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INCORPORATION BY REFERENCE
We file annual, quarterly and special reports and other information with the Commission. See “Where You Can Find More Information.” The following documents are incorporated into this prospectus by reference:
·our Annual Report on Form 10-K for the fiscal year ended April 27, 2014, filed with the Commission on June 23, 2014;
·our Quarterly Reports on Form 10-Q for the quarter ended July 27, 2014, filed with the Commission on August 29, 2014, for the quarter ended October 26, 2014, filed with the Commission on December 4, 2014, and for the quarter ended January 25, 2015, filed with the Commission on February 27, 2015;
·our Proxy Statement on Schedule 14A for the 2014 Annual Meeting of Stockholders, filed with the Commission on August 12, 2014 and supplemented on August 12, 2014; and
·our Current Reports on Form 8-K filed with the Commission on April 14, 2015, April 7, 2015, October 14, 2014, July 28, 2014 and July 10, 2014 (only with respect to Item 5.02).
All documents and reports filed by us with the SEC pursuant to SectionsSection 13(a), 13(c), 14 or 15(d) of the Exchange Act after (i)(other than portions of these documents that are either (1) described in paragraph (e) of Item 201 of RegistrationS-K orparagraphs (d)(1)-(3) and (e)(5) of Item 407 ofRegulation S-K promulgated by the dateSEC or (2) furnished under Item 2.02 or Item 7.01 of the initial registration statement of which this prospectus forms a part and prior to the effectiveness of the registration statement and (ii)Current Report onForm 8-K, unless otherwise indicated therein) after the date of this prospectus and on or beforeprior to the timetermination of the offerings under this exchange offer is completed are deemed toprospectus. The information contained in any such document will automatically be incorporated by reference inconsidered part of this prospectus from the date of filing of such documents or reports, except as to any portion of any futurethe document or report which is not deemed to be filed under those sections.with the SEC. Any statementinformation contained in athis prospectus or in any document incorporated or deemed to be incorporated by reference in this prospectus will be deemed to behave been modified or superseded for purposes of this prospectus to the extent that anya statement contained herein orin this prospectus, in any other document we subsequently filed document whichfile with the SEC that is also isincorporated or is deemed to be incorporated by reference in this prospectus or in the applicable prospectus supplement, modifies or supersedes suchthe original statement. Any statement so modified or superseded will not be deemed, except as so modified or superseded, to constitutebe a part of this prospectus. In no event, however, will any of the information that we “furnish” to the SEC in any current report onForm 8-K or any other report or filing be incorporated by reference into, or otherwise included in, this prospectus.
You may request a copy of these documents at no cost by writing or calling us at Isle of Capri Casinos, Inc., 600 Emerson Road, Suite 300, St. Louis, Missouri, 63141, Attention: Chief Legal Officer, Phone: (314) 813-9200. To obtain timely delivery of this information, you must request this information no later than five (5) business days before the expiration of the exchange offer. Therefore, you must request information on or before , 2015.
INDUSTRY AND MARKET DATA
In this prospectus and theany documents incorporated by reference in this prospectus, we rely onat no cost, by writing or telephoning us at the following address and refertelephone number:
Eldorado Resorts, Inc.
Attention: Investor Relations
100 West Liberty Street, Suite 1150
Reno, Nevada 89501
Tel: (775) 328-0112
Exhibits to information and statistics regarding the industry and the sectorsfilings will not be sent, however, unless those exhibits have specifically been incorporated by reference in which we operate. We obtained this information and statistics from various third-party sources and our own internal estimates. We believe that these sources and estimates are reliable, but have not independently verified them and cannot guarantee their accuracy or completeness.prospectus.
TO OBTAIN TIMELY DELIVERY OF ANY REQUESTED INFORMATION, YOU MUST MAKE ANY REQUEST NO LATER THAN , 2017, WHICH IS FIVE BUSINESS DAYS PRIOR TO THE EXPIRATION DATE OF THE EXCHANGE OFFER.
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SUMMARY
This summary highlights selected information contained elsewhereor incorporated by reference in this prospectus. Because this is only aThis summary it maydoes not contain all of the information you should consider in makingbefore tendering your decision of whether to participateExisting Notes in the exchange offer. To understand all of the terms of this exchange offer and for a more complete understanding of our business,Before making your decision, you should read carefully read(i) this entire prospectus, particularlyincluding the section entitled “Risk Factors,” (ii) all other information contained in and the documents incorporated by reference in this prospectus. In this prospectus, including the risks and uncertainties described under “Risk Factors” in our annual report onForm 10-K for the year ended December 31, 2016 and in our subsequent filings with the SEC, (iii) the other documents to which we userefer and (iv) our financial statements and notes to those financial statements incorporated by reference herein. This prospectus containsforward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in theseforward-looking statements as a result of certain factors. See “Forward-Looking Statements” for information relating to theseforward-looking statements.
Overview
The Company
ERI is a gaming and hospitality company that owns and operates 20 gaming facilities located in Ohio, Louisiana, Nevada, Pennsylvania, West Virginia, Colorado, Florida, Iowa, Mississippi and Missouri, featuring over 21,000 slot machines and video lottery terminals (“VLTs”), more than 500 table games and over 7,000 hotel rooms. ERI’s primary source of revenue is generated by gaming operations, but ERI uses hotels, restaurants, bars, entertainment, racing, retail shops and other services to attract customers to its properties. ERI was founded in 1973 in Reno, Nevada as a family business by the term “existing notes”Carano family.
ERI’s principal executive offices are located at 100 West Liberty Street, Suite 1150, Reno, Nevada 89501 and the telephone number at that location is (775) 328-0100.
We own and operate the following properties:
Eldorado Resort Casino Reno (“Eldorado Reno”) —An 814-room hotel, casino and entertainment facility connected via an enclosed skywalk to referSilver Legacy and Circus Reno located in downtown Reno, Nevada that includes 1,142 slot machines, 46 table games and an 11 table poker room;
Silver Legacy Resort Casino (“Silver Legacy”) —A 1,711-room themed hotel and casino connected via an enclosed skywalk to Eldorado Reno and Circus Reno that includes 1,212 slot machines and 63 table games;
Circus Circus Reno (“Circus Reno”) —A 1,571-room hotel-casino and entertainment complex connected via an enclosed skywalk to Eldorado Reno and Silver Legacy that includes 695 slot machines and 27 table games;
Eldorado Resort Casino Shreveport (“Eldorado Shreveport”) —A 403-room, all suite art deco-style hotel and tri-level riverboat dockside casino situated on the Red River in Shreveport, Louisiana that includes 1,387 slot machines, 52 table games and an eight table poker room;
Mountaineer Casino, Racetrack & Resort (“Mountaineer”) —A 354-room hotel, casino and entertainment facility and live thoroughbred horse racing located on the Ohio River at the northern tip of West Virginia’s northwestern panhandle that includes 1,510 slot machines, 36 table games and a 10 table poker room;
Presque Isle Downs & Casino (“Presque Isle Downs”) —A casino and live thoroughbred horse racing facility with 1,594 slot machines, 32 table games and a seven table poker room located in Erie, Pennsylvania;
Eldorado Gaming Scioto Downs (“Scioto Downs”) —A modern “racino” offering 2,206 video lottery terminals (“VLT”) and harness racing located 15 minutes from downtown Columbus, Ohio;
Isle Casino Hotel-Black Hawk—A land-based casino on an approximately 10-acre site in Black Hawk, Colorado that includes 1,086 slot machines, 25 table games, a nine table poker room and a 238-room hotel;
Lady Luck Casino-Black Hawk—A land based casino across the intersection from Isle Casino Hotel in Black Hawk, Colorado, that includes 455 slot machines, 10 table games, five poker tables and a 164-room hotel with a parking structure connecting Isle Casino Hotel-Black Hawk and Lady Luck Casino-Black Hawk;
Pompano—A casino and harness racing track on an approximately 223-acre owned site in Pompano Beach, Florida, that includes 1,446 slot machines and a 42 table poker room;
Bettendorf—A land-based single-level casino located off of Interstate 74 in Bettendorf, Iowa that includes 969 slot machines and 19 table games with two hotel towers with 509 hotel rooms;
Waterloo—A single-level land-based casino in Waterloo, Iowa that includes 948 slot machines, 25 table games, four poker tables and a 195-room hotel;
Isle of Capri Casino Hotel Lake Charles—A gaming vessel on an approximately 19 acre site in Lake Charles, Louisiana, with 1,157 slot machines, 49 table games, including 13 poker tables and two hotels offering 493 rooms;
Lula—Two dockside casinos in Lula, Mississippi with 885 slot machines and 21 table games, two on-site hotels with a total of 451 rooms and a 28-space RV Park;
Vicksburg—A dockside casino in Vicksburg, Mississippi that includes 613 slot machines, 7 table games and a hotel with a total of 89 rooms;
Boonville—A single-level dockside casino in Boonville, Missouri that includes 914 slot machines, 20 table games and a 140-room hotel;
Cape Girardeau—A dockside casino and pavilion and entertainment center in Cape Girardeau, Missouri that includes 930 slot machines, 22 table games and 4 poker tables;
Caruthersville—A riverboat casino located along the Mississippi River in Caruthersville, Missouri that includes 557 slot machines and nine table games;
Kansas City—A dockside casino located close to downtown Kansas City, Missouri offering 977 slot machines and 18 table games; and
Nemacolin—A casino property located on the 2,000 acre Nemacolin Woodlands Resort in Western Pennsylvania that includes 597 slot machines and 29 table games.
On August 22, 2016, Isle entered an agreement to sell Isle of Capri Casino Hotel Lake Charles for aggregate consideration of $134.5 million, subject to certain adjustments. The transaction is expected to be completed in 2017, subject to Louisiana Gaming Board approval and other customary closing conditions.
Isle Acquisition
On May 1, 2017, we completed our previously announced acquisition (the “Isle Acquisition”) of Isle of Capri Casinos, Inc., a Delaware corporation (“Isle”), pursuant to the $350,000,000 5.875% SeniorAgreement and Plan of Merger, dated as of September 19, 2016 (the “Merger Agreement”), by and among ERI, Isle, Eagle I Acquisition Corp., a Delaware corporation and direct wholly owned subsidiary of the Company, and Isle of Capri Casinos LLC (f/k/a Eagle II Acquisition Company LLC), a Delaware limited liability company and direct wholly owned subsidiary of the Company (“Escrow Issuer”).
Pursuant to the Merger Agreement, as a result of the Isle Acquisition, each share of common stock, par value $0.01 per share, of Isle (“Isle Stock”), became converted into the right to receive, at the election of the
holders of such shares of Isle Stock, subject to adjustment and proration and reallocation as described in the Merger Agreement, $23.00 in cash per share of Isle Stock (the “Cash Consideration”) or 1.638 shares of our Common Stock (the “Stock Consideration”).
Holders of 33,291,780 shares of Isle Stock elected to receive the Stock Consideration (“Stock Election Shares”), holders of 6,885,654 shares of Isle Stock elected to receive the Cash Consideration (“Cash Election Shares”), and holders of the remaining shares of Isle Stock did not make any election (“No Election Shares”). As a result and in accordance with the adjustment, proration and reallocation procedures described in the Merger Agreement, (x) each holder of Cash Election Shares and No Election Shares became entitled to receive Cash Consideration in respect of such Cash Election Shares and No Election Shares and (y) each holder of Stock Election Shares became entitled to receive Stock Consideration in respect of 52.2% of the Stock Election Shares held by such holder and Cash Consideration in respect of the remaining 47.8% of the Stock Election Shares held by such holder.
In connection with the Isle Acquisition, Escrow Issuer entered into the Indenture with respect to the issuance of the Existing Notes due 2021 thatand a new Credit Agreement by and among Escrow Issuer, as initial borrower, JPMorgan Chase Bank, N.A., as administrative agent, and the lenders party thereto dated as of April 17, 2017 (the “ERI Credit Facility”), consisting of a $1.45 billion term loan (the “Term Loan”) and a $300.0 million revolving credit facility. The proceeds from the Term Loan and proceeds from the issuance of the Existing Notes, were placed in escrow pending satisfaction of certain conditions, including consummation of the Isle Acquisition. In connection with the consummation of the Isle Acquisition on May 1, 2017, the escrowed funds were released and ERI assumed Escrow Issuer’s obligations under the ERI Credit Facility, the Indenture and the Existing Notes, and certain of ERI’s subsidiaries executed guarantees of ERI’s obligations under the ERI Credit Facility and the Indenture.
SUMMARY DESCRIPTION OF THE EXCHANGE OFFER
On March 29, 2017, Escrow Issuer issued on March 5, 2013and sold $375,000,000 in a private offering and subsequently all exchanged for an equivalentaggregate principal amount of registered notes issued on June 4, 2013, we use the term “old notes” to refer toExisting Notes in transactions exempt from registration under the $150,000,000 5.875% Senior Notes due 2021 that were issued on April 14, 2015 in a private offering, the term “exchange notes” to refer to the 5.875% Senior Notes due 2021 offered in the exchange offer described in this prospectus and the term “notes” to refer to the existing notes, old notes and the exchange notes, collectively. All references to the existing notes, old notes and exchange notes include references to the related guarantees. Some of the statements contained in this “Summary” are forward-looking statements. See “Cautionary Statement Regarding Forward-Looking Statements.”
The Company
We are a developer, owner and operator of branded gaming facilities and related dining, lodging and entertainment facilities in regional markets in the United States. As of April 27, 2014, we own or operate 15 gaming and entertainment facilities in Colorado, Florida, Iowa, Louisiana, Mississippi, Missouri and Pennsylvania. Collectively, these properties feature approximately 12,800 slot machines and over 300 table games (including approximately 80 poker tables) over 2,300 hotel rooms and more than 45 restaurants. We also operate a harness racing track at our casino in Florida. Our portfolio of properties provides us with a diverse geographic footprint that minimizes geographically concentrated risks caused by weather, regional economic difficulties, gaming tax rates and regulations imposed by local gaming authorities.
Our principal executive office is located at 600 Emerson Road, Suite 300, St. Louis, Missouri 63141. Our telephone number is (314) 813-9200. We maintain an internet website at http://www.islecorp.com. Information contained on our website is not incorporated by reference into this prospectus and you should not consider information contained on our website as part of this prospectus.
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Summary of the Exchange Offer
On April 14, 2015, we completed the private offering of $150,000,000 of our 5.875% Senior Notes due 2021.Securities Act. In connection with that private offering, wesuch transactions, Escrow Issuer entered into a registration rights agreementRegistration Rights Agreement, dated March 29, 2017 (the “Registration Rights Agreement”) with the initial purchasers of the old notes.Existing Notes. In that agreement, wethe Registration Rights Agreement, Escrow Issuer agreed among other things, to deliver to you this prospectus for the exchange of up to $150,000,000 of new 5.875% Senior Notes due 2021 that have been registeredregister under the Securities Act for up to $150,000,000 aggregate principal amount of the old 5.875% Senior Notes due 2021 that were issued on April 14, 2015. The old notes are an additional issuanceoffer of our existing 5.875% Seniornew Exchange Notes due 2021, of which $350.0 million aggregate principal amount were originally issued on March 5, 2013 in a private offeringexchange for our Existing Notes. On May 1, 2017, ERI assumed Escrow Issuer’s obligations under the Existing Notes, the Indenture and subsequently all exchanged for an equivalent principal amount of registered notes issued on June 4, 2013. The old notes have the same termsRegistration Rights Agreement. In this prospectus, we refer to the Existing Notes and are treatedthe Exchange Notes together as the same class as the existing notes, other than the issue date and offering price and, following the completion of this exchange offer, the exchange notes will be fungible with, and have the same CUSIP number as, the existing notes. The aggregate principal amount of notes is $500,000,000.
The exchange notes will be substantially identical to the old notes, except that:
·the exchange notes have been registered under the Securities Act and will be freely tradable by persons who are not affiliated with us;
·the exchange notes are not entitled to the rights that are applicable to the old notes under the registration rights agreement; and
·our obligation to pay additional interest on the old notes does not apply if the registration statement of which this prospectus forms a part is declared effective or certain other circumstances occur, as described under the heading “Description of Notes—Registration Rights; Special Interest.“Notes.”
Old notes may be exchanged only in minimum denominations of $2,000 and larger integral multiples of $1,000. You should read the discussion underin the headings “Summary—Thesection entitled “Summary Description of the Exchange Notes” and “Description of Notes” for further information regarding the exchange notes. You should also read the discussion under the heading “The Exchange Offer” for further information regarding the exchange offer and resale of the exchange notes.Notes.
