Execution Version
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RIVIERA HOLDINGS CORPORATION
SERIES A AND SERIES B
10% FIRST MORTGAGE NOTES DUE 2004
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INDENTURE
Dated as of August 13, 1997
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Norwest Bank Minnesota, National Association
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Trustee
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CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
310 (a)(1) ............................................... 7.10
(a)(2) ............................................... 7.10
(a)(3) ............................................... N.A.
(a)(4) ............................................... N.A.
(a)(5) ............................................... 7.10
(b) .................................................. 7.10
(c) .................................................. N.A.
311 (a) .................................................. 7.11
(b) .................................................. 7.11
(c) .................................................. N.A.
312 (a) .................................................. 2.05
(b) .................................................. 12.03
(c) .................................................. 12.03
313 (a) .................................................. 7.06
(b)(1) ............................................... 10.03
(b)(2) ............................................... 7.07
(c) .................................................. 7:06;12.02
(d) .................................................. 7.06
314 (a) .................................................. 4:03;12.02
(b) .................................................. 10.02
(c)(1) ............................................... 12.04
(c)(2) ............................................... 12.04
(c)(3) ............................................... N.A.
(d) .................................................. 10:03; 10:04; 10.05
(e) .................................................. 12.05
(f) .................................................. N.A.
315 (a) .................................................. 7.01
(b) .................................................. 7:05;12.02
(c) .................................................. 7.01
(d) .................................................. 7.01
(e) .................................................. 6.11
316 (a)(last sentence) ................................... 2.09
(a)(1)(A) ............................................ 6.05
(a)(1)(B) ............................................ 6.04
(a)(2) ............................................... N.A.
(b) .................................................. 6.07
(c) .................................................. 2.12
317 (a)(1) ............................................... 6.08
(a)(2) ............................................... 6.09
(b) .................................................. 2.04
318 (a) .................................................. 12.01
(b) .................................................. N.A.
(c) .................................................. 12.01
N.A. means not applicable.
*This Cross-Reference Table is not part of the Indenture.
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE..........................1
Section 1.01. Definitions............................................1
Section 1.02. Other Definitions.....................................15
Section 1.03. Incorporation by Reference of Trust Indenture Act.....15
Section 1.04. Rules of Construction.................................16
ARTICLE 2 THE NOTES..........................................................16
Section 2.01. Form and Dating.......................................16
Section 2.02. Execution and Authentication..........................17
Section 2.03. Registrar and Paying Agent............................17
Section 2.04. Paying Agent to Hold Money in Trust...................18
Section 2.05. Holder Lists..........................................18
Section 2.06. Transfer and Exchange.................................18
Section 2.07. Replacement Notes.....................................24
Section 2.08. Outstanding Notes.....................................24
Section 2.09. Treasury Notes........................................24
Section 2.10. Temporary Notes.......................................25
Section 2.11. Cancellation..........................................25
Section 2.12. Defaulted Interest....................................25
Section 2.13. CUSIP Number..........................................25
Section 2.14. Exchange Registration.................................25
ARTICLE 3 REDEMPTION AND PREPAYMENT..........................................26
Section 3.01. Notices to Trustee....................................26
Section 3.02. Selection of Notes to Be Redeemed.....................26
Section 3.03. Notice of Redemption..................................26
Section 3.04. Effect of Notice of Redemption........................27
Section 3.05. Deposit of Redemption Price...........................27
Section 3.06. Notes Redeemed in Part................................27
Section 3.07. Optional Redemption...................................28
Section 3.08. Redemption Pursuant to Gaming Law.....................28
Section 3.09. Mandatory Redemption..................................29
Section 3.10. Other Mandatory Offer to Purchase.....................29
ARTICLE 4 COVENANTS......................................................... 31
Section 4.01. Payment of Notes......................................31
Section 4.02. Maintenance of Office or Agency.......................31
Section 4.03. Reports...............................................31
Section 4.04. Compliance Certificate................................32
Section 4.05. Taxes.................................................32
Section 4.06. Stay, Extension and Usury Laws........................33
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Section 4.07. Restricted Payments...................................33
Section 4.08. Dividend and Other Payment Restrictions
Affecting Subsidiaries..............................................35
Section 4.09. Conversion of Black Hawk Operating Company to a
Restricted Subsidiary...............................................36
Section 4.10. Incurrence of Indebtedness and Issuance of
Preferred Stock.....................................................36
Section 4.11. Asset Sales...........................................38
Section 4.12. Transactions with Affiliates..........................39
Section 4.13. Liens.................................................40
Section 4.14. Business Activities...................................40
Section 4.15. Corporate Existence...................................40
Section 4.16. Offer to Repurchase Upon Change of Control............40
Section 4.17. Use of Proceeds.......................................41
Section 4.18. Additional Subsidiary Guarantees......................41
Section 4.19. Collateral Documents..................................42
Section 4.20. Maintenance of Insurance..............................42
Section 4.21. Limitation on Status as Investment Company............42
Section 4.22. Further Assurances....................................42
Section 4.23. Dissolution of Subsidiaries...........................43
ARTICLE 5 SUCCESSORS.........................................................43
Section 5.01. Merger, Consolidation, or Sale of Assets..............43
Section 5.02. Successor Corporation Substituted.....................43
ARTICLE 6 DEFAULTS AND REMEDIES..............................................44
Section 6.01. Events of Default.....................................44
Section 6.02. Acceleration..........................................45
Section 6.03. Other Remedies........................................46
Section 6.04. Waiver of Past Defaults...............................46
Section 6.05. Control by Majority...................................47
Section 6.06. Limitation on Suits...................................47
Section 6.07. Rights of Holders of Notes to Receive Payment.........47
Section 6.08. Collection Suit by Trustee............................47
Section 6.09. Trustee May File Proofs of Claim......................48
Section 6.10. Priorities............................................48
Section 6.11. Undertaking for Costs.................................48
Section 6.12. Management of Casinos.................................48
ARTICLE 7 TRUSTEE........................................................... 49
Section 7.01. Duties of Trustee.....................................49
Section 7.02. Rights of Trustee.....................................50
Section 7.03. Individual Rights of Trustee..........................50
Section 7.04. Trustee's Disclaimer..................................50
Section 7.05. Notice of Defaults....................................51
Section 7.06. Reports by Trustee to Holders of the Notes............51
Section 7.07. Compensation and Indemnity............................52
Section 7.08. Replacement of Trustee................................53
Section 7.09. Successor Trustee by Merger, etc......................54
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Section 7.10. Eligibility; Disqualification.........................54
Section 7.11. Preferential Collection of Claims Against Company.....54
ARTICLE 8 LEGAL DEFEASANCE AND COVENANT DEFEASANCE...........................54
Section 8.01. Option to Effect Legal Defeasance or Covenant
Defeasance..........................................................54
Section 8.02. Legal Defeasance and Discharge........................54
Section 8.03. Covenant Defeasance...................................55
Section 8.04. Conditions to Legal or Covenant Defeasance............55
Section 8.05. Deposited Money and Government Securities to be Held
in Trust; Other Miscellaneous Provisions............................56
Section 8.06. Repayment to Company..................................57
Section 8.07. Reinstatement.........................................57
ARTICLE 9 AMENDMENT, SUPPLEMENT AND WAIVER...................................57
Section 9.01. Without Consent of Holders of Notes...................57
Section 9.02. With Consent of Holders of Notes......................58
Section 9.03. Compliance with Trust Indenture Act...................59
Section 9.04. Revocation and Effect of Consents.....................59
Section 9.05. Notation on or Exchange of Notes......................59
Section 9.06. Trustee to Sign Amendments, etc.......................60
ARTICLE 10 COLLATERAL AND SECURITY...........................................60
Section 10.01. Collateral Documents.................................60
Section 10.02. Recording and Opinions...............................61
Section 10.03. Release of Collateral................................62
Section 10.04. Certificates of the Company..........................62
Section 10.05. Certificates of the Trustee..........................63
Section 10.06. Authorization of Actions to Be Taken by the Trustee
Under the Collateral Documents......................................63
Section 10.07. Authorization of Receipt of Funds by the Trustee
Under the Collateral Documents......................................63
Section 10.08. Termination of Security Interest.....................64
Section. 10.09. Cooperation of Trustee..............................64
Section. 10.10. Collateral Agent....................................64
ARTICLE 11 SUBSIDIARY GUARANTEES.............................................64
Section 11.01. Subsidiary Guarantees................................64
Section 11.02. Execution and Delivery of Subsidiary Guarantees......66
Section 11.03. Limitation of Guarantors' Liability..................66
Section 11.04. Merger or Consolidation of Guarantors................67
Section 11.05. Releases of Subsidiary Guarantees....................67
Section 11.06. "Trustee" To Include Paying Agent....................68
ARTICLE 12 MISCELLANEOUS.....................................................68
Section 12.01. Trust Indenture Act Controls.........................68
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Section 12.02. Notices..............................................68
Section 12.03. Communication by Holders of Notes with Other
Holders of Notes.....................................69
Section 12.04. Certificate and Opinion as to Conditions Precedent...69
Section 12.05. Statements Required in Certificate or Opinion........69
Section 12.06. Rules by Trustee and Agents..........................70
Section 12.07. No Personal Liability of Directors, Officers,
Employees and Stockholders...........................70
Section 12.08. Governing Law........................................70
Section 12.09. No Adverse Interpretation of Other Agreements........70
Section 12.10. Successors...........................................70
Section 12.11. Severability.........................................70
Section 12.12. Counterpart Originals................................70
Section 12.13. Acts of Holders......................................71
Section 12.14. Legal Holidays.......................................72
Section 12.15. Qualification of Indenture...........................72
Section 12.16. Table of Contents, Headings, etc.....................72
EXHIBITS
Exhibit A FORM OF NOTE
Exhibit B FORM OF SUBSIDIARY GUARANTEE
Exhibit C CERTIFICATE OF TRANSFEROR
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1 This paragraph should be included only if the Note is issued in global form.
2 This paragraph should be included only if the Note is a Transfer Restricted
Security.
3 This should only be included if the Note is issued in global form.
INDENTURE dated as of August 13, 1997 among Riviera Holdings
Corporation, a Nevada corporation (the "Company"), the Guarantors (as defined)
and Norwest Bank Minnesota, National Association, as trustee (the "Trustee").
Each party agrees as follows for the benefit of the other parties and
for the equal and ratable benefit of the Holders (as defined) of the Company's
10% Series A First Mortgage Notes due 2004 (the "Series A Notes") and the 10%
Series B First Mortgage Notes due 2004 (the "Series B Notes" and, together with
the Series A Notes, the "Notes"):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions.
"Acquired Debt" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person, and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided that
beneficial ownership of 10% or more of the voting securities of a Person shall
be deemed to be control.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Asset Sale" means (i) the sale, lease, conveyance or other disposition
by the Company or a Restricted Subsidiary of any assets or rights (including,
without limitation, by way of a sale and leaseback) other than sales of assets
(excluding capital assets) or rights in the ordinary course of business
consistent with past practices (provided that the sale, lease, conveyance or
other disposition of all or substantially all of the assets of the Company and
its Restricted Subsidiaries taken as a whole will be governed by the provisions
of Section 4.16 hereof and/or the provisions of Section 5.01 hereof and not by
the provisions of Section 4.11 hereof), and (ii) the issuance of Equity
Interests by the Company or any Restricted Subsidiary, or the sale by the
Company or any of its Restricted Subsidiaries of Equity Interests of any of the
Company's Subsidiaries (other than directors' qualifying shares), in the case of
either clause (i) or (ii), whether in a single transaction or a series of
related transactions (a) that have a fair market value in excess of $1.0 million
or (b) for net proceeds in excess of $1.0 million. Notwithstanding the
foregoing: (i) a transfer of assets by the Company to a Restricted Subsidiary or
by a Restricted Subsidiary to the Company or to another Restricted Subsidiary,
(ii) an issuance of Equity Interests by a Restricted Subsidiary to the Company
or to another Restricted Subsidiary, (iii) a Restricted Payment that is
permitted by Section 4.07 hereof, (iv) the surrender or waiver of contract
rights or the settlement, release or surrender of contract, tort or other claims
of any kind, and (v) the grant in the ordinary course of business of any
non-exclusive license of patents, trademarks, registrations therefor and other
similar intellectual property, will not be
deemed to be Asset Sales. In addition, no sale or disposition of the Riviera
Property (except a sale or disposition of the Six Acre Tracts) shall be a
permitted Asset Sale.
"Attributable Debt" in respect of a sale and leaseback transaction
means, at the time of determination, the present value (discounted at the rate
of interest implicit in such transaction, determined in accordance with GAAP) of
the obligation of the lessee for net rental payments during the remaining term
of the lease included in such sale and leaseback transaction (including any
period for which such lease has been extended or may, at the option of the
lessor, be extended).
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"Black Hawk Land" means that certain 71,000 square foot parcel of real
property in Black Hawk, Colorado that may be purchased by the Company as
described in the Offering Circular.
"Black Hawk Operating Company" means any Subsidiary or Subsidiaries of
the Company owning the Black Hawk Land or through which the Black Hawk Project
is operated, but excluding any Restricted Subsidiary which acts as a holding
company of any such Subsidiary or Subsidiaries.
"Black Hawk Project" means the pending project to develop, construct,
equip, open and operate a casino, substantially as described in the Offering
Circular, which will be located on the Black Hawk Land.
"Board of Directors" means the Board of Directors of the Company, or
any authorized committee of the Board of Directors.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any determination thereof
is to be made, the amount of the liability in respect of a capital lease that
would at such time be required to be capitalized on a balance sheet in
accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership or limited
liability company, partnership or membership interests (whether general or
limited), and (iv) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.
"Cash Equivalents" means (i) United States dollars, (ii) securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof having maturities of not
more than twelve months from the date of acquisition, (iii) certificates of
deposit and eurodollar time deposits with maturities of six months or less from
the date of acquisition, bankers' acceptances with maturities not exceeding
twelve months and overnight bank deposits, in each case with any domestic
commercial bank having capital and surplus in excess of $500 million and a Xxxxx
Bank Watch Rating of "B" or better, provided that any deposit accounts with
balances at all times less than $250,000 individually or $1,000,000 in the
aggregate need not meet such capital, surplus or rating requirements, (iv)
repurchase obligations with a term of not more than seven days for underlying
securities of the types described in clauses (ii) and (iii) above entered into
with any financial institution meeting the qualifications specified in clause
(iii) above, (v) commercial paper having the highest rating obtainable from
Xxxxx'x Investors Service, Inc. or Standard & Poor's Corporation and in each
case maturing within
2
twelve months after the date of acquisition, and (vi) money market funds,
substantially all the assets of which comprise securities of the types described
in clauses (ii) through (v) above.
"Change of Control" means the occurrence of any of the following: (i)
the sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all or
substantially all of the assets of the Company and its Restricted Subsidiaries
taken as a whole to any "person" (as such term is used in Section 13(d)(3) of
the Exchange Act) other than any Controlling Person or its Related Parties, (ii)
the adoption of a plan relating to the liquidation or dissolution of the
Company, (iii) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that any
"person" (as defined above), other than any Controlling Person and its Related
Parties, becomes the "beneficial owner" (as such term is defined in Rule 13d-3
and Rule 13d-5 under the Exchange Act, except that a person shall be deemed to
have "beneficial ownership" of all securities that such person has the right to
acquire, whether such right is currently exercisable or is exercisable only upon
the occurrence of a subsequent condition), directly or indirectly, of more than
35% of the outstanding Voting Stock of the Company (measured by voting power
rather than number of shares) and a greater percentage of the outstanding Voting
Stock of the Company than the percentage of such Voting Stock beneficially owned
by the Controlling Person and its Related Parties, holding the largest such
percentage, (iv) the first day prior to the Merger, if any, on which a majority
of the members of the Board of Directors of the Company are not Continuing
Directors, or (v) the Company consolidates with, or merges with or into, any
Person or sells, assigns, conveys, transfers, leases or otherwise disposes of
all or substantially all of its assets to any Person, or any Person consolidates
with, or merges with or into, the Company, in any such event pursuant to a
transaction in which any of the outstanding Voting Stock of the Company is
converted into or exchanged for cash, securities or other property, other than
any such transaction where the Voting Stock of the Company outstanding
immediately prior to such transaction is converted into or exchanged for Voting
Stock (other than Disqualified Stock) of the surviving or transferee Person
constituting a majority of the outstanding shares of such Voting Stock of such
surviving or transferee Person (immediately after giving effect to such
issuance). Notwithstanding the foregoing clauses (i) through (v), neither the
consummation of the Merger nor any acquisition of Elsinore by the Company
(whether effected by way of merger, stock or asset purchase, or otherwise) will
constitute an event of "Change of Control."
"Collateral" means the Riviera Property and other collateral granted
pursuant to the granting provisions (A) through (P) of the Deed of Trust, the
Collateral (as defined in the Security Agreements), the Collateral (as defined
in the Pledge Agreements), the Account (as defined in the Restricted Account
Agreement) and all similar real or personal property of any Person that becomes
a Restricted Subsidiary of the Company after the date hereof, except as
otherwise provided in Sections 4.09 and 4.18, and excluding in all cases any
Excluded Assets (as defined in any of the Collateral Documents).
"Collateral Agent" means the party named as such under Section 10.10
hereof.
"Collateral Documents" means the Deed of Trust, the Pledge Agreements,
the Security Agreements and the Restricted Account Agreement, together with any
documents creating security interests or Liens in Collateral which are executed
after the date hereof pursuant to Section 4.18 hereof.
"Consolidated Cash Flow" means, with respect to any Person for any
period, the Consolidated Net Income of such Person for such period plus (i) an
amount equal to any extraordinary loss plus any net loss realized in connection
with an Asset Sale (to the extent such losses were deducted in computing such
3
Consolidated Net Income), plus (ii) provision for taxes based on income or
profits of such Person and its Subsidiaries for such period, to the extent that
such provision for taxes was included in computing such Consolidated Net Income,
plus (iii) consolidated interest expense of such Person and its Subsidiaries for
such period, whether paid or accrued and whether or not capitalized (including,
without limitation, amortization of debt issuance costs and original issue
discount, non-cash interest payments, the interest component of any deferred
payment obligations, the interest component of all payments associated with
Capital Lease Obligations, imputed interest with respect to Attributable Debt,
commissions, discounts and other fees and charges incurred in respect of letter
of credit or bankers' acceptance financings, and net payments (if any) pursuant
to Hedging Obligations), to the extent that any such expense was deducted in
computing such Consolidated Net Income, plus (iv) depreciation, amortization
(including amortization of goodwill and other intangibles but excluding
amortization of prepaid cash expenses, other than pre-opening expenses, that
were paid in a prior period) and other non-cash expenses (excluding any such
non-cash expense to the extent that it represents an accrual of or reserve for
cash expenses in any future period or amortization of a prepaid cash expense,
other than preopening expenses, that was paid in a prior period) of such Person
and its Subsidiaries for such period to the extent that such depreciation,
amortization and other non-cash expenses were deducted in computing such
Consolidated Net Income, plus (v) all expenses relating to the defeasance and
redemption of the Company's 11% First Mortgage Notes due 2002, including any
redemption premium and the excess, if any, of interest expense over interest
income earned from the amounts deposited in trust for the defeasance, to the
extent such expenses were deducted in computing such Consolidated Net Income,
minus (vi) non-cash items increasing such Consolidated Net Income for such
period, in each case, on a consolidated basis and determined in accordance with
GAAP. Notwithstanding the foregoing, the provision for taxes based on the income
or profits of, and the depreciation and amortization and other non-cash charges
of, a Subsidiary of the referent Person shall be added to Consolidated Net
Income to compute Consolidated Cash Flow only to the extent (and in the same
proportion) that the Net Income of such Subsidiary was included in calculating
the Consolidated Net Income of such Person and only if a corresponding amount
would be permitted at the date of determination to be dividended to the Company
by such Subsidiary without prior governmental approval (that has not been
obtained), and without direct or indirect restriction pursuant to the terms of
its charter and all agreements, instruments, judgments, decrees, orders,
statutes, rules and governmental regulations applicable to that Subsidiary or
its stockholders.
"Consolidated Net Income" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that (i) the Net Income (but not loss) of any Person that is
not a Subsidiary or that is accounted for by the equity method of accounting
shall be included only to the extent of the amount of dividends or distributions
paid in cash to the referent Person or a Wholly Owned Restricted Subsidiary
thereof, (ii) the Net Income of any Restricted Subsidiary shall be excluded to
the extent that the declaration or payment of dividends or similar distributions
by that Restricted Subsidiary of that Net Income is not at the date of
determination permitted without any prior governmental approval (that has not
been obtained) or, directly or indirectly, by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Restricted Subsidiary or its
stockholders, (iii) the Net Income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition shall
be excluded, (iv) the cumulative effect of a change in accounting principles
shall be excluded and (v) the Net Income of any Unrestricted Subsidiary will be
excluded, whether or not distributed to the Company or one of its Subsidiaries.
"Consolidated Net Worth" means, with respect to any Person as of any
date, the sum of (i) the consolidated equity of the common stockholders of such
Person and its consolidated Subsidiaries as of such date plus (ii) the
respective amounts reported on such Person's balance sheet as of such date with
respect to any series of preferred stock (other than Disqualified Stock), but
only to the extent of any cash received by such Person upon issuance of such
preferred stock, less (x) all write-ups (other than write-ups resulting
4
from foreign currency translations and write-ups of tangible assets of a going
concern business made within 12 months after the acquisition of such business)
subsequent to the date of this Indenture in the book value of any asset owned by
such Person or a consolidated Subsidiary of such Person, (y) all investments as
of such date in unconsolidated Subsidiaries and in Persons that are not
Subsidiaries (except, in each case, Permitted Investments), and (z) all
unamortized debt discount and expense and unamortized deferred charges as of
such date, all of the foregoing determined in accordance with GAAP.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of the Company who (i) was a member of such
Board of Directors on the date of this Indenture or (ii) was nominated for
election or elected to such Board of Directors with the approval of a majority
of the Continuing Directors who were members of such Board at the time of such
nomination or election.
"Controlling Person" means Xx. Xxxxx Xxxxxxx, Morgens Waterfall or the
"Morgens Entities" referred to in the Offering Circular, Sun America Life
Insurance Company, or Keyport Life Insurance Co.
"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 12.02 hereof or such other address as to which the
Trustee may give notice to the Company.
"Deed of Trust" means the Deed of Trust and Collateral Assignment of
Rents, dated as of the date hereof, by the Company in favor of the Collateral
Agent, as amended and supplemented from time to time.
"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 Notes" means Notes that are in the form of the Notes
attached hereto as Exhibit A, that do not include the information called for by
footnotes 1 and 3 thereof.
"Depository" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.03 hereof as
the Depository with respect to the Notes, until a successor shall have been
appointed and become such pursuant to the applicable provision of this
Indenture, and, thereafter, "Depository" shall mean or include such successor.
"Disqualified Stock" means any Capital Stock that, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the Holder thereof, in whole or in part, on or prior to the date
that is 91 days after the date on which the Notes mature.
"Elsinore" means Elsinore Corporation, a Nevada corporation.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Offer" means the offer that may be made by the Company
pursuant to the Registration Rights Agreement to exchange Series B Notes for the
Series A Notes.
