regulation S under the Securities Act, (iii) the
transaction is not part of a plan or scheme to evade the registration
requirements of the Securities Act and (iv) if the proposed transfer is being
made prior to the expiration of the Distribution Compliance Period, the transfer
is not being made to a U.S. Person or for the account or benefit of a U.S.
Person (other than an Initial Purchaser) and the interest transferred will be
held immediately thereafter through Euroclear or Clearstream. Upon consummation
of the proposed transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Note will be subject to the
restrictions on Transfer enumerated in the Private Placement Legend printed on
the Regulation S Global Note and/or the Definitive Note and in the Indenture and
the Securities Act.
3. [_] Check and complete if Transferee will take delivery of a
beneficial interest in a Definitive Note pursuant to any provision of the
Securities Act other than Rule 144A or Regulation S. The Transfer is being
effected in compliance with the transfer restrictions applicable to beneficial
interests in Restricted Global Notes and Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act and any applicable blue
sky securities laws of any State of the United States, and accordingly the
Transferor hereby further certifies that (check one):
(a) [_] Such Transfer is being effected pursuant to and in accordance
with Rule 144 under the Securities Act; or
(b) [_] Such Transfer is being effected to the Company or a subsidiary
thereof; or
(c) [_] Such Transfer is being effected pursuant to an effective
registration statement under the Securities Act and in compliance with the
prospectus delivery requirements of the Securities Act; or
(d) [_] such Transfer is being effected to an Institutional Accredited
Investor and pursuant to an exemption from the registration requirements of the
Securities Act other than Rule 144A, Rule 144 or Rule 904, and the Transferor
hereby further certifies that it has not engaged in any general solicitation
within the meaning of Regulation D under the Securities Act and the Transfer
complies with the transfer restrictions applicable to beneficial interests in a
Restricted Global Note or Restricted Definitive Notes and the requirements of
the exemption claimed, which certification is supported by (1) a certificate
executed by the Transferee in a form of Exhibit E to the Indenture and (2) if
such Transfer is in respect of a principal amount of Notes at the time of
transfer of less than $250,000, an Opinion of Counsel provided by the Transferor
or the Transferee (a copy of which the Transferor has attached to this
certification and provided to the Company, which has confirmed its
acceptability), to the effect that such Transfer is in compliance with the
Securities Act. Upon consummation of the proposed transfer in accordance with
the terms of the Indenture, the Definitive Note will be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the Definitive Notes and in the Indenture and the Securities Act.
C-2
4. [_] Check if Transferee will take delivery of a beneficial interest
in an Unrestricted Global Note or of an Unrestricted Definitive Note.
(a) [_] Check if Transfer is Pursuant to Rule 144. (i) The Transfer
is being effected pursuant to and in accordance with Rule 144 under the
Securities Act and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any State of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will no longer be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes, on Restricted Definitive Notes and in the Indenture and the Securities
Act.
(b) [_] Check if Transfer is Pursuant to Regulation S. (i) The
Transfer is being effected pursuant to and in accordance with Rule 903 or Rule
904 under the Securities Act and in compliance with the transfer restrictions
contained in the Indenture and any applicable blue sky securities laws of any
State of the United States and (ii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act. Upon consummation of the proposed
Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will no longer be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture
and the Securities Act.
(c) [_] Check if Transfer is Pursuant to Other Exemption. (i) The
Transfer is being effected pursuant to and in compliance with an exemption from
the registration requirements of the Securities Act other than Rule 144, Rule
903 or Rule 904 and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any State of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will not be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes or Restricted Definitive Notes and in the Indenture.
C-3
This certificate and the statements contained herein are made for your benefit
and the benefit of the Company.
_________________________________________ Dated:__________________________
[Insert Name of Transferor]
By: ________________________________________
Name:
Title:
C-4
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) [_] a beneficial interest in the:
(i) [_] 144A Global Note (CUSIP _______), or
(ii) [_] Regulation S Global Note (CUSIP ), or
(b) [_] a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) [_] a beneficial interest in the:
(i) [_] 144A Global Note (CUSIP ), or
(ii) [_] Regulation S Global Note (CUSIP ), or
(iii) [_] Unrestricted Global Note (CUSIP ); or
(b) [_] a Restricted Definitive Note; or
(c) [_] an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
C-5
EXHIBIT D
FORM OF CERTIFICATE OF EXCHANGE
Mikohn Gaming Corporation
000 Xxxxx Xxxx
Xxx Xxxxx, XX [zip]
Firstar Bank, N.A.
