EXHIBIT 4.2
FIRST SUPPLEMENTAL
TRUST INDENTURE
TRANS WORLD GAMING CORP.,
TWG INTERNATIONAL U.S. CORPORATION,
TWG FINANCE CORP., ISSUERS
This First Supplemental Trust Indenture, dated as of October 29,
1998 (this "Supplemental Indenture"), is made by and between the TWG
International U.S. Corporation ("TWG International"), Trans World Gaming
Corp. ("TWG") and TWG Finance Corp. (together with any successors to their
rights, duties and obligations hereunder, the "Issuers"), and U.S. Trust
Company of Texas, N.A. (together with any successor trustee hereunder, the
"Trustee"), a national banking association having corporate trust offices
located in Dallas, Texas.
WHEREAS, the Issuers and the Trustee have heretofore executed and
delivered that certain Indenture dated as of March 31, 1998 (the "Primary
Indenture"), and the Issuers have issued their 12% Senior Secured Notes Due
March 17, 2005 (the "Securities") thereunder; and
WHEREAS, TWG International U.S. Corporation and the Trustee have
executed that certain Indenture dated as of March 31, 1998 (the "Finance
Indenture") and has issued its 12% Senior Secured Note Due March 17, 2005
(the "Finance Note") thereunder; and
WHEREAS, the Primary Indenture provides in Section 8.2 thereof that
the Issuers, when authorized by a resolution of their respective Boards of
Directors, and the Trustee may, with the consent of the Holders of not less
than a majority in aggregate principal amount of the Securities at the time
outstanding, add any provisions to or change in any manner or eliminate any
of the provisions of the Primary Indenture or of any supplemental indenture
or of modify in any manner the rights of the Holders of the Securities,
except under certain circumstances not applicable herein; and
WHEREAS, in order that the collaterization of the Finance Note may
comply with certain changes in the laws of the Czech Republic, the Issuers
and the Trustee, with the consent of a majority of the holders of the
aggregate principal amount of the Securities at the time outstanding, now
desire to amend the Primary Indenture for the purpose of modifying certain
provisions of the Primary Indenture to clarify that certain of the Collateral
(sixty-six percent of the Capital Stock of 21st Century Resorts, a.s. "21st
Century") securing the Finance Note may be transferred by TWG International
to a Czech limited liability company known as SC98A, s.r.o. on the condition
that (a) SC98A, s.r.o. is a Wholly Owned Subsidiary of TWG International;
(b) the Security Interest of TWG Finance Corp. and the Trustee in 21st
Century Resorts, a.s. pursuant to the Finance Indenture remains in full force
and effect; and (c) the Issuers take all steps necessary, subsequent to the
transfer of the Capital Stock of 21st Century to SC98A, s.r.o. to form a
Czech joint stock company and substitute that Czech joint stock company for
SC98A, s.r.o., one percent (1%) of which joint stock company shall be owned
by TWG and ninety-nine percent (99%) by TWG International, which joint stock
company shall be pledged in conformance with
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the Indenture, as amended herein, and the Finance Indenture, as amended, to
secure repayment of the Finance Note; and
WHEREAS, the Issuers and the Trustee, with the consent of the
majority of Holders of the aggregate principal amount of Securities at the
time outstanding, now desire to amend the Primary Indenture for the purpose
of modifying Section 3.23 of the Primary Indenture to clarify that
Trans World Gaming Corp. shall be permitted to own the outstanding Capital
Stock of Casino xx Xxxxxxxx on behalf of and for the benefit of TWG
International and that Casino xx Xxxxxxxx shall be treated for all purposes
as if it were owned by TWG International; and
WHEREAS, the Issuers and the Trustee, with the consent of a majority
of the holders of the aggregate principal amount of the Securities at the
time outstanding, further desire to amend the Primary Indenture to clarify
that the Collateral securing the Finance Notes shall not include Trans World
Leasing Limited, a Gibraltar legal entity, for the reason that such entity
shall not be a Subsidiary of TWG International and because all functions
which this entity was to perform in relation to the operations of the
Issuer's operation in the Czech Republic are to be performed by the Cyprus
Entity, as that term is defined in the Primary Indenture; and
WHEREAS, the execution and delivery of this Supplemental Indenture
has been duly and validly authorized in all respects by the respective Boards
of Directors of the Issuers; and
WHEREAS, the Trustee is a party to this Supplemental Indenture in
order to acknowledge its acceptance of the terms and provisions hereof and to
evidence its consent to the amendments to the Primary Indenture made hereby.