"Event of Loss" means, with respect to any property or asset (tangible
or intangible, real or personal) constituting Collateral owned by the Company or
any Restricted Subsidiary, any of the following:
5
(i) any loss, destruction or damage of such property or asset; (ii) any actual
condemnation, seizure or taking by exercise of the power of eminent domain or
otherwise of such property or asset, or confiscation of such property or asset
or the requisition of the use of such property or asset; or (iii) any settlement
in lieu of clause (ii) above, in the case of clause (i), (ii) or (iii), whether
in a single event or a series of related events, which results in Net Proceeds
in excess of $500,000.
"Fixed Charges" means, with respect to any Person for any period, the
sum, without duplication, of (i) the consolidated interest expense, of such
Person and its Restricted Subsidiaries for such period, whether paid or accrued
(excluding amortization of debt issuance costs and issuance discounts in
connection with the Offering and costs of extinguishing Indebtedness to be
repaid with proceeds of the Offering, but including, without limitation,
amortization of other debt issuance costs and original issue discount, non-cash
interest payments, the interest component of any deferred payment obligations,
the interest component of all payments associated with Capital Lease
Obligations, imputed interest with respect to Attributable Debt, commissions,
discounts and other fees and charges incurred in respect of letter of credit or
bankers' acceptance financings, and net payments (if any) pursuant to Hedging
Obligations) and (ii) the consolidated interest expense of such Person and its
Restricted Subsidiaries that was capitalized during such period, and (iii) any
interest expense on Indebtedness of another Person that is Guaranteed by such
Person or any of its Restricted Subsidiaries or secured by a Lien on assets of
such Person or any of its Restricted Subsidiaries (whether or not such Guarantee
or Lien is called upon) and (iv) the product of (a) all dividend payments,
whether or not in cash, on any series of preferred stock of such Person or any
of its Restricted Subsidiaries, other than dividend payments on Equity Interests
payable solely in Equity Interests of the Company, times (b) a fraction, the
numerator of which is one and the denominator of which is one minus the then
current combined federal, state and local statutory tax rate of such Person,
expressed as a decimal, in each case, on a consolidated basis and in accordance
with GAAP.
"Fixed Charge Coverage Ratio" means with respect to any Person for any
period, the ratio of the Consolidated Cash Flow of such Person and its
Restricted Subsidiaries for such period to the Fixed Charges of such Person or
its Restricted Subsidiaries for such period. In the event that the Company or
any of its Restricted Subsidiaries incurs, assumes, guarantees or redeems any
Indebtedness (other than revolving credit borrowings) or issues preferred stock
subsequent to the commencement of the period for which the Fixed Charge Coverage
Ratio is being calculated but prior to the date on which the event for which the
calculation of the Fixed Charge Coverage Ratio is made (the "Calculation Date"),
then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect
to such incurrence, assumption, guarantee or redemption of Indebtedness, or such
issuance or redemption of preferred stock, as if the same had occurred at the
beginning of the applicable four-quarter reference period. In addition, for
purposes of making the computation referred to above, (i) acquisitions that have
been made by the Company or any of its Restricted Subsidiaries, including
through mergers or consolidations and including any related financing
transactions, during the four-quarter reference period or subsequent to such
reference period and on or prior to the Calculation Date shall be given pro
forma effect as though they had occurred on the first day of the four-quarter
reference period and Consolidated Cash Flow for such reference period shall be
calculated without giving effect to clause (iii) of the proviso set forth in the
definition of Consolidated Net Income, and (ii) the Consolidated Cash Flow
attributable to discontinued operations, as determined in accordance with GAAP,
and operations or businesses disposed of prior to the Calculation Date, shall be
excluded on a pro forma basis, and (iii) the Fixed Charges attributable to
discontinued operations, as determined in accordance with GAAP, and operations
or businesses disposed of prior to the Calculation Date, shall be excluded on a
pro forma basis, but only to the extent that the obligations giving rise to such
Fixed Charges will not be obligations of the referent Person or any of its
Restricted Subsidiaries following the Calculation Date.
6
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect on the date of this Indenture.
"Gaming Authority" means any agency, authority, board, bureau,
commission, department, office or instrumentality of any nature whatsoever of
the United States of America or foreign government, any state, province or any
city or other political subdivision, whether now or hereafter existing, or any
officer or official thereof, including without limitation, the Nevada Gaming
Commission, the Nevada State Gaming Control Board, the Colorado Limited Gaming
Control Commission and any other agency with authority to regulate any gaming
operation (or proposed gaming operation) owned, managed or operated by the
Company or any of its Subsidiaries.
"Gaming Equipment" means slot machines, gaming tables and other gaming
devices, including, without limitation, gaming devices as defined in Nevada
Revised Statutes Section 463.0155, and related equipment.
"Gaming Law" means the gaming laws of any jurisdiction or jurisdictions
to which the Company, any of its Subsidiaries or any of the Guarantors is, or
may at any time after the date of this Indenture, be subject.
"Gaming License" means every material license, franchise or other
authorization required to own, lease, operate or otherwise conduct gaming
activities of the Company or any of its Subsidiaries, including without
limitation all such licenses granted under the Nevada Gaming Control Act, the
regulations promulgated pursuant thereto, and other applicable federal, state,
foreign or local laws.
"Global Note" means a Note that contains the paragraph referred to in
footnote 1 and the additional schedule referred to in footnote 3 to the form of
the Note attached hereto as Exhibit A, and that is deposited with and registered
in the name of the Depository.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which guarantee
or obligations the full faith and credit of the United States is pledged.
"Guarantors" means each of (i) ROC, RGM, RGMC and Riviera Gaming
Management -- Elsinore, Inc. and (ii) any other Restricted Subsidiary that
executes a Subsidiary Guarantee in accordance with the provisions of this
Indenture, and their respective successors and assigns.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements and (ii) other
agreements or arrangements designed to protect such Person against fluctuations
in interest rates.
"Holder" means a Person in whose name a Note is registered.
"Indebtedness" means, with respect to any Person, any indebtedness of
such Person, whether or not contingent, in respect of borrowed money or
evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof) or banker's acceptances
or representing Capital Lease Obligations or the balance deferred and unpaid of
the purchase price of any property or representing any Hedging Obligations,
except any such balance that constitutes an accrued
7
expense or trade payable, if and to the extent any of the foregoing indebtedness
(other than letters of credit and Hedging Obligations) would appear as a
liability upon a balance sheet of such Person prepared in accordance with GAAP,
as well as all indebtedness of others secured by a Lien on any asset of such
Person (whether or not such indebtedness is assumed by such Person) and, to the
extent not otherwise included, the guarantee by such Person of any indebtedness
of any other Person but excluding the Company's 11% First Mortgage Notes due
2002 and any guaranty by ROC of payment thereof. The amount of any Indebtedness
outstanding as of any date shall be (i) the accreted value thereof, in the case
of any Indebtedness that does not require current payments of interest, and (ii)
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.
"Investments" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including guarantees of Indebtedness or other obligations),
advances or capital contributions (excluding commission, travel and similar
advances to officers and employees made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP.
Investments do not include amounts deposited in trust for employee benefit
plans, and without limiting the generality of the foregoing, do not include
amounts deposited by the Company in any "rabbi" trust for the benefit of
executive officers or other employees of the Company. If the Company or any
Subsidiary of the Company sells or otherwise disposes of any Equity Interests of
any direct or indirect Restricted Subsidiary of the Company such that, after
giving effect to any such sale or disposition, such Person is no longer a
Subsidiary of the Company, the Company shall be deemed to have made an
Investment on the date of any such sale or disposition equal to the fair market
value of the Equity Interests of such Restricted Subsidiary not sold or disposed
of in an amount determined as provided in Section 4.07 hereof.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in Las Vegas, the City of New York 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 at a place of payment, 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.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction).
"Liquidated Damages" means all liquidated damages owed, if any, by the
Company to each Holder of Notes, pursuant to Section 5 of the Registration
Rights Agreement.
"Management Agreement" means an agreement providing for the management
by the Company or any of its Restricted Subsidiaries of a Person engaged in
Permitted Businesses, provided that the only cash consideration payable
thereunder shall be payable to the Company or a Restricted Subsidiary.
"Merger" means the acquisition of the Company by one or more entities
controlled by Xx. Xxxxx Xxxxxxx.
8
"Net Income" means, with respect to any Person, the net income (loss)
of such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however, (i) any net gain or
loss, together with any related provision for taxes on such gain or loss,
realized in connection with (a) any Asset Sale (including, without limitation,
dispositions pursuant to sale and leaseback transactions) or (b) the disposition
of any securities by such Person or any of its Restricted Subsidiaries or the
extinguishment of any Indebtedness of such Person or any of its Restricted
Subsidiaries, and (ii) any extraordinary or nonrecurring net gain or loss,
together with any related provision for taxes on such extraordinary or
nonrecurring net gain or loss.
"Net Proceeds" means the aggregate cash proceeds received by the
Company or any of its Restricted Subsidiaries in respect of any Asset Sale or
Event of Loss or in respect of the initial issuance and sale of the Notes
(including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale or Event of
Loss and insurance proceeds), net of the direct costs relating to such Asset
Sale, Event of Loss or sale of Notes (including, without limitation, legal,
accounting and investment banking fees, and sales commissions) and any
relocation expenses incurred as a result thereof, taxes paid or payable as a
result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements), amounts required to be applied to
the repayment of Indebtedness (other than the Revolving Credit Facility) secured
by a Lien on the asset or assets that were the subject of such Asset Sale and
any reserve for adjustment in respect of the sale price of such asset or assets,
or for liabilities retained by the Company or its Restricted Subsidiaries at the
time of the Asset Sale, in each case established in accordance with GAAP.
"Note Custodian" means the Trustee, as custodian with respect to the
Notes in global form, or any successor entity thereto.
"Non-Recourse Debt" means Indebtedness as to which neither the Company
nor any of its Restricted Subsidiaries (a) provides credit support of any kind
(including any undertaking, agreement or instrument that would constitute
Indebtedness), (b) is directly or indirectly liable as a guarantor or
otherwise), or (c) constitutes the lender.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Offering" means the offering of the Notes by the Company.
"Offering Circular" means the Offering Circular dated August 8, 1997
pursuant to which the Offering was made.
"Officer" means, with respect to any Person, the Chairman of the Board
of Directors, the Chief Executive Officer, the President, the Chief Operating
Officer, the Chief Financial Officer, the Treasurer, any Assistant Treasurer,
the Controller, the Secretary or any Vice President of such Person.
"Officers' Certificate" means a certificate signed on behalf of the
Company or a Guarantor, as the case may be, by two Officers of the Company or a
Guarantor, as the case may be, one of whom must be the principal executive
officer, the principal financial officer, the treasurer or the principal
accounting officer of the Company or a Guarantor, as the case may be, that meets
the requirements set forth in Section 12.05 hereof.
9
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements set forth in
Section 12.05 hereof. The counsel may be an employee of or counsel to the
Company, any Subsidiary of the Company, any Guarantor or the Trustee.
"Permitted Black Hawk Debt" means third-party financing for the Black
Hawk Project.
"Permitted Businesses" means the lines of business engaged in by the
Company and its Subsidiaries on the date of this Indenture, and all businesses
related, complementary, or incidental thereto, including but not limited to
gaming, lodging, entertainment and food and beverage service, retail store
leasing and concessions, licensing products, services and trade names, and
consulting with and managing third parties who are engaged in the foregoing and
similar lines of businesses.
"Permitted Investments" means (a) any Investment in the Company or in a
Restricted Subsidiary of the Company that is a Guarantor; (b) any Investment in
Cash Equivalents; (c) any Investment by the Company or any Restricted Subsidiary
of the Company in a Person if as a result of such Investment (i) such Person
becomes a Restricted Subsidiary of the Company and a Guarantor; or (ii) such
Person is merged, consolidated or amalgamated with or into, or transfers or
conveys substantially all of its assets to, or is liquidated into, the Company
or a Restricted Subsidiary of the Company that is a Guarantor; (d) any
Investment made as a result of the receipt of non-cash consideration from an
Asset Sale that was made pursuant to and in compliance with Section 4.11 hereof;
(e) any acquisition of assets solely in exchange for the issuance of Equity
Interests (other than Disqualified Stock) of the Company; (f) Hedging
Obligations; (g) any Investment in the Black Hawk Project (or an alternative
project as to which the Company is permitted to invest Net Proceeds of the
Offering pursuant to Section 4.17) not to exceed $30.0 million; (h) any
Investment in an entity formed for the purpose of developing the Six Acre Tracts
not to exceed $5.0 million (plus the value of the underlying real property, if
contributed to such entity); and (i) credit extensions to gaming customers.
"Permitted Liens" means (i) Liens created or permitted by the
Collateral Documents; (ii) Liens on Gaming Equipment, inventory and receivables
securing Indebtedness that was permitted by the terms of this Indenture to be
incurred; (iii) Liens in favor of the Company; (iv) Liens on property of a
Person existing at the time such Person is merged into, consolidated with or
acquired by the Company or any Subsidiary of the Company; provided that such
Liens were in existence prior to the contemplation of such merger, consolidation
or acquisition and do not extend to any assets other than those of the Person
merged into, consolidated with or acquired by the Company; (v) Liens on property
(other than the Black Hawk Land) existing at the time of acquisition thereof by
the Company or any Subsidiary of the Company, provided that such Liens were in
existence prior to the contemplation of such acquisition and do not extend to
any property other than the property acquired; (vi) Liens to secure the
performance of statutory obligations, surety or appeal bonds, performance bonds
or other obligations of a like nature incurred in the ordinary course of
business; (vii) Liens to secure Indebtedness (including Capital Lease
Obligations) permitted by Section 4.10 hereof (and any refinancing thereof)
covering only the assets acquired, constructed or improved with such
Indebtedness; (viii) Liens existing on the date of this Indenture; (ix) Liens
for taxes, assessments or governmental charges or claims that are not yet
delinquent or that are being contested in good faith by appropriate proceedings
promptly instituted and diligently conducted, provided that any reserve or other
appropriate provision as shall be required in conformity with GAAP shall have
been made therefor; (x) Liens incurred in the ordinary course of business of the
Company or any Subsidiary of the Company with respect to obligations that do not
exceed $5.0 million at any one time outstanding and that (a) are not incurred in
connection with the borrowing of money or the obtaining of advances or credit
(other than trade credit in the ordinary course of business) and (b) do not in
the aggregate materially detract from the value of the property or materially
impair the use thereof in the
10
operation of business by the Company or such Subsidiary; (xi) Liens incurred in
the ordinary course of business in respect of Hedging Obligations; (xii) Liens
arising by reason of any judgment, decree or order of any court with respect to
which the Company or any of its Restricted Subsidiaries is then in good faith
diligently prosecuting an appeal or other proceedings for review, provided that
the existence of such judgment, decree or order is not a Default or Event of
Default under this Indenture and any reserve or other appropriate provision as
shall be required in conformity with GAAP shall have been made therefor; (xiii)
Liens securing the Permitted Black Hawk Debt in existence on the date, if any,
on which Black Hawk Operating Company becomes a Restricted Subsidiary pursuant
to Section 4.09 hereof; (xiv) carriers' liens, warehousemen's liens, repairmen's
liens, vendors' liens, and similar encumbrances, rights or restrictions on
personal property, not in existence on the date of this Indenture and not
interfering in any material respect with the ordinary conduct of the business of
the Company or any of its Subsidiaries and not impairing in any material respect
the value of the Collateral; (xv) leases, subleases, easements, licenses and
rights of way not in existence on the date of this Indenture and not interfering
in any material respect with the ordinary conduct of the business of the Company
or any of its Subsidiaries and not impairing in any material respect the value
of the Collateral; (xvi) mechanics' liens incurred in the ordinary course of
business, provided that the same are being contested in good faith by
appropriate proceedings and (if required) bonded in an amount sufficient to
cover the amount of any such lien; (xvii) Liens securing Permitted Refinancing
Indebtedness in compliance with this Indenture with respect to secured
Indebtedness, provided that the Liens securing such Permitted Refinancing
Indebtedness do not extend to any assets other than those that secured the
Indebtedness refinanced; (xviii) with respect to any vessel included in the
Collateral, certain maritime liens, including liens for crew's wages and
salvage; and (xix) any extension, renewal, or replacement (or successive
extensions, renewals or replacements) in whole or in part, of Liens described in
clauses (i) through (xviii) above.
"Permitted Refinancing Indebtedness" means any Indebtedness of the
Company or any of its Subsidiaries issued in exchange for, or the net proceeds
of which are used to extend, refinance, renew, replace, defease or refund other
Indebtedness of the Company or any of its Restricted Subsidiaries; provided
that: (i) the principal amount (or accreted value, if applicable) of such
Permitted Refinancing Indebtedness does not exceed the principal amount of (or
accreted value, if applicable), plus accrued interest on, the Indebtedness so
extended, refinanced, renewed, replaced, defeased or refunded (plus the amount
of reasonable expenses incurred in connection therewith); (ii) except for
revolving credit Indebtedness, such Permitted Refinancing Indebtedness has no
mandatory obligation to pay principal on a date earlier than the final maturity
date of, and has a Weighted Average Life to Maturity equal to or greater than
the Weighted Average Life to Maturity of, the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; (iii) if the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded is
subordinated in right of payment to the Notes, such Permitted Refinancing
Indebtedness is subordinated in right of payment to the Notes on terms at least
as favorable to the Holders of Notes as those contained in the documentation
governing the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded; and (iv) such Indebtedness is incurred either by the
Company, or by the Restricted Subsidiary who is the obligor on the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or agency or political subdivision thereof (including any subdivision
or ongoing business of any such entity or substantially all of the assets of any
such entity, subdivision or business).
11
"Pledge Agreements" mean the respective Stock Pledge and Security
Agreements, dated as of the date hereof, by the Company and the Guarantors in
favor of the Collateral Agent, as amended and supplemented from time to time.
"pro forma" means, with respect to any calculation made or required to
be made pursuant to the terms of this Indenture, a calculation in accordance
with Article 11 of Regulation S-X under the Securities Act of 1933, as amended,
as interpreted by the Company's chief financial officer or Board of Directors in
consultation with its independent certified public accountants.
"RGM" means Riviera Gaming Management, Inc., a Nevada corporation.
"RGMC" means Riviera Gaming Management of Colorado, Inc., a Colorado
corporation.
"ROC" means Riviera Operating Corporation, a Nevada corporation.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of August 13, 1997, 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.
"Related Party" with respect to any Controlling Person means (a) any
Affiliate, or spouse or immediate family member (in the case of an individual)
of such Controlling Person, or (b) any trust, corporation, partnership or other
entity, the beneficiaries, stockholders, partners, owners or Persons
beneficially holding a majority interest of which consist of such Controlling
Person and/or such other Persons referred to in the immediately preceding clause
(a), or (c) any trustee, executor or receiver appointed to manage or administer
the assets of a Controlling Person who is an individual following the death of
such individual.
"Responsible Officer," when used with respect to the Trustee, means any
officer within the Corporate Trust Administration of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Restricted Account Agreement" means the Restricted Account Agreement,
dated as of the date hereof, by the Company in favor of the Collateral Agent, as
amended and supplemented from time to time.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of the
referent Person that is not an Unrestricted Subsidiary.
"Revolving Credit Facility" means the Revolving Line of Credit Loan
Agreement, entered into on February 28, 1997 between the Company and the lender
named therein, as the same may be further amended, modified, renewed, refunded,
replaced or refinanced from time to time, including (i) any related notes,
letters of credit, guarantees, collateral documents, instruments and agreements
executed in connection therewith, and in each case as amended, modified,
renewed, refunded, replaced or refinanced from time to time, and (ii) any notes,
guarantees, collateral documents, instruments and agreements executed in
connection with such amendments, modification, renewal, refunding, replacement
or refinancing.
12
"Riviera Property" means the real property owned by the Company and
located at 0000 Xxx Xxxxx Xxxxxxxxx Xxxxx, Xxx Xxxxx, Xxxxxx, and all additions
thereto and improvements thereon, which are subject to the Lien created by the
Deed of Trust.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Agreements" means the respective Security Agreements, dated
as of the date hereof, by the Company and the Guarantors in favor of the
Collateral Agent, as amended and supplemented from time to time.
"Significant Subsidiary" means any Restricted Subsidiary that would be
a "significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date of this Indenture.
"Six Acre Tracts" shall have the meaning specified in the Deed of
Trust.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a combination
thereof) and (ii) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are such Person or of one or more
Subsidiaries of such Person (or any combination thereof).
"Subsidiary 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), by any Guarantor
pursuant to Section 11.01 hereof (including by virtue of Section 4.18 hereof).
"TIA" means the Trust Indenture Act of 1939 (15 X.X.X.xx.xx.
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA.
"Transfer Restricted Securities" means securities that bear or are
required to bear the legend set forth in Section 2.06 hereof.
"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 the successor serving hereunder.
13
"Unrestricted Subsidiary" means (i) any Subsidiary that is designated
by the Board of Directors as an Unrestricted Subsidiary pursuant to a Board
Resolution; but only to the extent that such Subsidiary: (a) has no Indebtedness
other than Non-Recourse Debt; (b) is not party to any agreement, contract,
arrangement or understanding with the Company or any Restricted Subsidiary of
the Company unless the terms of any such agreement, contract, arrangement or
understanding are no less favorable to the Company or such Restricted Subsidiary
than those that might be obtained at the time from Persons who are not
Affiliates of the Company; (c) is a Person with respect to which neither the
Company nor any of its Restricted Subsidiaries has any direct or indirect
obligation, except as permitted pursuant to clause (xv) of Section 4.10 hereof,
(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 (d) has not guaranteed or otherwise
directly or indirectly provided credit support for any Indebtedness of the
Company or any of its Restricted Subsidiaries. Any such designation by the Board
of Directors shall be evidenced to the Trustee by filing with the Trustee a
certified copy of the Board Resolution giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
foregoing conditions and was permitted by the Section 4.07 hereof. If, at any
time, any Unrestricted Subsidiary would fail to meet the foregoing requirements
as an Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of this Indenture and any Indebtedness of such
Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the
Company as of such date (and, if such Indebtedness is not permitted to be
incurred as of such date under Section 4.10, the Company shall be in default of
such covenant). The Board of Directors of the Company may at any time designate
any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such
designation shall be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted
Subsidiary and such designation shall only be permitted if (i) such Indebtedness
is permitted under Section 4.10, calculated on a pro forma basis as if such
designation had occurred at the beginning of the four-quarter reference period,
and (ii) no Default or Event of Default would be in existence following such
designation.
"Voting Stock" of any Person as of any date means the Capital Stock of
such Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" of any Person means a Restricted
Subsidiary of such Person all of the outstanding Capital Stock or other
ownership interests of which (other than directors' qualifying shares) shall at
the time be owned by such Person or by one or more Wholly Owned Restricted
Subsidiaries of such Person.
14
Section 1.02. Other Definitions.
Defined in
Term Section
"Accredited Investors"....................... 2.01
"Affiliate Transaction"...................... 4.12
"Asset Sale Offer"........................... 4.11
"Benefitted Party"........................... 11.01
"Change of Control Offer".................... 4.16
"Change of Control Payment".................. 4.16
"Change of Control Payment Date"............. 4.16
"Covenant Defeasance"........................ 8.03
"DTC"........................................ 2.03
"Disqualified Holder"........................ 3.08
"Excess Proceeds"............................ 4.11
"incur"...................................... 4.10
"Legal Defeasance"........................... 8.02
"Mandatory Offer"............................ 3.10
"New Subsidiary"............................. 4.18
"Note Custodian"............................. 2.03
"Offer Amount"............................... 3.10
"Offer Period"............................... 3.10
"Paying Agent"............................... 2.03
"Payment Default"............................ 6.01
"Purchase Date".............................. 3.10
"QIB"...................................... 2.01
"Registrar"................................ 2.03
"Restricted Payments"...................... 4.07
Section 1.03. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the 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:
"indenture securities" means the Notes and the Subsidiary Guarantees;
"indenture security Holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
"obligor" on the Notes means the Company, the Guarantors and any
successor obligor upon the Notes or any Subsidiary Guarantee, as the case may
be.