000 0xx Xxxxxx 00000
Xx. Xxxx, Xxxxxxxxx 00000
Re: 11.875% Senior Secured Notes due 2008
Dear Sirs:
Reference is hereby made to the Indenture, dated as of August 22, 2001 (the
"Indenture"), between Mikohn Gaming Corporation, as issuer (the "Company"), the
Guarantors party thereto and Firstar Bank, N.A., as trustee. Capitalized terms
used but not defined herein shall have the meanings given to them in the
Indenture.
____________, (the "Owner") owns and proposes to exchange the Note[s] or
interest in such Note[s] specified herein, in the principal amount of
$____________ in such Note[s] or interests (the "Exchange"). In connection with
the Exchange, the Owner hereby certifies that:
1. Exchange of Restricted Definitive Notes or Beneficial Interests in a
Restricted Global Note for Unrestricted Definitive Notes or Beneficial Interests
in an Unrestricted Global Note.
(a) [_] Check if Exchange is from beneficial interest in a
Restricted Global Note to beneficial interest in an Unrestricted Global Note. In
connection with the Exchange of the Owner's beneficial interest in a Restricted
Global Note for a beneficial interest in an Unrestricted Global Note in an equal
principal amount, the Owner hereby certifies (i) the beneficial interest is
being acquired for the Owner's own account without transfer, (ii) such Exchange
has been effected in compliance with the transfer restrictions applicable to the
Global Notes and pursuant to and in accordance with the United States Securities
Act of 1933, as amended (the "Securities Act"), (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
beneficial interest in an Unrestricted Global Note is being acquired in
compliance with any applicable blue sky securities laws of any State of the
United States.
(b) [_] Check if Exchange is from beneficial interest in a
Restricted Global Note to Unrestricted Definitive Note. In connection with the
Exchange of the Owner's beneficial interest in a Restricted Global Note for an
Unrestricted Definitive Note, the Owner hereby certifies (i) the Definitive Note
is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the Definitive
D-1
Note is being acquired in compliance with any applicable blue sky securities
laws of any State of the United States.
(c) [_] Check if Exchange is from Restricted Definitive Note to
beneficial interest in an Unrestricted Global Note. In connection with the
Owner's Exchange of a Restricted Definitive Note for a beneficial interest in an
Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest
is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is being
acquired in compliance with any applicable blue sky securities laws of any State
of the United States.
(d) [_] Check if Exchange is from Restricted Definitive Note to
Unrestricted Definitive Note. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any State of the United States.
2. Exchange of Restricted Definitive Notes or Beneficial Interests in
Restricted Global Notes for Restricted Definitive Notes or Beneficial Interests
in Restricted Global Notes
(a) [_] Check if Exchange is from beneficial interest in a
Restricted Global Note to Restricted Definitive Note. In connection with the
Exchange of the Owner's beneficial interest in a Restricted Global Note for a
Restricted Definitive Note with an equal principal amount, the Owner hereby
certifies that the Restricted Definitive Note is being acquired for the Owner's
own account without transfer. Upon consummation of the proposed Exchange in
accordance with the terms of the Indenture, the Restricted Definitive Note
issued will continue to be subject to the restrictions on transfer enumerated in
the Private Placement Legend printed on the Restricted Definitive Note and in
the Indenture and the Securities Act.
(b) [_] Check if Exchange is from Restricted Definitive Note to
beneficial interest in a Restricted Global Note. In connection with the
Exchange of the Owner's Restricted Definitive Note for a beneficial interest in
the: [CHECK ONE] 144A Global Note or Regulation S Global Note with an equal
principal amount, the Owner hereby certifies (i) the beneficial interest is
being acquired for the Owner's own account without transfer and (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance with
the Securities Act, and in compliance with any applicable blue sky securities
laws of any State of the United States. Upon consummation of the proposed
Exchange in accordance with the terms of the Indenture, the beneficial interest
issued will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the relevant Restricted Global Note and in the
Indenture and the Securities Act.