NOW, THEREFORE, in consideration of the mutual understandings,
promises and agreements herein contained and other good and valuable
consideration, the sufficiency of which are hereby acknowledged, the Issuer
and the Trustee do covenant and agree hereby, for the equal and proportionate
benefit of the respective Holders from time to time of the Notes, as follows:
ARTICLE I
DEFINITIONS AND STATUTORY AUTHORITY
Section 1.1. SUPPLEMENTAL INDENTURE. This Supplemental
Indenture is a Supplemental Indenture, and is adopted in accordance with
Article 8 of the Primary Indenture.
Section 1.2. DEFINITIONS.
(A) Unless the context shall require otherwise, all defined terms
contained in the Primary Indenture shall have the same respective meanings
in this Supplemental Indenture as such defined terms are given in the Primary
Indenture.
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(B) As used in this Supplemental Indenture, except as otherwise
expressly provided or unless the context shall require otherwise:
(1) This "Supplemental Indenture" means this instrument as
originally executed or as it may, from time to time, be supplemented or
amended by one or more supplemental indentures hereto entered into pursuant
to the applicable provisions of the Primary Indenture.
(2) All references in this instrument to designated "Articles,"
"Sections," and other subdivisions are to the designated Articles, Sections,
and other subdivisions of this instrument as originally executed.
Section 1.3. PRIMARY INDENTURE TO REMAIN IN FORCE. Except as
amended by this Supplemental Indenture, the Primary Indenture shall remain in
full force and effect as to matters covered therein.
Section 1.4. SUCCESSORS AND ASSIGNS. All covenants and agreements
in this Supplemental Indenture by the Issuers and the Trustee shall bind the
Holders of the Notes, the Issuers, the Trustee and their respective
successors and assigns, whether so expressed or not.
Section 1.5. BENEFITS OF SUPPLEMENTAL INDENTURE. Nothing in this
Supplemental Indenture or in the Notes, express or implied, shall give any
Person, other than the parties hereto, their respective successors hereunder
and the Holders of the Notes, any benefit or any legal or equitable rights,
remedy or claim under this Supplemental Indenture.
Section 1.6. GOVERNING LAW. This Supplemental Indenture shall be
construed in accordance and governed by the laws of the State of New York.
ARTICLE II
AMENDMENTS TO PRIMARY INDENTURE
Section 2.1. ISSUANCE OF STOCK. Section 3.11(b) of the Primary
Indenture is deleted in its entirety and replaced in full by the following,
which shall read in its entirety as follows:
TWG International will not permit any of its Subsidiaries to issue
any additional Capital Stock and agrees that the Capital Stock of its
Subsidiaries pledged to TWG Finance and the Trustee in the Finance Indenture
shall at all times constitute one hundred percent (100%) of the Capital Stock
of the Cyprus Entity, one hundred percent (100%) of the Capital Stock of any
U.S. Subsidiary and of any foreign Subsidiary, where, as to such foreign
Subsidiary such pledge shall not create a "deemed dividend" and sixty-six
percent (66%) of the Capital Stock of any foreign Subsidiary where such
pledge shall not create a deemed dividend and where a pledge of more than
that percentage would create a "deemed dividend". Notwithstanding anything
above to the
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contrary, TWG International shall be permitted to own one
hundred percent (100%) of SC98A, s.r.o. so long as one hundred percent (100%)
of the Capital Stock of 21st Century Resorts, a.s. is owned by SC98A, s.r.o.
and sixty-six percent (66%) of the Capital Stock of 21st Century Resorts, a.s.
is pledged to secure repayment of the Funding Note. Alternatively , and
notwithstanding anything above to the contrary, the Capital Stock of 21st
Century Resorts, a.s. may be conveyed to a Wholly Owned Subsidiary of TWG
International ("Newco") and the Security Interest in the Capital Stock of 21st
Century released so long as sixty-six percent (66%) of the Capital Stock of
Newco is pledged to secure repayment of the Funding Note. In the event the
Capital Stock of 21st Century is transferred to SC98A, s.r.o., the Issuers
shall promptly take all reasonable action necessary to replace SC98A, s.r.o.
with a Czech joint stock company which is a Wholly Owned Subsidiary (the
"Substitute Entity") of TWG International, sixty-six (66%) of the Capital
Stock of which Substitute Entity shall be pledged to secure repayment of the
Funding Note. TWG International will not permit any of its Subsidiaries to
conduct any business through or otherwise own any outstanding shares or
interests of any class of Capital Stock of, any other corporation,
partnership, limited liability company or other Person, other than a Wholly-
Owned Subsidiary, except as permitted in Section 3.23 of this Indenture. TWG
may own one share of the outstanding Capital Stock of Newco or the Substitute
Entity so long as such share is pledged to TWG Finance and the Trustee of the
Finance Indenture to secure repayment of the Funding Note.