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.
14
Section 1.04. 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; and
(6) references to sections of or rules under the Securities Act
shall be deemed to include substitute, replacement of successor sections or
rules adopted by the SEC from time to time.
ARTICLE 2
THE NOTES
Section 2.01. Form and Dating.
The Notes and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A hereto. The Subsidiary Guarantees shall
be substantially in the form of Exhibit B hereto. 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 and the
Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby.
(a) Global Notes. Notes offered and sold within the United States
to qualified institutional buyers as defined in Rule 144A ("QIBs") in reliance
on Rule 144A shall be issued initially in the form of Global Notes, which shall
be deposited on behalf of the purchasers of the Notes represented thereby with
the Depository or its custodian at its New York office (or at an office of the
Trustee, if authorized to have custody of the Global Notes), and registered in
the name of the Depository or a nominee of the Depository, duly executed by the
Company and authenticated by the Trustee as hereinafter provided. The aggregate
principal amount of the Global Notes may from time to time be increased or
decreased by adjustments made on the records of the Trustee and the Depository
or its nominee as hereinafter provided. Notes offered and sold within the United
States to accredited investors as defined in Rule 501(a)(1), (2), (3), (4) or
(7) under the Securities Act who are not QIBs ("Accredited Investors") may be
issued initially in the form of Global Notes as specified above, or may be
issued initially in the form of Definitive Notes, registered in the name of the
Accredited Investor or its nominee, duly executed by the Company and
authenticated by the Trustee as hereinafter provided.
(b) Book-Entry Provisions. This Section 2.01(b) shall apply only
to Global Notes deposited with or on behalf of the Depository. The Company shall
execute and the Trustee shall, in accordance with this Section 2.01(b) and
Section 2.02, authenticate and deliver the Global Note that (i) shall be
registered in
15
the name of the Depository or the nominee of the Depository and (ii) shall be
delivered by the Trustee to the Depository or pursuant to the Depository's
instructions or held by the Trustee as custodian for the Depository.
(c) Definitive Notes. Any Person having a beneficial interest in
the Global Note may, upon request to the Trustee, exchange such beneficial
interest for Notes in the form of Definitive Notes substantially in the form of
Exhibit A attached hereto (but without including the text referred to in
footnotes 1 and 3 thereto).
(d) Global Notes Generally. Notes issued in global form shall be
substantially in the form of Exhibit A attached hereto (including the text
referred to in footnotes 1 and 3 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 amount of outstanding Notes from time to
time endorsed thereon and that the aggregate 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 amount of
outstanding Notes represented thereby shall be made by the Trustee or the Note
Custodian, at the direction of the Trustee, in accordance with instructions
given by the Holder thereof as required by Section 2.06 hereof.
Section 2.02. Execution and Authentication.
An Officer of the Company shall sign the Notes on behalf of the Company
by manual or facsimile signature. If an Officer whose signature is on a Note no
longer holds that office at the time such 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, authenticate Notes for original issue up to
the aggregate principal amount stated in paragraph 4 of the Notes. The aggregate
principal amount of Notes outstanding at any time may not exceed such amount
except as provided in Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate the 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 the Company or
an Affiliate of the Company. Section 2.03. Registrar and Paying Agent.
Section 2.03. Registrar and Paying Agent
The Company shall maintain an office or agency where (i) Notes may be
presented for registration of transfer or for exchange ("Registrar") and (ii)
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.
16
The Company initially appoints The Depository Trust Company ("DTC") to
act as Depository with respect to the Global Notes. The Company shall register
the Global Notes in the name of Cede & Co., as nominee of DTC. The Company
initially appoints the Trustee to act as the Registrar and Paying Agent and to
act as custodian with respect to the Global Notes ("Note Custodian").
Section 2.04. Paying Agent to Hold Money in Trust.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that such Paying Agent shall hold in trust for the benefit of
Holders or the Trustee all money held by such Paying Agent for the payment of
principal, premium or Liquidated Damages, if any, and interest on the Notes, and
shall notify the Trustee of any default by the Company or any Guarantor 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. At any time,
the Company may require a Paying Agent to pay all money held by it to the
Trustee. Upon payment of such monies 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 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 or any Guarantor, the Trustee shall serve as Paying
Agent for the Notes.
Section 2.05. 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 ss. 312(a). If the Trustee is
not the Registrar, the Company or the Guarantors shall 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 and the Guarantors shall otherwise comply with
TIA ss. 312(a).
Section 2.06. Transfer and Exchange.
(a) Transfer and Exchange of Definitive Notes. When Definitive Notes
are presented by a Holder to the Registrar with a request:
(i) to register the transfer of the Definitive Notes; or
(ii) to exchange such Definitive Notes for an equal principal
amount of Definitive Notes of other authorized denominations,
the Registrar shall register the transfer or make the exchange as requested if
its requirements for such transactions are met; provided, however, that the
Definitive Notes presented or surrendered for register of transfer or exchange:
(i) shall be duly endorsed or accompanied by a written
instruction of transfer in form satisfactory to the Registrar
duly executed by such Holder or by his attorney, duly
authorized in writing; and
(ii) in the case of a Definitive Note that is a Transfer
Restricted Security, such request shall be accompanied by the
following additional information and documents, as
applicable:
17
(A) if such Transfer Restricted Security is being delivered
to the Registrar by a Holder for registration in the
name of such Holder, without transfer, a certification
to that effect from such Holder (in substantially the
form of Exhibit C hereto); or
(B) if such Transfer Restricted Security is being
transferred to a QIB in accordance with Rule 144A or
pursuant to an exemption from registration in
accordance with Rule 144 or Rule 904 under the
Securities Act or pursuant to an effective registration
statement under the Securities Act, a certification to
that effect from such Holder (in substantially the form
of Exhibit C hereto); or
(C) if such Transfer Restricted Security is being
transferred in reliance on another exemption from the
registration requirements of the Securities Act, a
certification to that effect from such Holder (in
substantially the form of Exhibit C hereto) and an
Opinion of Counsel from such Holder or the transferee
reasonably acceptable to the Company and to the
Registrar to the effect that such transfer is in
compliance with the Securities Act.
(b) Transfer of a Definitive Note for a Beneficial Interest in a
Global Note. A Definitive Note may not be exchanged for a beneficial interest in
a Global Note except upon satisfaction of the requirements set forth below. Upon
receipt by the Trustee of a Definitive Note, duly endorsed or accompanied by
appropriate instruments of transfer, in form satisfactory to the Trustee,
together with:
(i) if such Definitive Note is a Transfer Restricted Security,
a certification from the Holder thereof (in substantially
the form of Exhibit C hereto) to the effect that such
Definitive Note is being transferred by such Holder to a
QIB in accordance with Rule 144A; and
(ii) whether or not such Definitive Note is a Transfer
Restricted Security, written instructions from the Holder
thereof directing the Trustee to make, or to direct the
Note Custodian to make, an endorsement on the Global Note
to reflect an increase in the aggregate principal amount
of the Notes represented by the Global Note,
in which case the Trustee shall cancel such Definitive Note in accordance with
Section 2.11 hereof and cause, or direct the Note Custodian to cause, in
accordance with the standing instructions and procedures existing between the
Depository and the Note Custodian, the aggregate principal amount of Notes
represented by the Global Note to be increased accordingly. If no Global Notes
are then outstanding, the Company shall issue and, upon receipt of an
authentication order in accordance with Section 2.02 hereof, the Trustee shall
authenticate a new Global Note in the appropriate principal amount.
(c) Transfer and Exchange of Global Notes. The transfer and exchange of
Global Notes or beneficial interests therein shall be effected through the
Depository, in accordance with this Indenture and the procedures of the
Depository therefor, which shall include restrictions on transfer comparable to
those set forth herein to the extent required by the Securities Act.
(d) Transfer of a Beneficial Interest in a Global Note for a Definitive
Note.
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(i) Any Person having a beneficial interest in a Global Note
may upon request to the Trustee exchange such beneficial
interest for a Definitive Note. Upon receipt by the
Trustee of written instructions or such other form of
instructions as is customary for the Depository, from the
Depository or its nominee on behalf of any Person having
a beneficial interest in a Global Note, and, in the case
of a Transfer Restricted Security, the following
additional information and documents (all of which may be
submitted by facsimile):
(A) if such beneficial interest is being transferred
to the Person designated by the Depository as
being the beneficial owner, a certification to
that effect from such Person (in substantially the
form of Exhibit C hereto); or
(B) if such beneficial interest is being transferred
to a QIB in accordance with Rule 144A or pursuant
to an exemption from registration in accordance
with Rule 144 or Rule 904 under the Securities Act
or pursuant to an effective registration statement
under the Securities Act, a certification to that
effect from the transferor (in substantially the
form of Exhibit C hereto); or
(C) if such beneficial interest is being transferred
in reliance on another exemption from the
registration requirements of the Securities Act, a
certification to that effect from the transferor
(in substantially the form of Exhibit C hereto)
and an Opinion of Counsel from the transferee or
transferor reasonably acceptable to the Company
and to the Registrar to the effect that such
transfer is in compliance with the Securities Act,
in which case the Trustee or the Note Custodian, at the
direction of the Trustee, shall, in accordance with the
standing instructions and procedures existing between the
Depository and the Note Custodian, cause the aggregate
principal amount of Global Notes to be reduced
accordingly and, following such reduction, the Company
shall execute and, upon receipt of an authentication
order in accordance with Section 2.02 hereof, the Trustee
shall authenticate and deliver to the transferee a
Definitive Note in the appropriate principal amount.
(ii) Definitive Notes issued in exchange for a beneficial
interest in a Global Note pursuant to this Section
2.06(d) shall be registered in such names and in such
authorized denominations as the Depository, pursuant to
instructions from its direct or indirect participants or
otherwise, shall instruct the Trustee. The Trustee shall
deliver such Definitive Notes to the Persons in whose
names such Notes are so registered.
(e) Restrictions on Transfer and Exchange of Global Notes.
Notwithstanding any other provision of this Indenture (other than the provisions
set forth in subsection (f) of this Section 2.06), a Global Note may not be
transferred as a whole except by the Depository to a nominee of the Depository
or by a nominee of the Depository to the Depository or another nominee of the
Depository or by the Depository or any such nominee to a successor Depository or
a nominee of such successor Depository.
(f) Authentication of Definitive Notes in Absence of Depository.
If at any time:
20
(i) the Depository for the Global Notes notifies the Company
that the Depository is unwilling or unable to continue as
Depository for the Global Notes and a successor
Depository for the Global Notes is not appointed by the
Company within 90 days after delivery of such notice; or
(ii) the Company, at its sole discretion, notifies the Trustee
in writing that it elects to cause the issuance of
Definitive Notes under this Indenture,
then, upon surrender by the Global Note Holder of its Global Note, the Company
shall execute, and the Trustee shall, upon receipt of an authentication order in
accordance with Section 2.02 hereof, authenticate and deliver to each Person
that the Global Note Holder and the Depository identify as being the beneficial
owner of the related Notes, Definitive Notes in an aggregate principal amount
equal to the principal amount of the Global Notes exchanged for such Definitive
Notes. Neither the Company nor the Trustee will be liable for any delay by the
Global Note Holder or the Depository in identifying the beneficial owners of
Notes and the Company and the Trustee may conclusively rely on, and will be
protected in relying on, instructions from the Global Note Holder or the
Depository for all purposes.
(g) Legends.
(i) Except as permitted by the following paragraphs (ii) and
(iii), each Note certificate evidencing Global Notes and
Definitive Notes (and all Notes issued in exchange
therefor or substitution thereof) shall bear legends in
substantially the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT")
OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY 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 SECURITY BY ITS
ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE
TRANSFER SUCH SECURITY, 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 CLOSING DATE
HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY
(OR ANY PREDECESSOR OF SUCH SECURITY) ONLY (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 NOTES ARE ELIGIBLE FOR RESALE PURSUANT
TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) THAT PURCHASES FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHOM NOTICE IS GIVEN
21
THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A,
(D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT
OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
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 SECURITY 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 OR 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 PURSUANT TO CLAUSE (D), (E)
OR (F) 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
SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO
THE TRUSTEE.
(ii) Upon any sale or transfer of a Transfer Restricted
Security (including any Transfer Restricted Security
represented by a Global Note) pursuant to Rule 144 under
the Securities Act or pursuant to an effective
registration statement under the Securities Act:
(A) in the case of any Transfer Restricted Security
that is a Definitive Note, the Registrar shall
permit the Holder thereof to exchange such
Transfer Restricted Security for a Definitive Note
that does not bear the legend set forth in (i)
above and rescind any restriction on the transfer
of such Transfer Restricted Security; and
(B) in the case of any Transfer Restricted Security
represented by a Global Note, such Transfer
Restricted Security shall not be required to bear
the legend set forth in (i) above, but shall
continue to be subject to the provisions of
Section 2.06(c) hereof; provided, however, that
with respect to any request for an exchange of a
Transfer Restricted Security that is represented
by a Global Note for a Definitive Note that does
not bear the legend set forth in (i) above, which
request is made in reliance upon Rule 144, the
Holder thereof shall certify in writing to the
Registrar that such request is being made pursuant
to Rule 144 (such certification to be
substantially in the form of Exhibit C hereto).
(iii) Notwithstanding the foregoing, upon consummation of the
Exchange Offer, the Company shall issue and, upon receipt
of an authentication order in accordance with Section
2.02 hereof, the Trustee shall authenticate Series B
Notes in exchange for Series A Notes accepted for
exchange in the Exchange Offer, which Series B Notes
shall not bear the legend set forth in (i) above, and the
Xxxxxxxxx
00
shall rescind any restriction on the transfer of such
Notes, in each case unless the Holder of such Series A
Notes is either (A) a broker-dealer, (B) a Person
participating in the distribution of the Series A Notes
or (C) a Person who is an affiliate (as defined in Rule
144A) of the Company.
(h) Cancellation and/or Adjustment of Global Notes. At such time as all
beneficial interests in Global Notes have been exchanged for Definitive Notes,
redeemed, repurchased or canceled, all Global Notes shall be returned to or
retained and canceled 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 Definitive Notes, redeemed, repurchased or canceled, the
principal amount of Notes represented by such Global Note shall be reduced
accordingly and an endorsement shall be made on such Global Note, by the Trustee
or the Notes Custodian, at the direction of the Trustee, to reflect such
reduction.
(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
Definitive Notes and Global Notes at the Registrar's
request.
(ii) No service charge shall be made to a Holder 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 3.07, 3.08, 4.11, or 4.16 hereof).
(iii) The Registrar shall not be required to register the
transfer or exchange of any Note selected for redemption
in whole or in part, except the unredeemed portion of any
Note being redeemed in part.
(iv) All Definitive Notes and Global Notes issued upon any
registration of transfer or exchange of Definitive Notes
or Global Notes shall be the valid obligations of the
Company, evidencing the same debt, and entitled to the
same benefits under this Indenture, as the Definitive
Notes or Global 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 Notes during a period beginning at the
opening of business 15 days before the day of any
selection of Notes for redemption under Section
3.02 hereof and ending at the close of business on
the day of selection; or
(B) to register the transfer or exchange of 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.
23
(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 neither the Trustee, any
Agent nor the Company shall be affected by notice to the
contrary.
(vii) The Trustee shall authenticate Definitive Notes and
Global Notes in accordance with the provisions of Section
2.02 hereof.
Section 2.07. Replacement Notes.
If any mutilated Note is surrendered to the Trustee, or the Company and
the Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Note, the Company shall issue and the Trustee, upon the written
order of the Company signed by two Officers of the Company, 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
the Guarantors and shall be entitled to all of the benefits of this Indenture
equally and proportionately with all other Notes duly issued hereunder.
Section 2.08. Outstanding Notes.
The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those canceled by it, those delivered 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 as
not outstanding. Except as set forth in Section 2.09 hereof, a Note does not
cease to be outstanding because the Company, a Subsidiary or an Affiliate of the
Company holds the Note.
If a Note is replaced pursuant to Section 2.07 hereof, it 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
4.01 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 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 2.09. 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, other obligor or any Affiliate of the Company shall be considered as
though they are not outstanding, except that for the purposes of determining
whether the Trustee shall be protected in relying on any such direction, waiver
or consent, only Notes that the Trustee knows are so owned shall be so
disregarded. Notwithstanding the foregoing, Notes that are to be acquired by the
Company, other obligor or an Affiliate of the Company pursuant to an
24
exchange offer, tender offer or other agreement shall not be deemed to be owned
by the Company, the obligor or Affiliate of the Company until legal title to
such Notes passes to the Company or Affiliate, as the case may be.
Section 2.10. Temporary Notes.
Until Definitive Notes are ready for delivery, the Company may prepare
and the Trustee shall authenticate temporary Notes upon a written order of the
Company signed by two Officers of the Company. 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 shall cancel all Notes surrendered for registration of transfer,
exchange, payment, replacement or cancellation and shall dispose of canceled
Notes as the Company directs. Certification of the destruction of all canceled
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.
If the Company defaults in a payment of interest on the Notes, it shall
pay the defaulted interest in any lawful manner plus, to the extent lawful,
interest payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, in each case at the rate provided in the Notes
and in Section 4.01 hereof. The Company shall notify the Trustee in writing of
the amount of defaulted interest proposed to be paid on each Note and the date
of the proposed payment. The Company shall fix or cause to be fixed each such
special record date and payment date, provided that no such special record date
shall be less than 10 days prior to the related payment date for such defaulted
interest. At least 15 days before the special record date, the Company (or, upon
the written request of the Company, the Trustee in the name and at the expense
of the Company) shall mail or cause to be mailed to Holders a notice that states
the special record date, the related payment date and the amount of such
interest to be paid.
Section 2.13. CUSIP Number.
The Company in issuing the Notes may use a "CUSIP" number and if so the
Trustee shall use the CUSIP number in notices of redemption or exchange as a
convenience to Holders, provided that any such notice may state that no
representation is made as to the correctness or accuracy of the CUSIP number
printed in the notice or on the Notes and that reliance may be placed only on
the other identification numbers printed on the Notes. The Company shall
promptly notify the Trustee of any change in the CUSIP number.
Section 2.14. Exchange Registration.
In the event that the Company delivers to the Trustee a copy of an
order of effectiveness or a certification of the Company with respect to such
effectiveness with respect to the Exchange Offer, the
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Trustee shall, at the Company's expense, notify the Holders of the receipt of
such order of effectiveness or certification and upon the request of any Holder
shall exchange such Holder's Notes upon the terms set forth in the Exchange
Offer.
ARTICLE 3
REDEMPTION AND PREPAYMENT
Section 3.01. Notices to Trustee.
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof or is otherwise required to redeem
Notes pursuant to any other provision of this Indenture, it shall furnish to the
Trustee, at least 30 days but not more than 60 days before a redemption date (or
such lesser period as may be acceptable to the Trustee), 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 3.02. Selection of Notes to Be Redeemed.
If less than all of the Notes are to be redeemed at any time, selection
of the Notes for redemption will be made by the Trustee 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 by such method as the Trustee shall deem fair and appropriate; provided
that no Notes of $1,000 or less shall be redeemed in part. Notices of redemption
shall be mailed by first class mail at least 30 but not more than 60 days before
the redemption date to each Holder of the Notes to be redeemed at its registered
address. Notices of redemption may not be conditional. If any Note is to be
redeemed in part only, the notice of redemption that relates to such Note shall
state the portion of the principal amount thereof to be redeemed. A new Note in
principal amount equal to the unredeemed portion thereof will be issued in the
name of the Holder thereof upon cancellation of the original Note. Notes called
for redemption become due on the date fixed for redemption. On and after the
redemption date, interest ceases to accrue on the Notes or portions of them
called for redemption. 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 3.03. Notice of Redemption.
Subject to the provisions of Section 3.10 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, 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;
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(e) hat Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(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, 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 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.03
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 3.05. Deposit of Redemption Price.
One Business Day prior to the redemption date, the Company shall
deposit with the Trustee or with the Paying Agent money sufficient to pay the
redemption price of, accrued 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, respectively, by the Company in excess of the amounts necessary to
pay the redemption price of, accrued 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 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 4.01 hereof, to the person in whose name such Note was registered at the
close of business on such record date.
Section 3.06. Notes Redeemed in Part.
Upon surrender of a Note that is redeemed in part, the Company shall
issue and, upon the Company's written request, the Trustee shall authenticate
for the Holder at the expense of the Company a new Note equal in principal
amount to the unredeemed portion of the Note surrendered.
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Section 3.07. Optional Redemption.
(a) Except as set forth in clause (b) of this Section 3.07, the
Notes will not be redeemable at the Company's option pursuant to this Section
3.07 prior to August 15, 2001. Thereafter, the Notes will be subject to
redemption at any time at the option of the Company, in whole or in part, upon
not less than 30 nor more than 60 days' notice, at the redemption prices
(expressed as percentages of principal amount) set forth below plus accrued and
unpaid interest and Liquidated Damages, if any, thereon to the applicable
redemption date, if redeemed during the twelve-month period beginning on August
15 of the years indicated below:
Year Percentage
2001.......................... 105.000%
2002.......................... 102.500%
2003 and thereafter........... 100.000%
(b) Notwithstanding the provisions of clause (a) of this Section
3.07, during the period commencing upon issuance of the Notes and ending on
August 15, 2000, the Company may redeem up to one-third of the principal amount
of Notes at a redemption price of 110.0% of the principal amount thereof, plus
accrued and unpaid interest and Liquidated Damages thereon, if any, to the
redemption date with the net cash proceeds of an offering of common stock of the
Company; provided that at least $116.7 million in aggregate principal amount of
the Notes remain outstanding immediately after the occurrence of such
redemption; and provided further that the call for such redemption shall occur
within 30 days of the date of the closing of such offering.
(c) Any redemption pursuant to this Section 3.07 shall be made
pursuant to the provisions of Sections 3.01 through 3.06 hereof.
Section 3.08. Redemption Pursuant to Gaming Law.
(a) Notwithstanding the foregoing or any other provisions of this
Indenture, if any Gaming Authority requires that a Holder or beneficial owner of
the Notes must be licensed, qualified or found suitable under any applicable
Gaming Law in order to maintain any or obtain any applied-for Gaming License or
franchise of the Company or any of its Subsidiaries under any applicable Gaming
Law, and such Holder or beneficial owner fails to apply for a license,
qualification or finding of suitability within 30 days after being requested to
do so by such Gaming Authority (or such lesser period that may be required by
such Gaming Authority or Gaming Law) or if such Holder or beneficial owner is
not so licensed, qualified or found suitable by such Gaming Authority (a
"Disqualified Holder"), the Company shall have the right, at its option, (i) to
require such Disqualified Holder or beneficial owner to dispose of such
Disqualified Holder's or beneficial owner's Notes within 30 days of notice of
such finding by the applicable Gaming Authority that such Disqualified Holder or
beneficial owner will not be licensed, qualified or found suitable as directed
by such Gaming Authority (or such earlier date as may be required by the
applicable Gaming Authority or Gaming Law) or (ii) to call for redemption of the
Notes of such Holder or beneficial owner at a redemption price equal to the
lesser of 100% of the principal amount thereof or the price at which the Holder
or beneficial owner acquired such Notes together with, in either case, accrued
and unpaid interest and Liquidated Damages, if any, thereon to the earlier of
the date of redemption or the date of the finding of unsuitability by such
Gaming Authority, which may be less than 30
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days following the notice of redemption if so ordered by such Gaming Authority.