Existing Notes | 6% Senior Notes due 2025. |
Exchange Notes | 6% Senior Notes due 2025 which have been registered under the Securities Act. The form and the terms of the Exchange Notes will be identical in all material respects to those of the Existing Notes, except that the transfer restrictions and registration rights relating to the Existing Notes will not apply to the Exchange Notes. |
Exchange Offer | | We willare offering to issue up to $375 million aggregate principal amount of the Exchange Notes in exchange our exchange notes for a like aggregate principal amount of the Existing Notes to satisfy our obligations under the Registration Rights Agreement. The Existing Notes were sold in transactions in reliance upon the exemptions from registration provided by Rule 144A and maturity of our old notes as provided inRegulation S under the registration rights agreement related to the old notes. Securities Act. |
Expiration Date; Tenders | The exchange offer is intendedwill expire at midnight, New York City time, on , 2017, the twentieth business day following the date of this prospectus, unless extended in our sole and absolute discretion. By tendering your Existing Notes, you represent to satisfy the rights granted to holdersus that: |
you are not our “affiliate,” as defined in Rule 405 under the Securities Act or if you are our “affiliate” as defined in Rule 405 under the Securities Act and you are engaging in or intend to engage in or have an arrangement or understanding with any person to participate in a distribution of the Exchange Notes to be acquired pursuant to the exchange offer, you will not rely on the applicable interpretations of the SEC and will comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction;
any Exchange Notes you receive in the exchange offer are being acquired by you in the ordinary course of your business;
at the time of the commencement of the exchange offer, neither you nor anyone receiving Exchange Notes from you, has any arrangement or understanding with any person to participate in the distribution, as defined in the Securities Act, of the Exchange Notes in violation of the Securities Act;
if you are abroker-dealer, you will receive the Exchange Notes for your own account in exchange for Existing Notes that were acquired by you as a result of yourmarket-making or other
| trading activities and that you will deliver a prospectus in connection with any resale of the old notesExchange Notes you receive. For further information regarding resales of the Exchange Notes by participatingbroker-dealers, see the discussion under the caption “Plan of Distribution”; and |
if you are not abroker-dealer, you are not engaged in, and do not intend to engage in, the distribution of the Exchange Notes, as defined in the Securities Act.
Withdrawal;Non-Acceptance | You may withdraw any Existing Notes tendered in that agreement. Afterthe exchange offer at any time prior to midnight, New York City time, on , 2017. To be effective, a written notice of withdrawal must be received by the Exchange Agent, at the address set forth under the caption “The Exchange Offer—Exchange Agent.” For further information regarding the withdrawal of any tendered Existing Notes, see “The Exchange Offer—Withdrawal Rights.” |
Conditions to the Exchange Offer | As described more fully in this prospectus, consummation of the exchange offer is complete you will no longer be entitledsubject to the satisfaction or waiver of certain conditions. We reserve the right to terminate or amend the exchange offer at any exchange or registration rights with respect to your notes.time before the expiration date if various specified events occur. |
Procedure for Tending Existing Notes | | |
Resales
| | Based on an interpretation by the staffFor a description of the Commission set forth in no-action letters issued to third parties, we believe that the exchange notes may be offeredprocedure for resale, resoldtendering Existing Notes, see “The Exchange Offer—Procedures for Tendering Existing Notes” and otherwise transferred by you (unless you are our “affiliate” within the meaning of Rule 405 under the Securities Act) without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that you:
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| | ·are acquiring the exchange notes in the ordinary course of business; and
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| | ·have not engaged in, do not intend to engage in, and have no arrangement or understanding with any person to participate in a distribution of the exchange notes.
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| | By signing the letter of transmittal and exchangingtransmittal.
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Consequences of Failure to Exchange | For a description of the consequences of failing to exchange your old notesExisting Notes pursuant to the exchange offer, see “Risk Factors—Certain Risks Related to the Exchange Offer.” |
Use of Proceeds | We will not receive any proceeds from the exchange offer. In consideration for issuing the Exchange Notes in exchange notes,for the Existing Notes as described below, youin this prospectus, we will be making representations to this effect.receive, retire and cancel the Existing Notes. |
Broker-Dealers | | |
| | Each participating broker-dealer that receives exchange notesExchange Notes for its own account pursuant to the exchange offer in exchange for the old notes that were acquired as a result of market-making or other trading activity must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Notes. The letter of transmittal states that by so acknowledging and delivering a prospectus, abroker-dealer will not be deemed to admit that it is an underwriter within the exchange notes. See “Plan of Distribution.” |
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| | Any holder of old notes who:
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| | ·is our affiliate,
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| | ·does not acquire the exchange notes in the ordinary course of its business, or
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| | ·cannot rely on the position of the staff of the Commission expressed in Exxon Capital Holdings Corporation, Morgan Stanley & Co. Incorporated or similar no-action letters
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| | must, in the absence of an exemption, comply with registration and prospectus delivery requirementsmeaning of the Securities ActAct. This prospectus, as it may be amended or supplemented from time to time, may be used by abroker-dealer in connection with the resaleresales of the exchange notes. We will not assume, nor will we indemnify you against, any liability you may incur under the Securities Act or state or local securities laws if you transfer any exchange notes issued to you in the exchange offer absent compliance with the applicable registration and prospectus delivery requirements or an applicable exemption.
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Expiration Time
| | The exchange offer will expire at 5:00 p.m., New York City time, on , 2015, or such later date and time to which we extend it. We do not currently intend to extend the expiration time.
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Conditions to the Exchange Offer
| | The exchange offer is subject to the following conditions, which we may waive:
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| | ·the exchange offer does not violate applicable law or applicable interpretations of the staff of the Commission; and
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| | ·there is no action or proceeding instituted or threatened in any court or by any governmental agency with respect to this exchange offer.
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| | See “The Exchange Offer—Conditions to the Exchange Offer.”
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Procedures for Tendering the Old Notes
| | If you wish to accept and participate in this exchange offer, you must complete, sign and date the accompanying letter of transmittal, or a copy of the letter of transmittal, according to the instructions contained in this prospectus and the letter of transmittal. You must also mail or otherwise deliver the completed, executed letter of transmittal or the copy thereof, together with the old notes and any other required documents, to the exchange agent at the address set forth on the cover of the letter of transmittal. If you hold old notes through The Depository Trust Company (“DTC”) and wish to participate in the exchange offer, you must comply with the Automated Tender Offer Program procedures of DTC, by which you will agree to be bound by the letter of transmittal. If you wish to accept and participate in this exchange offer and you cannot get your required documents to the exchange agent on time, you must send all of the items required by the guaranteed delivery procedures described below.
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| | By signing or agreeing to be bound by the letter of transmittal, you will represent to us that, among other things:
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| | ·any exchange notes that you receive will be acquired in the ordinary course of your business;
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| | ·you have no arrangement or understanding with any person or entity to participate in the distribution of the exchange notes;
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| | ·if you are a broker-dealer that will receive exchange notes for your own account received in exchange for old notes thatExisting Notes which were acquiredreceived by thebroker-dealer as a result of market-making activities, that you will deliver a prospectus, as required by law, in connection with any resalemarket making or other trading activities. See “Plan of the exchange notes; and
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| | ·you are not our “affiliate” as defined in Rule 405 under the Securities Act.
Distribution” for more information. |
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Special Procedures for Beneficial OwnersTaxation
| | If you are a beneficial owner whose old notes are registered in the nameThe exchange of a broker, dealer, commercial bank, trust company or other nominee and you wish to tender your old notes in the exchange offer, you should promptly contact the person in whose name the old notes are registered and instruct that person to tender on your behalf. If you wish to tender in the exchange offer on your own behalf, prior to completing and executing the letter of transmittal and delivering the certificates for your old notes, you must either make appropriate arrangements to register ownership of the old notes in your name or obtain a properly completed bond power from the person in whose name the old notes are registered. The transfer of registered ownership may take considerable time and may not be able to be completed prior to the expiration time.
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Guaranteed Delivery Procedures
| | If you wish to tender your old notes and:
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| | ·your old notes are not immediately available;
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| | ·you are unable to deliver on time your old notes or any other document that you are required to deliver to the exchange agent; or
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| | ·you cannot complete the procedures for delivery by book-entry transfer on time;
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| | then you may tender your old notes according to the guaranteed delivery procedures that are discussed in the letter of transmittal and in “The Exchange Offer—Guaranteed Delivery Procedures.”
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Withdrawal of Tenders
| | A tender of old notes pursuant to the exchange offer may be withdrawn at any time prior to the expiration time. To withdraw, you must send a written or facsimile transmission notice of withdrawal to the exchange agent at its address indicated under “The Exchange Offer—Exchange Agent” before the expiration time of the exchange offer.
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Acceptance of the Old Notes and Delivery of Exchange Notes
| | If all the conditions to the completion of this exchange offer are satisfied, we will accept any and all old notes that are properly tendered in this exchange offer and not properly withdrawn before the expiration time. We will return any old notes that we do not accept for exchange to its registered holder at our expense promptly after the expiration time. We will deliver the exchange notes to the registered holders of old notes accepted for exchange promptly after the expiration time and acceptance of such old notes. Please refer to the section in this prospectus entitled “The Exchange Offer—Acceptance of OldExisting Notes for Exchange and Delivery of Exchange Notes.”
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Effect on Holders of Old Notes
| | As a result of making, and upon acceptance for exchange of all validly tendered old notes pursuant to the terms of, the exchange offer, we will have fulfilled a covenant contained in the registration rights agreement. If you are a holder of old notes and do not tender your old notes in the exchange offer, you will continue to hold your old notes and you will be entitled to all the rights and limitations applicable to the old notes in the indenture, except for any rights under the registration rights agreement that by their terms terminate upon the consummation of the exchange offer. See “The Exchange Offer—Purpose and Effect of the Exchange Offer.”
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Accrued Interest on the Exchange Notes and the Old Notes
| | Each exchange note will bear interest from March 15, 2015. The holders of old notes that are accepted for exchange will be deemed to have waived the right to receive payment of accrued interest on those old notes from March 15, 2015 to the date of issuance of the exchange notes. Interest on the old notes accepted for exchange will cease to accrue upon issuance of the exchange notes.
Consequently, if you exchange your old notes for exchange notes, you will receive the same interest payment on September 15, 2015 that you would have received if you had not accepted this exchange offer.
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Consequences of Failure to Exchange
| | All untendered old notes will continue to be subject to the restrictions on transfer provided for in the old notes and in the indenture. In general, the old notes may not be offered or sold unless registered under the Securities Act, except pursuant to an exemption from, or in a taxable transaction not subject to, the Securities Act and applicable state or local securities laws. Other than in connection with the exchange offer, we do not currently anticipate that we will register the old notes under the Securities Act. The trading market for your old notes will becomeU.S. federal income tax purposes. For more limited to the extent that other holders of old notes participate in the exchange offer.
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information, see “Certain U.S. Federal Income Tax Considerations | | The exchange of old notes for exchange notes in the exchange offer should not be a taxable event for United States federal income tax purposes. See “Certain United States Federal Income Tax Considerations.”
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Use of Proceeds
| | We will not receive any cash proceeds from the issuance of the exchange notes in the exchange offer. See “Use of Proceeds.”
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Exchange Agent
| | U.S. Bank National Association is the exchange agent for the exchange offer. The address and telephone number of the exchange agent are set forth in the section captioned “The Exchange Offer—Exchange Agent.”
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The Exchange NotesSUMMARY DESCRIPTION OF THE EXCHANGE NOTES
The following summary contains basic information aboutbelow describes the exchange notes and is not intended to be complete. It may not contain allprincipal terms of the information that is important to you.Exchange Notes. Certain of the terms and conditions described below are subject to important limitations and exceptions. ForSee the “Description of the Exchange Notes” section of this prospectus for a more completedetailed description of the terms and conditions of the notes, see “Description ofExchange Notes.”
Issuer | Eldorado Resorts, Inc. |
Isle of Capri Casinos, Inc.
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General
| | The form and terms of the exchange notes are identical in all material respects to the form and terms of the old notes except that:
·the exchange notes have been registered under the Securities Act and, therefore, will not bear legends restricting their transfer; and
·the holders of exchange notes will not be entitled to rights under the registration rights agreement, including any registration rights or rights to additional interest.
The exchange notes will evidence the same debt as the old notes and will be entitled to the benefits of the indenture under which the old notes were issued.
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Exchange Notes Offered | | $150.0 million375,000,000 aggregate principal amount of 5.875%6% Senior Notes due 2021 registered under the Securities Act. 2025. |
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| | Existing Notes
| | The old notes are an additional issuance of our existing 5.875% Senior Notes due 2021, of which $350.0 million aggregate principal amount were originally issued on March 5, 2013 in a private offering and subsequently all exchanged for an equivalent principal amount of registered notes issued on June 4, 2013. The old notes have the same terms and are treated as the same class as the existing notes, other than the issue date and offering price and, following the completion of this exchange offer, the exchange notes will be fungible with, and have the same CUSIP number as, the existing notes. The aggregate principal amount of notes is $500,000,000.
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Maturity Date | April 1, 2025. |
March 15, 2021.
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Interest Rate | 6.000% per annum. |
Interest on the exchange notes will accrue at the rate of 5.875% per annum, payable semi-annually in arrears.
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Interest Payment Dates | | March 15 and September 15, commencing September 15, 2015. Holders of old notes whose old notes are accepted for exchange inInterest on the exchange offerNotes will be deemedpayable in cash semi-annually in arrears on April 1 and October 1 of each year, commencing on October 1, 2017.
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Gaming Redemption | The Notes are subject to have waivedredemption imposed by gaming laws and regulations of applicable gaming regulatory authorities. See “Description of the right to receive any payment in respectExchange Notes—Gaming redemption.” |
Ranking | The Notes and the guarantees are our and the Guarantors’ general senior unsecured obligations and will: |
rank senior in right of payment to all existing and future subordinated indebtedness of the Company and the Guarantors;
rank equally in right of payment with all existing and future senior indebtedness of the Company and the Guarantors, including the obligations under the Company’s 7% Senior Notes due 2023 (the “7% Notes”);
be effectively subordinated to any existing and future secured debt of the Company and the Guarantors, including indebtedness under the ERI Credit Facility (as defined in “Description of the Exchange Notes”) to the extent of the value of the collateral securing such indebtedness; and
be structurally subordinated to all existing and future indebtedness and other liabilities of the Company’s non-guarantor subsidiaries (other than indebtedness and liabilities owed to the Company or Guarantors).
| As of interest on the old notes accrued from March 15, 201531, 2017, after giving effect to the date of issuance of the exchange notes. Consequently, holders who exchange their old notes for exchange notes will receive the same interest payment on September 15, 2015 (the first interest payment date with respect to the old notes and the first interest payment date with respect to the exchange notes following consummation of the exchange offer) that they would have received if they had not accepted the exchange offer.Isle Acquisition: |
we and the Guarantors had approximately $2,326 million of total indebtedness outstanding, of which approximately $1,576 million is secured, and $175 million of availability under our revolving credit facility.
the non-guarantor subsidiaries did not have any outstanding indebtedness or other liabilities (excluding intercompany liabilities).
| | |
Subsidiary Guarantees
| | On the exchange date,The Notes will be fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by each of our current and future restricted subsidiaries thatother than immaterial subsidiaries. The guarantees our senior secured credit facility will guarantee the exchange notes, like the old notes and the existing notes (the “subsidiary guarantors”), provided that such restricted subsidiary is not otherwise prohibited from guaranteeing the exchange notes under applicable gaming laws or by any gaming authorities. The exchange notes may be guaranteed by additional subsidiaries in the futurereleased under certain circumstances. See “Description of Notes — Certain Covenants — Additional Note Guarantees.”
|
| | |
| | The Issuer and the subsidiary guarantors as of the date of this prospectus generated approximately 96.4% of our consolidated net revenues for the nine months ended January 25, 2015 and held approximately 92.7% of our consolidated assets as of January 25, 2015.
