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EXHIBIT 4(jj)
PREFERRED SECURITIES GUARANTEE AGREEMENT
CIRCUS CIRCUS ENTERPRISES, INC.
Dated as of [ ______ __, __]
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TABLE OF CONTENTS
PAGE
ARTICLE I - DEFINITIONS AND INTERPRETATION. . . . . . . . . . . . . . 1
SECTION 1.1. Definitions and Interpretation . . . . . . . . . . 1
ARTICLE II - TRUST INDENTURE ACT . . . . . . . . . . . . . . . . . . 5
SECTION 2.1. Trust Indenture Act; Application . . . . . . . . . 5
SECTION 2.2. Lists of Holders of Securities . . . . . . . . . . 5
SECTION 2.3. Reports by the Preferred Guarantee Trustee . . . . 5
SECTION 2.4. Periodic Reports to Preferred Guarantee Trustee. . 5
SECTION 2.5. Evidence of Compliance with Conditions Precedent . 6
SECTION 2.6. Events of Default; Waiver. . . . . . . . . . . . . 6
SECTION 2.7. Events of Default; Notice. . . . . . . . . . . . . 6
SECTION 2.8. Conflicting Interests. . . . . . . . . . . . . . . 6
ARTICLE III - POWERS, DUTIES AND RIGHTS OF PREFERRED
GUARANTEE TRUSTEE . . . . . . . . . . . . . . . . . . . 7
SECTION 3.1. Powers and Duties of the Preferred Guarantee
Trustee. . . . . . . . . . . . . . . . . . . . . . 7
SECTION 3.2. Certain Rights of Preferred Guarantee Trustee. . . 8
SECTION 3.3. Not Responsible for Recitals or Issuance of
Guarantee. . . . . . . . . . . . . . . . . . . . .10
ARTICLE IV - PREFERRED GUARANTEE TRUSTEE. . . . . . . . . . . . . . .10
SECTION 4.1. Preferred Guarantee Trustee; Eligibility . . . . .10
SECTION 4.2. Appointment, Removal and Resignation of
Preferred Guarantee Trustees . . . . . . . . . . .11
ARTICLE V - GUARANTEE . . . . . . . . . . . . . . . . . . . . . . . .12
SECTION 5.1. Guarantee. . . . . . . . . . . . . . . . . . . . .12
SECTION 5.2. Waiver of Notice and Demand. . . . . . . . . . . .12
SECTION 5.3. Obligations Not Affected . . . . . . . . . . . . .12
SECTION 5.4. Rights of Holders. . . . . . . . . . . . . . . . .13
SECTION 5.5. Guarantee of Payment . . . . . . . . . . . . . . .14
SECTION 5.6. Subrogation. . . . . . . . . . . . . . . . . . . .14
SECTION 5.7. Independent Obligations. . . . . . . . . . . . . .14
ARTICLE VI - LIMITATION OF TRANSACTIONS; SUBORDINATION. . . . . . . .14
SECTION 6.1. Limitation of Transactions . . . . . . . . . . . .14
SECTION 6.2. Ranking. . . . . . . . . . . . . . . . . . . . . .15
ARTICLE VII - TERMINATION . . . . . . . . . . . . . . . . . . . . . .15
SECTION 7.1. Termination. . . . . . . . . . . . . . . . . . . .15
ARTICLE VIII - INDEMNIFICATION. . . . . . . . . . . . . . . . . . . .15
SECTION 8.1. Exculpation. . . . . . . . . . . . . . . . . . . .15
SECTION 8.2. Indemnification. . . . . . . . . . . . . . . . . .16
ARTICLE IX - MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . .17
SECTION 9.1. Successors and Assigns . . . . . . . . . . . . . .17
PAGE
SECTION 9.2. Amendments . . . . . . . . . . . . . . . . . . . .17
SECTION 9.3. Notices. . . . . . . . . . . . . . . . . . . . . .17
SECTION 9.4. Benefit. . . . . . . . . . . . . . . . . . . . . .18
SECTION 9.5. Governing Law. . . . . . . . . . . . . . . . . . .18
SECTION 9.6. No Recourse Against Certain Persons. . . . . . . .18
PREFERRED SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Preferred Securities Guarantee"), dated
as of [_________ __, __], is executed and delivered by Circus Circus
Enterprises, Inc., a Nevada corporation (the "Guarantor"), and The Bank of
New York, a New York banking corporation, as trustee (the "Preferred
Guarantee Trustee"), for the benefit of the Holders (as defined herein) from
time to time of the Preferred Securities (as defined herein) of Circus
Finance II, a Delaware statutory business trust (the "Issuer").