Immediately upon a determination of unsuitability, the Disqualified Holder shall
have no further rights whatsoever with respect to the Notes (i) to exercise,
directly or indirectly, through any trustee, nominee or any other Person or
entity, any right conferred by the Notes or (ii) to receive any interest or any
other distribution or payment with respect to the Notes, or any remuneration in
any form from the Company for services rendered or otherwise, except the
redemption price of the Notes. The Company is not required to pay or reimburse
any Holder or beneficial owner of Notes who is required to apply for such
license, qualification or finding of suitability for the costs of such
application including investigatory costs. Such expenses will, therefore, be the
obligation of such Holder or beneficial owner.
(b) Any redemption pursuant to this Section 3.08 shall be made
pursuant to the provisions of Sections 3.01 through 3.06 hereof (except to the
extent otherwise required by a Gaming Authority or Gaming Law).
Section 3.09. Mandatory Redemption.
Except as set forth under Sections 4.11 and 4.16 hereof, the Company
shall not be required to make mandatory redemption payments with respect to the
Notes.
Section 3.10. Other Mandatory Offer to Purchase.
In the event that, pursuant to Section 4.11 or 4.16 hereof, the Company
shall be required to commence an offer to all Holders to purchase Notes (each
such type of offer, a "Mandatory Offer"), it shall follow the procedures
specified below.
The Mandatory Offer shall remain open for a period of at least 20
Business Days following its commencement until a termination date specified by
the Company (the "Offer Period"). Following the expiration of the Offer Period,
on a date not more than 60 days after commencement of the Mandatory Offer (the
"Purchase Date"), the Company shall purchase the principal amount of Notes
required to be purchased pursuant to Section 4.11 or 4.16 hereof, as the case
may be (the "Offer Amount"), or, if less than the Offer Amount has been
tendered, all Notes tendered in response to the Mandatory Offer. Payment for any
Notes so purchased shall be made in the same manner as interest payments are
made.
If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest shall
be paid to the Person in whose name a Note is registered at the close of
business on such record date, and no additional interest shall be payable to
Holders who tender Notes pursuant to the Mandatory Offer.
Upon the commencement of a Mandatory Offer, the Company shall send, by
first class mail, a notice to the Trustee and each of the Holders, with a copy
to the Trustee. The notice shall contain all instructions and materials
necessary to enable such Holders to tender Notes pursuant to the Mandatory
Offer. The Mandatory Offer shall be made to all Holders. The notice, which shall
govern the terms of the Mandatory Offer, shall state:
(a) that the Mandatory Offer is being made pursuant to this
Section 3.10 and Section 4.11 or 4.16 hereof and the length of time the
Mandatory Offer shall remain open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Note not tendered or accepted for payment shall continue
to accrue interest;
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(d) that, unless the Company defaults in making such payment, any
Note accepted for payment pursuant to the Mandatory Offer shall cease to accrue
interest after the Purchase Date;
(e) that Holders electing to have a Note purchased pursuant to any
Mandatory Offer shall be required to surrender the Note, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of the Note completed, or
transfer by book-entry transfer, to the Company, a depository, if appointed by
the Company, or a Paying Agent at the address specified in the notice at least
three days before the Purchase Date;
(f) that Holders shall be entitled to withdraw their election if
the Company, the depository or the Paying Agent, as the case may be, receives,
not later than the expiration of the Offer Period, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Note the Holder delivered for purchase and a statement that such
Holder is withdrawing his election to have such Note purchased;
(g) that, if the aggregate principal amount of Notes surrendered
by Holders exceeds the Offer Amount, the Company shall select the Notes to be
purchased on a pro rata basis (with such adjustments as may be deemed
appropriate by the Company so that only Notes in denominations of $1,000, or
integral multiples thereof, shall be purchased); and
(h) that Holders whose Notes were purchased only in part shall be
issued new Notes equal in principal amount to the unpurchased portion of the
Notes surrendered (or transferred by book-entry transfer).
On or before the Purchase Date, the Company shall, to the extent
lawful, accept for payment, on a pro rata basis to the extent necessary, the
Offer Amount of Notes or portions thereof tendered pursuant to the Mandatory
Offer, or if less than the Offer Amount has been tendered, all Notes tendered,
and shall deliver to the Trustee an Officers' Certificate stating that such
Notes or portions thereof were accepted for payment by the Company in accordance
with the terms of this Section 3.10. The Company, the depository or the Paying
Agent, as the case may be, shall promptly (but in any case not later than five
days after the Purchase Date) mail or deliver to each tendering Holder an amount
equal to the purchase price of the Notes tendered by such Holder and accepted by
the Company for purchase, and the Company shall promptly issue a new Note, and
the Trustee, upon written request from the Company shall authenticate and mail
or deliver such new Note to such Holder, in a principal amount equal to any
unpurchased portion of the Note surrendered. Any Note not so accepted shall be
promptly mailed or delivered by the Company to the Holder thereof. The Company
shall publicly announce the results of the Mandatory Offer on the Purchase Date.
Other than as specifically provided in this Section 3.10, any purchase
pursuant to this Section 3.10 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof. Notwithstanding any other provision of this
Indenture, any Change of Control Offer or Asset Sale Offer will be conducted in
compliance with applicable regulations under the federal securities laws,
including Rule 14e-1 under the Exchange Act and any other securities laws and
regulations thereunder to the extent that such laws and regulations are
applicable.
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ARTICLE 4
COVENANTS
Section 4.01. 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 10:00 a.m. 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 Registration Rights Agreement.
Section 4.02. Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan, the City of New
York (or at such other location where the Trustee maintains an office), 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 or the Guarantors in respect of the Notes and this Indenture
may be served. The Company 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 shall fail to maintain any such required office or agency
or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee.
The Company 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 designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, the City of New York for such purposes. The Company 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 of the Trustee
as one such office or agency of the Company in accordance with Section 2.03.
Section 4.03. Reports.
(a) Whether or not required by the rules and regulations of the
SEC, so long as any Notes are outstanding, the Company will furnish to the
Trustee and the Holders of Notes (i) all quarterly and annual financial
information that would be required to be contained in a filing with the SEC on
Forms 10-Q and 10-K if the Company were required to file such Forms that
describe the financial condition and results of the Company and its consolidated
Subsidiaries (showing in reasonable detail, either on the face of the financial
statements or in the footnotes thereto and in "Management's Discussion and
Analysis of Financial Condition and Results of Operations," the financial
condition and results of operations of the Company and its Restricted
Subsidiaries separate from the financial condition and results of operations of
the Unrestricted Subsidiaries of the Company) and, with respect to the annual
information only, a report thereon by the Company's certified independent
accountants and (ii) all current reports that would be required to be filed with
the SEC on Form 8-K if the Company were required to file such reports. In
addition, whether or not required by the rules and regulations of the SEC, the
Company will file a copy of
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all such information and reports with the SEC for public availability (unless
the SEC will not accept such a filing) and make such information available to
securities analysts and prospective investors upon request. The Company shall at
all times comply with TIA ss. 314(a).
(b) For so long as any Notes remain outstanding, the Company and
Guarantors shall furnish to the Trustee and all Holders and prospective
investors designated by the Holders of Transfer Restricted Securities, upon
their request, the information required to be delivered pursuant to Rule
144A(d)(4) under the Securities Act.
Section 4.04. Compliance Certificate.
(a) The Company shall deliver to the Trustee, within 90 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 has kept, observed, performed and fulfilled its
obligations under this Indenture and the Collateral Documents, and further
stating, as to each such Officer signing such certificate, that to the best of
his or her knowledge the Company and each obligor has kept, observed, performed
and fulfilled each and every covenant contained in this Indenture and the
Collateral Documents and is not in default in the performance or observance of
any of the terms, provisions and conditions of this Indenture or any Collateral
Document (or, if a Default or Event of Default (as defined) shall have occurred,
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 the best of his or her knowledge no event has occurred and
remains in existence by reason of which payments on account of the principal of,
premium or Liquidated Damages, if any, or interest, on the Notes is prohibited
or if such event has occurred, a description of the event and what action the
Company or such obligor is taking or proposes to take with respect thereto.
(b) So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a) above shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article 4 or Article 5 hereof or, if any such violation has
occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.
(c) The Company shall, so long as any of the Notes are
outstanding, deliver to the Trustee, forthwith upon 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.
Section 4.05. 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 is not adverse in any material respect
to the Holders of the Notes.
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Section 4.06. Stay, Extension and Usury Laws.
The Company and each of the Guarantors 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, 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 and
each of the Guarantors (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 4.07. Restricted Payments.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly: (i) declare or pay any dividend or make
any other payment or distribution on account of the Company's or any of its
Restricted Subsidiaries' Equity Interests or to the direct or indirect holders
of the Company's or any of its Restricted Subsidiaries' Equity Interests in
their capacity as such (other than payments, dividends or distributions payable
in Equity Interests (other than Disqualified Stock) of the Company or payments,
dividends or distributions payable to the Company or any Restricted Subsidiary);
(ii) purchase, redeem or otherwise acquire or retire for value any Equity
Interests of the Company or any Restricted Subsidiary (other than any such
Equity Interests owned by the Company or any Restricted Subsidiary); (iii) make
any payment on or with respect to, or purchase, redeem, defease or otherwise
acquire or retire for value any Indebtedness that is subordinated to the Notes,
except for payment of interest when due or principal at Stated Maturity; or (iv)
make any Restricted Investment (all such payments and other actions set forth in
clauses (i) through (iv) above being collectively referred to as "Restricted
Payments"), unless, at the time of and after giving effect to such Restricted
Payment:
(a) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof; and
(b) the Company would, at the time of such Restricted Payment and
after giving pro forma effect thereto (in the case of a Restricted Investment,
as if such Restricted Investment had been made at the beginning of the
applicable four-quarter period), have been permitted to incur at least $1.00 of
additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set
forth in the first paragraph of Section 4.10 hereof; and
(c) such Restricted Payment, together with the aggregate amount of
all other Restricted Payments made by the Company and its Restricted
Subsidiaries after the date of this Indenture (excluding Restricted Payments
permitted by clauses (ii) through (xi) of the next succeeding paragraph), is
less than the sum of (i) 50% of the Consolidated Net Income of the Company for
the period (taken as one accounting period) from the beginning of the first
fiscal quarter commencing after the date of this Indenture to the end of the
Company's most recently ended fiscal quarter for which internal financial
statements are available at the time of such Restricted Payment (or, if such
Consolidated Net Income for such period is a deficit, less 100% of such
deficit), plus (ii) 100% of the aggregate net cash proceeds received by the
Company from the issue or sale since the date of this Indenture of Equity
Interests of the Company (other than Disqualified Stock) or of Disqualified
Stock or debt securities of the Company that have been converted into such
Equity Interests (other than Equity Interests (or Disqualified Stock or
convertible debt securities) sold to a Subsidiary of the Company and other than
Disqualified Stock or convertible debt securities that have been converted into
Disqualified Stock), plus (iii) to the extent that any Restricted Investment
that was made
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after the date of this Indenture is sold for cash or otherwise liquidated or
repaid for cash, the lesser of (A) the cash return of capital with respect to
such Restricted Investment (less the cost of disposition, if any) and (B) the
initial amount of such Restricted Investment, plus (iv) 50% of any
dividends received by the Company or a Wholly Owned Restricted Subsidiary after
the date of this Indenture from an Unrestricted Subsidiary of the Company, to
the extent that such dividends were not otherwise included in Consolidated Net
Income for such period.
The foregoing provisions will not prohibit (i) the payment of any
dividend within 60 days after the date of declaration thereof, if at said date
of declaration such payment would have complied with the provisions of this
Indenture, or (ii) the redemption, repurchase, retirement or other acquisition
of any subordinated Indebtedness of the Company or a Restricted Subsidiary or
Equity Interests of the Company in exchange for, or out of the net cash proceeds
of the substantially concurrent sale (other than to a Subsidiary of the Company)
of, other Equity Interests of the Company (other than any Disqualified Stock);
provided that the amount of any such net cash proceeds that are utilized for any
such redemption, repurchase, retirement, defeasance or other acquisition shall
be excluded from clause (c) (ii) of the preceding paragraph; (iii) the
redemption, repurchase, retirement, defeasance or other acquisition of
subordinated Indebtedness of the Company or a Restricted Subsidiary or
Disqualified Stock of the Company, in either case in exchange for or with the
net cash proceeds from an incurrence of Permitted Refinancing Indebtedness or
from the issuance of Disqualified Stock; (iv) the redemption, repurchase,
retirement, defeasance or other acquisition, substantially concurrently with the
consummation of the Offering, of subordinated Indebtedness of the Company or a
Restricted Subsidiary with Net Proceeds of the Offering; (v) the repurchase,
redemption or other acquisition or retirement for value of any Equity Interests
of the Company or any Restricted Subsidiary of the Company held by any employee
of the Company (or any of its Restricted Subsidiaries); provided that the
aggregate price paid for all such repurchased, redeemed, acquired or retired
Equity Interests under this clause (v) will not exceed $1.0 million in any
calendar year, provided further that commencing the second full calendar year
following the date of this Indenture, the aggregate price that may be so paid
shall be increased by any amount of such $1.0 million that was not used for the
repurchase of Equity Interests in the immediately preceding calendar year; (vi)
loans or advances to employees of the Company or its Restricted Subsidiaries;
provided that all such loans and advances will not exceed $1.0 million in any
twelve-month period; (vii) payment of dividends on preferred stock of the
Company that was permitted to be issued pursuant to this Indenture; (viii) the
repurchase, redemption or other acquisition or retirement for value of any
Equity Interests of the Company held by any member of the Company's management,
in connection with the Merger and provided that the aggregate price paid for all
such repurchased, redeemed, acquired or retired Equity Interests under this
clause (viii) will not exceed $6.0 million; (ix) Restricted Investments in an
aggregate amount, taken together since the date of this Indenture, of not more
than $10,000,000 (it being understood that if any Restricted Investment acquired
with a Restricted Payment after the date of original issuance of the Notes
pursuant to this clause (ix) is sold, transferred or otherwise conveyed to any
person other than the Company or a Restricted Subsidiary, the portion of the net
cash proceeds or fair market value of securities or properties paid to the
Company and its Restricted Subsidiaries in connection with such sale, transfer
or conveyance that relates or corresponds to the repayment or return of the
original cost of such a Restricted Investment will replenish or increase the
amount of Restricted Investments permitted to be made pursuant to this clause
(ix), so that up to $10,000,000 of Restricted Investments may be outstanding
under this clause (ix) at any given time); (x) following the Merger,
distributions, loans or payments from the Company or its Restricted Subsidiaries
to the Company's direct parent corporation pursuant to intercompany
Indebtedness, intercompany tax sharing agreements (so long as the distributions,
loans or payments thereunder by the Company and its Subsidiaries shall not
exceed the amount of taxes the Company would be required to pay if it were the
filing person for all applicable taxes, and other intercompany payments for the
purpose of enabling the parent corporation to perform accounting, legal,
33
corporate reporting and administrative functions (including, without limitation,
amounts necessary to pay fees and expenses in connection with the Merger); and
(xi) additional Restricted Payments in an aggregate amount, taken together since
the date of this Indenture, of not more than $5,000,000; provided that with
respect to the actions described in clauses (i), (v), (vii), (viii), (ix) and
(xi), no Default or Event of Default shall have occurred and be continuing, or
would occur as a consequence of such actions.
The Board of Directors may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary if such designation would not cause a Default; provided
that in no event shall the business currently operated by ROC or RGM be
transferred to or held by an Unrestricted Subsidiary, and provided, further that
following any conversion of Black Hawk Operating Company to a Restricted
Subsidiary pursuant to Section 4.09 hereof, in no event shall the Black Hawk
Project or related business thereafter operated by Black Hawk Operating Company
be transferred to or held by an Unrestricted Subsidiary. For purposes of making
such determination, all outstanding Investments by the Company and its
Restricted Subsidiaries (except to the extent repaid in cash) in the Subsidiary
so designated will be deemed to be Restricted Payments at the time of such
designation and will reduce the amount available for Restricted Payments under
the first paragraph of this Section 4.07. All such outstanding Investments will
be deemed to constitute Investments in an amount equal to the greatest of (x)
the net book value of such Investments at the time of such designation, (y) the
fair market value of such Investments at the time of such designation and (z)
the original fair market value of such Investments at the time they were made.
Such designation will only be permitted if such Restricted Payment would be
permitted at such time and if such Restricted Subsidiary otherwise meets the
definition of an Unrestricted Subsidiary.
The amount of all Restricted Payments (other than cash) will be the
fair market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued by the Company or such
Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair
market value of any non-cash Restricted Payment shall be determined by the Board
of Directors whose resolution with respect thereto shall be delivered to the
Trustee, such determination to be based upon an opinion or appraisal issued by
an accounting, appraisal or investment banking firm of national standing if such
fair market value exceeds $5.0 million. Not later than the date of making any
Restricted Payment, the Company shall deliver to the Trustee an Officers'
Certificate stating that such Restricted Payment is permitted and setting forth
the basis upon which the calculations required by this Section 4.07 were
computed, together with a copy of any fairness opinion or appraisal required by
this Indenture.
Section 4.08. Dividend and Other Payment Restrictions Affecting
Subsidiaries.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary to (i)(a) pay dividends or make any other distributions to
the Company or any of its Restricted Subsidiaries (1) on its Capital Stock or
(2) with respect to any other interest or participation in, or measured by, its
profits, or (b) pay any indebtedness owed to the Company or any of its
Restricted Subsidiaries, (ii) make loans or advances to the Company or any of
its Restricted Subsidiaries or (iii) transfer any of its properties or assets to
the Company or any of its Restricted Subsidiaries, except for such encumbrances
or restrictions existing under or by reason of (a) this Indenture and the Notes,
(b) Indebtedness outstanding upon the acquisition of a Subsidiary, or upon the
conversion of Black Hawk Operating Company to a Restricted Subsidiary pursuant
to the provisions of Section 4.09 hereof, provided, that such Indebtedness was
not incurred in connection with, or in contemplation of, such acquisition or
conversion, and such encumbrance or restriction is not applicable to any Person
or the property or assets of any Person other than the new Restricted
Subsidiary, (c) a Permitted Lien, solely to the extent that such Lien limits the
sale, disposition or transfer of the property which is the subject thereof,
34
(d) applicable law, (e) by reason of customary non-assignment, subletting and
net worth provisions in leases entered into in the ordinary course of business
and consistent with past practices, (f) purchase money obligations for property
acquired in the ordinary course of business that impose restrictions of the
nature described in clause (iii) above on the property so acquired, or (g)
Permitted Refinancing Indebtedness, provided that the restrictions contained in
the agreements governing such Permitted Refinancing Indebtedness are no more
restrictive than those contained in the agreements governing the Indebtedness
being refinanced.
Section 4.09. Conversion of Black Hawk Operating Company to a Restricted
Subsidiary.
Immediately upon release of any quarterly financial statements required
by Section 4.03 during any period in which Black Hawk Operating Company is an
Unrestricted Subsidiary, the Company shall cause its accountants to calculate,
for the four full fiscal quarters most recently ended, (i) the Fixed Charge
Coverage Ratio of the Company and its Restricted Subsidiaries and (ii) the pro
forma Fixed Charge Coverage Ratio of the Company and its Restricted Subsidiaries
as though Black Hawk Operating Company were a Restricted Subsidiary. The Company
shall deliver to the Trustee an Officers' Certificate setting forth such
calculations. If the pro forma Fixed Charge Coverage Ratio described in clause
(ii) of the second preceding sentence is greater than the Fixed Charge Coverage
Ratio described in clause (i) of the second preceding sentence, provided that no
Default or Event of Default shall have occurred and be continuing and provided
that a Default or Event of Default would not thereby be created, Black Hawk
Operating Company (i) automatically will become and remain a Restricted
Subsidiary, and (ii) shall execute a Subsidiary Guarantee and such Collateral
Documents as are necessary to create and convey to the Trustee or other
Collateral Agent, for the benefit of the Holders, a perfected first-priority
Lien on all the Black Hawk Land and other Collateral (subject to Permitted
Liens) held by such Restricted Subsidiary; provided, that no such Subsidiary
Guarantee shall be executed, and no such Lien shall be created or conveyed with
respect to the Black Hawk Land or other real or personal property owned by Black
Hawk Operating Company, if the execution, creation or conveyance thereof would
violate or conflict with any law or the provisions of any Permitted Black Hawk
Debt outstanding at the time of such conversion. Notwithstanding the foregoing,
if the execution, creation or conveyance thereof would satisfy the conditions in
the preceding sentence but for any filing with or approval of any Gaming
Authority or other regulatory entity, the Company shall use, and shall cause
Black Hawk Operating Company to use, its best efforts to make all such required
filings and obtain all such required approvals in order to permit such
execution, creation and conveyance.
Section 4.10. Incurrence of Indebtedness and Issuance of Preferred Stock.
Following the issuance of the Notes and Subsidiary Guarantees, the
Company shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly, create, incur, issue, assume, guarantee or otherwise become directly
or indirectly liable, contingently or otherwise, with respect to (collectively,
"incur") any Indebtedness (including Acquired Debt) and the Company shall not
issue any Disqualified Stock and shall not permit any Restricted Subsidiary to
issue any shares of preferred stock, provided, however, that the Company or its
subsidiaries may incur Indebtedness (including Acquired Debt), and the Company
may issue shares of Disqualified Stock if (i) the Fixed Charge Coverage Ratio
for the Company's most recently ended four full fiscal quarters for which
internal financial statements are available immediately preceding the date on
which such additional Indebtedness is incurred or such stock is issued would
have been at least equal to 2.00 to 1, determined on a pro forma basis
(including a pro forma application of the net proceeds therefrom), as if the
additional Indebtedness had been incurred, or the stock had been issued, as the
case may be, at the beginning of such four-quarter period and (ii) except with
35
respect to revolving credit Indebtedness, the Weighted Average Life to Maturity
of such Indebtedness is greater than the remaining Weighted Average Life to
Maturity of the Notes.