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| | |
Ranking
| | The exchange notes and the guarantees, like the old notes and the existing notes, will be our and our subsidiary guarantors’ general unsecured obligations and will rank:
|
6
Table of Contents
| | ·pari passu with our and our subsidiary guarantors’ existing and future unsecured senior indebtedness, including the old notes and the existing notes ;
|
| | |
| | ·senior to our and our subsidiary guarantors’ existing and future subordinated indebtedness;
|
| | |
| | ·effectively junior to our and our subsidiary guarantors’ secured indebtedness, including indebtedness under our senior secured credit facility to the extent of the value of the assets securing such indebtedness; and
|
| | |
| | ·effectively junior to all obligations of our subsidiaries that are not subsidiary guarantors.
|
| | |
Use ofAsset Sale Proceeds
| | We will not receive anyIf we or our restricted subsidiaries engage in asset sales, we generally must either invest the net cash proceeds from the issuancesuch sales in our business within a period of time, prepay secured debt or make an offer to purchase an amount of the exchange notes. In consideration for issuingNotes equal to the exchange notes as contemplated in this prospectus, weexcess net cash proceeds. The purchase price of the Notes will receive in exchange old notes in likebe 100% of their principal amount which will be cancelledplus accrued and as such, will not result in any increase in our indebtedness. See “Use of Proceeds.”
unpaid interest. |
|
| | Optional Redemption | | On or after March 15, 2016, weWe may, at our option, redeem some or all of the exchange notesNotes at any time on or from time to timeafter April 1, 2020, at the redemption prices specifiedlisted under “Description of Notes — the Exchange Notes—Optional Redemption.redemption.”
|
| | |
| | Before March 15, 2016, Prior to April 1, 2020, we may also redeem some or all of the exchange notesNotes at any time or from time to time at a redemption price equal to 100% of the principal amount of each exchange note to bethe Notes redeemed plus a make-whole premium described under “Description of Notes — Optional Redemption” together with accrued and unpaid interest if any, to the date of redemption.
|
| | |
| | In addition, at any time priorredemption, plus a“make-whole” premium. Prior to March 15, 2016,April 1, 2020, we may redeem up to 35% of the exchange notesoriginal principal amount of the Notes with proceeds of certain equity offerings. See “Description of the net cash proceeds from specified equity offeringsExchange Notes—Optional redemption.”
|
Change of Control; Mandatory Offer to Repurchase | If a Change of Control (as defined in “Description of the Exchange Notes”) occurs, we must offer to repurchase the Notes at a redemption price equal to 105.875% of the principal amount of each exchange note to be redeemed, plus accrued and unpaid interest, if any, to the date of redemption. |
| | |
Redemption or Other Disposition Based Upon Gaming Laws
| | The exchange notes are subject to redemption or disposition requirements imposed by gaming laws and regulations of gaming authorities in jurisdictions in which we conduct gaming operations. See “Description of Notes — Gaming Redemption.”
|
| | |
Change of Control
| | Upon a change of control (as defined in “Description of Notes — Certain Definitions”), we may be required to offer to repurchase the exchange notes at 101% of the principal amount thereof plus any accrued and unpaid interest if any, to, but not including, the date of repurchase. See “Description of Notes — Repurchase at the Option of Holders — Change of Control.”
repurchase date. |
|
| | Asset Sales and Events of Loss
| | If we or any of our restricted subsidiaries sell certain assets or experience certain events of loss, we may be required to offer to repurchase the exchange notes at a redemption price equal to 100% of the principal amount of each exchange note to be redeemed plus accrued and unpaid interest, if any, to the date of repurchase. See “Description of Notes — Repurchase at the Option of Holders — Asset Sales” and “Description of Notes — Repurchase at the Option of Holders — Events of Loss.”
|
| | |
Certain Covenants | | The indenture governingIndenture contains covenants that, among other things, limit the exchange notes contains certain covenants, including limitationsability of the Company and restrictions on our and ourits restricted subsidiaries’ abilitysubsidiaries to: |
| | |
| | ·incur additional indebtedness or issue preferred stock;
|
| | |
| | ·pay dividends or make distributions on or purchase our equity interests;
|
| | |
| | ·make other restricted payments or investments;
|
| | |
| | ·redeem debt that is junior in right of payment to the exchange notes;
|
| | |
| | ·create liens on assets to secure debt;
|
| | |
| | ·sell or transfer assets;
|
| | |
| | ·enter into transactions with affiliates; and
|
7
pay dividends or distributions or make certain other restricted payments or investments;Table of Contents
incur or guarantee additional indebtedness or issue disqualified stock or create subordinated indebtedness that is not subordinated to the Notes or the guarantees;
create liens;
transfer and sell assets;
merge, consolidate, or sell, transfer or otherwise dispose of all or substantially all of our assets;
enter into certain transactions with affiliates;
engage in lines of business other than its core business and related businesses; and
create restrictions on dividends or other payments by our restricted subsidiaries.
| | ·enter into mergers, consolidations, or salesIn addition, the Indenture contains covenants relating to additional subsidiary guarantees in certain circumstances and the furnishing of all or substantially all of our assets.
|
| | |
| | As ofcustomary reports to the date of this prospectus, all of our subsidiaries other than our unrestricted subsidiaries (as defined in “Description of Notes — Certain Definitions”) were restricted subsidiaries. Our unrestrictednoteholders. Unrestricted subsidiaries are not subject to any of the restrictive covenants in the indenture. The restrictiveIndenture.
|
| These covenants set forth in the indenture are subject to a number of important exceptionslimitations and qualifications.exceptions. See “Description of the Exchange Notes—Certain covenants.” |
|
| | No Prior Market
| | The exchange notes will be freely transferable but will be new securities for which there will initially be no market. Accordingly, we cannot assure you whether a market for the exchange notes will develop or as to the liquidity of any such market that may develop.
|
| | |
Risk Factors | | An investmentSee “Risk Factors” and the other information in this prospectus for a discussion of the factors you should carefully consider before deciding to tender your Existing Notes in the exchange offer.
|
Selected Historical Consolidated Financial Information
The summary historical consolidated financial data presented below as of and for the three months ended March 31, 2017 and 2016 have been derived from ERI’s unaudited condensed consolidated financial statements, which are incorporated by reference in this prospectus. The summary historical consolidated financial data presented below for the fiscal years ended December 31, 2016, 2015 and 2014 have been derived from ERI’s audited consolidated financial statements, which are incorporated by reference in this prospectus.
On September 19, 2014 (the “MTR Merger Date”), a wholly-owned subsidiary of ERI merged into Eldorado Holdco LLC (“Holdco”), the parent of Eldorado Resorts, and MTR Gaming. Effective upon this merger (the “MTR Merger”), Holdco, Eldorado Resorts and MTR Gaming became wholly-owned subsidiaries of ERI. The MTR Merger has been accounted for as a reverse acquisition of MTR Gaming by Holdco under accounting principles generally accepted in the United States. As a result, Holdco is considered the acquirer of MTR Gaming for accounting purposes. The historical financial information included in the following table for periods prior to the MTR Merger Date are those of Eldorado Resorts and its subsidiaries. The presentation of information herein for periods prior to the MTR Merger Date and after the MTR Merger Date are not fully comparable because the results of operations for MTR Gaming are not included for periods prior to the MTR Merger Date.
You should read the financial information presented below in conjunction with our consolidated financial statements and accompanying notes as well as “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” incorporated by reference in this prospectus.
The summary pro forma condensed combined financial information has been prepared to illustrate the effects of certain adjustments that are expected to have a continuing impact on the results of operations related to the Isle Acquisition, as if the Isle Acquisition had occurred on January 1, 2016. Preparation of unaudited pro forma condensed combined financial information is based on estimates and assumptions deemed appropriate by ERI. The pro forma information is unaudited and is not necessarily indicative of the results that actually would have occurred if the Isle Acquisition had been consummated as of January 1, 2016, nor does it purport to represent the financial position and results of operations for future periods. The pro forma adjustments are based upon currently available information and upon certain assumptions that we believe are reasonable.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Unaudited
Pro forma | | | Three months
ended
March 31, | | | Year ended December 31, | |
| | | Three months | | | Fiscal Year | | | |
| | | ended | | | ended | | | |
| | | March 31, | | | December 31, | | | |
| | | 2017 | | | 2016 | | | 2017 | | | 2016 | | | 2016 | | | 2015(1) | | | 2014(2) | | | 2013 | | | 2012 | |
| | | | | | | | | (unaudited) | | | | | | | | | | | | | | | | |
| (dollars in millions, except operating data) | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Consolidated Statement of Operations Data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Operating revenues: | | | | | | | | | | | | | | | | | | | | | | | | |
Casino | | $ | 347.0 | | | $ | 1,488.8 | | | $ | 162.8 | | | $ | 169.1 | | | $ | 693.0 | | | $ | 614.2 | | | $ | 298.8 | | | $ | 192.4 | | | $ | 200.3 | |
Pari-mutuel commissions | | | 3.6 | | | | 19.6 | | | | 0.6 | | | | 0.7 | | | | 8.6 | | | | 9.0 | | | | 2.0 | | | | — | | | | — | |
Food and beverage | | | 50.0 | | | | 228.6 | | | | 29.5 | | | | 33.7 | | | | 142.0 | | | | 97.7 | | | | 68.2 | | | | 60.6 | | | | 59.3 | |
Hotel | | | 22.5 | | | | 115.6 | | | | 18.0 | | | | 20.2 | | | | 94.3 | | | | 37.5 | | | | 28.0 | | | | 26.9 | | | | 26.2 | |
Other | | | 11.5 | | | | 57.2 | | | | 8.6 | | | | 10.9 | | | | 45.2 | | | | 26.1 | | | | 13.2 | | | | 10.4 | | | | 10.4 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total revenues | | | 434.6 | | | | 1,909.8 | | | | 219.5 | | | | 234.6 | | | | 983.1 | | | | 784.5 | | | | 410.2 | | | | 290.3 | | | | 296.2 | |
Less promotional allowances | | | (39.8 | ) | | | (192.3 | ) | | | (18.6 | ) | | | (21.0 | ) | | | (90.3 | ) | | | (64.8 | ) | | | (48.4 | ) | | | (43.1 | ) | | | (41.5 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net operating revenues | | | 394.8 | | | | 1,717.5 | | | | 200.9 | | | | 213.6 | | | | 892.8 | | | | 719.7 | | | | 361.8 | | | | 247.2 | | | | 254.7 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Unaudited
Pro forma | | | Three months
ended
March 31, | | | Year ended December 31, | |
| | | Three months | | | Fiscal Year | | | |
| | | ended | | | ended | | | |
| | | March 31, | | | December 31, | | | |
| | | 2017 | | | 2016 | | | 2017 | | | 2016 | | | 2016 | | | 2015(1) | | | 2014(2) | | | 2013 | | | 2012 | |
| | | | | | | | | (unaudited) | | | | | | | | | | | | | | | | |
| (dollars in millions, except operating data) | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | |
Casino | | | 176.2 | | | | 751.5 | | | | 90.5 | | | | 96.3 | | | | 390.3 | | | | 357.6 | | | | 167.8 | | | | 101.9 | | | | 104.0 | |
Pari-mutuel commissions | | | 3.6 | | | | 18.7 | | | | 1.2 | | | | 1.3 | | | | 9.8 | | | | 10.0 | | | | 2.4 | | | | — | | | | — | |
Food and beverage | | | 24.0 | | | | 109.5 | | | | 17.4 | | | | 19.7 | | | | 81.9 | | | | 52.6 | | | | 37.4 | | | | 29.0 | | | | 29.1 | |
Hotel | | | 7.8 | | | | 36.1 | | | | 6.6 | | | | 7.1 | | | | 30.7 | | | | 11.3 | | | | 8.5 | | | | 7.9 | | | | 8.0 | |
Other | | | 15.9 | | | | 71.2 | | | | 5.3 | | | | 6.1 | | | | 26.9 | | | | 15.3 | | | | 9.3 | | | | 7.3 | | | | 7.3 | |
Marketing and promotions | | | 23.0 | | | | 95.5 | | | | 10.1 | | | | 9.6 | | | | 40.6 | | | | 31.2 | | | | 22.0 | | | | 17.8 | | | | 18.7 | |
General and administrative | | | 58.0 | | | | 237.0 | | | | 31.8 | | | | 31.7 | | | | 130.2 | | | | 96.9 | | | | 58.7 | | | | 43.7 | | | | 44.9 | |
Corporate | | | 12.3 | | | | 46.0 | | | | 6.6 | | | | 6.9 | | | | 19.9 | | | | 16.5 | | | | 4.6 | | | | — | | | | — | |
Preopening Expense | | | — | | | | 0.8 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
Depreciation and amortization | | | 28.8 | | | | 116.4 | | | | 15.6 | | | | 16.2 | | | | 63.4 | | | | 56.9 | | | | 28.6 | | | | 17.0 | | | | 17.7 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Operating expenses | | | 349.6 | | | | 1,482.7 | | | | 185.0 | | | | 194.9 | | | | 793.7 | | | | 648.3 | | | | 339.3 | | | | 224.6 | | | | 229.7 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loss on sale or disposition of property | | | — | | | | (0.8 | ) | | | — | | | | — | | | | (0.8 | ) | | | — | | | | (0.1 | ) | | | (0.2 | ) | | | (0.2 | ) |
Acquisition charges | | | — | | | | — | | | | (1.6 | ) | | | (0.5 | ) | | | (9.2 | ) | | | (2.5 | ) | | | (7.4 | ) | | | (3.2 | ) | | | — | |
Equity in (loss) income of unconsolidated affiliates(3) | | | (0.2 | ) | | | — | | | | (0.2 | ) | | | — | | | | — | | | | 3.5 | | | | 2.7 | | | | 3.4 | | | | (9.0 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Operating income | | | 45.0 | | | | 234.0 | | | | 14.1 | | | | 18.3 | | | | 89.1 | | | | 72.4 | | | | 17.7 | | | | 22.6 | | | | 15.8 | |
Other income (expense): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest expense, net | | | (27.4 | ) | | | (109.0 | ) | | | (12.7 | ) | | | (13.0 | ) | | | (50.9 | ) | | | (61.6 | ) | | | (30.7 | ) | | | (15.7 | ) | | | (16.1 | ) |
Gain on valuation of unconsolidated affiliate | | | — | | | | — | | | | — | | | | — | | | | — | | | | 35.6 | | | | — | | | | 12.0 | | | | — | |
Gain on termination of supplemental executive retirement plan | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 0.7 | | | | — | | | | — | |
Loss on early retirement of debt, net | | | — | | | | (0.2 | ) | | | — | | | | — | | | | (0.2 | ) | | | (1.9 | ) | | | (0.1 | ) | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total other expense | | | (27.4 | ) | | | 109.1 | | | | (12.7 | ) | | | (13.1 | ) | | | (51.1 | ) | | | (27.9 | ) | | | (30.1 | ) | | | (3.7 | ) | | | (16.8 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income (loss) before income taxes | | | 17.6 | | | | 124.8 | | | | 1.5 | | | | 5.2 | | | | 38.0 | | | | 44.5 | | | | (12.4 | ) | | | 18.9 | | | | (1.0 | ) |
(Provision) benefit for income taxes(4) | | | (5.4 | ) | | | (16.4 | ) | | | (0.5 | ) | | | (1.8 | ) | | | (13.2 | ) | | | 69.6 | | | | (1.8 | ) | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income (loss) | | | 12.2 | | | | 108.4 | | | | 1.0 | | | | 3.4 | | | | 24.8 | | | | 114.1 | | | | (14.2 | ) | | | 18.9 | | | | (1.0 | ) |
Less net income attributable to non-controlling interest(5) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (0.1 | ) | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income (loss) attributable to ERI(5) | | $ | 12.2 | | | $ | 108.4 | | | $ | 1.0 | | | $ | 3.4 | | | $ | 24.8 | | | $ | 114.1 | | | $ | (14.3 | ) | | $ | 18.9 | | | $ | (1.0 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Unaudited
Pro forma | | | Three months
ended
March 31, | | | Year ended December 31, | |
| | | Three months | | | |
| | | ended | | | |
| | | March 31, | | | |
| | | 2017 | | | 2017 | | | 2016 | | | 2016 | | | 2015(1) | | | 2014(2) | | | 2013 | | | 2012 | |
| | | | | | (unaudited) | | | | | | | | | | | | | | | | |
Operating Data(7): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Number of hotel rooms(8) | | | 7,132 | | | | 4,853 | | | | 4,853 | | | | 4,853 | | | | 4,853 | | | | 1,571 | | | | 1,217 | | | | 1,217 | |
Average hotel occupancy rate(9) | | | 51.5 | % | | | 49.3 | % | | | 57.4 | % | | | 63.1 | % | | | 77.9 | % | | | 84.1 | % | | | 85.1 | % | | | 84.1 | % |
Number of slot machines(8) | | | 21,280 | | | | 9,778 | | | | 9,934 | | | | 9,746 | | | | 10,281 | | | | 8,665 | | | | 2,738 | | | | 2,779 | |
Number of table games(8) | | | 510 | | | | 254 | | | | 258 | | | | 256 | | | | 263 | | | | 177 | | | | 100 | | | | 97 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Unaudited
Pro forma | | | As of March 31, | | | As of December 31, | |
| | | March 31,
2017 | | | 2017 | | | 2016 | | | 2016 | | | 2015 | | | 2014 | | | 2013 | | | 2012 | |
| | | | | | (unaudited) | | | | | | | | | | | | | | | | |
| (dollars in millions) | | | | | | | | | | | | | | | | | | | | | | | | |
Consolidated Balance Sheet Data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents | | $ | 272.3 | | | $ | 44.6 | | | $ | 44.1 | | | $ | 61.0 | | | $ | 78.3 | | | $ | 87.6 | | | $ | 29.8 | | | $ | 25.3 | |
Total assets | | | 3,611.2 | | | | 1,645.8 | | | | 1,286.1 | | | | 1,294.0 | | | | 1,325.0 | | | | 1,171.6 | | | | 270.2 | | | | 262.5 | |
Total debt | | | 2,325.8 | | | | 1,191.0 | | | | 856.6 | | | | 823.2 | | | | 892.2 | | | | 778.9 | | | | 170.8 | | | | 176.1 | |
Stockholders’ equity | | | 816.0 | | | | 301.5 | | | | 275.0 | | | | 298.5 | | | | 270.7 | | | | 151.6 | | | | 75.6 | | | | 61.0 | |
| | | | | | | | | | | | | | | | |
| | | Three months ended
March 31, | | | Year ended
December 31, | |
| | | 2017 | | | 2016 | | | 2016 | | | 2015(1) | |
| (dollars in millions) | | | |
Other Data: | | | | | | | | | | | | | | | | |
Adjusted EBITDA(6) | | $ | 33.4 | | | $ | 38.3 | | | $ | 168.3 | | | $ | 160.6 | |
| (1) | On July 7, 2015, Eldorado Resorts entered into the Purchase and participationSale Agreement (the “Reno Purchase Agreement”) with subsidiaries of MGM Resorts International to purchase the 50% interest in the exchange offer involves risk. Silver Legacy Joint Venture held by Galleon, Inc. and the assets constituting Circus Reno. On November 24, 2015 (the “Reno Acquisition Date”), Eldorado Resorts acquired all of the assets and properties of Circus Reno and the 50% membership interest in the Silver Legacy Joint Venture owned by Galleon, Inc. (the “Reno Acquisition”). The total purchase consideration was $223.6 million. Following the consummation of the Reno Acquisition, the Silver Legacy Joint Venture became a wholly-owned indirect subsidiary of ERI. |
| (2) | On the MTR Merger Date, a wholly-owned subsidiary of ERI merged into Holdco, the parent of Eldorado Resorts, and MTR Gaming. Effective upon the MTR Merger, Holdco, Eldorado Resorts and MTR Gaming became wholly-owned subsidiaries of ERI. |