WITNESSETH:
WHEREAS, pursuant to an amended and restated Declaration of Trust (the
"Declaration"), dated as of [_________ __, __], among the trustees of the
Issuer named therein, the Guarantor, as sponsor, and the holders from time to
time of undivided beneficial interests in the assets of the Issuer, the
Issuer is issuing on the date hereof __________ preferred securities having
an aggregate liquidation amount of $___________ designated the _____% Trust
Originated Preferred Securities-SM- ("TOPrS-SM-" or the "Preferred
Securities");
WHEREAS, as incentive for the Holders to purchase the Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree,
to the extent set forth in this Preferred Securities Guarantee, to pay to the
Holders of the Preferred Securities the Guarantee Payments (as defined
herein) and to make certain other payments on the terms and conditions set
forth herein;
WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (the "Common Securities Guarantee") with substantially identical
terms as this Preferred Securities Guarantee for the benefit of the holders
of the Common Securities (as defined herein), except that if an Indenture
Event of Default (as defined herein), has occurred and is continuing, the
rights of holders of the Common Securities to receive Guarantee Payments
under the Common Securities Guarantee are subordinated to the rights of
Holders of Preferred Securities to receive Guarantee Payments under this
Preferred Securities Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall
benefit the Guarantor, the Guarantor executes and delivers this Preferred
Securities Guarantee for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1. DEFINITIONS AND INTERPRETATION
In this Preferred Securities Guarantee, unless the context otherwise
requires:
(a) capitalized terms used in this Preferred Securities Guarantee
but not defined in the preamble above have the respective meanings assigned
to them in this Section 1.1;
(b) a term defined anywhere in this Preferred Securities Guarantee
has the same meaning throughout;
(c) all references to "the Preferred Securities Guarantee" or
"this Preferred Securities Guarantee" are to this Preferred Securities
Guarantee as modified, supplemented or amended from time to time;
(d) all references in this Preferred Securities Guarantee to
Articles and Sections are to Articles and Sections of this Preferred
Securities Guarantee, unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Preferred Securities Guarantee, unless otherwise defined in
this Preferred Securities Guarantee or unless the context otherwise requires;
and
(f) a reference to the singular includes the plural and vice versa.
"AFFILIATE" has the same meaning as given to that term in Rule 405 of
the Securities Act of 1933, as amended, or any successor rule thereunder.
"BUSINESS DAY" means any day other than a Saturday, a Sunday or any
other day on which banking institutions in New York, New York are authorized
or required by law to close.
"COMMON SECURITIES" means the securities representing common undivided
beneficial interests in the assets of the Issuer.
"COVERED PERSON" means any Holder or beneficial owner of Preferred
Securities.
"EVENT OF DEFAULT" means a default by the Guarantor on any of its
payment or other obligations under this Preferred Securities Guarantee after
giving effect to all applicable cure periods.
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"GUARANTEE PAYMENTS" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent
not paid or made by the Issuer: (i) any accrued and unpaid Distributions (as
defined in the Declaration) that are required to be paid on such Preferred
Securities to the extent the Issuer has funds available therefor, (ii) the
redemption price, including all accrued and unpaid Distributions to the date
of redemption (the "Redemption Price"), to the extent the Issuer has funds
available therefor, with respect to any Preferred Securities called for
redemption by the Issuer, and (iii) upon a voluntary or involuntary
dissolution, winding-up or termination of the Issuer (other than in
connection with the distribution of Subordinated Debentures to the Holders in
exchange for Preferred Securities as provided in the Declaration), the lesser
of (a) the aggregate of the liquidation amount and all accrued and unpaid
Distributions on the Preferred Securities to the date of payment, to the
extent the Issuer shall have funds available therefor, and (b) the amount of
assets of the Issuer remaining available for distribution to Holders in
liquidation of the Issuer (in either case, the "Liquidation Distribution").
If an Indenture Event of Default has occurred and is continuing, the rights
of holders of the Common Securities to receive payments under the Common
Securities Guarantee are subordinated to the rights of Holders of Preferred
Securities to receive Guarantee Payments.
"HOLDER" shall mean any holder, as registered on the books and records
of the Issuer, of any Preferred Securities; PROVIDED, HOWEVER, that, in
determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder,
"Holder" shall not include the Guarantor or any Affiliate of the Guarantor.
"INDEMNIFIED PERSON" means the Preferred Guarantee Trustee, any
Affiliate of the Preferred Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives or agents of the
Preferred Guarantee Trustee.
"INDENTURE" means the Indenture dated as of [_________ __, __], between
the Guarantor and The Bank of New York, as trustee, and the First
Supplemental Indenture thereto pursuant to which certain subordinated debt
securities of the Guarantor are to be issued to the Property Trustee (as
defined in the Declaration), as from time to time amended.
"INDENTURE EVENT OF DEFAULT" has the same meaning as that given to the
term "Event of Default" in the Indenture.