The provisions of the first paragraph of this Section 4.10 will not
apply to the incurrence of any of the following items of Indebtedness, so long
as after giving effect to such incurrence, no Default or Event of Default shall
have occurred and be continuing or would occur as a consequence thereof
(collectively, "Permitted Debt"):
(i) the incurrence of revolving credit Indebtedness and letters of
credit (with letters of credit being deemed to have a principal amount equal
to the maximum potential liability of the Company and its Subsidiaries
thereunder) under the Revolving Credit Facility; provided that the aggregate
principal amount outstanding under the Revolving Credit Facility after
giving effect to such incurrence, including all Permitted Refinancing
Indebtedness incurred to refund, refinance or replace any other Indebtedness
incurred pursuant to this clause (i), does not exceed an amount equal to
$20.0 million;
(ii) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness represented by Capital Lease Obligations,
mortgage financings or purchase money obligations, in each case incurred for
the purpose of financing all or any part of the purchase price or cost of
construction or improvement of property, plant or equipment (including slot
machines and other gaming equipment) used in the business of the Company or
such Restricted Subsidiary, in an aggregate principal amount not to exceed
$15.0 million at any time outstanding;
(iii) the incurrence by the Company or any of its Subsidiaries of
Permitted Refinancing Indebtedness in exchange for, or the net proceeds of
which are used to refund, refinance or replace Indebtedness that was
permitted by this Indenture to be incurred or was existing on the date of
this Indenture;
(iv) the incurrence by the Company or any of its Subsidiaries of
Hedging Obligations that are incurred for the purpose of fixing or hedging
interest rate risk with respect to any floating rate Indebtedness that is
permitted by the terms of this Indenture to be outstanding;
(v) the guarantee by the Company or any of the Guarantors of
Indebtedness of the Company or a Restricted Subsidiary of the Company that
was permitted to be incurred by another provision of this Section 4.10;
(vi) the incurrence of additional Indebtedness in an aggregate
principal amount (or accreted value, as applicable) at any time outstanding,
including all Permitted Refinancing Indebtedness incurred to refund,
refinance or replace any other Indebtedness incurred pursuant to this clause
(vi), not to exceed $10.0 million;
(vii) the incurrence by the Company of additional Indebtedness that
is subordinated to the Notes pursuant to customary subordination provisions,
that has no mandatory obligation to pay principal on a date earlier than the
final maturity date of, and has a Weighted Average Life to Maturity equal to
or greater than the Weighted Average Life to Maturity of, the Notes, and
that is in an aggregate principal amount (or accreted value, as applicable)
at any time outstanding, including all Permitted Refinancing Indebtedness
incurred to refund, refinance or replace any other Indebtedness incurred
pursuant to this clause (vii), not to exceed $10.0 million;
(viii) the incurrence by Black Hawk Operating Company of Permitted
Black Hawk Debt;
36
(ix) the incurrence by the Company's Unrestricted Subsidiaries
(other than Black Hawk Operating Company) of Non-Recourse Debt, provided,
however, that if any such Indebtedness ceases to be Non-Recourse Debt, such
event will be deemed to constitute an incurrence of Indebtedness by a
Restricted Subsidiary of the Company; and provided, further, that any
Permitted Black Hawk Debt outstanding at the time, if at all, that Black
Hawk Operating Company becomes a Restricted Subsidiary pursuant to the
provisions of Section 4.09 hereof shall not be deemed at such time to
constitute an incurrence of Indebtedness for purposes of this Section 4.10
so long as such Indebtedness is taken into account in the calculation of the
Fixed Charge Coverage Ratio of the Company as described in Section 4.09
hereof;
(x) reimbursement obligations with respect to letters of credit
issued in the ordinary course of business, indemnifications, adjustments of
purchase prices, performance bonds, appeal bonds, surety bonds, workers'
compensation obligations, insurance obligations or bonds, completion
guaranties and other similar bonds or obligations incurred in the ordinary
course of business;
(xi) Indebtedness owed by (i) a Restricted Subsidiary to the
Company or to another Restricted Subsidiary or (ii) the Company to a
Restricted Subsidiary;
(xii) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument inadvertently
drawn against insufficient funds in the ordinary course of business;
(xiii) Indebtedness representing the balance deferred and unpaid of
the purchase price of any property or services used in the ordinary course
of the business of the Company and its Restricted Subsidiaries that would
constitute ordinarily a trade payable to trade creditors;
(xiv) a bond or surety obligation posted in order to prevent the
loss or material impairment of a Gaming License or as otherwise required by
an order of any Gaming Authority, in each case to the extent required by
applicable law and consistent in character and amount with customary
industry practice; and
(xv) guarantees, "keep well" provisions or other evidences of
credit support by the Company or its Restricted Subsidiaries of Permitted
Black Hawk Debt, provided that the terms of such guarantees or other
instruments shall not require or permit payments thereunder by the Company
or its Restricted Subsidiaries in an amount greater than $5.0 million in any
twelve-month period.
For purposes of determining compliance with this Section 4.10, in the
event that an item of Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in clauses (i) through (xv) above or is
entitled to be incurred pursuant to the first paragraph of this Section 4.10,
the Company will, in its sole discretion, classify such item of Indebtedness in
any manner that complies with this Section 4.10 and such item of Indebtedness
will be treated as having been incurred pursuant to only one of such clauses or
pursuant to the first paragraph hereof. Accrual of interest and the accretion of
accreted value will not be deemed to be an incurrence of Indebtedness for
purposes of this Section 4.10.
Section 4.11. Asset Sales.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless (i) the Company (or the
Restricted Subsidiary, as the case may be) receives consideration at the time of
such Asset Sale at least equal to the fair market value (evidenced by a
resolution of the Board
37
of Directors set forth in an Officers' Certificate delivered to the Trustee) of
the assets or Equity Interests issued or sold or otherwise disposed of and (ii)
at least 80% of the consideration therefor received by the Company or such
Restricted Subsidiary is in the form of cash; provided that the amount of (x)
any liabilities (as shown on the Company's or such Restricted Subsidiary's most
recent balance sheet), of the Company or any Restricted Subsidiary (other than
contingent liabilities and liabilities that are by their terms subordinated to
the Notes or any Subsidiary Guarantee thereof) that are assumed by the
transferee of any such assets and (y) any securities, notes or other Obligations
received by the Company or any such Restricted Subsidiary from such transferee
that, within 30 days of such receipt, are converted by the Company or such
Restricted Subsidiary into cash (to the extent of the cash received), will be
deemed to be cash for purposes of this provision.
Within 360 days after the receipt of any Net Proceeds from an Asset
Sale or Event of Loss, the Company may apply such Net Proceeds to the
acquisition of an interest in another business, the making of a capital
expenditure, cost of construction or real property improvements or the
acquisition of other assets, in each case, in the same line of business as the
Permitted Businesses. Any Net Proceeds received from the sale of assets that do
not constitute Collateral may be applied also to the repayment of any senior
debt secured by such assets. Pending the final application of any such Net
Proceeds, the Company may temporarily reduce the Revolving Credit Facility or
otherwise invest such Net Proceeds in any manner that is not prohibited by this
Indenture. Any Net Proceeds from Asset Sales that are not applied or invested as
provided in the first two sentences of this paragraph will be deemed to
constitute "Excess Proceeds." Within fifteen days of each date on which the
aggregate amount of Excess Proceeds exceeds $5.0 million, the Company will be
required to commence an offer to all Holders of Notes (an "Asset Sale Offer") to
purchase the maximum principal amount of Notes that may be purchased out of the
Excess Proceeds, at an offer price in cash in an amount equal to 100% of the
principal amount thereof plus accrued and unpaid interest and Liquidated
Damages, if any, thereon, to the date of purchase, in accordance with the
procedures set forth in Section 3.10 hereof. To the extent that the aggregate
amount of Notes tendered pursuant to an Asset Sale Offer is less than the Excess
Proceeds, the Company may use any remaining Excess Proceeds for general
corporate purposes. If the aggregate principal amount of Notes surrendered by
Holders thereof exceeds the amount of Excess Proceeds, the Trustee will select
the Notes to be purchased on a pro rata basis. Upon completion of such offer to
purchase, the amount of Excess Proceeds will be reset at zero.
Section 4.12. Transactions with Affiliates.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, any Affiliate (each of the foregoing, an "Affiliate Transaction"), unless
(i) such Affiliate Transaction is on terms that are no less favorable to the
Company or the relevant Restricted Subsidiary than those that would have been
obtained in a comparable transaction by the Company or such Restricted
Subsidiary with an unrelated Person and (ii) the Company delivers to the Trustee
(a) with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $1.0 million, a
resolution of the Board of Directors set forth in an Officers' Certificate
certifying that such Affiliate Transaction complies with clause (i) above and
that such Affiliate Transaction has been approved by a majority of the
disinterested members of the Board of Directors and (b) with respect to any
Affiliate Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $5.0 million (except with respect to any
Management Agreement, in which case the following requirement will not apply),
an opinion as to the fairness to the Holders of such Affiliate Transaction from
a financial point of view issued by an
38
accounting, appraisal or investment banking firm of national standing; provided
that (u) purchases of goods and services in the ordinary course of business, (v)
any employment agreement entered into by the Company or any of its Restricted
Subsidiaries in the ordinary course of business and consistent with the past
practice of the Company or such Restricted Subsidiary, (w) registration rights
agreements, existing on the date of this Indenture, (x) transactions between or
among the Company and/or its Restricted Subsidiaries, (y) Restricted Payments
that are permitted by the provisions of this Indenture described in Section 4.07
hereof, and (z) reasonable fees and compensation (including, without limitation,
bonuses, retirement plans and securities, stock options and stock ownership
plans) paid or issued to and indemnity provided on behalf of, officers,
directors, employees or consultants of the Company or any Restricted Subsidiary
in the ordinary course of business, in each case, shall not be deemed Affiliate
Transactions.
Section 4.13. Liens.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or suffer to
exist any Lien on any asset now owned or hereafter acquired, or any income or
profits therefrom or assign or convey any right to receive income therefrom,
except Permitted Liens. So long as Black Hawk Operating Company is an
Unrestricted Subsidiary, Black Hawk Operating Company may create, incur, assume
or suffer to exist (i) Liens (in addition to Permitted Liens) on the Black Hawk
Land only in respect of Permitted Black Hawk Debt and (ii) Liens upon any other
assets without restriction.
Section 4.14. Business Activities.
The Company shall not, and shall not permit any Restricted Subsidiary
to, engage in any business other than Permitted Businesses, except to such
extent as would not be material to the Company and its Restricted Subsidiaries
taken as a whole.
Section 4.15. Corporate Existence.
Subject to Article 5 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 is not adverse in any material
respect to the Holders of the Notes. If any Subsidiary that is a Guarantor is
dissolved pursuant to this Section 4.15, any Collateral owned by such Guarantor
shall be distributed to the Company or another Guarantor. Upon such dissolution,
its Subsidiary Guarantee will be released, and any Collateral owned by such
Guarantor prior to its dissolution shall become subject to the Collateral
Documents executed by the Company or such other Guarantor that acquires such
Collateral.
Section 4.16. Offer to Repurchase Upon Change of Control.
(a) Upon the occurrence of a Change of Control, each Holder of
Notes will have the right to require the Company to repurchase all or any part
(equal to $1,000 or an integral multiple thereof) of such Holder's Notes
pursuant to the offer described below (the "Change of Control Offer") at an
offer price in
39
cash equal to 101% of the aggregate principal amount thereof plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the date of purchase
(the "Change of Control Payment"). Within 30 days following any Change of
Control, the Company shall mail a notice to each Holder describing the
transaction or transactions that constitute the Change of Control and offering
to repurchase Notes on the date specified in such notice, which date shall be no
earlier than 30 days and no later than 60 days from the date such notice is
mailed (the "Change of Control Payment Date"), pursuant to the procedures
required by Section 3.10 hereof and described in such notice.
(b) On the Change of Control Payment Date, the Company shall, to
the extent lawful, (1) accept for payment all Notes or portions thereof properly
tendered pursuant to the Change of Control Offer, (2) deposit with the Paying
Agent an amount equal to the Change of Control Payment in respect of all Notes
or portions thereof so tendered and (3) deliver or cause to be delivered to the
Trustee the Notes so accepted together with an Officers' Certificate stating the
aggregate principal amount of Notes or portions thereof being purchased by the
Company. The Paying Agent shall promptly mail to each Holder of Notes so
tendered the Change of Control Payment for such Notes and the Trustee will
promptly authenticate and mail (or cause to be transferred by book entry) to
each Holder a new Note equal in principal amount to any unpurchased portion of
the Notes surrendered, if any; provided that each such new Note will be in a
principal amount of $1,000 or an integral multiple thereof. The Company will
publicly announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date.
The Change of Control provisions described above will be applicable
whether or not any other provisions of this Indenture are applicable.
The Company will not be required to make a Change of Control Offer upon
a Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set forth
in this Indenture applicable to a Change of Control Offer made by the Company
and purchases all Notes validly tendered and not withdrawn under such Change of
Control Offer.
Section 4.17. Use of Proceeds.
The Company and its Subsidiaries will apply the Net Proceeds from the
Offering in accordance with the provisions set forth in the Offering Circular
under "Use of Proceeds."
Section 4.18. Additional Subsidiary Guarantees.
If the Company or any of its Restricted Subsidiaries acquire or create
another Subsidiary after the date of this Indenture, then such newly acquired or
created Subsidiary shall execute a supplemental indenture setting forth its
Subsidiary Guarantee, together with such Collateral Documents as are necessary
to create and convey to the Trustee or other Collateral Agent, for the Benefit
of the Holders, a perfected first-priority Lien on all Collateral (subject to
Permitted Liens) held by such Subsidiary, provided such Subsidiary shall have
first obtained all approvals required, if any, by Gaming Authorities to execute
the supplemental indenture and such Collateral Documents, and deliver an Opinion
of Counsel, in accordance with the terms of this Indenture, except in either
case for all Subsidiaries that have properly been designated as Unrestricted
Subsidiaries in accordance with this Indenture for so long as they continue to
constitute Unrestricted Subsidiaries. Upon any conversion of (i) Black Hawk
Operating Company from an Unrestricted Subsidiary to a Restricted Subsidiary
pursuant to the provisions of Section 4.09 hereof, or (ii) any other
Unrestricted Subsidiary to a Restricted Subsidiary pursuant to the definition of
"Unrestricted Subsidiary," the newly-created Restricted Subsidiary also be
subject to the requirements of the preceding sentence; provided, that no such
Subsidiary Guarantee shall be executed, and no such Lien shall be created
40
or conveyed with respect to the Black Hawk Land or other real or personal
property owned by Black Hawk Operating Company, if the execution, creation or
conveyance thereof would violate or conflict with any law or the provisions of
any Permitted Black Hawk Debt outstanding at the time of such conversion. In
addition, if the Company or any of its Restricted Subsidiaries acquires or
creates another Subsidiary (such Subsidiary, a "New Subsidiary") after the date
of this Indenture, whether the New Subsidiary is a Restricted Subsidiary or an
Unrestricted Subsidiary, the Company or such Restricted Subsidiary that is the
owner of Capital Stock of the New Subsidiary shall execute a Pledge Agreement
with respect to such Capital Stock, in substantially the same form as the Pledge
Agreements executed as of the date of this Indenture, pledging to the Trustee or
other Collateral Agent designated by the Trustee all of such Capital Stock owned
by pledgor.
Section 4.19. Collateral Documents.
Neither the Company nor any of its Subsidiaries shall amend, waive or
modify, or take or refrain from taking any action that has the effect of
amending, waiving or modifying any provision of the Collateral Documents, to the
extent that such amendment, waiver, modification or action could have an adverse
effect on the rights of the Trustee or the Holders of the Notes; provided, that:
(i) the Collateral may be released or modified as expressly provided in this
Indenture and in the Collateral Documents; (ii) any Subsidiary Guarantee and
pledges may be released as expressly provided in this Indenture and in the
Collateral Documents; and (iii) this Indenture and any of the Collateral
Documents may be otherwise amended, waived or modified as set forth in Article 9
hereof.
Section 4.20. Maintenance of Insurance.
On the date of this Indenture and at all times until the Notes have
been paid in full, the Company and the Guarantors shall, and shall cause their
Restricted Subsidiaries to, have and maintain in effect insurance with
responsible carriers against such risks and in such amounts as is customarily
carried by similar businesses with such deductibles, retentions, self insured
amounts and coinsurance provisions as are customarily carried by similar
businesses of similar size, including, without limitation, property and
casualty.
Section 4.21. Limitation on Status as Investment Company.
None of the Company or any of the Guarantors shall become subject to
registration as an "investment company" (as that term is defined in the
Investment Company Act of 1940, as amended), or otherwise become subject to
regulation under the Investment Company Act of 1940.
Section 4.22. Further Assurances.
The Company shall (and shall cause each of its Subsidiaries to) do,
execute, acknowledge, deliver, record, re-record, file, re-file, register and
re-register, any and all such further acts, deeds, conveyances, security
agreements, mortgages, assignments, estoppel certificates, financing statements
and continuations thereof, termination statements, notices of assignment,
transfers, certificates, assurances and other instruments as may be required
from time to time in order (i) to carry out more effectively the purposes of the
Collateral Documents, (ii) to subject to the Liens created by any of the
Collateral Documents any of the properties, rights or interests required to be
encumbered thereby, (iii) to perfect and maintain the validity, effectiveness
and priority of any of the Collateral Documents and the Liens intended to be
created thereby, and (iv) to better assure, convey, grant, assign, transfer,
preserve, protect and confirm to the Trustee any of the rights granted or now or
hereafter intended by the parties thereto to be granted to the Trustee or under
41
any other instrument executed in connection therewith or granted to the Company
under the Collateral Documents or under any other instrument executed in
connection therewith.
Section 4.23. Dissolution of Subsidiaries.
Not later than 120 days following the initial issuance of the Notes,
the Company shall cause Riviera Gaming Management - Three, Inc., Riviera Splash,
Inc. and Riviera Gaming Management - Treasure Bay, Inc. to be dissolved or
merged into the Company or any Guarantor.
ARTICLE 5
SUCCESSORS
Section 5.01. Merger, Consolidation, or Sale of Assets.
The Company shall not consolidate or merge with or into (whether or not
the Company is the surviving corporation) or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its properties or
assets in one or more related transactions to, another corporation, Person or
entity unless (i) the Company is the surviving corporation or the entity or the
Person formed by or surviving any such consolidation or merger (if other than
the Company) or to which such sale, assignment, transfer, lease, conveyance or
other disposition shall have been made is a corporation organized or existing
under the laws of the United States, any state thereof or the District of
Columbia; (ii) the entity or Person formed by or surviving any such
consolidation or merger (if other than the Company) or the entity or Person to
which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made assumes all the Obligations of the Company under the Notes
pursuant to a supplemental indenture in a form reasonably satisfactory to the
Trustee; (iii) immediately after such transaction no Default or Event of Default
exists; (iv) except in the case of a merger of the Company with or into a Wholly
Owned Restricted Subsidiary of the Company, the Company or the entity or Person
formed by or surviving any such consolidation or merger (if other than the
Company), or to which such sale, assignment, transfer, lease, conveyance or
other disposition shall have been made (A) will have Consolidated Net Worth
immediately after the transaction equal to or greater than the Consolidated Net
Worth of the Company immediately preceding the transaction and (B) will, at the
time of such transaction and after giving pro forma effect thereto as if such
transaction had occurred at the beginning of the applicable four-quarter period,
be permitted to incur at least $1.00 of additional Indebtedness pursuant to the
Fixed Charge Coverage Ratio test set forth in the first paragraph of Section
4.10 hereof; and (v) such transaction would not require any Holder or beneficial
owner of Notes to obtain a Gaming License or be qualified or found suitable
under the law of any applicable gaming jurisdiction; provided, that such Holder
or beneficial owner would not have been required to obtain a Gaming License or
be qualified or found suitable under the laws of any applicable gaming
jurisdiction in the absence of such transaction. The foregoing provision will
not prohibit the Merger.
Section 5.02. Successor Corporation Substituted.
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the assets
of the Company in accordance with Section 5.01 hereof, the successor corporation
formed by such consolidation or into or with which the Company is merged or to
which such sale, assignment, transfer, lease, conveyance or other disposition is
made shall succeed to, and be substituted for (so that from and after the date
of such consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Indenture referring to the "Company" shall refer instead to
the successor corporation and not to the Company), and may exercise every right
and power of the Company under this Indenture with the same effect as if such
successor Person had been named as the Company
42
herein; provided, however, that the predecessor Company shall not be relieved
from the obligation to pay the principal of and interest on the Notes except in
the case of a sale of all or substantially all of the Company's assets that
meets the requirements of Section 5.01 hereof.
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default.
An "Event of Default" occurs if:
(a) the Company defaults in the payment when due of interest on, or
Liquidated Damages with respect to, the Notes and such default continues for a
period of 30 days;
(b) the Company defaults in the payment when due of principal of or
premium, if any, on the Notes when the same becomes due and payable at maturity,
upon redemption (including in connection with an offer to purchase) or
otherwise;
(c) the Company fails to comply with any of the provisions of Section
4.16 or 5.01 hereof;
(d) the Company or any Guarantor breaches in any material respect any
representation or warranty set forth in this Indenture, the Notes, the
Subsidiary Guarantees or the Collateral Documents, or defaults in the
performance of any covenant set forth in this Indenture, the Notes, the
Subsidiary Guarantees or the Collateral Documents, and in either case, such
breach or default continues for 60 days after notice to the Company by the
Trustee or the Holders of at least 25% in principal amount of the Notes then
outstanding;
(e) a default occurs under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its Restricted
Subsidiaries (or the payment of which is guaranteed by the Company or any of its
Restricted Subsidiaries) whether such Indebtedness or guarantee now exists, or
is created after the date of this Indenture, which default (a) is caused by a
failure to pay principal of or premium, if any, or interest on such Indebtedness
prior to the expiration of the grace period provided in such Indebtedness on the
date of such default (a "Payment Default") or (b) results in the acceleration of
such Indebtedness prior to its express maturity and, in each case, the principal
amount of such Indebtedness, together with the principal amount of any other
such Indebtedness under which there has been a Payment Default or the maturity
of which has been so accelerated, aggregates $5.0 million or more;
(f) a final judgment or final judgments for the payment of money are
entered by a court or courts of competent jurisdiction against the Company or
any of its Restricted Subsidiaries and such judgment or judgments remain
undischarged for a period (during which execution shall not be effectively
stayed) of 60 days, provided that the aggregate of all such undischarged
judgments exceeds $5 million;
(g) the Company or any Guarantor repudiates its respective Obligations
under any of the Collateral Documents, or any of the Collateral Documents is
held in any judicial proceeding to be unenforceable or invalid or shall cease
for any reason to be in full force and effect;
(h) the Company or any of its Significant Subsidiaries or any group of
Restricted Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary pursuant to or within the meaning of Bankruptcy Law:
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(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it in
an involuntary case,
(iii) consents to the appointment of a custodian of it or for
all or substantially all of its property,
(iv) makes a general assignment for the benefit of its
creditors, or
(v) generally is not paying its debts as they become due; or
(i) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(i) is for relief against the Company or any of its
Significant Subsidiaries or any group of Restricted
Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary in an involuntary case;
(ii) appoints a custodian of the Company or any of its
Significant Subsidiaries or any group of Restricted
Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary or for all or substantially all of
the property of the Company or any of its Significant
Subsidiaries or any group of Restricted Subsidiaries that,
taken as a whole, would constitute a Significant
Subsidiary; or
(iii) orders the liquidation of the Company or any of its
Significant Subsidiaries or any group of Restricted
Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60
consecutive days;
(j) any Subsidiary Guarantee is held in any judicial proceeding to be
unenforceable or invalid or shall cease for any reason to be in full force and
effect, or any Guarantor, or any Person acting on behalf of any Guarantor, shall
deny or disaffirm its Obligations under its Subsidiary Guarantee; or
(k) any Gaming License of the Company or any of its Restricted
Subsidiaries is revoked, terminated or suspended or otherwise ceases to be
effective, resulting in the cessation or suspension of operation for a period of
more than 90 days of the casino business of any casino-hotel owned, leased or
operated directly or indirectly by the Company or any of its Restricted
Subsidiaries (other than any voluntary relinquishment of a Gaming License if
such relinquishment is, in the reasonable, good faith judgment of the Board of
Directors of the Company, evidenced by a resolution of such Board, both
desirable in the conduct of the business of the Company and its Restricted
Subsidiaries, taken as a whole, and not disadvantageous in any material respect
to the Holders).
Section 6.02. Acceleration.