| (3) | Except as explained in note (4) below, equity in income of unconsolidated affiliates prior to the Reno Acquisition Date represents (a) Eldorado Resorts’ 48.1% joint venture interest in the Silver Legacy Joint Venture (or, prior to the MTR Merger Date, its 50% interest in Eldorado Limited Liability Company (“ELLC”)) and (b) for periods prior to September 1, 2014, Eldorado Resorts’ 21.3% interest in Tamarack Crossing, LLC (“Tamarack”). Since ERI operates in the same line of business as the Silver Legacy and Tamarack, each with casino and/or hotel operations, ERI’s equity in the income of such affiliates is included in operating income. |
| (4) | Prior to participatingSeptember 19, 2014, Holdco was taxed as a partnership under the Internal Revenue Code of 1986, as amended (the “Code”) pursuant to which income taxes were primarily the responsibility of the partners. On September 18, 2014, as part of the MTR Merger, ERI became a C Corporation subject to the federal and state corporate-level income taxes at prevailing corporate tax rates. While taxed as a partnership, Holdco was not subject to federal income tax liability. Because holders of membership interests in Holdco were required to include their respective shares of Holdco and Eldorado Resorts’ taxable income (loss) in their individual income tax returns, Eldorado Resorts made distributions to its member, Holdco and Holdco made distributions to its members to cover such liabilities. |
| (5) | Prior to the Reno Acquisition Date, non-controlling interest represented the minority partners’ share of ELLC’s 50% joint venture interest in the exchange offer, potential investors should carefully considerSilver Legacy Joint Venture. The non-controlling interest in ELLC was owned by certain Holdco equity holders and was approximately 4%. The non-controlling interest in the matters set forth underSilver Legacy was 1.9%. ERI acquired the caption “Risk Factors” beginning on page 9remaining 50% joint venture interest pursuant to the Reno Acquisition and exercised its rights to acquire the non-controlling interest of this prospectus,ELLC. |
| (6) | Adjusted EBITDA, a non-GAAP financial measure, has been presented as a supplemental disclosure because it is a widely used measure of performance and information included or incorporated by reference herein, including, without limitation, the information set forth under “Risk Factors” and elsewherebasis for valuation of companies in our Annual Report on Form 10-K for the fiscal year ended April 27, 2014industry and our Quarterly Report on Form 10-Q for the quarter ended January 25, 2015.we believe that this non-GAAP supplemental information will be helpful in understanding ERI’s |
8
| ongoing operating results. ERI defines Adjusted EBITDA as operating income (loss) before depreciation and amortization, stock based compensation, (gain) loss on the sale or disposal of property, equity in income of unconsolidated affiliates, acquisition charges, S-1 expenses and other regulatory gaming assessments, to the extent that such items existed in the periods presented. Adjusted EBITDA is not a measure of performance or liquidity calculated in accordance with GAAP, is unaudited and should not be considered an alternative to, or more meaningful than, net income (loss) as an indicator of operating performance. Uses of cash flows that are not reflected in Adjusted EBITDA include capital expenditures, interest payments, income taxes, debt principal repayments and certain regulatory gaming assessments, which can be significant. As a result, Adjusted EBITDA should not be considered as a measure of liquidity. Other companies that provide EBITDA information may calculate EBITDA differently than ERI does. The definition of “Adjusted EBITDA” may not be the same as the definitions used in any of ERI’s debt agreements. Set forth below is a quantitative reconciliation of ERI’s Adjusted EBITDA to net income (loss), which we believe is the most comparable financial measure calculated in accordance with GAAP, for each of the years ended December 31, 2016 and 2015 and for each of the three months ended March 31, 2017 and 2016 (unaudited, in thousands). |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Year ended December 31, 2016 | |
| | | Operating
income (loss) | | | Depreciation
and
amortization | | | Stock-based
compensation(c) | | | Transaction
expenses(d) | | | Severance
expense | | | Other(e) | | | Adjusted
EBITDA | |
Nevada | | $ | 41,620 | | | $ | 20,220 | | | $ | — | | | $ | — | | | $ | 230 | | | $ | 263 | | | $ | 62,333 | |
Louisiana | | | 23,378 | | | | 7,861 | | | | — | | | | — | | | | — | | | | (41 | ) | | | 31,198 | |
Eastern(b) | | | 53,610 | | | | 34,887 | | | | — | | | | — | | | | 305 | | | | 1,033 | | | | 89,835 | |
Corporate | | | (29,490 | ) | | | 481 | | | | 3,341 | | | | 9,182 | | | | 1,461 | | | | (55 | ) | | | (15,080 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 89,118 | | | $ | 63,449 | | | $ | 3,341 | | | $ | 9,182 | | | $ | 1,996 | | | $ | 1,200 | | | $ | 168,286 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Year ended December 31, 2015 | |
| | | Operating
income (loss) | | | Depreciation
and
amortization | | | Stock-based
compensation(c) | | | Transaction
expenses(d) | | | Severance
expense | | | Other(e) | | | Adjusted
EBITDA | |
Nevada | | $ | 13,989 | | | $ | 9,547 | | | $ | — | | | $ | — | | | $ | 115 | | | $ | (3,457 | ) | | $ | 20,194 | |
Louisiana | | | 21,423 | | | | 7,621 | | | | — | | | | — | | | | 25 | | | | (18 | ) | | | 29,051 | |
Eastern | | | 56,491 | | | | 39,341 | | | | — | | | | — | | | | 163 | | | | (273 | ) | | | 95,722 | |
Corporate | | | (19,387 | ) | | | 412 | | | | 1,488 | | | | 3,069 | | | | 75 | | | | 54 | | | | (14,289 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Excluding Pre-Reno Acquisition | | $ | 72,516 | | | $ | 56,921 | | | $ | 1,488 | | | $ | 3,069 | | | $ | 378 | | | $ | (3,694 | ) | | $ | 130,678 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Pre-Reno Acquisition(a) | | | 19,850 | | | | 10,008 | | | | — | | | | — | | | | 20 | | | | 2 | | | | 29,880 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Including Pre-Reno Acquisition(f) | | $ | 92,366 | | | $ | 66,929 | | | $ | 1,488 | | | $ | 3,069 | | | $ | 398 | | | $ | (3,692 | ) | | $ | 160,558 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three months ended March 31, 2017 | |
| | | Operating
income (loss) | | | Depreciation
and
amortization | | | Stock-based
compensation(c) | | | Transaction
expenses(d) | | | Severance
expense | | | Other(e) | | | Adjusted
EBITDA | |
Nevada | | $ | 1,526 | | | $ | 4,643 | | | $ | — | | | $ | — | | | $ | 160 | | | $ | — | | | $ | 6,329 | |
Louisiana | | | 5,918 | | | | 1,932 | | | | — | | | | — | | | | — | | | | — | | | | 7,850 | |
Eastern | | | 15,042 | | | | 8,880 | | | | — | | | | — | | | | — | | | | 156 | | | | 24,078 | |
Corporate | | | (8,337 | ) | | | 149 | | | | 1,733 | | | | 1,614 | | | | (11 | ) | | | — | | | | (4,852 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 14,149 | | | $ | 15,604 | | | $ | 1,733 | | | $ | 1,614 | | | $ | 149 | | | $ | 156 | | | $ | 33,405 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three months ended March 31, 2016 | |
| | | Operating
income (loss) | | | Depreciation
and
amortization | | | Stock-based
compensation(c) | | | Transaction
expenses(d) | | | Severance
expense | | | Other(e) | | | Adjusted
EBITDA | |
Nevada | | $ | 5,565 | | | $ | 5,463 | | | $ | — | | | $ | — | | | $ | — | | | $ | (34 | ) | | $ | 10,994 | |
Louisiana | | | 6,502 | | | | 1,946 | | | | — | | | | — | | | | — | | | | (1 | ) | | | 8,447 | |
Eastern(b) | | | 13,731 | | | | 8,684 | | | | — | | | | — | | | | — | | | | 491 | | | | 22,906 | |
Corporate | | | (7,535 | ) | | | 111 | | | | 1,454 | | | | 518 | | | | 1,445 | | | | — | | | | (4,007 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 18,263 | | | $ | 16,204 | | | $ | 1,454 | | | $ | 518 | | | $ | 1,445 | | | $ | 456 | | | $ | 38,340 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (a) | Figures for the year ended December 31, 2015 represent the results of Silver Legacy and Circus Reno for the period beginning on January 1, 2015 and ending on November 24, 2015, the date that the acquisition of such properties was consummated. Such figures are based on the unaudited historical internal financial statements of such entities and have not been reviewed by ERI’s auditors. |
| (b) | Effective January 1, 2016, the Ohio Lottery Commission enacted a regulatory change which resulted in the establishment of a $1.0 million progressive slot liability and a corresponding decrease in net slot win in during the first quarter of 2016. The changes are non-cash and related primarily to prior years. The net non-cash impact to Adjusted EBITDA was $0.6 million for each of the year ended December 31, 2016 and the three months ended March 31, 2016. |
| (c) | Included in stock-based compensation expense is $0.8 million and $0.5 million of additional stock-based compensation expense as a result of severance related restricted stock units becoming fully vested during the year ended December 31, 2016 and the three months ended March 31, 2016, respectively. |
| (d) | Transaction expenses represent acquisition costs related to the Isle Acquisition, the MTR Merger and the Reno Acquisition and also include a credit of $2.0 thousand for the year ended December 31, 2016 and for the three months ended March 31, 2016, and an expense of $0.6 million for the year ended December 31, 2015 and for the three months ended March 31, 2016 related to S-1 offering costs. |
| (e) | Other is comprised of (gain) loss on the sale or disposal of property, equity in income of unconsolidated affiliate and other regulatory gaming assessments, including the item listed in footnote (b) above. |
| (f) | Results of operations for the year ended December 31, 2015 include the operations of Silver Legacy and Circus Reno, which were acquired by ERI on November 24, 2015, as if the acquisition occurred on January 1, 2015. Such presentation does not conform with GAAP or the Securities and Exchange Commission rules for pro forma presentation; however, we have included the combined information because we believe it provides a meaningful comparison for the periods presented. |
| (7) | Excludes the operating data of the Silver Legacy, Circus Reno and Tamarack prior to the Reno Acquisition Date for each period presented. |
| (8) | As of the end of each period presented. Total table games does not include poker games, and total slot machines includes VLTs. |
| (9) | For each period presented. |
TableRatio of ContentsEarnings to Fixed Charges
The ratio of earnings to fixed charges is computed by dividing earnings and distributions from unconsolidated affiliates by fixed charges. For this purpose, earnings consist of net income from continuing operations before income taxes and (income) loss from unconsolidated affiliates and non-controlling interests, plus fixed charges, less capitalized interest and less net income attributable to noncontrolling interest. Fixed charges consist of interest expense and capitalized interest.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Year ended December 31, | | | Three months
ended March 31, | |
| (dollars in thousands) | | 2012 | | | 2013 | | | 2014 | | | 2015 | | | 2016 | | | 2016 | | | 2017 | |
Ratio of earnings to fixed charges | | | 1.6x | | | | 2.1x | | | | — | | | | 1.7x | | | | 1.7x | | | | 1.4x | | | | 1.1x | |
Deficiency in earnings to cover fixed charges | | | — | | | | — | | | | 14,544 | | | | — | | | | — | | | | — | | | | — | |
RISK FACTORS
An investment inIn this section, we describe risks associated with our business capital structure and the exchange notes and participation in the exchange offer involves risk. Prior to participating in the exchange offer, potential investorsoffer. You should carefully consider all of the informationrisk factors set forth below as well as the risk factors contained in this prospectus and the documents incorporated by reference herein, including, without limitation, the information set forth under “Risk“Part I, Item 1A. Risk Factors” and elsewhereincluded in our Annual Report on Form 10-K for the fiscal year ended April 27, 2014December 31, 2016 and incorporated herein by reference, the other information contained under “Forward-Looking Statements” and elsewhere in this prospectus before tendering your Notes in the exchange offer. Any of the following risks, as well as other risks and uncertainties, could materially and adversely affect our Quarterly Report on Form 10-Q forbusiness, financial condition or results of operations and thus cause the quarter ended January 25, 2015 and, in particular,value of the Notes to decline. The risks and uncertainties described below together with all other information contained and incorporated by reference in this prospectus. The risks and uncertainties described herein and therein are not the only onesrisks facing us.our company. Additional risks and uncertainties not presentlycurrently known to us or thatthose we currently deemview to be immaterial may also occur. The occurrence of any of those risksmaterially and uncertainties may materially adversely affect our business, financial condition or results of operations, cash flows or business.operations. In thatsuch a case, the price or value of our securities, including the exchange notes, could decline and you couldmay lose all or part of your investment. Consequently, an investment in the exchange notes and participation in the exchange offer should only be considered by persons who can assume such risk. You are encouraged to perform your own investigation with respect to the exchange notes, the exchange offer and our company. Some of the statements in this discussion of risk factors are forward-looking statements. See “Cautionary Statement Regarding Forward-Looking Statements.”Notes.
Risks Related to the OldNotes and Our Substantial Indebtedness
We have a substantial amount of indebtedness, which could have a material adverse effect on our financial condition and our ability to obtain financing in the future and to react to changes in our business
We have, and after giving effect to the offering of the Notes will continue to have, a substantial amount of debt, which requires significant principal and interest payments. As of March 31, 2017, after giving effect to the Isle Acquisition, we and our restricted subsidiaries had approximately $2,326 million of total indebtedness outstanding, of which approximately $1,576 million was secured, and $175 million of availability under our revolving credit facility.
This indebtedness may have important negative consequences for us, including:
limiting our ability to satisfy our obligations;
increasing our vulnerability to general adverse economic and industry conditions;
limiting our flexibility in planning for, or reacting to, changes in our businesses and the markets in which we operate;
placing us at a competitive disadvantage compared to competitors that have less debt;
increasing our vulnerability to, and limiting our ability to react to, changing market conditions, changes in our industry and economic downturns;
limiting our ability to obtain additional financing to fund working capital requirements, capital expenditures, debt service, general corporate or other obligations;
subjecting us to a number of restrictive covenants that, among other things, limit our ability to pay dividends and distributions, make acquisitions and dispositions, borrow additional funds, and make capital expenditures and other investments;
restricting our and our wholly-owned subsidiaries’ ability to make dividend payments and other payments;
limiting our ability to use operating cash flow in other areas of our business because we must dedicate a significant portion of these funds to make principal and/or interest payments on our outstanding debt;
exposing us to interest rate risk due to the variable interest rate on borrowings under the ERI Credit Facility;
causing our failure to comply with the financial and restrictive covenants contained in our current or future indebtedness, which could cause a default under such indebtedness and which, if not cured or waived, could have a material adverse effect on us and could force us into bankruptcy or liquidation; and
affecting our ability to renew gaming and other licenses necessary to conduct our business.
Future interest expense will be significantly higher than historic interest expense as a result of higher levels of indebtedness incurred to consummate the Isle Acquisition. Our ability to make payments on our debt and potential to pay dividends on our common stock, which we have not historically done, will depend on our ability to generate cash in the future, which will depend on many factors beyond our control. We cannot assure you that:
our business will generate sufficient cash flow from operations to service and repay our debt, pay dividends on our common stock and fund working capital and planned capital expenditures;
future borrowings will be available under our credit facilities or any future credit facilities in an amount sufficient to enable us to repay our debt, pay dividends on our common stock and fund working capital and planned capital expenditures; or
we will be able to refinance any of our debt on commercially reasonable terms or at all.
If we cannot generate sufficient cash from our operations to meet our debt service obligations, we may need to reduce or delay capital expenditures, the development of our business generally and any acquisitions. If we become unable to meet our debt service and repayment obligations, we would be in default under the terms of our credit agreement, which would allow our lenders to declare all outstanding borrowings to be due and payable. If the amounts outstanding under our credit facilities were to be accelerated, we cannot assure you that our assets would be sufficient to repay in full the money owed.
Despite our current indebtedness levels, we and our subsidiaries may still incur significant additional indebtedness. Incurring more indebtedness could increase the risks associated with our substantial indebtedness
We and our subsidiaries may be able to incur substantial additional indebtedness, including additional secured indebtedness, in the future. The terms of the Indenture, the 7% Notes Indenture and the ERI Credit Facility will restrict, but will not completely prohibit, us from doing so. As of March 31, 2017, after giving effect to the Isle Acquisition, we had $175 million of undrawn availability under our revolving credit facility. In addition, the Indenture will allow us to issue additional Notes under certain circumstances which will also be guaranteed by the Guarantors. The Indenture will also allow us to incur certain other additional secured and unsecured debt and does not prevent us from incurring other liabilities that do not constitute indebtedness. See “Description of the Exchange Notes.”
If new debt or other liabilities are added to our current debt levels, the related risks that we and our subsidiaries now face could intensify.