"MAJORITY IN LIQUIDATION AMOUNT OF THE SECURITIES" means, except as
provided by the Trust Indenture Act, a vote by Holder(s) of Preferred
Securities, voting separately as a class, of more than 50% of the liquidation
amount (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accrued and unpaid Distributions to the date
upon which the voting percentages are determined) of all Preferred Securities
outstanding as of the date of determination.
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"OFFICERS' CERTIFICATE" means, with respect to any Person, a certificate
signed on behalf of such Person by two Authorized Officers (as defined in the
Declaration) of such Person. Any Officers' Certificate delivered with
respect to compliance with a condition or covenant provided for in this
Preferred Securities Guarantee shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition;
(b) a brief statement of the nature and scope of the examination
or investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination
or investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"PERSON" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever
nature.
"PREFERRED GUARANTEE TRUSTEE" means The Bank of New York, until a
Successor Preferred Guarantee Trustee has been appointed and has accepted
such appointment pursuant to the terms of this Preferred Securities Guarantee
and thereafter means each such Successor Preferred Guarantee Trustee.
"PROPERTY TRUSTEE" shall have the meaning ascribed to such term in the
Declaration.
"RESPONSIBLE OFFICER" means, with respect to the Preferred Guarantee
Trustee, (a) any vice president, any assistant vice president, any assistant
secretary, any assistant treasurer, any trust officer or any other officer of
the corporate trust department of the Preferred Guarantee 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
that officer's knowledge of and familiarity with the particular subject and
(b) who shall have direct responsibility for the administration of this
Agreement.
"SUBORDINATED DEBENTURES" means the series of subordinated debt
securities of the Guarantor designated the _____% Subordinated Deferrable
Interest Debentures due ______ __, ____ held by the Property Trustee.
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"SUCCESSOR PREFERRED GUARANTEE TRUSTEE" means a successor Preferred
Guarantee Trustee possessing the qualifications to act as Preferred Guarantee
Trustee under Section 4.1.
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939, as amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1. TRUST INDENTURE ACT; APPLICATION
(a) This Preferred Securities Guarantee is subject to the
provisions of the Trust Indenture Act that are required to be part of this
Preferred Securities Guarantee and shall, to the extent applicable, be
governed by such provisions.
(b) If and to the extent that any provision of this Preferred
Securities Guarantee limits, qualifies or conflicts with the duties imposed
by Section 310 to 317, inclusive, of the Trust Indenture Act, such imposed
duties shall control.
SECTION 2.2. LISTS OF HOLDERS OF SECURITIES
(a) The Guarantor shall provide the Preferred Guarantee Trustee
with a list, in such form as the Preferred Guarantee Trustee may reasonably
require, of the names and addresses of the Holders of the Preferred
Securities ("List of Holders") (i) as of [_____ __] and [_____ __] of each
year, within 10 Business Days thereafter, and (ii) at any other time within
30 days of receipt by the Guarantor of a written request from the Preferred
Guarantee Trustee for a List of Holders, which shall be as of a date no more
than 14 days before such List of Holders is given to the Preferred Guarantee
Trustee; PROVIDED, HOWEVER, that the Guarantor shall not be obligated to
provide such List of Holders at any time the List of Holders does not differ
from the most recent List of Holders given to the Preferred Guarantee Trustee
by the Guarantor. The Preferred Guarantee Trustee may destroy any List of
Holders previously given to it on receipt of a new List of Holders.
(b) The Preferred Guarantee Trustee shall comply with its
obligations under Sections 311(a), 311(b) and 312(b) of the Trust
Indenture Act.
SECTION 2.3. REPORTS BY THE PREFERRED GUARANTEE TRUSTEE
Within 60 days after each [_____ __] beginning with the [_____ __]
following the date on which the Preferred Securities are originally issued,
the Preferred Guarantee Trustee shall transmit by mail to each Holder of the
Preferred Securities in the manner and to the extent provided in Trust
Indenture Act Section 313(c) a brief report dated as of such [_____ __] that
complies with Trust Indenture Act Section 313(a). The Preferred Guarantee
Trustee shall also comply with Trust Indenture Act Section 313(b).
A copy of each report at the time of the maling to the Holders of the
Preferred Securities shall be filed by the Company with the Securities and
Exchange Commission and each stock exchange on which the Preferred
Securities are listed. The Company will promptly notify the Preferred
Guarantee Trustee if and when the Preferred Securities are listed on any
stock exchange.
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SECTION 2.4. PERIODIC REPORTS TO PREFERRED GUARANTEE TRUSTEE
The Guarantor shall provide to the Preferred Guarantee Trustee such
documents, reports and information as required by Section 314 of the Trust
Indenture Act (if any) and the compliance certificate required by Section 314
of the Trust Indenture Act in the form, in the manner and at the times
required by Section 314 of the Trust Indenture Act.