If any Event of Default (other than an Event of Default specified in
clause (h) or (i) of Section 6.01 hereof) occurs and is continuing, the Trustee
or the Holders of at least 25% in principal amount of the then outstanding Notes
may declare all the Notes to be due and payable immediately. Upon any such
declaration, the Notes shall become due and payable immediately. Notwithstanding
the foregoing, if an Event of Default specified in clause (h) or (i) of Section
6.01 hereof occurs with respect to the Company, any of its Significant
Subsidiaries or any group of Subsidiaries that, taken as a whole, would
constitute a
43
Significant Subsidiary, all outstanding Notes shall be due and payable
immediately without further action or notice. Holders of the Notes may not
enforce this Indenture or the Notes except as provided in this Indenture.
If an Event of Default occurs by reason of any willful action (or
inaction) taken (or not taken) by or on behalf of the Company with the intention
of avoiding payment of the premium that the Company would have had to pay if the
Company then had elected to redeem the Notes pursuant to Section 3.07 hereof,
then, upon acceleration of the Notes, an equivalent premium shall also become
and be immediately due and payable, to the extent permitted by law, anything in
this Indenture or in the Notes to the contrary notwithstanding. If an Event of
Default occurs prior to August 15, 2001 by reason of any willful action (or
inaction) taken (or not taken) by or on behalf of the Company with the intention
of avoiding the prohibition on redemption of the Notes prior to such date, then,
upon acceleration of the Notes, an additional premium shall also become and be
immediately due and payable in an amount, for each of the years beginning on
August 15 of the years set forth below, as set forth below (expressed as a
percentage of the principal amount):
Year Percentage
1997................... 110.0%
1998................... 110.0%
1999................... 110.0%
2000................... 107.5%
Section 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy to collect the payment of principal, premium, 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 6.04. Waiver of Past Defaults.
Holders of not less than a majority in aggregate principal amount of
the then outstanding Notes by notice to the Trustee may on behalf of the Holders
of all of the Notes waive an existing Default or Event of Default and its
consequences hereunder, except a continuing Default or Event of Default in the
payment of the principal of, premium and Liquidated Damages, if any, or interest
on, the Notes (including in connection with an offer to purchase) (provided,
however, that the Holders of a majority in aggregate principal amount of the
then outstanding Notes may rescind an acceleration and its consequences,
including any related payment default that resulted from such acceleration).
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 consequent thereon.
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Section 6.05. Control by Majority.
Holders of a majority in 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 may be unduly
prejudicial to the rights of other Holders of Notes or that may involve the
Trustee in personal liability.
Section 6.06. Limitation on Suits.
A Holder of a Note may pursue a remedy with respect to this Indenture,
the Notes or the Subsidiary Guarantees 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 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 loss,
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, or to obtain a preference or priority over, another Holder of a Note.
Section 6.07. Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal, 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 6.08. Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(a) or (b) 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.
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Section 6.09. Trustee May File Proofs of Claim.
The Trustee may 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 and
the Holders allowed in any judicial proceedings relative to the Company or any
other obligor or their respective creditors or property. Nothing herein
contained shall be deemed to authorize the Trustee to authorize or consent to or
accept or adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Notes or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Holder in any such proceeding.
Section 6.10. Priorities.
If the Trustee collects any money pursuant to this Article, it shall
pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.07 hereof,
including payment of all compensation, expense and liabilities incurred, and all
advances made, by the Trustee and the costs and expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the Notes for
principal, premium 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: to the Company or any obligors on the Notes, as their interests
may appear 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.
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 6.07 hereof, or a suit by Holders of more than 10% in
principal amount of the then outstanding Notes.
Section 6.12. Management of Casinos.
Notwithstanding any provision of this Article 6 to the contrary, and
subject to all applicable Gaming Laws, following an Event of Default that
permits the taking of possession of any casino that constitutes Collateral by
the Trustee or Collateral Agent or the appointment of a receiver of either such
Collateral or any part thereof, or after such taking of possession or such
appointment, the Trustee, Collateral Agent or any such receiver shall be
authorized, in addition to the rights and powers of the Trustee, Collateral
Agent and such receiver set forth elsewhere in this Indenture and the Collateral
Documents, to retain one or more experienced operators of casinos to manage such
casino on behalf of the Holders of Notes; provided, however, that any such
operator shall have all necessary legal qualifications, including all Gaming
Licenses to manage such casino.
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care in its exercise, as a prudent man would exercise or
use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(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 does not limit the effect of paragraph
(b) of this Section;
(ii) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer,
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 6.05 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 paragraphs
(a), (b), and (c) of this Section.
(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) 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 and except for money held in trust pursuant to Section
8.04(a), which money will be so segregated.
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Section 7.02. Rights of Trustee.
(a) 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.
(b) 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
an Officers' Certificate or an Opinion of Counsel (in either case complying with
Section 12.04) or both, as the Trustee may require. 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.
Section 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes, make loans to, accept deposits from, perform services
and 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 it must eliminate such conflict within
90 days, apply 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.
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Section 7.04. 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 7.05. 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 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, or
interest on any Note, the Trustee may withhold the notice if and so long as a
committee of its Responsible Officers in good faith determines that withholding
the notice is in the interests of the Holders of the Notes.
Section 7.06. Reports by Trustee to Holders of the Notes.
(a) 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 ss. 313(a) (but if no
event described in TIA ss. 313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted). The Trustee also
shall comply with TIA ss. 313(b)(2). The Trustee shall also transmit by mail all
reports as required by TIA ss. 313(c).
(b) 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 ss. 313(d). The
Company shall promptly notify the Trustee when the Notes are listed on any stock
exchange.
(c) At the expense of the Company, the Trustee or, if the Trustee is
not the Registrar, the Registrar, shall report the names of record holders of
the Notes to any Gaming Authority when requested to do so by the Company.
(d) At the express direction of the Company and at the Company's
expense, the Trustee shall provide any Gaming Authority with:
(i) copies of all notices, reports and other written
communications which the Trustee gives to Holders;
(ii) a list of all of the Holders promptly after the original
issuance of the Notes and periodically thereafter if the Company so
directs;
(iii) notice of any Default under this Indenture, any
acceleration of the Indebtedness evidenced hereby, the institution of
any legal actions or proceedings before any court or governmental
authority in respect of a Default or Event of Default hereunder;
(iv) notice of the removal or resignation of the Trustee
within five Business Days of the effectiveness thereof;
(v) notice of any transfer or assignment of rights under this
Indenture or the Subsidiary Guarantees known to the Trustee within five
Business Days thereof; and
(vi) a copy of any amendment to the Notes or this Indenture
within five Business Days of the effectiveness thereof.
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(e) To the extent requested by the Company and at the Company's
expense, the Trustee shall cooperate with any Gaming Authority in order to
provide such Gaming Authority with the information and documentation requested
and as otherwise required by applicable law.
Section 7.07. 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, except to the extent attributable to the Trustee's
negligence, willful misconduct or bad faith.
The Company shall indemnify the Trustee against any and all losses,
liabilities or expenses 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 7.07) 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 or bad faith. 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 shall have the right to employ separate counsel in any such claim and
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of the Trustee unless (i) the employment of such counsel
shall have been specifically authorized in writing by the Company, (ii) the
Company shall have failed to assume the defense of such action or (iii) the
named parties to any such action (including any impleaded parties) include both
the Trustee and the Company, and the Trustee shall have been advised by such
counsel that there may be one or more legal defenses available to it which are
different from or additional to those available to the Company (in which case
the Company shall not have the right to assume the defense of such action on
behalf of the Trustee). 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 7.07 shall survive
the satisfaction and discharge of this Indenture.
To secure the Company's payment Obligations to the Trustee under this
Section, the Trustee shall, until such Obligations are paid, have a Lien prior
to the Notes on the Collateral and on all money or property held or collected by
the Trustee, except that held in trust to pay principal and interest on
particular Notes.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(h) or (i) 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.
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Section 7.08. 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 and only upon any requisite approval
from all Gaming Authorities.
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
(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 any Gaming Authority requires a Trustee to be approved, licensed or
qualified and the Trustee fails or declines to do so, such approval, license or
qualification shall be obtained upon the request of, and at the expense of, the
Company unless the Trustee declines to do so, or, if the Trustee's relationship
with either the Company or the Guarantors may, in the Company's discretion,
jeopardize any material gaming license or franchise or right or approval granted
thereto, the Trustee shall resign, and, in addition, the Trustee may at its
option resign if the Trustee in its sole discretion determines not to be so
approved, licensed or qualified.
If a successor Trustee 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, 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 7.07 hereof. Notwithstanding replacement of the Trustee pursuant
to this Section 7.08, the Company's Obligations under Section 7.07 hereof shall
continue for the benefit of the retiring Trustee.
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Section 7.09. 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, provided such corporation is otherwise eligible and qualified under
this Article 7.
Section 7.10. Eligibility; Disqualification.
There shall at all times be a Trustee hereunder that is a corporation
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 a combined capital and surplus of at least $100 million
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 ss. 310(a)(1), (2) and (5). The Trustee is subject to TIA
ss. 310(b).
Section 7.11. Preferential Collection of Claims Against Company.
The Trustee is subject to TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. 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, at any time, elect to have
either Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article 8. Upon either
Legal Defeasance or Covenant Defeasance, the security interests in Collateral
shall be terminated pursuant to Section 10.08.
Section 8.02. Legal Defeasance and Discharge.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be deemed to have been
discharged from its Obligations with respect to all outstanding Notes 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 the entire Indebtedness represented by the
outstanding Notes, which shall thereafter be deemed to be "outstanding" only for
the purposes of Section 8.05 hereof and the other Sections of this Indenture
referred to in (ii) below, and to have satisfied all its other Obligations under
such Notes 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: (i) the rights of Holders of outstanding Notes to receive
payments in respect of the principal of, premium, if any, and interest and
Liquidated Damages on such Notes when such payments are due from the trust
referred to below, (ii) the Company's Obligations with respect to the Notes
under Article 2 and Section 4.02 hereof, (iii) the rights, powers, trusts,
duties and immunities of the Trustee, and the Company's Obligations in
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connection therewith and (iv) the provisions of this Article 8. Subject to
compliance with this Article 8, the Company may exercise its option under this
Section 8.02 notwithstanding the prior exercise of its option under Section 8.03
hereof.
Section 8.03. Covenant Defeasance.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be released from its
Obligations under the covenants contained in Sections 4.03, 4.04, 4.05, 4.07,
4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.15 and 4.16 hereof with respect to the
outstanding Notes on and after the date the conditions set forth below are
satisfied (hereinafter, "Covenant Defeasance"), and the Notes shall thereafter
be deemed not "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 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 6.01 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 8.01 hereof of
the option applicable to this Section 8.03 hereof, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, Sections 6.01(d) through
6.01(g) hereof shall not constitute Events of Default.
Section 8.04. Conditions to Legal or Covenant Defeasance.
The following shall be the conditions to the application of either
Section 8.02 or 8.03 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 dollars, non-callable
Government Securities, or a combination thereof, in such amounts as 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 maturity or on the
applicable redemption date, as the case may be, and the Company must specify
whether the Notes are being defeased to maturity or to a particular redemption
date;
(b) in the case of an election under Section 8.02 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee 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, and based
thereon such Opinion of Counsel shall confirm that, the Holders of the
outstanding Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such 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;
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(c) in the case of an election under Section 8.03 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that the Holders of the
outstanding Notes will not recognize income, gain or loss for U.S. 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) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of Default
resulting from the borrowing of funds to be applied to such deposit);
(e) such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, any material agreement or
instrument (other than this Indenture) 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 shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the intent
of preferring the Holders over any other creditors of the Company or with the
intent of defeating, hindering, delaying or defrauding any other creditors of
the Company or others; and
(g) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that, subject to certain
factual assumptions and to Bankruptcy Law, insolvency and similar exceptions,
all conditions precedent provided for or relating to the Legal Defeasance or the
Covenant Defeasance have been complied with.
Section 8.05. Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions.
Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.05, the
"Trustee") pursuant to Section 8.04 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.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or non-callable Government
Securities deposited pursuant to Section 8.04 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
or results from any action or inaction of the Trustee that is not consistent
with the Trustee's obligations under this Indenture.
Anything in this Article 8 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 non-callable Government Securities held by it as provided
in Section 8.04 hereof which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
8.04(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.
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Section 8.06. 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,
or interest on any Note and remaining unclaimed for two years after such
principal, and premium, if any, or interest has become due and payable shall be
paid to the Company on its request or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Note shall thereafter, as a
secured 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 8.07. Reinstatement.
If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.02 or
8.03 hereof, as the case may be, by reason of any order or judgment of any court
or governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's Obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is
permitted to apply all such money in accordance with Section 8.02 or 8.03
hereof, as the case may be; provided, however, that, if the Company makes any
payment of principal of, premium, 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, or shall be entitled to receive a refund of money so
held in an amount equal to such payment of principal, premium or interest made
by the Company following such reinstatement.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Notes.
Notwithstanding Section 9.02 of this Indenture, the Company, the
Guarantors and the Trustee may amend or supplement this Indenture, the Notes,
the Subsidiary Guarantees or the Collateral Documents 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, consolidation or sale of assets
pursuant to Article 5 hereof;
(d) 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 legal
rights hereunder of any Holder;
(e) to release Collateral that is permitted to be released under this
Indenture; or
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(f) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA.
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
7.02 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 affects its own rights, duties or
immunities under this Indenture or otherwise.
Section 9.02. With Consent of Holders of Notes.
Except as provided below in this Section 9.02, the Company, the
Guarantors and the Trustee may amend or supplement this Indenture (including
Sections 3.10, 4.11 and 4.16 hereof), the Notes, the Subsidiary Guarantees or
the Collateral Documents with the consent of the Holders of at least a majority
in principal amount of the Notes then outstanding (including consents obtained
in connection with a purchase of, or tender offer or exchange offer for, the
Notes), and, subject to Sections 6.04 and 6.07 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, the Notes, the Subsidiary Guarantees or
the Collateral Documents may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes (including consents
obtained in connection with a tender offer or exchange offer for the Notes).
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 7.02 hereof, the Trustee shall
join with the Company in the execution of such amended or supplemental Indenture
unless such amended or supplemental Indenture affects the Trustee's own rights,
duties or immunities under this Indenture or otherwise, in which case the
Trustee may in its discretion, but shall not be obligated to, enter into such
amended or supplemental Indenture.
It shall not be necessary for the consent of the Holders of Notes under
this Section 9.02 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 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. Subject to Sections 6.04 and 6.07 hereof, 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 the Guarantors with any
provision of this Indenture, the Notes, the Subsidiary Guarantees or the
Collateral Documents. However, without the consent of each Holder affected, an
amendment or waiver may not (with respect to any Notes held by a non-consenting
Holder):
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(a) reduce the principal amount of Notes whose Holders must consent to
an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any Note or
alter or waive any of the provisions with respect to the timing of, and payment
with respect to, redemption of the Notes except as provided above with respect
to Sections 3.10, 4.11 and 4.16 hereof;
(c) reduce the rate of, or change the time for payment of, interest on
any Note;
(d) waive a Default or Event of Default in the payment of principal of
or premium, if any, or interest on the Notes (except a rescission of
acceleration of the Notes by the Holders of at least a majority in aggregate
principal amount of the then outstanding Notes and a waiver of the payment
default that resulted from such acceleration);
(e) make any Note payable in money other than that stated in the Notes;
(f) make any change in the provisions of this Indenture relating to
waivers of past Defaults or the rights of Holders of Notes to receive payments
of principal of or premium, if any, or interest on the Notes;
(g) waive a redemption payment with respect to any Note (other than a
payment required by Sections 3.10, 4.11 or 4.16); or
(h) make any change in the foregoing amendment and waiver provisions.
Section 9.03. Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture, the Notes, the
Subsidiary Guarantees or the Collateral Documents shall be set forth in an
amended or supplemental Indenture that complies with the TIA as then in effect.
Section 9.04. Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, 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
debt 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. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
Section 9.05. 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.
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Section 9.06. Trustee to Sign Amendments, etc.
The Trustee shall sign any amended or supplemental Indenture authorized
pursuant to this Article 9 if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. The Company
may not sign an amendment or supplemental Indenture until its Board of Directors
approves it. In executing any amended or supplemental indenture, the Trustee
shall be entitled to receive and (subject to Section 7.01) shall be fully
protected in relying upon, an Officer's Certificate and an Opinion of Counsel
stating that the execution of such amended or supplemental indenture is
authorized or permitted by this Indenture.
ARTICLE 10
COLLATERAL AND SECURITY
Section 10.01. Collateral Documents.
The due and punctual payment of the principal of, premium and
Liquidated Damages, if any, 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, and interest on the overdue
principal of and interest and Liquidated Damages (to the extent permitted by
law), if any, on the Notes and performance of all other Obligations of the
Company and the Guarantors to the Holders of Notes or the Trustee under this
Indenture, the Notes, the Subsidiary Guarantees and the Collateral Documents,
according to the terms hereunder or thereunder, shall be secured by the
Collateral owned by the Company or the Guarantor executing such Collateral
Documents, respectively, whether now owned or hereafter acquired as provided in
the Collateral Documents. Each Holder of Notes, by its acceptance thereof,
consents and agrees to the terms of the Collateral Documents (including, without
limitation, the provisions providing for foreclosure and release of Collateral)
as the same may be in effect or may be amended from time to time in accordance
with its terms and authorizes and directs the Collateral Agent to enter into the
Collateral Documents and to perform its Obligations and exercise its rights
thereunder in accordance therewith. The Company and the Guarantors shall deliver
to the Trustee copies of all documents delivered to the Collateral Agent (if the
Collateral Agent is not also the Trustee) pursuant to the Collateral Documents,
and shall 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 Documents, to
assure and confirm to the Trustee and the Collateral Agent the security interest
in the Collateral contemplated hereby, by the Collateral Documents or any part
thereof, 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 expressed. The Company shall take,
or shall cause the Guarantors to take, upon request of the Trustee, any and all
actions reasonably required to cause the Collateral Documents to create and
maintain, as security for the Obligations of the Company and Guarantors
hereunder, a valid and enforceable perfected first priority Lien in and on all
the Collateral, in favor of the Collateral Agent for the benefit of the Holders
of Notes, superior to and prior to the rights of all third Persons and subject
to no other Liens than Permitted Liens.
So long as no Event of Default shall have occurred and be continuing,
and subject to this Indenture and the terms of the Collateral Documents, the
Company and its Restricted Subsidiaries will be entitled to receive all cash
dividends, interest and other payments made upon or with respect to the
Collateral pledged by them and to exercise any voting and other consensual
rights pertaining to the Collateral pledged by them. Upon the occurrence and
during the continuance of an Event of Default, and subject to the prior approval
of Nevada Gaming Authorities, (a) all rights of the Company and its Restricted
Subsidiaries to exercise such voting or other consensual rights will cease, and
all such rights will become vested in the Collateral Agent, which, to the extent
permitted by law, will have the sole right to exercise such voting and
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other consensual rights and (b) all rights of the Company and its Restricted
Subsidiaries to receive all cash dividends, interest and other payments made
upon or with respect to the Collateral will cease and such cash dividends,
interest and other payments will be paid to the Collateral Agent, and (c) the
Collateral Agent may sell the Collateral or any part thereof in accordance with
the terms of the Collateral Documents. All funds distributed under the
Collateral Documents and received by the Collateral Agent for the benefit of the
Holders of the Notes will be distributed by the Collateral Agent in accordance
with the provisions of this Indenture.
Section 10.02. Recording and Opinions.
(a) The Company and the Guarantors shall cause the applicable
Collateral Documents including the Deed of Trust and any financing statements,
all amendments or supplements to each of the foregoing and any other similar
security documents as necessary, to be registered, recorded and filed and/or
re-recorded, re-filed and renewed in such manner and in such place or places, if
any, as may be required by law or reasonably requested by the Trustee in order
fully to preserve and protect the Liens securing the Obligations under the Notes
and the Subsidiary Guarantees pursuant to the Collateral Documents and to
effectuate and preserve the security of the Holders of Notes and all rights of
the Trustee.
(b) The Company, the Guarantors and any other obligor shall furnish to
the Trustee:
(i) promptly after the execution and delivery of this
Indenture, and promptly after the execution and delivery
of any other instrument of further assurance or amendment,
an Opinion of Counsel either (x) stating that in the
opinion of such counsel, this Indenture, the Deed of Trust
and other applicable Collateral Documents and all other
instruments of further assurance or amendment have been
properly recorded, registered and filed to the extent
necessary to make effective the Lien intended to be
created by such Collateral Documents and stating that, as
to such Collateral Documents and such other instruments
such recording, registering and filing are the only
recordings, registerings and filings necessary to give
notice thereof and further stating that all financing
statements and continuation statements have been executed
and filed that are necessary fully to perfect the Liens
intended to be created by the Collateral Documents, or (y)
stating that, in the opinion of such counsel, no such
action is necessary to make any other Lien created under
any of the Collateral Documents effective as intended by
such Collateral Documents; and
(ii) On August 30, in each year beginning with the year 1998,
an Opinion of Counsel, dated as of such date, either (x)
stating that, in the opinion of such counsel, such action
has been taken with respect to the recording, registering,
filing, re-recording, re-registering and re-filing of this
Indenture and all supplemental indentures, financing
statements, continuation statements or other instruments
of further assurance as is necessary to maintain the Lien
of this Indenture and the Collateral Documents until the
next Opinion of Counsel is required to be rendered
pursuant to this paragraph, and stating that all financing
statements and continuation statements have been executed
and filed that are necessary fully to perfect the Liens
intended to be created by the Collateral Documents or (y)
stating that in the opinion of such counsel, no such
action is necessary to maintain such Lien, until the next
Opinion of Counsel is required to be rendered pursuant to
this paragraph.
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Section 10.03. Release of Collateral.
(a) Subject to subsections (b), (c) and (d) of this Section 10.03,
Collateral may be released from the Lien and security interest created by the
Collateral Documents at any time or from time to time in accordance with the
provisions of the Collateral Documents or as provided by this Indenture. Upon
the request of the Company pursuant to an Officers' Certificate certifying that
all conditions precedent hereunder have been met and that no Default or Event of
Default shall have occurred and be continuing or would occur as a result
thereof, and stating whether or not such release is in connection with an Asset
Sale (and at the sole cost and expense of the Company), the Collateral Agent
shall release Collateral that is sold, conveyed or disposed of in compliance
with the provisions of this Indenture, or that is otherwise authorized to be
released by this Indenture or the Collateral Documents; provided, that if such
sale, conveyance or disposition constitutes an Asset Sale, the Company shall
apply the Net Proceeds in accordance with Section 4.11 hereof, and the Officers'
Certificate referred to above shall certify that the Net Proceeds have been or
will be so applied; and provided further, that in no event shall the Riviera
Property (except for the Six Acre Tracts) be sold or released from such Lien.
Upon receipt of such Officers' Certificate the Collateral Agent 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 Documents.
(b) No Collateral shall be released from the Lien and security interest
created by the Collateral Documents pursuant to the provisions of this Indenture
or the Collateral Documents unless there shall have been delivered to the
Trustee the certificate required by this Section 10.03.
(c) At any time when a Default or Event of Default shall have occurred
and be continuing and the maturity of the Notes shall have been accelerated
(whether by declaration or otherwise) and the Trustee shall have received a
notice of acceleration, no release of Collateral pursuant to the provisions of
the Collateral Documents shall be effective as against the Holders of Notes.