We are a holding company and will depend on our subsidiaries for dividends, distributions and repayment of our indebtedness, including the Notes
We are structured as a holding company, a legal entity separate and distinct from our subsidiaries. Our only significant asset is the capital stock or other equity interests of our operating subsidiaries. As a holding company, we conduct all of our business through our subsidiaries. Consequently, our principal source of cash flow, including cash flow to pay interest on the Notes and make payments on our other indebtedness, will be dividends and distributions from our subsidiaries. If our subsidiaries are unable to make dividend payments or distributions to us and sufficient cash or liquidity is not otherwise available, we may not be able to pay interest or principal on the Notes. Unless they are Guarantors of the Notes, our subsidiaries will not have any obligation to pay amounts due on the Notes or to make funds available for that purpose. Our subsidiaries may not be able to, or be permitted to, make distributions to enable us to make payments in respect of our indebtedness, including the Notes. Each of our subsidiaries is a distinct legal entity and, under certain circumstances, legal and contractual restrictions may limit our ability to obtain cash from our subsidiaries. In addition, while the Indenture will limit the ability of our restricted subsidiaries to restrict the payment of
dividends or make other intercompany payments to us, these limitations will be subject to certain qualifications and exceptions. In the event that we do not receive distributions from our subsidiaries, we may be unable to make required principal and interest payments on our indebtedness, including the Notes.
The Notes and the Exchange Notes
The notesNote Guarantees are unsecured obligations of ERI and the related guaranteesGuarantors, respectively. As such, the Notes and the Note Guarantees are effectively subordinated to our and our subsidiary guarantors’ senior secured indebtedness and the indebtednessany of our subsidiaries that do not guaranteeor the notes.
The notesGuarantors’ existing and the related guarantees are unsecured obligations and therefore will be effectively subordinated to our and the subsidiary guarantors’future secured indebtedness, including borrowings under our senior secured credit facilitydebt, to the extent of the value of the assetscollateral securing such indebtedness.indebtedness
Our obligations under the Notes and the Guarantors’ obligations under the Note Guarantees are not secured by any of our or the Guarantors’ assets. As a result, the Notes and the Note Guarantees are effectively subordinated to our and the Guarantors’ existing and any future secured indebtedness, including indebtedness under the ERI Credit Facility and any other secured indebtedness incurred in the future, to the extent of the value of the collateral securing such indebtedness, which includes substantially all of our assets that may be pledged as collateral pursuant to applicable gaming laws. As of January 25, 2015,March 31, 2017, after giving effect to the Isle Acquisition, we andhad $1,576 million of secured indebtedness (including the subsidiary guarantors had total indebtedness of $1.0 billion, of which $19.3 million was secured indebtedness.obligations under the ERI Credit Facility). In addition, as of January 25, 2015, we hadmay incur additional secured debt in the ability to borrow an additional $273.0 million under the revolving credit facility of our senior secured credit facility, all of which would be secured. The indenture governing the notes allows us and the subsidiary guarantors to incur a significant amount of additional indebtedness, some of which may also be secured. In the event we or the subsidiary guarantors become the subject of a bankruptcy, liquidation, dissolution, reorganization or similar proceeding, our assets and the assets of the subsidiary guarantors securing other indebtedness could not be used to pay the holders of the notes until after all secured claims against us and the subsidiary guarantors have been paid in full and, after paying such secured claims in full, there may not be sufficient or any proceeds remaining to pay the holders of the notes.
Some of our subsidiaries will not guarantee the notes. None of the non-guarantor subsidiaries has any obligation to pay any amounts due on the notes or to provide us with funds for our or their respective payment obligations, whether by dividends, distributions, loans or other payments.future. In the event of a bankruptcy, insolvency, dissolution, liquidation or reorganization, or similar proceeding relating toupon a default in payment on, or the acceleration of, any of our non-guarantor subsidiaries,secured indebtedness, holders of theirour secured debt and other creditors, including trade creditors, will generally be entitledcould foreclose on the pledged assets to paymentthe exclusion of their claims from the assets of those non-guarantor subsidiaries before any such assets are made available for distribution to us or any subsidiary guarantor. Under such circumstances, after paying the creditorsholders of the non-guarantor subsidiaries in full, thereNotes, even if an event of default exists under the Indenture at such time and, as a result, such holders of our secured debt would be paid before holders of the Notes receive any amounts due under the Notes to the extent of the value of the collateral securing such indebtedness. In that event, holders of the Notes may not be sufficientable to recover any or any assets remaining to make payments to us so that we can meet our payment obligations, including our obligationsall of the principal or interest due under the notes. As a result,Notes and holders of the notes andNotes may receive less, ratably, than the related guarantees will be effectively subordinated to all existing and future liabilities of our subsidiaries that do not guarantee the notes, including the trade payables.
For the nine months ended January 25, 2015, our non-guarantor subsidiaries accounted for approximately 3.6% of our consolidated net revenues, and, as of such date, our non-guarantor subsidiaries had total consolidated assets of $92.2 million and had total consolidated liabilities of $33.6 million outstanding, including $0.1 million of indebtedness. The indenture governing the notes does not limit the ability of most of our non-guarantor subsidiaries to incur additional debt.
9
Table of Contents
The notes and the guarantees are unsecured, and your right to enforce remedies is limited by the rights of holders of secured debt.debt in the event of our or the Guarantors’ bankruptcy, insolvency, liquidation, dissolution or reorganization.
The notesFurthermore, if the holders of our secured debt foreclose upon and sell the guaranteespledged equity interests in any Guarantor, then that Guarantor will be released from its Note Guarantee automatically and immediately upon such sale. In any such event, because the Notes are not be secured by any of our assets or the equity interests in the Guarantors, it is possible that there would be no assets remaining from which your claims could be satisfied or, if any assets remained, they might be insufficient to satisfy your claims in full.
The agreements governing our indebtedness impose significant operating and financial restrictions on us
The agreements governing our indebtedness, including the ERI Credit Facility, the Indenture and the 7% Notes Indenture, contain covenants that limit our ability and the ability of our subsidiaries. Our obligations underrestricted subsidiaries to:
incur additional debt or issue certain preferred shares;
pay dividends on or make other distributions in respect of our senior secured credit facility are secured bycapital stock or make other restricted payments;
make certain investments;
sell or transfer certain assets;
create liens on certain assets to secure debt;
consolidate, merge, sell or otherwise dispose of all or substantially all of our assetsassets;
enter into certain transactions with our affiliates; and
allow to exist certain restrictions on the assetsability of our subsidiaries.subsidiaries to pay dividends or make other payments to us.
All of these covenants may adversely affect our ability to finance our operations, meet or otherwise address our capital needs, pursue business opportunities, react to market conditions or otherwise restrict activities or business plans. A breach of any of these covenants could result in a default in respect of the related indebtedness. If a default occurs, the relevant lenders could elect to declare the indebtedness, together with accrued interest and other fees, to be immediately due and payable and proceed against any collateral securing that indebtedness.
We may not have sufficient cash flows from operating activities to service our indebtedness and meet our other cash needs and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful
Our ability to make payments on and to refinance our indebtedness will depend on our ability to generate cash in the future. Our ability to generate cash will be subject to general economic, financial, competitive, legislative, regulatory and other factors, some of which are beyond our control. Our future cash flow, cash on hand or available borrowings may not be sufficient to meet our obligations and commitments. If we become insolventare unable to generate sufficient cash flow from operations in the future to service our indebtedness and to meet our other commitments, we will be required to adopt one or are liquidated,more alternatives, such as refinancing or restructuring our indebtedness (including the Notes), selling material assets or operations or seeking to raise additional debt or equity capital. These actions may not be effected on a timely basis or on satisfactory terms or at all, or these actions may not enable us to continue to satisfy our capital requirements. In addition, the ERI Credit Facility, the Indenture, the 7% Notes Indenture and any of our other existing or future debt agreements contain and will contain restrictive covenants that may prohibit us from adopting any of these alternatives. Our failure to comply with these covenants could result in an event of default which, if payment undernot cured or waived, could result in the acceleration of all our senior secured credit facility is accelerated,debts. See “Description of the Exchange Notes.”
If we cannot make scheduled payments on our debt, we will be in default, and as a result, holders of the Notes and certain of our other indebtedness could declare all outstanding principal and interest to be due and payable, the lenders under the ERI Credit Facility could terminate their commitments to loan money and the lenders under such facility could foreclose against the assets securing the borrowings under such agreements and we could be forced into bankruptcy or liquidation, which, in each case, could result in your losing all or a portion of your investment in the Notes.
We may not be able to repurchase the Notes upon a change of control or pursuant to an asset sale offer
Upon a change of control, as defined under the Indenture, the holders of Notes will have the right to require us to offer to purchase all of the Notes then outstanding at a price equal to 101% of their principal amount plus accrued and unpaid interest to the repurchase date. In order to obtain sufficient funds to pay the purchase price of the outstanding Notes, we expect that we would have to refinance the Notes. We cannot assure you that we would be able to refinance the Notes on reasonable terms, if at all. Our failure to offer to purchase all outstanding Notes or to purchase all validly tendered Notes would be an event of default under the Indenture. Such an event of default may cause the acceleration of our senior secured credit facilityother debt. Our other debt also may contain restrictions on repayment requirements with respect to specified events or transactions that constitute a change of control under the Indenture.
In addition, in certain circumstances specified in the Indenture, we are required to commence an asset sale offer, as defined in the Indenture, pursuant to which we will be entitledobligated to exercisepurchase the remedies availableapplicable Notes at a price equal to 100% of their principal amount plus accrued and unpaid interest. Our other debt may contain restrictions that would limit or prohibit us from completing any such asset sale offer. Our failure to purchase any such Notes when required under the Indenture is an event of default under the Indenture.
Holders of the Notes may not be able to determine when a secured lenderchange of control giving rise to their right to have the Notes repurchased has occurred following a sale of “substantially all” of our assets
The definition of “change of control” in the Indenture includes a phrase relating to the sale of “all or substantially all” of our assets. There is no precise established definition of the phrase “substantially all” under applicable law. TheseAccordingly, the ability of a holder of Notes to require us to repurchase its Notes as a result of a sale of less than all of our assets to another person may be uncertain.
If we default under the ERI Credit Facility or the 7% Notes, we may not be able to service our debt obligations
In the event of a default under the 7% Notes, the credit agreement governing the ERI Credit Facility or certain other indebtedness, the lenders will have a claim oncould elect to declare all amounts borrowed, together with accrued and unpaid interest and other fees, to be due and payable, cease making further loans and institute foreclosure proceedings against our assets, and we could be forced into bankruptcy or liquidation. If such acceleration occurs, thereby permitting an acceleration of amounts outstanding under the assets ofNotes, we may not be able to repay the amounts due under the Notes and our subsidiaries beforeother outstanding indebtedness. This could have serious consequences to the holders of the notes.
Notes and to our financial condition and results of operations, and could cause us to become bankrupt or insolvent. If a default occurred under the credit facilities of one of our unrestricted subsidiaries, the subsidiary or subsidiaries party to such credit facility might have to take actions that could result in the diminution or elimination of our equity interest in such subsidiary.
TheUnrestricted subsidiaries will not be subject to the restrictive covenants in the Indenture
Only ERI and its restricted subsidiaries are subject to the restrictive covenants in the Indenture. None of the unrestricted subsidiaries are subject to the restrictive covenants in the Indenture. As a result, any such unrestricted subsidiaries will be able to engage in many of the activities that we and the Guarantors will be prohibited or limited from doing under the terms of the Indenture. These actions could be detrimental to our ability to make payments of principal and interest under the Notes when due and to comply with our other obligations under the Notes and could reduce the amount of our assets that would be available to satisfy your claims should we default on the Notes.
Because each Guarantor’s liability under its guarantees may be unenforceable duereduced to fraudulent conveyance statutes.zero, voided or released under certain circumstances, you may not receive any payments from some or all of the Guarantors
Various fraudulent conveyance and similar lawsHolders of the Notes will have been enacted for the protectionbenefit of creditors and may be utilized by courts to avoid or limit the guarantees of the notesGuarantors. However, the guarantees by our subsidiaries. The requirements for establishingthe Guarantors will be limited to the maximum amount that the Guarantors are permitted to guarantee under applicable law. As a result, a Guarantor’s liability under its guarantee could be reduced to zero, depending upon the amount of other obligations of such Guarantor. Further, under the circumstances discussed more fully below, a court under federal and state fraudulent conveyance vary depending onand transfer statutes could void the lawobligations under a guarantee or further subordinate it to all other obligations of the jurisdiction thatGuarantor. See “—The Notes or the Note Guarantees may not be enforceable because of fraudulent conveyance or fraudulent transfer laws and, as a result, you may be required to return payments received by you in respect of the Notes or the Note Guarantees.” In addition, you will lose the benefit of a particular guarantee if it is being applied. Generally,released under certain circumstances described under this section “—Risks Related to the Notes and Our Substantial Indebtedness.”
The Notes or the Note Guarantees may not be enforceable because of fraudulent conveyance or fraudulent transfer laws and, as a result, you may be required to return payments received by you in respect of the Notes or the Note Guarantees
The issuance of the Notes by the Company, or the incurrence of the Note Guarantees by the Guarantors (including any future note guarantees) may be subject to review under U.S. federal bankruptcy law or relevant state fraudulent conveyance or fraudulent transfer laws if a bankruptcy case or lawsuit is commenced by or on
behalf of the Company or the Guarantors or our or their unpaid creditors. Under these laws, if in such a bankruptcy, reorganizationcase or other judicial proceedinglawsuit a court were to find that, at the guarantor time the Company issued the Notes or such Guarantor incurred a guarantee of the Notes, the Company or such Guarantor:
issued the Notes or incurred the guarantee of the Notes with the intent of hindering, delaying or defrauding current or future creditors;
received less than reasonably equivalent value or fair consideration for issuing the Notes or incurring indebtedness evidenced by guarantees, and:the Note Guarantee;
·was insolvent
at the time of the incurrence of such indebtedness,·or was rendered insolvent by reason of incurring such indebtedness,
insolvent;
·was at such time engaged, or about to engage, in a business or transaction for which its remaining assets constituted unreasonably small capital to carry on its business; or
·intended to incur, or believed that it would incur, debts and obligations beyond its ability to pay as such debts as theyand obligations matured (as all of the foregoing terms are defined in or interpreted under the relevant fraudulent conveyance or transfer statutes),
then such court could with respectavoid the Notes or the Note Guarantee of such Guarantor or subordinate the amounts owing under the Notes or such Note Guarantee to the guarantor, declare voidCompany’s or such Guarantor’s presently existing or future debt, or take other actions detrimental to you.
As a general matter, value is given for a transfer or an obligation if, in wholeexchange for the transfer or obligation, property is transferred or a valid antecedent debt is satisfied. Based on financial and other information, we believe that the Notes and the Note Guarantees have been incurred for proper purposes and in partgood faith and that we and each Guarantor are solvent, have sufficient capital for carrying on our or its business and are able to pay our or its indebtedness as it matures. We cannot assure you, however, that a court reviewing these matters would agree with us. A legal challenge to the Notes or a Note Guarantee on fraudulent conveyance or fraudulent transfer grounds may focus on the benefits, if any, realized by us or the Guarantors as a result of the issuance of the Note Guarantees. Specifically, a court would likely find that a Guarantor did not receive reasonably equivalent value or fair consideration for its Note Guarantee if the Guarantor did not substantially benefit directly or indirectly from the issuance of the Notes. Thus, it may be asserted (and a court may consequently determine) that the Guarantors incurred their Note Guarantees for ERI’s benefit and did not themselves receive a direct or indirect benefit from the issuance of the Notes, such that they incurred the obligations of such guarantor under the guarantees, as well asNote Guarantees for less than reasonably equivalent value or fair consideration.
The measure of insolvency for purposes of the foregoing considerations will vary depending upon the law of the jurisdiction that is being applied in any liens granted byproceeding. Generally, a guarantor securing its guarantee or the guaranteed obligations. Any payment by such guarantor pursuant to its guarantee could also be required to be returned to it, or to a fund for the benefit of its creditors. Generally, an entity willcompany would be considered insolvent if, at the time it incurred the debt or issued the guarantee:
the sum of its debts (including contingent liabilities) is greater than theits assets, at fair saleable value of all of its property at a fair valuation or if valuation;
the present fair saleable value of its assets is less than the amount that will be required to pay itsthe probable liability on its total existing debts and liabilities (including contingent liabilities) as they become absolute and mature.matured; or
it could not pay its debts as they became due.
In addition, any payment by the Company pursuant to the Notes or by a Guarantor under a Note Guarantee made at a time the Company or such Guarantor were found to be insolvent could be voided and required to be returned to the Company or such Guarantor or to a fund for the benefit of the Company or such Guarantor’s creditors if such payment is made to an insider within a one-year period prior to a bankruptcy filing or within 90 days for any outside party and such payment would give such insider or outsider party
more than such party would have received in a distribution under the Bankruptcy Code in a hypothetical Chapter 7 case. In addition, any future guarantee in favor of the holders of the Notes might be avoidable by such Guarantor (as debtor-in-possession) or by its trustee in bankruptcy or other third parties if certain events or circumstances exist or occur. For instance, if the entity granting the future guarantee was insolvent at the time of the grant and if such grant was made within 90 days before that entity commenced a bankruptcy proceeding (or one year before commencement of a bankruptcy proceeding if the creditor that benefited from the guarantee is an “insider” under the U.S. Bankruptcy Code), and the granting of the future guarantee enabled the Noteholders to receive more than they would if the Guarantor were liquidated under Chapter 7 of the U.S. Bankruptcy Code, then such guarantee could be avoided as a preferential transfer. Guarantees granted after the issue date may be treated under bankruptcy law as if they were delivered to guarantee previously existing indebtedness. In bankruptcy proceedings commenced within 90 days of the issuance of a guarantee, any such guarantee given to guarantee previously existing indebtedness is more likely to be avoided as a preference by the bankruptcy court than if delivered and promptly recorded on the issue date. Accordingly, if any Guarantor were to file for bankruptcy protection after the issue date of the Notes and the guarantees had been granted less than 90 days before the commencement of such bankruptcy proceeding, such guarantees of the Notes may be particularly subject to challenge as a result of having been delivered after the issue date. To the extent that such challenge succeeded, the holders of the Notes would lose the benefit of the guarantee that the collateral was intended to provide.