SECTION 2.5. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT
The Guarantor shall provide to the Preferred Guarantee Trustee with a
certification of compliance with any conditions precedent, if any, provided
for in this Preferred Securities Guarantee that relate to any of the matters
set forth in Section 314(c) of the Trust Indenture Act. Any certificate or
opinion required to be given by an officer pursuant to Section 314(c)(1) of
the Trust Indenture Act may be given in the form of an Officers' Certificate.
SECTION 2.6. EVENTS OF DEFAULT; WAIVER
The Holders of a Majority in liquidation amount of Preferred Securities
may, by vote, on behalf of the Holders of all of the Preferred Securities,
waive any past Event of Default and its consequences. Upon such waiver, any
such Event of Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured, for every purpose of this
Preferred Securities Guarantee, but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right
consequent thereon.
SECTION 2.7. EVENTS OF DEFAULT; NOTICE
(a) The Preferred Guarantee Trustee shall, within 90 days after
the occurrence of an Event of Default that is actually known to the Preferred
Guarantee Trustee (or as soon as reasonably practical thereafter), transmit
by mail, first class postage prepaid, to the Holders of the Preferred
Securities, notices of all Events of Default actually known to the Preferred
Guarantee Trustee, unless such defaults have been cured before the giving of
such notice; PROVIDED, HOWEVER, that the Preferred Guarantee Trustee shall be
protected in withholding such notice if and so long as the board of
directors, the executive committee, or a trust committee of directors and/or
Responsible Officers of the Preferred Guarantee Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders of the Preferred Securities.
(b) The Preferred Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Preferred Guarantee Trustee
shall have received actual knowledge, or a Responsible Officer charged with
the administration of the Declaration shall have obtained written notice, of
such Event of Default.
SECTION 2.8. CONFLICTING INTERESTS
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The Declaration shall be deemed to be specifically described in this
Preferred Securities Guarantee for the purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1. POWERS AND DUTIES OF THE PREFERRED GUARANTEE TRUSTEE
(a) This Preferred Securities Guarantee shall be held by the
Preferred Guarantee Trustee for the benefit of the Holders of the Preferred
Securities, and the Preferred Guarantee Trustee shall not transfer this
Preferred Securities Guarantee to any Person except a Holder of Preferred
Securities exercising his or her rights pursuant to Section 5.4(b) or to a
Successor Preferred Guarantee Trustee on acceptance by such Successor
Preferred Guarantee Trustee of its appointment to act as Successor Preferred
Guarantee Trustee. The right, title and interest of the Preferred Guarantee
Trustee shall automatically vest in any Successor Preferred Guarantee
Trustee, and such vesting (and cessation as to the Preferred Guarantee
Trustee) of title shall be effective whether or not conveyancing documents
have been executed and delivered pursuant to the appointment of such
Successor Preferred Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing, the
Preferred Guarantee Trustee shall enforce this Preferred Securities Guarantee
for the benefit of the Holders of the Preferred Securities.
(c) The Preferred Guarantee Trustee, before the occurrence of any
Event of Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Preferred Securities Guarantee, and no implied covenants shall
be read into this Preferred Securities Guarantee against the Preferred
Guarantee Trustee. In case an Event of Default has occurred (that has not
been cured or waived pursuant to Section 2.6), the Preferred Guarantee
Trustee shall exercise such of the rights and powers vested in it by this
Preferred Securities Guarantee, and use the same degree of care and skill in
its exercise thereof, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(d) No provision of this Preferred Securities Guarantee shall be
construed to relieve the Preferred Guarantee Trustee from liability for its
own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) prior to the occurrence of any Event of Default and
after the curing or waiving of all such Events of Default that may have
occurred:
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(A) the duties and obligations of the Preferred
Guarantee Trustee shall be determined solely by the express provisions of
this Preferred Securities Guarantee, and the Preferred Guarantee Trustee
shall not be liable except for the performance of such duties and obligations
as are specifically set forth in this Preferred Securities Guarantee, and no
implied covenants or obligations shall be read into this Preferred Securities
Guarantee against the Preferred Guarantee Trustee; and
(B) in the absence of bad faith on the part of the
Preferred Guarantee Trustee, the Preferred Guarantee Trustee may conclusively
rely, as to the truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished to the
Preferred Guarantee Trustee and conforming to the requirements of this
Preferred Securities Guarantee; but in the case of any such certificates or
opinions that by any provision hereof are specifically required to be
furnished to the Preferred Guarantee Trustee, the Preferred Guarantee Trustee
shall be under a duty to examine the same to determine whether or not they
conform to the requirements of this Preferred Securities Guarantee (but need
not confirm or investigate the accuracy of mathematical calculations or other
facts stated therein);
(ii) the Preferred Guarantee Trustee shall not be liable for
any error of judgment made in good faith by a Responsible Officer of the
Preferred Guarantee Trustee, unless it shall be proved that the Preferred
Guarantee Trustee was negligent in ascertaining the pertinent facts upon
which such judgment was made;
(iii) the Preferred Guarantee Trustee shall not be liable
with respect to any action taken or omitted to be taken by it in good faith
in accordance with the direction of the Holders of not less than a Majority
in liquidation amount of the Preferred Securities relating to the time,
method and place of conducting any proceeding for any remedy available to the
Preferred Guarantee Trustee, or exercising any trust or power conferred upon
the Preferred Guarantee Trustee under this Preferred Securities Guarantee; and
(iv) no provision of this Preferred Securities Guarantee
shall require the Preferred Guarantee Trustee to expend or risk its own funds
or otherwise incur personal financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers, if the
Preferred Guarantee Trustee shall have reasonable grounds for believing that
the repayment of such funds or liability is not reasonably assured to it
under the terms of this Preferred Securities Guarantee or adequate indemnity
against such risk or liability is not reasonably assured to it.