D-2
This certificate and the statements contained herein are made for your benefit
and the benefit of the Company.
________________________________
[Insert Name of Owner]
By: ____________________________
Name:
Title:
Dated: _______________
D-3
EXHIBIT E
FORM OF CERTIFICATE FROM ACQUIRING
INSTITUTIONAL ACCREDITED INVESTOR
Mikohn Gaming Corporation
000 Xxxxx Xxxx
Xxx Xxxxx, XX 00000
Firstar Bank, N.A.
000 0xx Xxxxxx 00000
Xx. Xxxx, Xxxxxxxxx 00000
Re: 11.875% Senior Secured Notes due 2008
Dear Sirs:
Reference is hereby made to the Indenture, dated as of August 22, 2001 (the
"Indenture"), between Mikohn Gaming Corporation, as issuer (the "Company"), the
Guarantors party thereto and Firstar Bank, N.A., as trustee. Capitalized terms
used but not defined herein shall have the meanings given to them in the
Indenture.
In connection with our proposed purchase of $____________ aggregate
principal amount of: (a) a beneficial interest in a Global Note, or (b) a
Definitive Note, we confirm that:
1. We understand that any subsequent transfer of the Notes or any
interest therein is subject to certain restrictions and conditions set forth in
the Indenture and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Notes or any interest therein except in
compliance with, such restrictions and conditions and the United States
Securities Act of 1933, as amended (the "Securities Act").
2. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes and any interest therein
may not be offered or sold except as permitted in the following sentence. We
agree, on our own behalf and on behalf of any accounts for which we are acting
as hereinafter stated, that if we should sell the Notes or any interest therein,
we will do so only (A) to the Company or any Guarantor or any of their
respective subsidiaries, (B) in accordance with Rule 144A under the Securities
Act to a "qualified institutional buyer" (as defined therein), (C) to an
institutional "accredited investor" (as defined below) that, prior to such
transfer, furnishes (or has furnished on its behalf by a U.S. broker-dealer) to
you and to the Company a signed letter substantially in the form of this letter
and, if the proposed transfer is in respect of an aggregate principal amount of
Notes of less than $250,000, an Opinion of Counsel in form reasonably accept-
able to the Company to the effect that such transfer is in compliance with the
Securities Act, (D) outside the United States in accordance with Rule 904 of
Regulation S under the Securities Act, (E) pursuant to the provisions of Rule
144 under the Securities Act, (F) in accordance with another exemption from the
registration requirements of the Securities Act (and based upon an opinion of
counsel acceptable to the Company) or (G) pursuant to an effective registration
statement under the Securities Act, and we further agree to provide to any
person purchasing the Definitive Note
E-1
from us in a transaction meeting the requirements of clauses (A) through (F) of
this paragraph a notice advising such purchaser that resales thereof are
restricted as stated herein.
3. We understand that, on any proposed resale of the Notes or beneficial
interest therein, we will be required to furnish to you and the Company such
certifications, legal opinions and other information as you and the Company may
reasonably require to confirm that the proposed sale complies with the foregoing
restrictions. We further understand that the Notes purchased by us will bear a
legend to the foregoing effect. We further understand that any subsequent
transfer by us of the Notes or beneficial interest therein acquired by us must
be effected through one of the Initial Purchasers.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or its investment.
5. We are acquiring the Notes or beneficial interest therein purchased by
us for our own account or for one or more accounts (each of which is an
institutional "accredited investor") as to each of which we exercise sole
investment discretion.
E-2
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
______________________________________ Dated:_____________________________
[Insert Name of Accredited Investor]
By: ______________________________________
Name:
Title:
E-3
EXHIBIT F
FORM OF SUPPLEMENTAL INDENTURE
TO BE DELIVERED BY SUBSEQUENT
GUARANTORS
Supplemental Indenture (this "Supplemental Indenture"), dated as of ____,
among ___________________ (the "Guaranteeing Subsidiary"), a subsidiary of
Mikohn Gaming Corporation (or its permitted successor), a Nevada corporation
(the "Company"), the Company and Firstar Bank, N.A., as trustee under the
Indenture referred to below (the "Trustee").