We meaning only Islecannot assure you as to what standard a court would apply in determining whether we or the Guarantors were solvent at the relevant time or that a court would agree with our conclusions in this regard, or, regardless of Capri Casinos, Inc., have no operationsthe standard that a court uses, that it would not determine that the Company or a Guarantor were indeed insolvent on that date; that any payments to the holders of our ownthe Notes (including under the Note Guarantees) did not constitute preferences, fraudulent transfers or conveyances on other grounds; or that the issuance of the Notes and derive all of our revenue from our subsidiaries. the Note Guarantees would not be subordinated to the Company’s or any Guarantor’s other debt.
If a guarantee of the notes by a subsidiary wereNote Guarantee is avoided as a fraudulent conveyance or found to be unenforceable for any reason, you will not have a claim against that obligor and will only be a creditor of ERI or any Guarantor to the extent the obligation of ERI or such Guarantor is not set aside or found to be unenforceable. Sufficient funds to repay the Notes may not be available from these other sources, including the remaining obligors, if any; accordingly, in the event of a finding that a fraudulent transfer holdersor conveyance occurred, you may not receive any repayment on the Notes. You may also be required to return payments you have received with respect to such Note Guarantees.
Each Note Guarantee contains a provision intended to limit the Guarantor’s liability to the maximum amount that it could incur without causing the incurrence of other indebtedness of, and trade creditors of, that subsidiary would generally be entitled to payment of their claims from the assets of the subsidiary before such assets could be made available for distribution to us to satisfy our own obligations such as the notes.
The obligations of each subsidiary guarantor under its guarantee of the notes willNote Guarantee to be limited so as not to constitute a fraudulent conveyance under applicable law.transfer. This provision may not be effective (as a legal matter or otherwise) to protect the guaranteeNote Guarantees from being voidedavoided under applicable fraudulent transfer law,laws or may eliminatereduce the subsidiary guarantors’ obligations or reduce such obligationsGuarantor’s obligation to an amount that effectively makes the guaranteeNote Guarantee worthless. In a recent Florida bankruptcy case, a similarcourt decision (which was subsequently reinstated by the United States Court of Appeals for the Eleventh Circuit on different grounds), this kind of provision was found to be ineffective to protect the guarantees.
WeFinally, as a court of equity, a bankruptcy court may not be ablesubordinate the claims in respect of the Notes or Note Guarantees to repurchase notes upon a changeother claims against ERI or the Guarantors, respectively, under the principle of control offer, which would constituteequitable subordination if the court determines that (a) the holder of Notes engaged in some type of inequitable conduct, (b) the inequitable conduct resulted in injury to our other creditors or conferred an event of default.
Under the indenture governing the notes,unfair advantage upon the occurrenceholders of a change of control (as defined therein), we are required to offer to repurchase allNotes and (c) equitable subordination is not inconsistent with the provisions of the notes. The indentures governing our 7.750% Senior Notes due 2019 (the “2019 notes”) and the 8.875% Senior Subordinated Notes due 2020 (the “subordinated notes”) have the same definition of change of control as the indenture governing the notes and, upon the occurrence of a change of control, we would alsoBankruptcy Code.
You may be required to make an offer to repurchase all of such notes. However, our senior secured credit facility prohibits us from repurchasing the subordinated notes prior to their stated maturity and, if a change of control were to occur, we would have to first obtain the consent of the lenders under our senior secured credit facility to waive such restriction and allow us to repurchase the subordinated notes. We cannot assure you that we would be able to obtain such a consent. Nonetheless, our failure to offer to repurchase the subordinated notes or repurchase any subordinated notes so tendered in such an offer due to the prohibitions under our senior secured credit facility would still constitute an event of default under the indenture governing the subordinated notes, which in turn could trigger an event of default under the indenture governing the notes.
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Even if we were able to obtain the consent of the lenders under our senior secured credit facility to repurchase the subordinated notes, we may not have the funds available or be able to raise the funds necessary to repurchase all of our outstanding debt securities, including the notes that are tendered for repurchase upon a change of control. Any failure by us to make or complete a change of control offer for the notes or any other series of notes would place us in default under the applicable indenture and, if not otherwise waived or cured, could result in a cross-default under the other indentures and our senior secured credit facility.
In addition, if a change of control (as defined in our senior secured credit facility) occurs, then our ability to borrow under our senior secured credit facility may be terminated at the election of the lenders under our senior secured credit facility. As we have historically relied on access to credit facilities to fund capital expenditures and for other general corporate purposes, any termination of commitments under our senior secured credit facility could adversely affect our financial situation and our ability to conduct our business.
We may require you to dispose ofsell your notes or redeem your notesNotes if any gaming authority finds you unsuitable to hold them which could cause you to lose some of your investment.
We may require you to dispose of your notes or redeem your notes if any gaming authority finds you unsuitable to hold them or in order to otherwise comply with gaming laws to which we are subject. Gaming authorities canhave the authority generally to require that any beneficial owner of our securities, including holders of the notes,Notes, file an application and be investigated for a finding of suitability. If a gaming authority requires a record or beneficial owner of a noteNote is required by any gaming authority to file a suitability application, thebe found suitable, such owner mustwill be required to apply for a finding of suitability within 30 days after request of such gaming authority or at an earlierwithin such other time prescribed by thesuch gaming authority. The gaming authority has the power to investigate an owner’sapplicant for a finding of suitability and the owner must pay all costs of the investigation.investigation for such finding of suitability. If thea record or beneficial owner is required to be found unsuitable, then thesuitable and is not found suitable, such record or beneficial owner may be required either by law orpursuant to the terms of the notes,Notes or law to dispose of the notes.Notes. See “Description of the Notes — Exchange Notes—Gaming Redemption” of this prospectus and “PART I — ITEM 1. BUSINESS — Government Regulations” and “Description of Government Regulations” in Exhibit 99.1 to our Annual Report on Form 10-K for the fiscal year ended April 27, 2014, which is incorporated by reference herein.redemption.”
Our debt agreements impose significant operating and financial restrictions on us and our subsidiaries which may adversely affect our ability to operate our business.
The indentures governing the notes, the 2019 notes and the subordinated notes and our senior secured credit facility impose significant operating and financial restrictions on us and our subsidiaries. These restrictions limit our ability and the ability of our subsidiaries to, among other things:
·incur additional indebtedness or issue preferred stock;
·pay dividends and or distributions on our capital stock, repurchase, redeem or retire our capital stock;
·prepay subordinated indebtedness;
·make investments;
·guarantee other indebtedness;
· �� create liens on our assets;
·transfer and sell assets;
·create or permit restrictions on the ability of our subsidiaries to make dividends or make other distributions to us;
·enter into sale/leaseback transactions;
·enter into transactions with affiliates; and
·merge or consolidate with another company or sell all or substantially all of our assets.
In addition, our senior secured credit facility requires us to maintain specified financial ratios and satisfy certain financial covenants, including, but not limited to, maintaining a consolidated senior secured leverage ratio and a consolidated
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total leverage ratio below specified maximum thresholds, maintaining a consolidated interest coverage ratio above specified minimum thresholds and limiting the amount of our annual capital expenditures. Some of these financial ratios become more restrictive over the life of our senior secured credit facility. We could also incur additional indebtedness having even more restrictive covenants. As a result of these restrictions and covenants, our management’s ability to operate our business in its discretion is limited, and we may be unable to finance our future operations, compete effectively, pursue acquisitions or take advantage of new business opportunities, any of which could harm our business.
The failure to comply with any of the covenants under our senior secured credit facility or the indentures governing the notes, the 2019 notes, the subordinated notes, or any other indebtedness could prevent us from being able to draw on our revolving credit facility, cause an event of default under such debt agreement and result in an acceleration of all of our outstanding indebtedness. If all of our outstanding indebtedness were to be accelerated, we may not have, or be able to obtain through sales of assets, financing arrangements or otherwise, sufficient funds to pay all such accelerated indebtedness, including the notes, in full.
We may not be able to generate a sufficient amount of cash flow to meet our debt service obligations.
Our ability to make scheduled payments or to refinance our obligations with respect to the notes and our other indebtedness will depend on our financial and operating performance, which, in turn is subject to prevailing economic and industry conditions and other factors, including the availability of financing in banking and capital markets, which have experienced significant disruptions in recent periods, beyond our control. If our cash flow and capital resources are insufficient to fund our debt service obligations and other commitments, we could face substantial liquidity problems and may be forced to reduce or delay scheduled expansions and capital expenditures, sell material assets or operations, obtain additional capital, or restructure or refinance our indebtedness. We may be unable to effect any of these actions on a timely basis, on commercially reasonable terms or at all, or these actions may be insufficient to meet our capital requirements. In addition, any refinancing of our indebtedness could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our operations. If we cannot make scheduled payments on our indebtedness, we will be in default and, as a result, our debt holders could declare all outstanding principal and interest to be due and payable, and we could be forced into bankruptcy or liquidation.
Certain Risks Related to the Exchange Offer
If you do not properly tender your Existing Notes, you will continue to hold unregistered Existing Notes and your ability to transfer Existing Notes will be adversely affected
We will only issue Exchange Notes in exchange for Existing Notes that are timely received by the Exchange Agent (as defined herein) together with all required documents, including a properly completed and signed letter of transmittal. Therefore, you should allow sufficient time to ensure timely delivery of the Existing Notes and you should carefully follow the instructions on how to tender your Existing Notes. Neither we nor the Exchange Agent are required to tell you of any defects or irregularities with respect to your tender of the Existing Notes. If you do not tender your Existing Notes or if we do not accept your Existing Notes because you did not tender your Existing Notes properly, then, after we consummate the exchange offer, you may continue to hold Existing Notes that are subject to the existing transfer restrictions. In addition, if you tender your Existing Notes for the purpose of participating in a distribution of the Exchange Notes, you will be required to comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale of the Exchange Notes. If you are aYoubroker-dealer that receives Exchange Notes for your own account in exchange for Existing Notes that you acquired as a result ofmarket-making activities or any other trading activities, you will be required to acknowledge that you will deliver a prospectus in connection with any resale of such Exchange Notes. After the exchange offer is consummated, if you continue to hold any Existing Notes, you may have difficulty selling them because there will be less Existing Notes outstanding. In addition, if a large amount of Existing Notes are not tendered or are tendered improperly, the old noteslimited amount of Exchange Notes that youwould be issued and outstanding after we consummate the exchange offer could lower the market price of such Exchange Notes.
Your ability to transfer the Exchange Notes may be limited by the absence of an active trading market
The Exchange Notes are new securities for which there currently is no market. Although the initial purchasers in the private placement of the Existing Notes have informed us that they intend to make a market in the Exchange Notes, they are not obligated to do so and any such market making may be discontinued at any time without notice. In addition, the market making activity may be limited during the pendency of the exchange offer.
Accordingly, there can be no assurance as to the development or liquidity of any market for the Exchange Notes. We do not exchange.intend to apply for listing of the Exchange Notes on any securities exchange or for quotation through the Nasdaq National Market.
Markets fornon-investment grade debt, such as the Exchange Notes, have historically been subject to disruptions that have caused substantial volatility in the prices of securities similar to the Exchange Notes. We cannot assure you that the market, if any, for the Exchange Notes will be free from similar disruptions, and any such disruptions may adversely affect the prices at which you may sell your Exchange Notes.
USE OF PROCEEDS
We will not receive any proceeds from the issuance of the Exchange Notes in the exchange offer. In consideration for issuing the Exchange Notes as contemplated in this prospectus, we will receive in exchange a like principal amount of Existing Notes, the terms of which are identical in all material respects to the Exchange Notes, except that the Exchange Notes will have a different CUSIP number and will not contain terms with respect to transfer restrictions, registration rights or additional interest upon a failure to fulfill certain obligations under the registration rights agreement. The Existing Notes surrendered in exchange for the Exchange Notes will be retired and cancelled and cannot be reissued. Accordingly, the issuance of the Exchange Notes will not result in any change in our capitalization.
If you do
THE EXCHANGE OFFER
Purpose of the Exchange Offer
The Existing Notes were sold to qualified institutional buyers pursuant to Rule 144A under the Securities Act and tonon-U.S. persons outside the United States in reliance on Regulation S under the Securities Act. In connection with the sale of the Existing Notes, Escrow Issuer entered into the Registration Rights Agreement with J.P. Morgan Securities LLC, as representative of the initial purchasers of the Existing Notes. On May 1, 2017, we executed a joinder to the Registration Rights Agreement, pursuant to which we agreed to be deemed the issuer under the Registration Rights Agreement, be bound by all the covenants, agreements and acknowledgments applicable to such party and perform all obligations and duties required as an issuer thereunder.
Among other things, the Registration Rights Agreement requires us to register the Exchange Notes under the federal securities laws and offer to exchange the Exchange Notes for the Existing Notes. The Exchange Notes will be issued without a restrictive legend and generally may be resold without registration under the federal securities laws. We are extending the exchange offer to each registered holder of outstanding Existing Notes or persons who hold Existing Notes through The Depository Trust Company (“DTC Participants”) in order to comply with the Registration Rights Agreement. Under some circumstances set forth in the Registration Rights Agreement, holders of Existing Notes, including holders who are not exchange your old notes for exchange notespermitted to participate in the exchange offer youor who may not freely sell Exchange Notes received in the exchange offer, may require us to file and cause to become effective, a shelf registration statement covering resales of the Existing Notes by these holders.
Eachbroker-dealer that receives Exchange Notes for its own account in exchange for Existing Notes, where such Existing Notes were acquired by suchbroker-dealer as a result ofmarket-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Notes. See “Plan of Distribution.”
Terms of the Exchange Offer; Period for Tendering Existing Notes
Subject to terms and conditions detailed in this prospectus, we will accept for exchange Existing Notes that are properly tendered on or prior to the Expiration Date and not withdrawn as permitted below. The term “Expiration Date” means midnight, New York City time, , 2017, the twentieth day following the date of this prospectus. We may, however, in our sole discretion, extend the period of time that the exchange offer is open, in which case the term “Expiration Date” will mean the latest time and date to which the exchange offer is extended.
As of the date of this prospectus, $375 million aggregate principal amount of Existing Notes are outstanding. We are sending this prospectus, together with the letter of transmittal, to all registered holders of Existing Notes that we are aware of on the date hereof.
We expressly reserve the right, at any time, to extend the period of time that the exchange offer is open, and delay acceptance for exchange of any Existing Notes, by giving oral (if oral, to be promptly confirmed in writing) or written notice of an extension to the holders of the Existing Notes and the Exchange Agent (as described below). During any extension, all Existing Notes previously tendered will remain subject to the exchange offer and may be accepted for exchange by us. Any Existing Notes not accepted for exchange for any reason will be returned without expense to the tendering holder as promptly as practicable after the expiration or termination of the exchange offer.
Existing Notes tendered in the exchange offer must be in minimum denominations of principal amount of $2,000 and any integral multiple of $1,000 thereof.
We expressly reserve the right to amend or terminate the exchange offer, and not to exchange any Existing Notes, upon the occurrence of any of the conditions to the exchange offer specified under “—Conditions to the Exchange Offer.” We will give oral (if oral, to be promptly confirmed in writing) or written notice of any extension, amendment,non-acceptance or termination to the holders of the Existing Notes and the Exchange Agent as promptly as practicable. In the case of any extension, we will notify the trustee and the Exchange Agent and issue a notice by means of a press release or other public announcement no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date.
Shelf Registration Statement
If (i) because of any change in law or in currently prevailing interpretations of the staff of the SEC, we are not permitted to effect the exchange offer, (ii) the exchange offer has not been consummated by February 22, 2018 or (iii) upon receipt of a written request from any of the initial purchasers representing that such initial purchaser holds Existing Notes that are or were ineligible to be exchanged in the exchange offer, then the Company shall file a “shelf” registration statement providing for the registration of, and the sale on a continuous basis by the holders of, all of the Registrable Securities (the “Shelf Registration Statement”). “Registrable Securities” mean the Notes (together with the Guarantees) that may not be sold without restriction under federal or state securities law.
The Registration Rights Agreement provides that we:
(a) will use our reasonable best efforts to cause to be filed the Shelf Registration Statement with the SEC as soon as practicable after the time such obligation to file arises;
(b) will use our reasonable best efforts to cause the Shelf Registration Statement to become or be declared effective under the Securities Act; and
(c) will use our reasonable best efforts to keep such Shelf Registration Statement continuously effective until the Existing Notes cease to be Registrable Securities.