SECTION 3.2. CERTAIN RIGHTS OF PREFERRED GUARANTEE TRUSTEE
(a) Subject to the provisions of Section 3.1:
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(i) The Preferred Guarantee Trustee may conclusively rely,
and shall be fully protected in acting or refraining from acting upon, any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and to have
been signed, sent or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by
this Preferred Securities Guarantee shall be sufficiently evidenced by a
Direction (as defined in the Declaration) or an Officers' Certificate.
(iii) Whenever, in the administration of this Preferred
Securities Guarantee, the Preferred Guarantee Trustee shall deem it desirable
that a matter be proved or established before taking, suffering or omitting any
action hereunder, the Preferred Guarantee Trustee (unless other evidence is
herein specifically prescribed) may, in the absence of bad faith on its part,
request and conclusively rely upon an Officers' Certificate which, upon receipt
of such request, shall be promptly delivered by the Guarantor.
(iv) The Preferred Guarantee Trustee shall have no duty to see
to any recording, filing or registration of any instrument (or any rerecording,
refiling or reregistration thereof).
(v) The Preferred Guarantee Trustee may consult with counsel
of its selection, and the advice or opinion of such counsel with respect to
legal matters shall be full and complete authorization and protection in respect
of any action taken, suffered or omitted by it hereunder in good faith and in
accordance with such advice or opinion. Such counsel may be counsel to the
Guarantor or any of its Affiliates and may include any of its employees. The
Preferred Guarantee Trustee shall have the right at any time to seek
instructions concerning the administration of this Preferred Securities
Guarantee from any court of competent jurisdiction.
(vi) The Preferred Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
Preferred Securities Guarantee at the request or direction of any Holder, unless
such Holder shall have provided to the Preferred Guarantee Trustee such adequate
security and indemnity as would satisfy a reasonable person in the position of
the Preferred Guarantee Trustee, against the costs, expenses (including
attorneys' fees and expenses) and liabilities that might be incurred by it in
complying with such request or direction, including such reasonable advances as
may be requested by the Preferred Guarantee Trustee; PROVIDED, HOWEVER, that
nothing contained in this Section 3.2(a)(vi) shall be taken to relieve the
Preferred Guarantee Trustee, upon the occurrence of an Event of Default, of its
obligation to exercise the rights and powers vested in it by this Preferred
Securities Guarantee.
(vii) The Preferred Guarantee Trustee shall not be bound to
make any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or other
paper or document, but the Preferred Guarantee Trustee, in its
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discretion, may make such further inquiry or investigation into such facts or
matters as it may see fit.
(viii) The Preferred Guarantee Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder either directly or by
or through agents or attorneys, and the Preferred Guarantee Trustee shall not be
responsible for any misconduct or negligence on the part of any agent or
attorney appointed with due care by it hereunder.
(ix) Any action taken by the Preferred Guarantee Trustee or
its agents hereunder shall bind the Holders of the Preferred Securities, and the
signature of the Preferred Guarantee Trustee or its agents alone shall be
sufficient and effective to perform any such action. No third party shall be
required to inquire as to the authority of the Preferred Guarantee Trustee to so
act or as to its compliance with any of the terms and provisions of this
Preferred Securities Guarantee, both of which shall be conclusively evidenced by
the Preferred Guarantee Trustee's or its agent's taking such action.
(x) Whenever in the administration of this Preferred
Securities Guarantee the Preferred Guarantee Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or right or taking any
other action hereunder, the Preferred Guarantee Trustee (i) may request
instructions from the Holders of a Majority in liquidation amount of the
Preferred Securities, (ii) may refrain from enforcing such remedy or right or
taking such other action until such instructions are received, and (iii) shall
be protected in acting in accordance with such instructions.