W I T N E S S E T H
-------------------
WHEREAS, the Company has heretofore executed and delivered to the Trustee
an indenture (the "Indenture"), dated as of August 22, 2001, providing for the
issuance of 11.875% Senior Secured Notes due 2008 (the "Notes");
WHEREAS, the Indenture provides that under certain circumstances the
Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental
indenture pursuant to which any newly-acquired or created Guarantor shall
unconditionally guarantee all of the Company's obligations under the Notes and
the Indenture on the terms and conditions set forth herein (the "Subsidiary
Guarantee"); and
WHEREAS, pursuant to Section 9.1 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders of the Notes as follows:
1. Capitalized Terms. Capitalized terms used herein without definition
shall have the meanings assigned to them in the Indenture.
2. Agreement to Guarantee. The Guaranteeing Subsidiary irrevocably and
unconditionally guarantees the Guarantee Obligations, which include (i) the due
and punctual payment of the principal of, premium, if any, and interest and
Liquidated Damages, if any, on the Notes, whether at maturity, by acceleration,
call for redemption, upon a Change of Control Offer, an Asset Sale Offer, an
Excess Cash Flow Offer, or otherwise, the due and punctual payment of interest
on the overdue principal and premium, if any, and (to the extent permitted by
law) interest on any interest on the Notes, and payment of expenses, and the due
and punctual performance of all other obligations of the Company, to the Holders
or the Trustee all in accordance with the terms set forth in Article X of the
Indenture, and (ii) in case of any extension of time of payment or renewal of
any Notes or any 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, call for redemption, upon
a Change of Control Offer, an Asset Sale Offer, an Excess Cash Flow Offer, or
otherwise.
F-1
The obligations of Guaranteeing Subsidiary to the Holders and to the
Trustee pursuant to this Subsidiary Guarantee and the Indenture are expressly
set forth in Article X of the Indenture and reference is hereby made to such
Indenture for the precise terms of this Subsidiary Guarantee.
No past, present or future director, officer, employee, incorporator or
stockholder (direct or indirect) of the Guaranteeing Subsidiary (or any such
successor entity), as such, shall have any liability for any obligations of the
Guaranteeing Subsidiary under this Subsidiary Guarantee or the Indenture or for
any claim based on, in respect of, or by reason of, such obligations or their
creation, except in their capacity as an obligor or Guarantor of the Notes in
accordance with the Indenture.
This is a continuing Guarantee and shall remain in full force and effect
and shall be binding upon the Guaranteeing Subsidiary and its successors and
assigns until full and final payment of all of the Company's obligations under
the Notes and Indenture or until released in accordance with the Indenture and
shall inure to the benefit of the successors and assigns of the Trustee and the
Holders, and, in the event of any transfer or assignment of rights by any Holder
or the Trustee, the rights and privileges herein conferred upon that party shall
automatically extend to and be vested in such transferee or assignee, all
subject to the terms and conditions hereof. This is a Guarantee of payment and
performance and not of collectibility.
The obligations of the Guaranteeing Subsidiary under its Subsidiary
Guarantee shall be limited to the extent necessary to insure that it does not
constitute a fraudulent conveyance under applicable law.
THE TERMS OF ARTICLE X OF THE INDENTURE ARE INCORPORATED HEREIN BY
REFERENCE.
3. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK
SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE, INCLUDING,
WITHOUT LIMITATION, SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
4. Counterparts. The parties may sign any number of copies of this
Supple-mental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
5. Effect of Headings. The Section headings herein are for convenience
only and shall not affect the construction hereof.
F-2
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.
THE COMPANY:
MIKOHN GAMING CORPORATION
By: ____________________________
Name:
Title:
GUARANTEEING SUBSIDIARY:
NAME:
By: ____________________________
Name:
Title:
THE TRUSTEE:
FIRSTAR BANK, N.A.
By: ____________________________
Name:
Title:
F-3