(d) The release of any Collateral from the terms of this Indenture and
the Collateral Documents shall not be deemed to impair the security under this
Indenture in contravention of the provisions hereof if and to the extent the
Collateral is released pursuant to the terms of the Collateral Documents. To the
extent applicable, the Company shall cause TIA ss. 313(b), relating to reports,
and TIA ss. 314(d), relating to the release of property or securities from the
Lien and security interest of the Collateral Documents and relating to the
substitution therefor of any property or securities to be subjected to the Lien
and security interest of the Collateral Documents, to be complied with. Any
certificate or opinion required by TIA ss. 314(d) may be made by an Officer of
the Company except in cases where TIA ss. 314(d) requires that such certificate
or opinion be made by an independent Person, which Person shall be an
independent engineer, appraiser or other expert selected or approved by the
Trustee in the exercise of reasonable care.
Section 10.04. Certificates of the Company.
The Company shall furnish to the Trustee and the Collateral Agent,
prior to each proposed release of Collateral pursuant to the Collateral
Documents, an Opinion of Counsel, which may be rendered by internal counsel to
the Company, to the effect specified in Section 12.04 hereof. The Trustee may,
to the extent permitted by Sections 7.01 and 7.02 hereof, accept as conclusive
evidence of compliance with the foregoing provisions the appropriate statements
contained in such documents and such Opinion of Counsel.
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Section 10.05. Certificates of the Trustee.
In the event that the Company wishes to release Collateral in
accordance with this Indenture or the Collateral Documents and has delivered the
certificates and documents required by the Collateral Documents and Sections
10.03 and 10.04 hereof, the Trustee shall determine whether it has received all
documentation required in connection with such release and, based on such
determination and the Opinion of Counsel delivered pursuant to Section 10.04,
shall deliver a certificate to the Company setting forth such determination.
Section 10.06. Authorization of Actions to Be Taken by the Trustee Under
the Collateral Documents.
Subject to the provisions of Sections 7.01 and 7.02 hereof, and only
upon any requisite approval of all Gaming Authorities, the Trustee may, in its
sole discretion and without the consent of the Holders of Notes, on behalf of
the Holders of Notes, take all actions it deems necessary or appropriate in
order to (a) enforce any of the terms of the Collateral Documents and (b)
collect and receive any and all amounts payable in respect of the Obligations of
the Company and Guarantors hereunder. The Trustee shall have power to institute
and maintain such suits and proceedings as it may deem expedient to prevent any
impairment of the Collateral by any acts that may be unlawful or in violation of
the Collateral Documents or this Indenture, and such suits and proceedings as
the Trustee may deem expedient to preserve or protect its interests and the
interests of the Holders of Notes 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 of Notes or
of the Trustee).
Subject to certain gaming and bankruptcy laws, upon an Event of Default
and so long as such Event of Default continues, the Trustee may exercise in
respect of the Collateral, in addition to the other rights and remedies provided
for herein, in the Collateral Documents or otherwise available to it, all of the
rights and remedies of a secured party under the Uniform Commercial Code or
other applicable law, and the Trustee may also upon obtaining possession of the
Collateral as set forth herein, without notice to the Company, except as
specified below, sell the Collateral or any part thereof in one or more parcels
at public or private sale, at any exchange, broker's board or at any of the
Trustee's offices or elsewhere, for cash, on credit or for future delivery, and
upon such other terms as the Trustee may deem commercially reasonable. The
Company acknowledges and agrees that any such private sale may result in prices
and other terms less favorable to the seller than if such a sale were a public
sale. The Company agrees that, to the extent notice of sale shall be required by
law, at least 15 days' notice to the Company of the time and place of any public
sale or the time after which any private sale is to be made shall constitute
reasonable notification. The Trustee shall not be obligated to make any sale
regardless of notice of sale having been given. The Trustee may adjourn any
public or private sale from time to time by announcement at the time and place
fixed therefor, and such sale may, without further notice, be made at the time
and place to which it was so adjourned.
Section 10.07. Authorization of Receipt of Funds by the Trustee Under the
Collateral Documents.
The Trustee is authorized to receive any funds for the benefit of the
Holders of Notes distributed under the Collateral Documents, and to make further
distributions of such funds to the Holders of Notes according to the provisions
of this Indenture.
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Section 10.08. Termination of Security Interest.
Upon the payment in full of all Obligations of the Company and
Guarantors under this Indenture, the Notes and Subsidiary Guarantees, or upon
Legal Defeasance or Covenant Defeasance, the Trustee shall, at the request of
the Company, deliver a certificate to the Company stating that such Obligations
have been paid in full (except as otherwise provided in Article 8), and shall
execute all terminations and other documents, and take all actions, necessary to
release the Liens pursuant to this Indenture and the Collateral Documents.
Section. 10.09. Cooperation of Trustee.
In the event the Company or any Guarantor is required to pledge or
grant a security interest in additional Collateral, the Trustee shall cooperate
with the Company or such Guarantor in reasonably and promptly agreeing to the
form of, and executing as required, any instruments or documents necessary to
make effective the security interest in the Collateral to be so substituted,
pledged or granted. To the extent practicable, the terms of any security
agreement, deed of trust or other instrument or document necessitated by any
such substitution, pledge or grant shall be comparable to the provisions of the
existing Collateral Documents. Subject to, and in accordance with the
requirements of this Article 10 and the terms of the Collateral Documents, in
the event that the Company or any Guarantor engages in any transaction pursuant
to Section 10.03 hereof, the Trustee shall cooperate with the Company or such
Guarantor in order to facilitate such transaction in accordance with any
reasonable time schedule proposed by the Company, including by delivering and
releasing the Collateral in a prompt and reasonable manner.
Section. 10.10. Collateral Agent.
The Collateral Agent initially shall be the Trustee. The Trustee may,
from time to time, appoint one or more additional or substitute Collateral
Agents hereunder. Each of such Collateral Agents may be delegated any one or
more of the duties or rights of the Trustee hereunder or under the Collateral
Documents or that are specified in any Collateral Documents, including without
limitation, the right to hold any Collateral in the name of, registered to, or
in the physical possession of, such Collateral Agent, for the ratable benefit of
the Holders of the Notes. Each such Collateral Agent shall have such rights and
duties as may be specified in an agreement between the Trustee and such
Collateral Agent.
ARTICLE 11
SUBSIDIARY GUARANTEES
Section 11.01. Subsidiary Guarantees.
(a) Each of the Guarantors, jointly and severally, hereby
unconditionally guarantees, on a senior secured basis to each Holder of a Note
authenticated and delivered by the Trustee and to the Trustee and its successors
and assigns, irrespective of the validity or enforceability of this Indenture,
the Notes or the Obligations of the Company under this Indenture or the Notes,
that: (i) the principal of, premium, if any, and Liquidated Damages, if any and
interest on the Notes shall be paid in full when due, whether at the maturity or
interest payment or mandatory redemption date, by acceleration, call for
redemption or otherwise, and interest on the overdue principal, premium and
Liquidated Damages, if any, and (to the extent permitted by law) interest, if
any, of the Notes and all other Obligations of the Company to the Holders or the
Trustee under this Indenture or the Notes shall be promptly paid in full or
performed, all in accordance with the terms of this Indenture and the Notes; and
(ii) in case of any extension of time of payment or renewal of any Notes or any
of such other Obligations, they shall be paid in full when due or
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performed in accordance with the terms of the extension or renewal, whether at
maturity, by acceleration, redemption or otherwise. Failing payment when due of
any amount so guaranteed or failing performance of any other Obligation of the
Company to the Holders, for whatever reason, each Guarantor shall be jointly and
severally obligated to pay, or to perform or to cause the performance of, the
same immediately, whether or not such failure to pay or perform has become an
Event of Default that could cause acceleration pursuant to Section 6.02 hereof.
An Event of Default under this Indenture or the Notes shall constitute an event
of default under this Subsidiary Guarantee, and shall entitle the Holders of
Notes to accelerate the Obligations of each Guarantor hereunder in the same
manner and to the same extent as the Obligations of the Company.
(b) Each Guarantor hereby agrees that its Obligations with regard to
each Subsidiary Guarantee shall be joint and several and unconditional,
irrespective of the validity or enforceability of the Notes or this Indenture,
the absence of any action to enforce the same, any waiver or consent by any
Holder of Notes with respect to any provision hereof or thereof, the recovery of
any judgment against the Company or any other obligor with respect to this
Indenture, the Notes or the Obligations of the Company under this Indenture or
the Notes, any action to enforce the same or any other circumstances that might
otherwise constitute a legal or equitable discharge or defense of a Guarantor
except for payment in full of the Obligations. Each Guarantor, to the extent
permitted by law, hereby waives and relinquishes all claims, rights and remedies
accorded by applicable law to guarantors and agrees not to assert or take
advantage of any such claims, rights or remedies, including but not limited to:
(i) any right to require the Trustee, the Holders or the Company (each, a
"Benefitted Party") to proceed against the Company 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 Benefitted Party's power before proceeding
against such Guarantor; (ii) the defense of the statute of limitations in any
action hereunder or in any action for the collection of any Indebtedness or the
performance of any Obligation hereby guaranteed; (iii) any defense that may
arise by reason of the incapacity, lack of authority, death or disability of any
other Person 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; (iv) diligence, presentment, demand, protest and notice of any
kind 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 such Guarantor, the Company, any Benefitted Party, any
creditor of such Guarantor, the Company or on the part of any other Person
whomsoever in connection with any Indebtedness or Obligations hereby guaranteed;
(v) any defense based upon an election of remedies by a Benefitted Party,
including but not limited to an election to proceed against such Guarantor for
reimbursement; (vi) any defense based upon any statute or rule of law that
provides that the obligation of a surety must be neither larger in amount nor in
other respects more burdensome than that of the principal; (vii) any defense
arising because of a Benefitted Party's election, in any proceeding instituted
under Bankruptcy Law, of the application of Section 1111(b)(2) of the Bankruptcy
Law; (viii) any defense based on any borrowing or grant of a security interest
under Section 364 of the Bankruptcy Law; or (ix) the provisions of Nevada
Revised Statutes 40.430 or similar laws of Nevada or other states limiting a
debtor or lien holder to one form of action for the recovery of debt or
enforcement of a right. Each Guarantor hereby covenants that its Subsidiary
Guarantee will not be discharged except by complete performance of the
Obligations contained in the Notes and this Indenture or as otherwise expressly
provided herein.
(c) If any Holder or the Trustee is required by any court or otherwise
to return to either the Company or any Guarantor, or any custodian, trustee, or
similar official acting in relation to either the Company or such Guarantor, any
amount paid by the Company or such Guarantor to the Trustee or such Holder, the
applicable Subsidiary Guarantee, to the extent theretofore discharged, shall be
reinstated in full force and effect. Each Guarantor agrees that it will not be
entitled to any right of subrogation in relation to
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the Holders in respect of any Obligations guaranteed hereby until payment in
full of all Obligations guaranteed hereby.
(d) Each Guarantor further agrees that, as between such Guarantor, on
the one hand, and the Holders and the Trustee, on the other hand, (i) the
maturity of the Obligations guaranteed hereby may be accelerated as provided in
Section 6.02 hereof for the purposes of this Subsidiary Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration as to the Company or any other obligor on the Notes of the
Obligations guaranteed hereby and (ii) in the event of any declaration of
acceleration of those Obligations as provided in Section 6.02 hereof, those
Obligations shall forthwith become due and payable by such Guarantor for the
purpose of this Subsidiary Guarantee.
Section 11.02. Execution and Delivery of Subsidiary Guarantees.
To evidence the Subsidiary Guarantees set forth in Section 11.01
hereof, each of the Guarantors agrees that a notation of the Subsidiary
Guarantees substantially in the form included in Exhibit B 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 the Chairman of the
Board, any Vice Chairman, the President or one of the Vice Presidents of each of
the Guarantors. Notwithstanding the foregoing, in the event additional
Subsidiary Guarantees are created pursuant to Section 4.18 hereof, any Notes
issued prior to the existence of any such additional Subsidiary Guarantees need
not be reissued by the Company to include the names of such additional
Guarantors.
Each of the Guarantors agree that the Subsidiary Guarantees set forth
in Section 11.01 hereof 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
Subsidiary Guarantees.
If an Officer whose facsimile signature is on a Note no longer holds
that office at the time the Trustee authenticates the Note on which the
Subsidiary Guarantees are endorsed, the Subsidiary Guarantees shall be valid
nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Subsidiary Guarantees
set forth in this Indenture on behalf of the Guarantors.
Section 11.03. Limitation of Guarantors' Liability.
Each Guarantor, and by its acceptance hereof, each Holder, hereby
confirms that it is its intention that the Subsidiary Guarantee by such
Guarantor not constitute a fraudulent transfer or conveyance for purposes of the
Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent
Transfer Act or any similar federal or state law to the extent applicable to any
of the Subsidiary Guarantees. To effectuate the foregoing intention, each such
Holder hereby irrevocably agrees that the obligation of such Guarantor under its
Subsidiary Guarantee under this Article 11 shall be limited to the maximum
amount as will, after giving effect to such maximum amount and all other
liabilities of such Guarantor that are relevant under such laws, and after
giving effect to any collections from, rights to receive contribution from or
payments made by or on behalf of any other Guarantor in respect of the
obligations of such other Guarantor under this Article 11, result in the
Obligations of such Guarantor in respect of such maximum amount not constituting
a fraudulent conveyance. Each beneficiary under the Subsidiary Guarantees, by
accepting the benefits hereof, confirms its intention that, in the event of a
bankruptcy, reorganization or other similar proceeding of the Company or any
Guarantor in which concurrent claims are made upon any Guarantor hereunder, to
the extent such claims will not be fully
66
satisfied, each such claimant with a valid claim against the Company shall be
entitled to a ratable share of all payments by such Guarantor in respect of such
concurrent claims.
Section 11.04. Merger or Consolidation of Guarantors.
No Guarantor shall consolidate with or merge with or into (whether or
not such Guarantor is the surviving Person), another corporation, Person or
entity whether or not affiliated with such Guarantor (other than any other
Guarantor or the Company) unless (i) subject to the provisions of the following
paragraph, the Person formed by or surviving any such consolidation or merger
(if other than such Guarantor, any other Guarantor or the Company) assumes all
the Obligations of such Guarantor pursuant to a supplemental indenture and
appropriate Collateral Documents in form and substance reasonably satisfactory
to the Trustee, under the Notes, this Indenture and the Collateral Documents;
(ii) immediately after giving effect to such transaction, no Default or Event of
Default exists; (iii) such Guarantor, or any Person formed by or surviving any
such consolidation or merger, would have Consolidated Net Worth (immediately
after giving effect to such transaction but without giving effect to purchase
accounting adjustments), equal to or greater than the Consolidated Net Worth of
such Guarantor immediately preceding the transaction; (iv) the Company would be
permitted by virtue of the Company's pro forma Fixed Charge Coverage Ratio,
immediately after giving effect to such transaction, to incur at least $1.00 of
additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set
forth in Section 4.10 hereof, and (v) such transaction would not result in the
loss or suspension or material impairment of any Gaming License (unless a
replacement Gaming License is effective prior to or simultaneously with such
loss, suspension or material impairment).
Section 11.05. Releases of Subsidiary Guarantees.
In the event of a sale or other disposition of all of the assets of any
Guarantor (other than ROC), by way of merger, consolidation or otherwise, or a
sale or other disposition of all of the Capital Stock of any Guarantor (other
than ROC), then such Guarantor (in the event of a sale or other disposition, by
way of such a merger, consolidation or otherwise, of all of the Capital Stock of
such Guarantor) or the corporation acquiring the property (in the event of a
sale or other disposition of all of the assets of such Guarantor) shall be
released and relieved of any Obligations under its Subsidiary Guarantee and any
Liens in favor of the Collateral Agent upon the Collateral owned by such
Guarantor will be released; provided that (i) immediately after giving effect to
such transaction, no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof and (ii) the Net Proceeds of
such sale or other disposition are applied in accordance with the applicable
provisions of this Indenture. Additionally, in the event that a Guarantor that
is a Restricted Subsidiary is properly designated as an Unrestricted Subsidiary
in accordance with this Indenture, then such Guarantor will be released and
relieved of any Obligations under its Subsidiary Guarantee, and any Liens in
favor of the Collateral Agent upon the Collateral owned by such Guarantor will
be released. Upon delivery by the Company to the Trustee of an Officers'
Certificate and Opinion of Counsel, to the effect that such sale or other
disposition or designation of an Unrestricted Subsidiary was made by the Company
in accordance with all applicable 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 Subsidiary Guarantee. Any
Guarantor not released from its Obligations under its Subsidiary Guarantee shall
remain liable for the full amount of principal of, premium and Liquidated
Damages, if any, and interest on the Notes and for the other Obligations of such
Guarantor under this Indenture as provided in this Article 11. Nothing herein
shall relieve the Company from its Obligations to apply the proceeds of an Asset
Sale as provided in Section 4.11 hereof.
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Section 11.06. "Trustee" To Include Paying Agent.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article 11 shall in such case (unless the context shall
otherwise require) be construed as extending to and including such Paying Agent
within its meaning as fully and for all intents and purposes as if such Paying
Agent were named in this Article 11 in place of the Trustee.
ARTICLE 12
MISCELLANEOUS
Section 12.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by TIA ss.318(c), the imposed duties shall control.
Section 12.02. Notices.
Any notice or communication by the Company, Guarantors or the Trustee
to the others is duly given if in writing and delivered in person or mailed by
first class mail (registered or certified, return receipt requested), telex,
telecopier or overnight air courier guaranteeing next day delivery, to the
others' address:
If to the Company or the Guarantors:
Riviera Holdings Corporation
0000 Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Chief Executive Officer
With a copy to:
Dechert Price & Xxxxxx
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx
If to the Trustee:
Norwest Bank Minnesota, N.A.
Corporate Trust Department
6th and Marquette
Xxxxxxxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxxxx
The Company or the Trustee, by notice to the others may designate
additional or different addresses for subsequent notices or communications.
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All notices and communications (other than those sent to Holders) shall
be deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when answered back, if telexed; when receipt acknowledged,
if telecopied; and 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 ss. 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 12.03. Communication by Holders of Notes with Other Holders
of Notes.
Holders may communicate pursuant to TIA ss. 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 ss.
312(c).
Section 12.04. 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 12.05 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
(b) an Opinion of Counsel in form and substance reasonably satisfactory
to the Trustee (which shall include the statements set forth in Section 12.05
hereof) stating that, in the opinion of such counsel, all such conditions
precedent and covenants, and all other applicable legal requirements, including,
without limitation, all requirements of the TIA and the rules thereunder, have
been satisfied.
Section 12.05. 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 ss. 314(a)(4)) shall comply with the provisions of TIA ss.
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;
69
(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.
Section 12.06. 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 12.07. No Personal Liability of Directors, Officers, Employees and
Stockholders.
No past, present or future director, officer, employee, incorporator or
stockholder of the Company, Subsidiary or an Affiliate thereof, as such, shall
have any liability for any Obligations of the Company or Guarantors under the
Notes, the Subsidiary Guarantees, this Indenture or the Collateral Documents or
for any claim based on, in respect of, or by reason of, such Obligations or
their creation. 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 12.08. Governing Law.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE NOTES AND THE SUBSIDIARY GUARANTEES WITHOUT REGARD
TO THE CONFLICTS OF LAW PROVISIONS REQUIRING THE APPLICATION OF THE LAWS OF ANY
OTHER JURISDICTION.
Section 12.09. 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 12.10. Successors.
All agreements of the Company and the Guarantors in this Indenture, the
Notes and the Subsidiary Guarantees, as applicable, shall bind their respective
successors. All agreements of the Trustee in this Indenture shall bind its
successors.
Section 12.11. Severability.
In case any provision in this Indenture, in the Notes or in the
Subsidiary Guarantees shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
Section 12.12. 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.
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Section 12.13. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by the
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agents duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company and
the Guarantors. Such instrument or instruments (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as the "Act" of the
Holders signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and conclusive in favor of the Trustee, the Company
and the Guarantors, if made in the manner provided in this Section 13.13.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to such witness, notary or officer the
execution thereof. Where such execution is by a signer acting in a capacity
other than his individual capacity, such certificate or affidavit shall also
constitute sufficient proof of authority. The fact and date of the execution of
any such instrument or writing, or the authority of the Person executing the
same, may also be proved in any other manner which the Trustee deems sufficient.
(c) The principal amount and serial numbers of Notes held by any
Holder, and the date of holding the same, shall be proved by the register of the
Notes maintained by the Registrar as provided in Section 2.03.
(d) If the Company shall solicit from the Holders of the Notes any
request, demand, authorization, direction, notice, consent, waiver or other Act,
the Company may, at its option, by or pursuant to a resolution of the Company's
Board of Directors, fix in advance a record date for the determination of
Holders entitled to give such request, demand, authorization, direction, notice,
consent, waiver or other Act, but the Company shall have no obligation to do so.
Notwithstanding TIA ss. 316(c), such record date shall be the record date
specified in or pursuant to such resolution, which shall be a date not earlier
than the date 30 days prior to the first solicitation of Holders generally in
connection therewith or the date of the most recent list of Holders forwarded to
the Trustee prior to such solicitation pursuant to Section 2.05 and not later
than the date such solicitation is completed. If such a record date is fixed,
such request, demand, authorization, direction, notice, consent, waiver or other
Act may be given before or after such record date, but only the Holders of
record at the close of business on such record date shall be deemed to be
Holders for the purposes of determining whether Holders of the requisite
proportion of the then outstanding Notes have authorized or agreed or consented
to such request, demand, authorization, direction, notice, consent, waiver or
other Act, and for that purpose the then outstanding Notes shall be computed as
of such record date; provided, that no such authorization, agreement or consent
by the Holders on such record date shall be deemed effective unless it shall
become effective pursuant to the provisions of this Indenture not later than
eleven months after the record date.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Note shall bind every future Holder of
the same Note and the Holder of every Note issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such Note.
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(f) Without limiting the foregoing, a Holder entitled hereunder to take
any action hereunder with regard to any particular Note may do so itself with
regard to all or any part of the principal amount of such Note or by one or more
duly appointed agents each of which may do so pursuant to such appointment with
regard to all or any part of such principal amount.
Section 12.14. Legal Holidays.
If any date specified in this Indenture, the Notes, Subsidiary
Guarantees or the Collateral Documents for the occurrence of any event
(including the giving of notice and the making of a payment) shall not be a
Business Day, then such event shall occur on the next succeeding date that is a
Business Day with the same force and effect as if such event had occurred on the
date originally specified and, if such event is a payment day in respect of the
Notes, no interest shall accrue for the intervening period.
Section 12.15. Qualification of Indenture.
The Company shall qualify this Indenture under the TIA and shall pay
all costs and expenses (including attorneys' fees for the Company, the Trustee
and the Holders of the Notes) incurred in connection therewith, including, but
not limited to, costs and expenses of qualification of this Indenture and the
Notes and printing this Indenture and the Notes. In connection with any such
qualification of this Indenture under the TIA, the Trustee shall be entitled to
receive from the Company any such Officers' Certificates, Opinions of Counsel or
other documentation as it may reasonably request.
Section 12.16. Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table 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]
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SIGNATURES
Dated as of August __, 1997 RIVIERA HOLDINGS CORPORATION
By: _______________________________
Name: Xxxxxxx X. Xxxxxxxxx
Title: Chief Executive Officer
Dated as of August __, 1997 RIVIERA OPERATING CORPORATION
By: _______________________________
Name:
Title:
Dated as of August __, 1997 RIVIERA GAMING MANAGEMENT, INC.
By: _______________________________
Name:
Title:
Dated as of August __, 1997 RIVIERA GAMING MANAGEMENT -
ELSINORE, INC.