(b) No provision of this Preferred Securities Guarantee shall be
deemed to impose any duty or obligation on the Preferred Guarantee Trustee to
perform any act or acts or exercise any right, power, duty or obligation
conferred or imposed on it in any jurisdiction in which it shall be illegal, or
in which the Preferred Guarantee Trustee shall be unqualified or incompetent in
accordance with applicable law, to perform any such act or acts or to exercise
any such right, power, duty or obligation. No permissive power or authority
available to the Preferred Guarantee Trustee shall be construed to be a duty.
SECTION 3.3. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF GUARANTEE
The recitals contained in this Preferred Securities Guarantee shall be
taken as the statements of the Guarantor, and the Preferred Guarantee Trustee
does not assume any responsibility for their correctness. The Preferred
Guarantee Trustee makes no representation as to the validity or sufficiency of
this Preferred Securities Guarantee.
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1. PREFERRED GUARANTEE TRUSTEE; ELIGIBILITY
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(a) There shall at all times be a Preferred Guarantee Trustee which
shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the Securities and
Exchange Commission to act as an institutional trustee under the Trust Indenture
Act, authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least 50 million U.S. dollars ($50,000,000),
and subject to supervision or examination by Federal, State, Territorial or
District of Columbia authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of the
supervising or examining authority referred to above, then, for the purposes of
this Section 4.1(a)(ii), the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published.
(b) If at any time the Preferred Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Preferred Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.2(c).
(c) If the Preferred Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Preferred Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
SECTION 4.2. APPOINTMENT, REMOVAL AND RESIGNATION OF PREFERRED GUARANTEE
TRUSTEES
(a) Subject to Section 4.2(b), the Preferred Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.
(b) The Preferred Guarantee Trustee shall not be removed in
accordance with Section 4.2(a) until a Successor Preferred Guarantee Trustee
has been appointed and has accepted such appointment by written instrument
executed by such Successor Preferred Guarantee Trustee and delivered to the
Guarantor.
(c) The Preferred Guarantee Trustee appointed to office shall hold
office until a Successor Preferred Guarantee Trustee shall have been appointed
or until its removal or resignation. The Preferred Guarantee Trustee may resign
from office (without need for prior or subsequent accounting) by an instrument
in writing executed by the Preferred Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor Preferred
Guarantee Trustee has been appointed and has accepted such appointment by
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instrument in writing executed by such Successor Preferred Guarantee Trustee and
delivered to the Guarantor and the resigning Preferred Guarantee Trustee.
(d) If no Successor Preferred Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.2 within 30
days after delivery of an instrument of resignation or removal, the Preferred
Guarantee Trustee resigning or being removed may (at the expense of the
Guarantor) petition any court of competent jurisdiction for appointment of a
Successor Preferred Guarantee Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper, appoint a Successor
Preferred Guarantee Trustee.
ARTICLE V
GUARANTEE
SECTION 5.1. GUARANTEE
The Guarantor irrevocably and unconditionally agrees to pay in full to the
Holders the Guarantee Payments (without duplication of amounts theretofore paid
by the Issuer), as and when due (taking into account any permitted deferral
thereof), regardless of any defense, right of set-off or counterclaim that the
Issuer may have or assert. The Guarantor's obligation to make a Guarantee
Payment may be satisfied by direct payment of the required amounts by the
Guarantor to the Holders or by causing the Issuer to pay such amounts to the
Holders.
SECTION 5.2. WAIVER OF NOTICE AND DEMAND
The Guarantor hereby waives notice of acceptance of this Preferred
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Issuer or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.
SECTION 5.3. OBLIGATIONS NOT AFFECTED
The obligations, covenants, agreements and duties of the Guarantor under
this Preferred Securities Guarantee shall in no way be affected or impaired by
reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Preferred Securities to be performed
or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions, Redemption Price, Liquidation Distribution or any
other sums
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payable under the terms of the Preferred Securities or the extension of time
for the performance of any other obligation under, arising out of, or in
connection with, the Preferred Securities (other than an extension of time
for payment of Distributions or other sum payable that results from the
extension of any interest payment period on the Subordinated Debentures
permitted by the Indenture);
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Preferred Securities, or
any action on the part of the Issuer granting indulgence or extension of any
kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the benefit
of creditors, reorganization, arrangement, composition or readjustment of debt
of, or other similar proceedings affecting, the Issuer or any of the assets of
the Issuer;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute
a legal or equitable discharge or defense of a guarantor; it being the intent of
this Section 5.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain
consent of, the Guarantor with respect to the happening of any of the foregoing.
SECTION 5.4. RIGHTS OF HOLDERS
(a) The Holders of a Majority in liquidation amount of the Preferred
Securities have the right to direct the time, method and place of conducting of
any proceeding for any remedy available to the Preferred Guarantee Trustee in
respect of this Preferred Securities Guarantee or exercising any trust or power
conferred upon the Preferred Guarantee Trustee under this Preferred Securities
Guarantee.