A holder that sells Notes pursuant to the Shelf Registration Statement generally would be required to be named as a selling security holder in the related prospectus and to deliver a prospectus to purchasers, will be subject to certain of the civil liability provisions under the Securities Act in connection with such sales and will be bound by the provisions of the Registration Rights Agreement which are applicable to such a holder (including certain indemnification obligations). We will provide a copy of the Registration Rights Agreement to prospective investors upon request.
If (i) the exchange offer is not completed on or prior to February 22, 2018, (ii) in the event we are required to file a Shelf Registration Statement and such Shelf Registration Statement is not declared effective on or prior to February 22, 2018, or (iii) in the event we are required to file a Shelf Registration Statement and such Shelf Registration Statement has become effective and thereafter ceases to be effective, or the prospectus contained in such Shelf Registration Statement ceases to be usable at any time during the period in which we are required to keep the Shelf Registration Statement effective pursuant to the terms of the Registration Rights Agreement, and such failure to remain effective or usable (A) exists for more than 30 days in any 12-month period (whether or not consecutive) or (B) occurs on more than two occasions in any 12-month period, then, in each case, commencing on the day thereafter, additional interest shall accrue on the Notes over and above the stated interest at a rate of 0.25% per annum for the first 90 days immediately following such date, such additional interest rate increasing by an additional 0.25% per annum at the beginning of each subsequent90-day period up to a maximum increase of 1.00% per annum.
Procedures for Tendering Existing Notes
All of the Existing Notes are held inbook-entry form through the facilities of the Depositary Trust Company (“DTC”). Holders who own Existing Notes and wish to exchange them in the exchange offer should follow the instructions below.
Beneficial owners who hold Existing Notes in a brokerage or custodian account through a custodian or nominee, including a broker, dealer, bank or trust company, will need to timely instruct their custodian or nominee to exchange their Existing Notes on or prior to the Expiration Time, in the manner described below (or as otherwise instructed by such custodian or nominee) and upon the terms and conditions set forth in this prospectus and the letter of transmittal. Beneficial owners should refer to any materials forwarded by the custodian or nominee to determine how they can timely instruct their custodian or nominee to take these actions.
In order to participate in the exchange offer, beneficial owners must instruct their nominee or custodian to participate on their behalf. Each beneficial owner’s nominee or custodian should arrange for the DTC Participant holding the Existing Notes through its DTC account to submit those Existing Notes for exchange in the exchange offer to the Exchange Agent prior to the Expiration Time.
Beneficial owners who hold their Existing Notes through a broker or bank should ask their broker or bank if they will be charged a fee to exchange their Existing Notes through the broker or bank.
The exchange offer is being conducted using DTC’s ATOP procedures. Accordingly, DTC Participants must submit their Existing Notes for exchange in the exchange offer in accordance with DTC’s ATOP procedures. Since all Existing Notes must be exchanged bybook-entry transfer to the applicable DTC account of the Exchange Agent, the beneficial owner’s bank, broker, dealer, trust company, or other nominee must execute exchange through ATOP. Financial institutions that are DTC Participants must execute exchanges through ATOP by transmitting acceptance of the exchange offer to DTC on or prior to the Expiration Time.
DTC will verify acceptance of the exchange offer, execute abook-entry transfer of the exchanged Existing Notes into the applicable DTC account of the Exchange Agent, and send to the Exchange Agent a“book-entry confirmation,” which shall include an Agent’s Message transmitted by DTC to and received by the Exchange Agent and forming part of abook-entry confirmation, which states that DTC has received an express acknowledgment from a DTC Participant exchanging Existing Notes that the DTC Participant has received and agrees to be bound by the terms of the letter of transmittal as though a signatory thereof and that the Company may enforce such agreement against the DTC Participant.
Acceptance of Existing Notes for Exchange; Delivery of Exchange Notes
Upon the terms and subject to the conditions of the exchange offer, the acceptance for exchange of Existing Notes validly tendered and not withdrawn and the issuance of the Exchange Notes will be made promptly following the expiration date. For the purposes of the exchange offer, we shall be deemed to have accepted for exchange validly tendered Existing Notes when, as and if we had given notice of acceptance to the Exchange Agent.
The Exchange Agent will act as agent for the tendering holders of Existing Notes for the purposes of receiving Exchange Notes from us and causing the Existing Notes to be assigned, transferred and exchanged. Upon the terms and subject to the conditions of the exchange offer, delivery of Exchange Notes to be issued in exchange for accepted Existing Notes will be made by the Exchange Agent promptly after acceptance of the tendered Existing Notes. Existing Notes not accepted for exchange by us will be returned without expense to the tendering holders or in the case of Existing Notes tendered bybook-entry transfer into the Exchange Agent’s account at DTC promptly following the expiration date or, if we terminate the exchange offer prior to the expiration date, promptly after the exchange offer is terminated.
Book-Entry Transfer
The Existing Notes were issued as global securities in fully registered form without interest coupons. Beneficial interests in the global securities, held by direct or indirect participants in DTC, are shown on, and
transfers of these interests are effected only through, records maintained inbook-entry form by DTC with respect to its participants.
The Exchange Agent will establish an account with respect to thebook-entry interests at DTC for purposes of the exchange offer promptly after the date of this prospectus. You must deliver yourbook-entry interest bybook-entry transfer to the account maintained by the Exchange Agent at DTC. Any financial institution that is a participant in DTC’s systems may makebook-entry delivery ofbook-entry interests by causing DTC to transfer thebook-entry interests into the Exchange Agent’s account at DTC in accordance with DTC’s procedures for transfer.
To validly participate in the exchange offer, DTC Participants must (i) deliver Existing Notes by means ofbook-entry transfer into the applicable DTC account of the Exchange Agent, (ii) transmit electronic confirmation through ATOP, whereby an Agent’s Message will be sent to the Exchange Agent, and (iii) deliver any other required documentation to the Exchange Agent.
By taking these actions with respect to the exchange offer, the holder and his or her custodian or nominee will be deemed to have agreed (i) to the terms and conditions of the exchange offer as set forth in the prospectus and the letter of transmittal and (ii) that the Company and the Exchange Agent may enforce the terms and conditions against such holder and such holder’s custodian or nominee.
The Exchange Agent will not accept any exchange materials other than the DTC Participant’s Agent’s Message.
General Provisions
The method of delivery of Existing Notes and all other documents or instructions including, without limitation, the Agent’s Message and the letter of transmittal, is at the beneficial owner’s risk. An exchange will be deemed to have been received only when the DTC Participant (i) delivers Existing Notes by means ofbook-entry transfer into the applicable DTC account of the Exchange Agent, (ii) transmits electronic confirmation through ATOP, whereby an Agent’s Message will be sent to the Exchange Agent, and (iii) delivers any other required documentation to the Exchange Agent.
All questions concerning the validity, form, exchanges (including time of receipt), and acceptance of exchanged Existing Notes will be determined by the Company in its sole discretion, which determination will be final and binding. The Company reserves the absolute right to reject any and all exchanges of Existing Notes not in proper form or any Existing Notes the acceptance for exchange of which may, in the opinion of its counsel, be unlawful. The Company also reserves the absolute right to waive any defect or irregularity in exchanges of Existing Notes, whether or not similar defects or irregularities are waived in the case of other tendered securities. The interpretation of the terms and conditions by the Company shall be final and binding on all parties. Unless waived, any defects or irregularities in connection with exchanges of Existing Notes in the exchange offer must be cured within such time as the Company shall determine. None of the Company, the Exchange Agent or any other person will be under any duty to give notification of defects or irregularities with respect to exchanges of Existing Notes in the exchange offer, nor shall any of them incur any liability for failure to give such notification.
Exchanges of Existing Notes in the exchange offer will not be deemed to have been made until such defects or irregularities have been cured or waived. Any Existing Notes received by the Exchange Agent that are not validly exchanged and as to which the defects or irregularities have not been cured or waived will be returned by the Exchange Agent to the DTC Participant, unless otherwise provided in the letter of transmittal, as soon as practicable following the Expiration Time or the withdrawal or termination of the exchange offer.
Exchanges of Existing Notes in the exchange offer pursuant to any of the procedures described in this prospectus and in the instructions in the letter of transmittal and acceptance of such Existing Notes by the
Company will constitute a binding agreement between the holder and the Company upon the terms and conditions of the exchange offer. Any submitted Existing Notes that are not accepted in the exchange offer for any reason will be returned by crediting the account maintained at DTC from which such Existing Notes were submitted.
We have not provided guaranteed delivery provisions in connection with the exchange offer. Existing Notes being exchanged must be delivered to the Exchange Agent in accordance with the procedures described in this prospectus, on or prior to the Expiration Time.
Terms and Conditions of the Letter of Transmittal
The letter of transmittal contains, among other things, the following terms and conditions, which are part of the exchange offer.
The party tendering Existing Notes for Exchange Notes, transfers and exchanges the Existing Notes to us and irrevocably constitutes and appoints the Exchange Agent as the transferor’s agent andattorney-in-fact to cause the Existing Notes to be assigned, transferred and exchanged.
The transferor represents and warrants that it has full power and authority to tender, exchange, sell, assign and transfer the Existing Notes, and that, when the same are accepted for exchange, we will acquire good, marketable and unencumbered title to the tendered Existing Notes, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claims. The transferor also warrants that it will, upon request, execute and deliver any additional documents deemed by us or the Exchange Agent to be necessary or desirable to complete the exchange, assignment and transfer of tendered Existing Notes. All authority conferred by the transferor will survive the death or incapacity of the transferor and every obligation of the transferor shall be binding upon the heirs, legal representatives, successors, assigns, executors and administrators of such transferor.
If the transferor is not abroker-dealer, it represents that it is not engaged in, and does not intend to engage in, a distribution of Exchange Notes. If the transferor is abroker-dealer that will receive Exchange Notes for its own account in exchange for Existing Notes, it represents that the Existing Notes to be exchanged for Exchange Notes were acquired by it as a result ofmarket-making activities or other trading activities, and acknowledges that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of Exchange Notes acquired in the exchange offer; however, by so acknowledging and by delivering a prospectus, the transferor will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act.
Withdrawal Rights
Existing Notes tendered in the exchange offer may be withdrawn at any time prior to the expiration date.
For a withdrawal to be effective, a written or facsimile transmission of notice of withdrawal must be timely received by the Exchange Agent at its address set forth below under “—Exchange Agent” on or prior to the expiration date. Any notice of withdrawal must specify the person named in the letter of transmittal as having tendered Existing Notes to be withdrawn, the certificate numbers of Existing Notes to be withdrawn, the aggregate principal amount of Existing Notes to be withdrawn (which must be an authorized denomination), that the holder is withdrawing his election to have the Existing Notes exchanged, and the name of the registered holder of such Existing Notes, if different from that of the person who tendered the Existing Notes. Additionally, the signature on the notice of withdrawal must be guaranteed by an eligible institution (except in the case of Existing Notes tendered for the account of an eligible institution). The Exchange Agent will return the properly withdrawn Existing Notes promptly following receipt of notice of withdrawal. Our determination regarding the validity of notices of withdrawals, including time of receipt, will be final and binding on all parties.
If Existing Notes have been tendered pursuant to the procedures for book-entry transfer, the notice of withdrawal must specify the name and number of the account at DTC to be credited with the withdrawal of Existing Notes, in which case a notice of withdrawal will be effective if delivered to the Exchange Agent by written or facsimile transmission. Withdrawals of tenders of Existing Notes may not be rescinded. Existing Notes properly withdrawn will not be deemed validly tendered for purposes of the exchange offer, but may be retendered at any subsequent time on or prior to the expiration date by following any of the procedures described herein.
Conditions to the Exchange Offer
Notwithstanding any other provision of the exchange offer, or any extension of an exchange offer, we will not be required to issue Exchange Notes with respect to any properly tendered Existing Notes not previously accepted and may terminate the exchange offer (by oral (if oral, to be promptly confirmed in writing) or written notice to the Exchange Agent and by timely public announcement communicated, unless otherwise required by applicable law or regulation, by making a press release) or, at our option, modifying or otherwise amending the exchange offer, if the exchange offer, or the making of any exchange by a note holder, would violate (i) applicable law or (ii) any applicable SEC policy or interpretation of the staff of the SEC.
The foregoing conditions are for our sole benefit and may be asserted by us with respect to all or any portion of the exchange offer regardless of the circumstances (including any action or inaction by us) giving rise to such condition or may be waived by us in whole or in part at any time or from time to time in our sole discretion. Our failure at any time to exercise any of the foregoing rights will not be deemed a waiver of any right, and each right will be deemed an ongoing right which may be asserted at any time or from time to time.
In addition, we will not accept for exchange any Existing Notes tendered, and no Exchange Notes will be issued in exchange for any Existing Notes, if at such time any stop order shall be threatened or in effect with respect to the registration statement of which this Prospectus constitutes a part or qualification under the Trust Indenture Act of 1939, as amended (the “TIA”) of the Indenture.
Exchange Agent
U.S. Bank National Association has been appointed as the Exchange Agent for the exchange offer. All executed letters of transmittal should be directed to the Exchange Agent at the address set forth below. Questions and requests for assistance, requests for additional copies of this prospectus or of the letter of transmittal and requests for notices of guaranteed delivery should be directed to the Exchange Agent addressed as follows:
By Registered or Certified Mail, Overnight Courier or Regular Mail, or Delivery by Hand:
U.S. Bank National Association
Global Corporate Trust Services
Attn: Corporate Actions
111 Fillmore Ave. East,EP-MN-WS2N
St. Paul, MN 55107
By Facsimile:
For Eligible Institutions only
(651) 466-7372
For Information or Confirmation
by Telephone:
(800) 934-6802
Delivery of the letter of transmittal to an address other than as set forth above or transmission of such letter of transmittal via facsimile other than as set forth above does not constitute a valid delivery.
Solicitations of Tenders; Expenses
We have not retained anydealer-manager or similar agent in connection with the exchange offer and will not make any payments to brokers, dealers or others for soliciting acceptances of the exchange offer. We will, however, pay the Exchange Agent reasonable and customary fees for its services and will reimburse it for reasonableout-of-pocket expenses. We will also pay brokerage houses and other custodians, nominees and fiduciaries the reasonableout-of-pocket expenses incurred by them in forwarding tenders for their customers. We will pay for the expenses incurred in connection with the exchange offer, including the fees and expenses of the Exchange Agent and printing, accounting and legal fees.
No person has been authorized to give any information or to make any representations in connection with the exchange offer other than those contained in this prospectus. If given or made, information or representations should not be relied upon as having been authorized by us. Neither the delivery of this prospectus nor any exchange made based upon this prospectus shall, under any circumstance, create any implication that there has been no change in our affairs since the respective dates as of which information is given. The exchange offer is not being made to (nor will tenders be accepted from or on behalf of) holders of Existing Notes in any jurisdiction in which the making of the exchange offer or the acceptance of the exchange offer would not be in compliance with the laws of such jurisdiction. However, we may, at our discretion, take such action as we deem necessary to make the exchange offer in any such jurisdiction and extend the exchange offer to holders of Existing Notes in such jurisdiction. In any jurisdiction of which the securities laws or blue sky laws require the exchange offer to be made by a licensed broker or dealer, the exchange offer is being made on our behalf by one or more registered brokers or dealers that are licensed under the laws of such jurisdiction.
Appraisal Rights
Holders of Existing Notes will not have dissenters’ rights or appraisal rights in connection with the exchange offer.
Other
Participation in the exchange offer is voluntary and holders should carefully consider whether to accept. Holders of the Existing Notes are urged to consult their financial and tax advisors in making their own decisions on what action to take.
As a result of the making of, and upon acceptance for exchange of all validly tendered Existing Notes pursuant to the terms of this exchange offer, we will have fulfilled a covenant contained in the Registration Rights Agreement. Holders of the Existing Notes who do not tender their certificates in the exchange offer will continue to hold such certificates and will be entitled to all the rights and limitations under the Indenture pursuant to which the Existing Notes were issued, except for any such rights under the Registration Rights Agreement which by their terms terminate or cease to have further effect as a result of the making of this exchange offer. All untendered Existing Notes will continue to be subject to the restrictions on transfer set forth in the Existing Notes and the Indenture. To the extent that Existing Notes are tendered and accepted in the exchange offer, the trading market, if any, for any Existing Notes that remain outstanding could be adversely affected.
We may in the future seek to acquire untendered Existing Notes in open market or privately negotiated transactions, through a subsequent exchange offer or otherwise. We have no present plan to acquire any Existing Notes which are not tendered in the exchange offer.
Consequences of Exchanging or Failing to Exchange Outstanding Notes
If you do not exchange your old notesExisting Notes for Exchange Notes in the exchange offer, your Existing Notes will continue to be subject to the provisions of the Indenture regarding transfer and exchange of the Existing Notes and the restrictions on transfer of the Existing Notes described in the legend on your old notes. Thecertificates. These transfer restrictions on transfer of your old notes arise,are required because wethe Existing Notes were issued the old notes under exemptionsan exemption from, or in transactions not subject to, the registration requirements of the Securities Act and applicable state securities laws. In general, youthe Existing Notes may only offernot be offered or sellsold unless registered under the old notes if they are registeredSecurities Act, except under an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws or offered and sold under an exemption from these requirements.laws. We do not intendplan to register the old notesExisting Notes under the Securities Act. To
Based on interpretations by the extent old notes are tendered and acceptedstaff of the SEC, as set forth inno-action letters issued to third parties, we believe that the Exchange Notes you receive in the exchange offer the trading market, if any, for the remaining old notes would be adversely affected. See “The Exchange Offer—Consequences of Failure to Exchange” for a discussion of the possible consequences of failing to exchange your old notes.