By: _______________________________
Name:
Title:
Dated as of August __, 1997 RIVIERA GAMING MANAGEMENT
OF COLORADO, INC.
By: _______________________________
Name:
Title:
S-1
Dated as of August __, 1997 NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION
By: _______________________________
Name:
Title:
S-2
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EXHIBIT A
(Face of Note)
10% First Mortgage Notes due 2004
No. $__________
RIVIERA HOLDINGS CORPORATION
promises to pay to
or registered assigns,
the principal sum of
Dollars on August 15, 2004.
Interest Payment Dates: February 15, and August 15
Record Dates: February 1, and August 1
Dated: August __, 1997
RIVIERA HOLDINGS CORPORATION
By: ___________________________
Name:
Title:
This is one of the [Global]
Notes referred to in the
within-mentioned Indenture:
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
as Trustee
By:__________________________________
================================================================================
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(Back of Note)
10% First Mortgage Notes due 2004
[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
Depository to a nominee of the Depository or by a nominee of the Depository to
the Depository or another nominee of the Depository or by the Depository or any
such nominee to a successor Depository or a nominee of such successor
Depository. Unless this certificate is presented by an authorized representative
of The Depository Trust Company (55 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx) ("XXX"),
to the issuer 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.]1
[THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT") OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY 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 SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH SECURITY, 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
CLOSING DATE HEREOF AND THE LAST DATE ON WHICH THE
COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER
OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY)
ONLY (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 NOTES ARE
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON
IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM
NOTICE IS GIVEN THAT
------------------------
1 This paragraph should be included only if the Note is issued in global form.
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THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A,
(D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS
THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING
OF 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 SECURITY 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 OR 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 PURSUANT TO CLAUSE (D), (E) OR (F) 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 SECURITY IS
COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE
TRUSTEE.]2
Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
1. INTEREST. Riviera Holdings Corporation, a Nevada corporation (the
"Company"), promises to pay interest on the principal amount of this Note at 10%
per annum from August 13, 1997 until maturity and shall pay the Liquidated
Damages, if any, payable pursuant to Section 5 of the Registration Rights
Agreement referred to below. The Notes will mature on August 15, 2004. The
Company will pay interest and Liquidated Damages semi-annually on February 15
and August 15 of each year, or if any such day is not a Business Day, on the
next succeeding Business Day (each an "Interest Payment Date"), commencing on
February 15, 1998. 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 date
of original issuance. 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
(except defaulted interest) and Liquidated Damages, if any, to Holders of record
at the close of business on the February 1 or August 1 immediately preceding the
Interest Payment Date, even if such Notes are canceled after such record date
and on or before such Interest Payment Date, except as provided in Section 2.12
of the Indenture with respect to defaulted interest. The Notes will be payable
as to principal, premium, if any, interest and
------------------------
2 This paragraph should be included only if the Note is a Transfer
Restricted Security.
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Liquidated Damages, if any, at the office or agency of the Company maintained
for such purpose within the City and State of New York, 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 respective addresses set forth in the
register of Holders of the Notes, provided that payment by wire transfer of
immediately available funds will be required with respect to principal, premium
and Liquidated Damages, if any, and interest on, all Notes, the Holders of which
shall have provided wire transfer instructions to the Company. 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, Norwest Bank Minnesota,
National Association, 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 AND COLLATERAL DOCUMENTS. The Company issued the Notes
under an Indenture dated as of August 13, 1997 ("Indenture") between the
Company, the Guarantors 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 xx.xx. 77aaa-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 Notes are secured obligations of
the Company limited to $175.0 million in aggregate principal amount. The Notes
are secured pursuant to the Collateral Documents referred to in the Indenture by
a first lien on the Collateral owned by the Company or any Guarantor,
respectively, whether now owned or hereafter acquired, subject to Permitted
Liens.
5. OPTIONAL REDEMPTION.
(a) Except as set forth in subparagraph (b) or (d) of this Paragraph 5,
the Company shall not have the option to redeem the Notes prior to August 15,
2001. Thereafter, the Company shall have the option to redeem the Notes, in
whole or in part, upon not less than 30 nor more than 60 days' notice, at the
redemption prices (expressed as percentages of principal amount) set forth below
plus accrued and unpaid interest thereon to the applicable redemption date, if
redeemed during the twelve-month period beginning on August 15 of the years
indicated below:
Year Percentage
2001........................ 105.000%
2002........................ 102.500%
2003 and thereafter......... 100.000%
(b) Notwithstanding the provisions of subparagraph (a) of this
Paragraph 5, during the period commencing upon issuance of the Notes and ending
on August 15, 2000, the Company may redeem up to one-third of the principal
amount of Notes at a redemption price of 110.0% of the principal amount thereof,
plus accrued and unpaid interest and Liquidated Damages thereon, if any, to the
redemption date with the net cash proceeds of an offering of common stock of the
Company; provided that at least $116.7 million in aggregate principal amount of
the Notes remain outstanding immediately after the occurrence of such
redemption; and provided further that the call for such redemption shall occur
within 30 days of the date of the closing of such offering.
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(c) Any redemption pursuant to subparagraph (a) or (b) of this
Paragraph 5 shall be made pursuant to the provisions of Sections 3.01 through
3.06 of the Indenture.
(d) Notwithstanding the provisions of subparagraph (a) of this
Paragraph 5, if any Gaming Authority requires that a Holder or beneficial owner
of the Notes must be licensed, qualified or found suitable under any applicable
Gaming Law in order to maintain any or obtain any applied-for Gaming License or
franchise of the Company or any of its Subsidiaries under any applicable Gaming
Law, and such Holder or beneficial owner fails to apply for a license,
qualification or finding of suitability within 30 days after being requested to
do so by such Gaming Authority (or such lesser period that may be required by
such Gaming Authority or Gaming Law) or if such Holder or beneficial owner is
not so licensed, qualified or found suitable by such Gaming Authority (a
"Disqualified Holder"), the Company shall have the right, at its option, (i) to
require such Disqualified Holder or beneficial owner to dispose of such
Disqualified Holder's or beneficial owner's Notes within 30 days of notice of
such finding by the applicable Gaming Authority that such Disqualified Holder or
beneficial owner will not be licensed, qualified or found suitable as directed
by such Gaming Authority (or such earlier date as may be required by the
applicable Gaming Authority or Gaming Law) or (ii) to call for redemption of the
Notes of such Holder or beneficial owner at a redemption price equal to the
lesser of 100% of the principal amount thereof or the price at which the Holder
or beneficial owner acquired such Notes together with, in either case, accrued
and unpaid interest and Liquidated Damages, if any, thereon to the earlier of
the date of redemption 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. Immediately upon a
determination of unsuitability, the Disqualified Holder shall have no further
rights whatsoever with respect to the Notes (i) to exercise, directly or
indirectly, through any trustee, nominee or any other Person or entity, any
right conferred by the Notes or (ii) to receive any interest or any other
distribution or payment with respect to the Notes, or any remuneration in any
form from the Company for services rendered or otherwise, except the redemption
price of the Notes. The Company is not required to pay or reimburse any Holder
or beneficial owner of Notes who is required to apply for such license,
qualification or finding of suitability for the costs of such application
including investigatory costs. Such expenses will, therefore, be the obligation
of such Holder or beneficial owner. Any redemption pursuant to this subparagraph
(d) of this Paragraph 5 shall be made pursuant to the provisions of Sections
3.01 through 3.06 of the Indenture (except to the extent otherwise required by a
Gaming Authority or Gaming Law).
6. MANDATORY REDEMPTION.
Except as set forth in paragraph 7 below, the Company shall not be
required to make mandatory redemption payments with respect to the Notes.
7. REPURCHASE AT OPTION OF HOLDER.
(a) If there is a Change of Control, the Company shall be required to
make an offer (a "Change of Control Offer") to repurchase all or any part (equal
to $1,000 or an integral multiple thereof) of each Holder's Notes at an offer
price in cash equal to 101% of the aggregate principal amount thereof plus
accrued and unpaid interest and Liquidated Damages, if any, thereon to the date
of purchase (the "Change of Control Payment"). Within 30 days following any
Change of Control, the Company shall mail a notice to each Holder describing the
transaction or transactions that constitute the Change of Control and setting
forth the procedures governing the Change of Control Offer as required by the
Indenture. The Company shall not be required to make a Change of Control Offer
upon a Change of Control if a third party makes the Change of Control Offer in
the manner, at the times and otherwise in compliance with the
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requirements set forth in Sections 3.10 and 4.16 of the Indenture and purchases
all Notes validly tendered and not withdrawn under such Change of Control Offer.
(b) If the Company or a Subsidiary consummates any Asset Sales, within
fifteen days of each date on which the aggregate amount of Excess Proceeds
exceeds $5.0 million, the Company shall commence an offer to all Holders of
Notes (as "Asset Sale Offer") pursuant to Sections 3.10 and 4.11 of the
Indenture to purchase the maximum principal amount of Notes that may be
purchased out of the Excess Proceeds, at an offer price in cash in an amount
equal to 100% of the principal amount thereof plus accrued and unpaid interest
and Liquidated Damages, if any, thereon to the date of purchase, in accordance
with the procedures set forth in the Indenture. To the extent that the aggregate
amount of Notes tendered pursuant to an Asset Sale Offer is less than the Excess
Proceeds, the Company may use any remaining Excess Proceeds for general
corporate purposes. If the aggregate principal amount of Notes surrendered by
Holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select
the Notes to be purchased on a pro rata basis. Upon completion of such offer to
purchase, the amount of Excess Proceeds will be reset at zero.
8. NOTICE OF REDEMPTION. Notice of redemption will be mailed 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 whole 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 thereof
called for redemption.
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 or the Notes may be amended or supplemented with the consent of
the Holders of at least a majority in principal amount of the then outstanding
Notes, and any existing default or compliance with any provision of the
Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes. Without the consent
of any Holder of a Note, the Indenture or the Notes 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, consolidation, or sale of assets, 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 legal rights under the Indenture of any such
Holder, to release Collateral that is permitted to be released under the
Indenture, or to comply with requirements of the SEC in order to effect or
maintain the qualification of the Indenture under the Trust Indenture Act.
A-6
12. DEFAULTS AND REMEDIES. Events of Default include: (i) default for
30 days in the payment when due of interest on, or Liquidated Damages with
respect to, the Notes; (ii) default in payment when due of principal of or
premium, if any, on the Notes when the same becomes due and payable at maturity,
upon redemption (including in connection with an offer to purchase) or
otherwise, (iii) failure by the Company to comply with Sections 4.16 or 5.01 of
the Indenture; (iv) failure by the Company for 60 days after notice to the
Company by the Trustee or the Holders of at least 25% in principal amount of the
Notes then outstanding to comply with certain other agreements in the Indenture,
the Notes or the Collateral Documents; (v) default under certain other
agreements relating to Indebtedness of the Company, which default (a) is caused
by failure to pay principal of, premium, or interest on such Indebtedness prior
to the applicable grace period or (b) results in the acceleration of such
Indebtedness prior to its express maturity; (vi) certain final judgments for the
payment of money that remain undischarged for a period of 60 days; (vii) the
Company or any Guarantor repudiates its respective Obligations under its
Subsidiary Guarantee any of the Collateral Documents; (viii) certain events of
bankruptcy or insolvency with respect to the Company or any of its Significant
Subsidiaries; (ix) any Subsidiary Guarantee shall be held in any judicial
proceeding to be unenforceable or invalid or shall cease for any reason to be in
full force and effect and (x) any Gaming License of the Company or any
Restricted Subsidiary is revoked, terminated or suspended, resulting in the
cessation of operation for a period of more than 90 days of the casino business
owned or operated by the Company or any of its Restricted Subsidiaries. If any
Event of Default occurs and is continuing, the Trustee or the Holders of at
least 25% in principal amount of the then outstanding Notes may declare all the
Notes to be due and payable immediately. Notwithstanding the foregoing, in the
case of an Event of Default arising from certain events of bankruptcy or
insolvency, all outstanding Notes will become due and payable without further
action or notice. Holders of the Notes may not enforce the Indenture or the
Notes except as provided in the Indenture. Subject to certain limitations,
Holders of a majority in principal amount of the then outstanding Notes may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Holders of the Notes notice of any continuing Default or Event of
Default (except a Default or Event of Default relating to the payment of
principal of, premium, if any, or interest on any Note) if a committee of the
Trustee's Responsible Officers in good faith determines that withholding the
notice is in the Holders' interest. The Holders of at least a majority in
aggregate principal amount of the Notes then outstanding by notice to the
Trustee may on behalf of the Holders of all of the Notes waive any existing
Default or Event of Default and its consequences under the Indenture except a
continuing Default or Event of Default in the payment of interest on, or the
principal of, the Notes.
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. A director, officer, employee,
incorporator or stockholder of the Company, Subsidiary or Affiliate, as such,
shall not have any liability for any Obligations of the Company or Guarantors
under the Notes, the Subsidiary Guarantees, the Indenture or the Collateral
Documents or for any claim based on, in respect of, or by reason of, such
Obligations or their creation. Each Holder by accepting a Note waives and
releases all such liability. The waiver and release are part of the
consideration for the 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 (=
A-7
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 SECURITIES. In
addition to the rights provided to Holders of Notes under the Indenture, Holders
of Transferred Restricted Securities shall have all the rights set forth in the
Registration Rights Agreement dated as of August __, 1997, between the Company
and the parties named on the signature pages thereof (the "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.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
Riviera Holdings Corporation
0000 Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Attention: Chief Executive Officer
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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 him.
--------------------------------------------------------------------------------
Date: _____________________
Your Signature:___________________________
(Sign exactly as your name appears on
the face of the Note)
Signature Guarantee.
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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 4.11 or 4.16 of the Indenture, check the box below:
[GRAPHIC OMITTED] Section 4.11 [GRAPHIC OMITTED] Section 4.16
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.11 or Section 4.16 of the Indenture, state the
amount you elect to have purchased: $___________
Date: _____________________
Your Signature:__________________________________
(Sign exactly as your name appears
on the face of the Note)
Tax Identification No.:
(Signature Guarantee)
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SCHEDULE OF EXCHANGES OF DEFINITIVE NOTE3
The following exchanges of a part of this Global Note for Definitive
Notes have been made:
Principal Amount of this Signature of
Amount of decrease in Amount of increase in Global Note authorized officer of
Principal Amount of Principal Amount of following such decrease Trustee or Note
Date of Exchange this Global Note this Global Note (or increase) Custodian
---------------- --------------------- --------------------- ------------------------ ---------------------
------------------------
3 This should only be included if the Note is issued in global form.
A-11
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EXHIBIT B
SUBSIDIARY GUARANTEES
Riviera Operating Corporation, a Nevada corporation, Riviera Gaming
Management, Inc., a Nevada Corporation, Riviera Gaming Management - Elsinore,
Inc., a Nevada corporation, and Riviera Gaming Management of Colorado, Inc., a
Colorado corporation (each a "Guarantor" and, together with any successor or
additional Guarantor under the Indenture (the "Indenture") referred to in the
Note upon which this notation is endorsed, the "Guarantors"), have jointly and
severally and unconditionally guaranteed the Obligations of the Company under
the Notes and the Indenture, on a senior secured basis (each such guarantee
being a "Subsidiary Guarantee"), to each Holder of a Note authenticated and
delivered by the Trustee, or its successors or assigns, irrespective of the
validity or enforceability of the Indenture, the Notes or the Obligations of the
Company under the Indenture or the Notes, that: (i) the principal of, premium,
if any, interest and Liquidated Damages, if any, on the Notes shall be paid in
full when due, whether at the maturity or interest payment or redemption date,
by acceleration, call for redemption or otherwise, and interest on the overdue
principal, premium and Liquidated Damages, if any, and (to the extent permitted
by law) interest, if any, on the Notes and all other Obligations of the Company
to the Holders of the Notes or the Trustee under the Indenture or the Notes
shall be promptly paid in full or performed, all in accordance with the terms of
the Indenture and the Notes; and (ii) in case of any extension of time of
payment or renewal of any Notes or any of such other Obligations, they shall be
paid in full when due or performed in accordance with the terms of the extension
or renewal, whether at maturity, by acceleration, redemption or otherwise.
Failing payment when due of any amount so guaranteed or failing performance of
any other Obligation of the Company to the Holders, for whatever reason, each
Guarantor shall be jointly and severally obligated to pay, or to perform or to
cause the performance of, the same immediately, whether or not such failure to
pay has become an Event of Default that could cause acceleration pursuant to
Section 6.02 of the Indenture. An Event of Default under the Indenture or the
Notes shall constitute an event of default under this Subsidiary Guarantee, and
shall entitle the Holders of Notes to accelerate the Obligations of each
Guarantor hereunder in the same manner and to the same extent as the Obligations
of the Company. Each Guarantor agrees that this is a guarantee of payment not a
guarantee of collection. Capitalized terms used herein have the meanings
assigned to them in the Indenture unless otherwise indicated, and the
Obligations of the Guarantors pursuant to the Subsidiary Guarantees are subject
to the terms of the Indenture, to which reference is hereby made for the precise
terms thereof.
Each Guarantor, to the extent permitted by law, hereby waives and
relinquishes all claims, rights and remedies accorded by applicable law to
guarantors and agrees not to assert or take advantage of any such claims, rights
or remedies, including but not limited to: (i) any right to require the Trustee,
the Holders or the Company (each, a "Benefitted Party") to proceed against the
Company 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
Benefitted Party's power before proceeding against such Guarantor; (ii) the
defense of the statute of limitations in any action hereunder or in any action
for the collection of any Indebtedness or the performance of any Obligation
hereby guaranteed; (iii) any defense that may arise by reason of the incapacity,
lack of authority, death or disability of any other Person 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; (iv)
diligence, presentment, demand, protest and notice of any kind 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 such Guarantor, the Company, any Benefitted Party, any creditor of such
Guarantor, the Company or on the part of any other Person whomsoever in
connection with any Indebtedness or Obligations hereby guaranteed; (v) any
defense based upon an election of remedies by a Benefitted Party, including but
not limited to an election to proceed against such Guarantor for reimbursement;
(vi) any defense based upon any statute or rule of law that provides that the
obligation of a surety must be neither larger in amount nor in other respects
more burdensome than that of the principal; (vii) any defense arising because of
a Benefitted Party's election, in any proceeding instituted under Bankruptcy
Law, of the application of Section 1111(b)(2) of the Bankruptcy Law; (viii) any
defense based on any borrowing or grant of a security interest under Section 364
of the
B-1
Bankruptcy Law or (ix) the provisions of Nevada Revised Statutes 40.430 or
similar laws of Nevada or other states limiting a debtor or lien holder to one
form of action for the recovery of debt or enforcement of a right. Each
Guarantor hereby covenants that its Subsidiary Guarantee will not be discharged
except by complete performance of the Obligations contained in the Notes and the
Indenture or as otherwise expressly provided herein.
Pursuant to Section 11.03 of the Indenture, the Obligation of each
Guarantor under its Guarantee is limited to the maximum amount as will, after
giving effect to such maximum amount and all other liabilities of such Guarantor
that are relevant for purposes of fraudulent transfer or conveyance under the
Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent
Transfer Act or any similar federal or state law, and after giving effect to any
collections from, rights to receive contribution from or payments made by or on
behalf of any other Guarantor in respect of the Obligations of such other
Guarantor under Article 11 of the Indenture, result in the Obligations of such
Guarantor in respect of such maximum amount not constituting a fraudulent
conveyance, all subject to the terms of the Indenture, to which reference is
hereby made for the precise terms thereof.
As set forth in the Indenture, the Obligation of each Guarantor under
its Subsidiary Guarantee may be released under certain circumstances, including
the sale of all or substantially all of the assets of a Guarantor or such
Guarantor becoming an Unrestricted Subsidiary of the Company, all subject to the
terms of the Indenture, to which reference is hereby made for the precise terms
thereof.
The Subsidiary Guarantees shall be binding upon the Guarantors and
their successors and assigns and shall inure to the benefit of the successors
and assigns of the Trustee and the Holders of the Notes 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 of the
Indenture.
The Subsidiary Guarantees shall not be valid or obligatory for any
purpose until the certificate of authentication on the Note on which the
Subsidiary Guarantees are noted shall have been executed by the Trustee under
the Indenture by the manual signature of one of its authorized officers.
B-2
By each of the following, and any other Guarantor as may be added or
substituted from time to time, as Guarantors:
Dated as of August __, 1997 RIVIERA OPERATING CORPORATION
By: _______________________________
Name:
Title:
Dated as of August __, 1997 RIVIERA GAMING MANAGEMENT, INC.
By: _______________________________
Name:
Title:
Dated as of August __, 1997 RIVIERA GAMING MANAGEMENT -
ELSINORE, INC.
By: _______________________________
Name:
Title:
Dated as of August __, 1997 RIVIERA GAMING MANAGEMENT
OF COLORADO, INC.
By: _______________________________
Name:
Title:
B-3
================================================================================
EXHIBIT C
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF
TRANSFER OF NOTES
Re: ___% First Mortgage Notes due 2004 of Riviera Holdings Corporation.
This Certificate relates to $_____ principal amount of Notes held in *
* ________ book-entry or *_______ definitive form by ________________
(the "Transferor").
The Transferor*:
[GRAPHIC OMITTED] has requested the Trustee by written order to deliver
in exchange for its beneficial interest in the Global Note held by the
Depository a Note or Notes in definitive, registered form of authorized
denominations in an aggregate principal amount equal to its beneficial interest
in such Global Note (or the portion thereof indicated above); or
[GRAPHIC OMITTED] has requested the Trustee by written order to
exchange or register the transfer of a Note or Notes.
In connection with such request and in respect of each such Note, the
Transferor does hereby certify that Transferor is familiar with the Indenture
relating to the above captioned Notes and as provided in Section 2.06 of such
Indenture, the transfer of this Note does not require registration under the
Securities Act (as defined below) because:*
[GRAPHIC OMITTED] Such Note is being acquired for the Transferor's own
account, without transfer (in satisfaction of Section 2.06(a)(ii)(A) or Section
2.06(d)(i)(A) of the Indenture).
[GRAPHIC OMITTED] Such Note is being transferred to a "qualified
institutional buyer" (as defined in Rule 144A under the Securities Act of 1933,
as amended (the "Securities Act")) in reliance on Rule 144A (in satisfaction of
Section 2.06(a)(ii)(B), Section 2.06(b)(i) or Section 2.06(d)(i)(B) of the
Indenture) or pursuant to an exemption from registration in accordance with Rule
904 under the Securities Act (in satisfaction of Section 2.06(a)(ii)(B) or
Section 2.06(d)(i)(B) of the Indenture.)
---------------
*Check applicable box.
C-1
[GRAPHIC OMITTED] Such Note is being transferred in accordance with
Rule 144 under the Securities Act, or pursuant to an effective registration
statement under the Securities Act (in satisfaction of Section 2.06(a)(ii)(B) or
Section 2.06(d)(i)(B) of the Indenture).
[GRAPHIC OMITTED] Such Note is being transferred in reliance on and in
compliance with an exemption from the registration requirements of the
Securities Act, other than Rule 144A, 144 or Rule 904 under the Securities Act.
An Opinion of Counsel (as defined in the Indenture) to the effect that such
transfer does not require registration under the Securities Act accompanies this
Certificate (in satisfaction of Section 2.06(a)(ii)(C) or Section 2.06(d)(i)(C)
of the Indenture).
------------------------------
[INSERT NAME OF TRANSFEROR]
By:___________________________
Date:______________________________
---------------
*Check applicable box.
C-2