(b) If the Preferred Guarantee Trustee fails to enforce this
Preferred Securities Guarantee, any Holder of Preferred Securities may institute
a legal proceeding directly against the Guarantor to enforce its rights under
this Preferred Securities Guarantee, without first instituting a legal
proceeding against the Issuer, the Preferred Guarantee Trustee or any other
Person.
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(c) Notwithstanding subsection 5.4(b), any Holder of Preferred
Securities may directly institute proceedings against the Guarantor to obtain
Guarantee Payments in respect of the Preferred Securities owned by such Holder,
without first waiting to determine if the Preferred Guarantee Trustee has
enforced this Preferred Securities Guarantee or first instituting a legal
proceeding against the Issuer, the Preferred Guarantee Trustee or any other
Person.
SECTION 5.5. GUARANTEE OF PAYMENT
This Preferred Securities Guarantee creates a guarantee of payment and not
of collection.
SECTION 5.6. SUBROGATION
The Guarantor shall be subrogated to all (if any) rights of the Holders of
Preferred Securities against the Issuer in respect of any amounts paid to such
Holders by the Guarantor under this Preferred Securities Guarantee; PROVIDED,
HOWEVER, that the Guarantor shall not (except to the extent required by
mandatory provisions of law) be entitled to enforce or exercise any right that
it may acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Preferred Securities
Guarantee, if, at the time of any such payment, any amounts are due and unpaid
under this Preferred Securities Guarantee. If any amount shall be paid to the
Guarantor in violation of the preceding sentence, the Guarantor agrees to hold
such amount in trust for the Holders and to pay over such amount to the Holders.
SECTION 5.7. INDEPENDENT OBLIGATIONS
The Guarantor acknowledges that its obligations hereunder are independent
of the obligations of the Issuer with respect to the Preferred Securities, and
that the Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this Preferred Securities Guarantee
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1. LIMITATION OF TRANSACTIONS
(a) So long as any Preferred Securities remain outstanding, if an
Event of Default or Indenture Event of Default shall exist, then (a) the
Guarantor shall not declare or pay any dividend on, or make any distribution
with respect to, or redeem, purchase, acquire or make a liquidation payment with
respect to, any of its capital stock, and (b) the Guarantor shall not make any
payment of interest, principal or premium, if any, on or repay, repurchase or
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redeem any debt securities issued by the Guarantor which rank pari passu with
or junior to the Subordinated Debentures.
(b) Notwithstanding subsection 6.1(a) or any other language to the
contrary contained in this Preferred Securities Guarantee, nothing shall
prevent the Guarantor from: (i) declaring or paying any dividend on, or
making any distribution with respect to, or redeeming, purchasing, acquiring
or making a liquidation payment with respect to, any of its capital stock in
or with securities of the Guarantor (including capital stock) that rank
junior to such capital stock or (ii) paying any interest, principal or
premium on, or repaying, repurchasing or redeeming, any debt securities
issued by the Guarantor which rank pari passu with or junior to the
Subordinated Debentures, with securities of the Guarantor (including
capital stock) that rank junior to such debt securities.
SECTION 6.2. RANKING
This Preferred Securities Guarantee constitutes an unsecured obligation of
the Guarantor and will rank (i) subordinate and junior in right of payment to
all other liabilities of the Guarantor, (ii) pari passu with the most senior
preferred or preference stock issued by the Guarantor from time to time and with
any guarantee now or hereafter entered into by the Guarantor in respect of any
preferred or preference stock of any Affiliate of the Guarantor and (iii) senior
to the Guarantor's common stock.
ARTICLE VII
TERMINATION
SECTION 7.1. TERMINATION
This Preferred Securities Guarantee shall terminate upon the earliest to
occur of (i) the full payment of the Redemption Price of all Preferred
Securities, (ii) the distribution of Subordinated Debentures to the Holder(s)
of all of the Preferred Securities or (iii) full payment of the amounts
payable in accordance with the Declaration upon liquidation of the Issuer.
Notwithstanding the foregoing, this Preferred Securities Guarantee will
continue to be effective or will be reinstated, as the case may be, if at any
time any Holder of Preferred Securities must restore payment of any sums paid
under the Preferred Securities or under this Preferred Securities Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1. EXCULPATION
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(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Guarantor or any Covered Person for any loss,
damage or claim incurred by reason of any act or omission performed or omitted
by such Indemnified Person in good faith in accordance with this Preferred
Securities Guarantee and in a manner that such Indemnified Person reasonably
believed to be within the scope of the authority conferred on such Indemnified
Person by this Preferred Securities Guarantee or by law, except that an
Indemnified Person shall be liable for any such loss, damage or claim incurred
by reason of such Indemnified Person's negligence or willful misconduct with
respect to such acts or omission.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions, the Redemption Price or the Liquidation Distribution to
Holders of Preferred Securities might properly be paid.