Section 2.2. SECURITY INTERESTS. Section 3.17(a) of the Primary
Indenture is deleted in its entirety and replaced in full by the following,
which shall read in its entirety as follows:
TRANSACTIONS WITH AFFILIATES. Except for transactions with the
Cyprus Entity, the Substitute Entity (as permitted in Section 3.11(b)) and
Newco (as permitted in Section 3.11 (b)), neither TWG International nor any
of its Subsidiaries shall directly or indirectly, sell, lease, license,
transfer, exchange, or otherwise dispose of any of its properties, assets
or services to, or purchase, lease, or license the use of any property,
assets or services from, or transfer funds to, or enter into any contract,
agreement, understanding, loan, advance or Guarantee with, to, or for the
benefit of, any Affiliate (each of the foregoing, an "Affiliate Transaction",
whether constituting one transaction or a series of related transactions),
unless (a)such Affiliate Transaction is on terms that are no less favorable to
TWG International or the relevant Subsidiary than those that would have been
obtained in a comparable transaction by TWG International or such Subsidiary
with an unrelated person and (b) TWG International delivers to the Trustee
(i) with respect to any Affiliate Transaction involving aggregate payments
in excess of $100,000, a resolution of the Board of Directors of TWG
International approved by a majority of the disinterested members of the
Board of Directors, certifying that such Affiliate Transaction complies
with clause (a) above, and (ii) with respect to any Affiliate Transaction
involving aggregate payments in excess of $250,000, an opinion as to the
fairness of such Affiliate Transaction to TWG International or such
Subsidiary from a financial point of view issued by an independent investment
banking firm of national standing.
Section 2.3. NON USA OPERATIONS. Section 3.23 of the Primary
Indenture is deleted in its entirety and replaced in full by the following,
which shall read in its entirety as follows:
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SECTION 3.23 NON USA OPERATIONS. All business operations
outside of the United States of America shall be under the control of and
inure to the benefit of TWG International and its Wholly Owned Subsidiaries,
except in Bishkek. All business operations (other than those of TWG Finance)
within the United States and in Bishkek shall be under the control of and
inure to the benefit of TWG. The business operations of TWG Finance shall be
governed by this Indenture and the Collateral Agreements. Notwithstanding
anything above to the contrary, the Capital Stock of Casino xx Xxxxxxxx may
be owned by TWG, but shall be under the control of and inure to the benefit of
TWG International and its Wholly Owned Subsidiaries. For purposes of this
Indenture and Finance Indenture, the Capital Stock of Casino xx Xxxxxxxx
shall be treated as if it constituted a Subsidiary of TWG International and
shall be pledged to secure repayment of the Finance Note in compliance with
the terms of the Finance Note. To the extent permissible under applicable
law, the Issuer shall use its best efforts to cause the legal and beneficial
ownership of the Capital Stock of Casino xx Xxxxxxxx to be conveyed to TWG
International, subject to the pledge thereof to TWG Finance and the Trustee.
However, one share of the issued and outstanding shares of Capital
Stock of Newco or the Substitute Entity may be held by TWG so long as such
share is pledged by TWG to the Trustee to secure repayment of the Finance
Note.
Section 2.4. ASSIGNMENT OF RIGHTS UNDER COLLATERAL AGREEMENTS.
Section 14.13 is added to the Primary Indenture, and it should read in its
entirety as follows:
As additional security for the Notes, TWG Finance does hereby
irrevocably grant, convey, pledge, transfer and assign and deliver in trust
to the Trustee and its successors and assigns in trust forever all of the TWG
Finance's right, title and interest in and to any of the present and future
Collateral Agreements, as that term is defined in the Finance Indenture,
including: the Conditional Equipment Title Transfer Agreement dated as of the
date hereof, among Trans World Gaming Management Limited, TWG Finance and the
Trustee, as Security Agent; any agreement evidencing a security interest in
sixty-six percent (66%) of the Capital Stock of Newco or the Substitute
Entity; that certain Share Pledge Agreement dated as of March 31, 1998
evidencing the pledge by TWG International in favor of TWG Finance and the
Trustee of sixty-six percent of the shares of 21st Century; that certain
Security Agreement as of the date hereof pursuant to which TWG International
pledges one hundred percent (100%) of the Capital Stock of the Cyprus Entity
to TWG Finance and the Trustee to secure repayment of the Funding Note; the
Conditional Assignment of Receivables Agreement and Contract Rights dated as
of the date hereof among Trans World Gaming Management Limited in favor of
TWG Finance and the Trustee, as Security Agent; and the Floating Charge dated
as of the date hereof, issued by Trans World Gaming Management Limited in
favor of TWG Finance and the Trustee, as Security Agent.
Section 2.5 DEFINITION OF NEWCO. The definition of Newco is added
to the Indenture, which shall read as follows:
Newco shall have the meaning specified in Section 3.11.
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Section 2.6 DEFINITION OF SUBSTITUTE ENTITY. The definition of
Substitute Entity is added to the Indenture, which shall read as follows:
"Substitute Entity" shall have the meaning specified in Section 3.11.
ARTICLE III
MISCELLANEOUS
Section 3.1. RATIFICATION AND REAFFIRMATION. The Issuers and
Trustee hereby ratify and reaffirm all the terms and conditions of the
Primary Indenture, as specifically amended and supplemented by this
Supplemental Indenture, and each hereby acknowledges that the Primary
Indenture remains in full force and effect, as so amended and supplemented.
Section 3.2. EXECUTION AND COUNTERPARTS. This Supplemental
Indenture may be executed in several counterparts, all of which shall
constitute one and the same instrument and each of which shall be, and shall
be deemed to be, an original.
Section 3.3 EFFECTIVENESS. This Supplemental Indenture shall only
become effective in the event the following conditions are met:
(a) a new Wholly-Owned Subsidiary of TWG International
U.S. Corporation is properly formed under the laws of the
Czech Republic (subject to the right of TWG to own one
share thereof, which share shall be pledged to the
Trustee and the holder of the Finance Note under the
Finance Indenture);
(b) the Trustee and the holder of the Finance Note shall
be granted a Security Interest in sixty-six percent (66%)
of all Capital Stock of such entity; and
(c) one hundred percent (100%) of the Capital Stock of
21st Century shall be transferred to such newly formed
Subsidiary; or
(d) as an alternative to those conditions set forth in
Section 3.3(a), (b) and (c), TWG International shall have
acquired one hundred percent of ownership of SC98A,
s.r.o. and transferred to it one hundred percent (100%)
of the Capital Stock of 21st Century, with such transfer
of 21st Century subject to the Security Interest of TWG
Finance and the Trustee in sixty-six percent (66%) of the
Capital Stock of 21st Century as granted by TWG
International pursuant to the terms of that certain
Shares Pledge Agreement dated March 31, 1998.
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The Issuers will deliver a letter or certificate to the Trustee
in which such person will certify to the Trustee that the foregoing
conditions have been met and that this Supplement is effective. The
consenting Security Holders will execute this document solely to signify
their consent to this Supplemental Indenture.
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IN WITNESS WHEREOF, the Issuer and the Trustee have caused this
Supplemental Indenture to be signed on their behalf by their duly authorized
representative, all as of the date first hereinabove written.
TWG INTERNATIONAL U.S. CORPORATION
By:_______________________________________
Name: Xxxxxx Tottenham
Title: President
TWG FINANCE CORP.
By: ______________________________________
Name: Xxxxxx Tottenham
Title: President
TRANS WORLD GAMING CORP.
By:_______________________________________
Name: Xxxxxx Tottenham
Title: President
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Consent of Security Holders:
The below designated Security holder of the Primary Indenture, by its
execution hereof, consents to the First Supplemental Trust Indenture.
VALUE PARTNERS, LTD.
By: ___________________________
Name: Xxxxxxx X. Xxxxx
Managing Partner of Xxxxx &Partners
General Partner of Value Partners
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U.S. TRUST COMPANY OF TEXAS, N.A.,
as Trustee
By: ___________________________
Name: Xxxx Xxxxxxxxx
Title: Authorized Officer
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