(c) The provisions of this Section 8.1 shall survive the termination
of this Preferred Securities Guarantee.
SECTION 8.2. INDEMNIFICATION
(a) The Guarantor shall indemnify and hold harmless each Indemnified
Person from and against any loss, damage or claim incurred by such Indemnified
Person by reason of any act or omission performed or omitted by such Indemnified
Person in good faith in accordance with this Preferred Securities Guarantee and
in a manner such Indemnified Person reasonably believed to be within the scope
of authority conferred on such Indemnified Person in accordance with this
Preferred Securities Guarantee, except that no Indemnified Person shall be
entitled to be indemnified in respect of any loss, damage or claim incurred by
such Indemnified Person by reason of negligence or willful misconduct with
respect to such acts or omissions.
(b) Expenses (including legal fees and expenses) incurred by an
Indemnified Person in defending any claim, demand, action, suit or proceeding
(whether such claim, demand, action, suit or proceeding arises between the
parties hereto or results from suits involving third parties) shall, from time
to time, be advanced by the Guarantor prior to the final disposition of such
claim, demand, action, suit or proceeding upon receipt by the Guarantor of an
undertaking by or on behalf of the Indemnified Person to repay such amount if it
shall be determined that the Indemnified Person is not entitled to be
indemnified as authorized in Section 8.2(a).
(c) The Guarantor agrees
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(i) to pay to the Preferred Guarantee Trustee from time to
time such compensation as the Guarantor and the Preferred Guarantee Trustee
shall from time to time agree in writing for all services rendered by it
hereunder (which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust);
(ii) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Preferred Guarantee Trustee
in accordance with any provision of this Agreement (including the reasonable
compensation and expenses and disbursements of its agents and counsel).
(d) The provisions of this Section 8.2 shall survive the termination
of this Preferred Securities Guarantee.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1. SUCCESSORS AND ASSIGNS
All guarantees and agreements contained in this Preferred Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Preferred Securities then outstanding.
SECTION 9.2. AMENDMENTS
Except with respect to any changes that do not adversely affect the rights
of Holders (in which case no consent of Holders will be required), this
Preferred Securities Guarantee may only be amended with the prior approval of
the Holders of at least a Majority in liquidation amount of the Preferred
Securities. The provisions of Section 12.2 of the Declaration with respect to
meetings of Holders of the Securities apply to the giving of such approval.
In executing, or accepting the additional trusts created by, and amendment
permitted by this Section or the modification thereby of the trust created by
this Agreement, the Preferred Guarantee Trustee shall be entitled to receive,
and shall be fully protected in relying upon, an Opinion of Counsel stating that
the execution of such amendment is authorized or permitted by this Agreement.
The Preferred Guarantee Trustee may, but shall not be obligated to, enter into
any such amendment which affects the Trustee's own rights, duties or immunities
under this Agreement or otherwise.
SECTION 9.3. NOTICES
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All notices provided for in this Preferred Securities Guarantee shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by first class mail, as follows:
(a) If given to the Preferred Guarantee Trustee, at the Preferred
Guarantee Trustee's mailing address set forth below (or such other address as
the Preferred Guarantee Trustee may give notice of to the Holders of the
Preferred Securities):
The Bank of New York
000 Xxxxxxx Xxxxxx, Xxxxx 00X
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Trustee Administration
(b) If given to the Guarantor, at the Guarantor's mailing address set
forth below (or such other address as the Guarantor may give notice of to the
Holders of the Preferred Securities):
Circus Circus Enterprises, Inc.
_________________________
_________________________
_________________________
_________________________
(c) If given to any Holder of Preferred Securities, at the address
set forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid.
SECTION 9.4. BENEFIT
This Preferred Securities Guarantee is solely for the benefit of the
Holders of the Preferred Securities and, subject to Section 3.1(a), is not
separately transferable from the Preferred Securities.
SECTION 9.5. GOVERNING LAW
THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF
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XXX XXXXX XX XXX XXXX, XXXXXXX REGARD TO CONFLICTS OF LAWS PRINCIPLES.
SECTION 9.6. NO RECOURSE AGAINST CERTAIN PERSONS
No past, present or future director, officer, employee or stockholder, as
such, of the Guarantor or any successor thereof shall have any liability for any
obligations of the Guarantor under this Preferred Securities Guarantee or for
any claim based on, in respect of, or by reason of, such obligations or their
creation and all such liability is hereby waived and released. Such waiver and
release are part of the consideration for the issue of this Preferred Securities
Guarantee and the Preferred Securities.
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THIS PREFERRED SECURITIES GUARANTEE AGREEMENT is executed as of the day and
year first above written.
CIRCUS CIRCUS ENTERPRISES, INC.,
as Guarantor
By:_______________________________
Name:
Title:
THE BANK OF NEW YORK,
as Preferred Guarantee Trustee
By:________________________________
Title:
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