You may find it difficult to sell your exchange notes, because there is no existing trading market for the exchange notes.
You may find it difficult to sell your exchange notes, because an active trading market for the exchange notes may not develop. There is no existing trading market for the exchange notes. We do not intend to apply for listing or quotation of the exchange notes on any exchange, and so we do not know the extent to which investor interest will lead to the development of a trading market or how liquid that market might be. Although the initial purchasers of the old notes have informed us that they intend to make a market in the exchange notes, they are not obligated to do so, and any market making may be discontinued at any timeoffered for resale, resold or otherwise transferred without notice. As a result, the market price of the exchange notes, as well as your ability to sell the exchange notes, could be adversely affected.
Broker-dealers or noteholders may become subject tocompliance with the registration and prospectus delivery requirementsprovisions of the Securities Act. However, you will not be able to freely transfer the Exchange Notes if:
you are our “affiliate,” as defined in Rule 405 under the Securities Act,
Any broker-dealer that exchanges its old notes
you are not acquiring the Exchange Notes in the exchange offer forin the purposeordinary course of participatingyour business,
you have an arrangement or understanding with any person to participate in athe distribution, as defined in the Securities Act, of the Exchange Notes you will receive in the exchange notes,offer,
you are holding Existing Notes that have, or resells exchange notesare reasonably likely to have, the status of an unsold allotment in the initial offering, or
you are abroker-dealer that were received by itExchange Notes for its own account in the exchange offer may be deemedin exchange for Existing Notes that were acquired as a result ofmarket-making or other trading activities.
We do not intend to have received restricted securitiesrequest the SEC to consider, and may be required to comply with the registration and prospectus delivery
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requirements of the Securities Act in connection with any resale transaction by that broker-dealer. Any profit on the resale of the exchange notes and any commission or concessions received by a broker-dealer may be deemed to be underwriting compensation under the Securities Act.
In addition to broker-dealers, any noteholder that exchanges its old notes inSEC has not considered, the exchange offer forin the purposecontext of participatinga similarno-action letter. As a result, we cannot guarantee that the staff of the SEC would make a similar determination with respect to the exchange offer as in the circumstances described in theno-action letters discussed above. Each holder, other than abroker-dealer, must acknowledge that it is not engaged in, and does not intend to engage in, a distribution of the Exchange Notes and has no arrangement or understanding to participate in a distribution of the Exchange Notes. If you are our affiliate, are engaged in or intend to engage in a distribution of the Exchange Notes or have any arrangement or understanding with respect to the distribution of the Exchange Notes you will receive in the exchange notesoffer, you may be deemed to have received restricted securitiesnot rely on the applicable interpretations of the staff of the SEC and may be required toyou must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction by that noteholder.
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RATIO OF EARNINGS TO FIXED CHARGES
The following table shows our ratio of earnings to fixed charges for each of the periods indicated.
|
| Year Ended
|
| Nine
Months
Ended
|
|
|
| April 25,
2010(1)
|
| April 24,
2011
|
| April 29,
2012(2)
|
| April 28,
2013(3)
|
| April 27,
2014(4)
|
| January 25,
2015
|
|
Ratio of earnings to fixed charges
| | —
| | 1.0x
| | —
| | —
| | —
| | 1.1x
| |
(1)For the year ended April 25, 2010, earnings were insufficient to cover fixed charges by approximately $12.2 million.
(2)For the year ended April 29, 2012, earnings were insufficient to cover fixed charges by approximately $11.6 million.
(3)For the year ended April 28, 2013, earnings were insufficient to cover fixed charges by approximately $48.3 million.
(4)For the year ended April 27, 2014, earnings were insufficient to cover fixed charges by approximately $148.3 million.
For purposes of determining the ratio of earnings to fixed charges, earnings consist of earnings before provision for income taxes and non-controlling interests, plus fixed charges, excluding capitalized interest. Fixed charges consist of interest on indebtedness, including capitalized interest, plus that portion of rental expense that is considered to be interest.
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USE OF PROCEEDS
We will not receive any cash proceeds from the issuance of the exchange notes. In consideration for issuing the exchange notes as contemplated in this prospectus, we will receive in exchange old notes in like principal amount, which will be cancelled and, as such, will not result in any increase in our indebtedness.
We used the entire net proceeds from the sale of the old notes of approximately $151.1 million, after deducting discounts and selling and offering expenses payable by us, together with cash on hand and additional borrowings under our senior secured credit facility, to fund (i) the purchase of 2019 notes tendered in the tender offer that we launched April 7, 2015, (ii) the redemption of any 2019 notes that remained outstanding following consummation of such tender offer and (iii) the payment of related fees and expenses of the old notes offering and the tender offer.
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THE EXCHANGE OFFER
Purpose and Effect ofinvolving the Exchange Offer
We entered intoNotes. If you are a registration rights agreement with respect to the old notes. Under the registration rights agreement, we agreed, for the benefit of the holders of the old notes, that we will, (a) not later than 180 days after the date of original issuance of the old notes, file a registration statement for the old notes with the Commission with respect to a registered offer to exchange the old notes for our exchange notes having terms substantially identical in all material respects to such old notes (except that the exchange notes will generally not contain terms with respect to transfer restrictions), (b) use all commercially reasonable efforts to cause the registration statement provided for under the registration rights agreement to be declared effective under the Securities Act within 240 days after the date of original issuance of the old notes and (c) use all commercially reasonable efforts to close the exchange offer 30 days after the commencement thereof provided that we have accepted all the old notes theretofore validly tendered in accordance with the terms of the exchange offer. We will keep the exchange offer registration statement effective for not less than 30 days (or longer if required by applicable law) after the date notice of the exchange offer is mailed to the holders of the old notes eligible to participate in the exchange offer.
For each old note surrendered to us pursuant to the exchange offer, the holder of the old note will receive a new note having a principal amount equal to that of the surrendered old note. Interest on each new note will accrue from the last interest payment date on which interest was paid on the old note surrendered in exchange thereof or, if no interest has been paid on such outstanding note, from the date of its original issue.
Under existing Commission interpretations, exchange notes acquired in a registered exchange offer by holders of old notes are freely transferable without further registration under the Securities Act if the holder of the exchange notes represents that it is acquiring the exchange notes in the ordinary course of its business, that it has no arrangement or understanding to participate in the distribution of the exchange notes and that it is not an affiliate of us or our subsidiary guarantors, as such terms are interpreted by the Commission, provided that broker-dealers (“participating broker-dealers”) receiving exchange notes in a registered exchange offer will have a prospectus delivery requirement with respect to resales of such exchange notes. The Commission has taken the position that participating broker-dealers may fulfill their prospectus delivery requirements with respect to exchange notes (other than a resale of an unsold allotment from the original sale of the old notes) with the prospectus contained in the exchange offer registration statement relating to such exchange notes.
Under the registration rights agreement, we are required to allow participating broker-dealers and other Persons, if any, with similar prospectus delivery requirements to use the prospectus contained in the exchange offer registration statement in connection with the resale of such exchange notes for 180 days following the effective date of such exchange offer registration statement (or such shorter period during which participating broker-dealers are required by law to deliver such prospectus).
A holder of old notes who wishes to exchange its old notes for exchange notes in the exchange offer will be required to represent in the letter of transmittal that any exchange notes to be received by it will be acquired in the ordinary course of its business and that, at the time of the commencement of the exchange offer, it has no arrangement or understanding with any person to participate in the distribution (within the meaning of the Securities Act) of the exchange notes and that it is not an “affiliate” of us or our subsidiary guarantors, as defined in Rule 405 of the Securities Act, or, if it is an affiliate, that it will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable.
Each broker-dealer, that receives exchange notes for its own account in exchange for old notes, where such old notes were acquired by such broker-dealer as a result of market-making activities or other trading activities, you must acknowledge that it will deliver a prospectus in connection with any resale of such exchange notes. See “Plan of Distribution.”
In certain instances, we may be required to file a shelf registration statement relating to resales of notes. In such case, we will use all commercially reasonable efforts to cause the Commission to declare effective a shelf registration statement with respect to the resale of the notes within the time periods specified in the registration rights agreement. See “Description of Notes—Registration Rights; Special Interest.”
We may be required to pay liquidated damages in the form of additional interest on the Entitled Securities (as defined below) if:
·we fail to file the required registration statement on time;
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·the registration statement is not declared effective by the Commission on time;
·we do not complete the offer to exchange the old notes for the exchange notes within 30 days after the date the registration statement becomes effective; or
·if applicable, the shelf or exchange offer registration statement is declared effective but ceases to be effective during specified periods of time in connection with certain resales of the Entitled Securities.
If a registration default described above occurs, the annual interest rate on the Entitled Securities will increase initially by 0.25% for the first 90-day period immediately following the occurrence of such registration default. The annual interest rate on the Entitled Securities will increase by an additional 0.25% for each subsequent 90-day period during which the registration default continues, up to a maximum additional interest rate of 1.0% per year over the interest rate shown on the cover of the offering memorandum distributed in connection with the private placement offering of the old notes. If we correct the registration default, the accrual of such special interest will cease, and the interest rate on the Entitled Securities will revert to the original level. If we must pay liquidated damages, we will pay them in cash on the same dates that we make other interest payments on the notes until we correct the registration default. See “Description of Notes—Registration Rights; Special Interest.”
Resale of Exchange Notes
Based on interpretations of the Commission staff set forth in no-action letters issued to unrelated third parties, we believe that exchange notes issued under the exchange offer in exchange for old notes may be offered for resale, resold and otherwise transferred by any exchange note holder without compliance with the registration and prospectus delivery provisions of the Securities Act if:
·such holder is not an “affiliate” of us or our subsidiary guarantors within the meaning of Rule 405 under the Securities Act;
·such exchange notes are acquired in the ordinary course of the holder’s business; and
·the holder does not intend to participate in the distribution of such exchange notes.
Any holder who tenders in the exchange offer with the intention of participating in any manner in a distribution of the exchange notes cannot rely on the position of the staff of the Commission set forth in Exxon Capital Holdings Corporation or similar interpretive letters and must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction.
If, as stated above, a holder cannot rely on the position of the staff of the Commission set forth in Exxon Capital Holdings Corporation or similar interpretive letters, any effective registration statement used in connection with a secondary resale transaction must contain the selling security holder information required by Item 507 of Regulation S-K under the Securities Act.
This prospectus may be used for an offer to resell, for the resale or for other retransfer of exchange notes only as specifically set forth in this prospectus. With regard to broker-dealers, only broker-dealers that acquired the old notes as result of market-making activities or other trading activities may participate in the exchange offer. Each broker-dealer that receives exchange notes for its own account in exchange for eligible notes, where such eligible notes were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that ityou will deliver a prospectus in connection with any resale of the exchange notes. Please read “Plan of Distribution” for more details regarding the transfer of exchange notes.
Terms of the Exchange Offer
Upon the terms and subject to the conditions set forth in this prospectus and in the letter of transmittal, we will accept for exchange any old notes properly tendered and not withdrawn prior to the expiration time. Old notes may only be tendered in denominations of $2,000 and integral multiples of $1,000 in excess of $2,000; provided, that the untendered portion of any old note must be in a minimum denomination of $2,000. We will issue $2,000 principal amount or an integral multiple of $1,000 of exchange notes in exchange for a corresponding principal amount of old notes surrendered in the exchange offer. In exchange for each old note surrendered in the exchange offer, we will issue exchange notes with a like principal amount.
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The form and terms of the exchange notes will be substantially identical to the form and terms of the old notes, except that the exchange notes will
·be registered under the Securities Act,
·not bear legends restricting their transfer, and
·not provide for any additional interest upon our failure to fulfill our obligations under the registration rights agreement to file and cause to be effective a registration statement.
The exchange notes will evidence the same debt as the old notes. The exchange notes will be issued under and entitled to the benefits of the same indenture that authorized the issuance of the old notes. Consequently, both series will be treated as a single class of debt securities under that indenture.
The exchange offer is not conditioned upon any minimum aggregate principal amount of exchange notes being tendered for exchange.
As of the date of this prospectus, $150,000,000 aggregate principal amount of the old notes is outstanding. The old notes are an additional issuance of our existing 5.875% Senior Notes due 2021, of which $350.0 million aggregate principal amount were originally issued on March 5, 2013 in a private offering and subsequently all exchanged for an equivalent principal amount of registered notes issued on June 4, 2013. The old notes have the same terms and are treated as the same class as the existing notes, other than the issue date and offering price and, following the completion of this exchange offer, the exchange notes will be fungible with, and have the same CUSIP number as, the existing notes. The aggregate principal amount of notes is $500,000,000.
This prospectus, the letter of transmittal and the notice of guaranteed delivery are being sent to all registered holders of old notes. There will be no fixed record date for determining registered holders of old notes entitled to participate in the exchange offer.
We intend to conduct the exchange offer in accordance with the provisions of the registration rights agreement, the applicable requirements of the Securities Act and the Exchange Act and the rules and regulations of the Commission. Old notes that are not tendered for exchange in the exchange offer will remain outstanding and continue to accrue interest and will be entitled to the rights and benefits such holders have under the indenture relating to the old notes.
We will be deemed to have accepted for exchange properly tendered old notes when we have given oral or written notice of the acceptance to the exchange agent. The exchange agent will act as agent for the tendering holders for the purposes of receiving the exchange notes from us and delivering exchange notes to such holders. Subject to the terms of the exchange offer and the registration rights agreement, we expressly reserve the right to amend or terminate the exchange offer, and not to accept for exchange any old notes not previously accepted for exchange, upon the occurrence of any of the conditions specified below under the caption “—Conditions to the Exchange Offer.”
Holders who tender old notes in the exchange offer will not be required to pay brokerage commissions or fees or, subject to the instructions in the letter of transmittal, transfer taxes with respect to the exchange of old notes. We will pay all charges and expenses, other than those transfer taxes described below, in connection with the exchange offer. It is important that you read the section labeled “—Fees and Expenses” below for more details regarding fees and expenses incurred in the exchange offer.
Expiration Time; Extensions; Amendments
The exchange offer will expire at 5:00 p.m., New York City time, on , 2015, unless, in our sole discretion, we extend it.
In order to extend the exchange offer, we will notify the exchange agent orally or in writing of any extension. We will notify in writing or by public announcement the registered holders of old notes of the extension no later than 9:00 a.m., New York City time, on the business day after the previously scheduled expiration time.
We expressly reserve the right, in our sole discretion:
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·to delay accepting for exchange any old notes due to an extension of the exchange offer;
·to extend the exchange offer or to terminate the exchange offer and to refuse to accept old notes not previously accepted if any of the conditions set forth below under “—Conditions to the Exchange Offer” have not been satisfied by giving oral or written notice of such extension or termination to the exchange agent; or
·subject to the terms of the registration rights agreement, to amend the terms of the exchange offer in any manner.
Any such delay in acceptance, extension, termination or amendment will be followed as promptly as practicable by oral or written notice or public announcement thereof to the registered holders of old notes. If we amend the exchange offer in a manner that we determine to constitute a material change, we will promptly disclose such amendment in a manner reasonably calculated to inform the holders of old notes of such amendment.
Without limiting the manner in which we may choose to make public announcements of any delay in acceptance, extension, termination or amendment of the exchange offer, we shall have no obligation to publish, advertise or otherwise communicate any such public announcement other than by issuing a timely press release to a financial news service. If we make any material change to this exchange offer, we will disclose this change by means of a post-effective amendment to the registration statement that includes this prospectus and will distribute an amended or supplemented prospectus to each registered holder of old notes.Notes. In addition, we will extend this exchange offer for an additional five to ten business days as required by the Exchange Act, depending on the significance of the amendment, if the exchange offer would otherwise expire during that period. We will promptly notify the exchange agent by oral notice, promptly confirmed in writing, or written notice of any delay in acceptance, extension, termination or amendment of this exchange offer.
Conditions to the Exchange Offer
Notwithstanding any other terms of the exchange offer, we will not be required to accept for exchange, or exchange any exchange notes for, any old notes, and we may terminate the exchange offer as provided in this prospectus before accepting any old notes for exchange, if we determine in our sole discretion:
·the exchange offer would violate applicable law or any applicable interpretation of the staff of the Commission; or
·any action or proceeding has been instituted or threatened in any court or by any governmental agency with respect to the exchange offer.
In addition, we will not be obligated to accept for exchange the old notes of any holder that has not made the representations described in the letter of transmittal and under “—Purpose and Effect of the Exchange Offer,” “—Procedures for Tendering the Old Notes” and “Plan of Distribution,” and such other representations as may be reasonably necessary under applicable Commission rules, regulations or interpretations to make available to it an appropriate form for registration of the exchange notes under the Securities Act.
We expressly reserve the right, at any time or at various times, to extend the period of time during which the exchange offer is open. Consequently, we may delay acceptance of any old notes by giving oral or written notice of such extension to the registered holders of the old notes as promptly as practicable. During any such extensions, all old notes previously tendered will remain subject to the exchange offer, and we may accept them for exchange unless they have been previously withdrawn. We will return any old notes that we do not accept for exchange for any reason without expense to their tendering holder promptly after the expiration or termination of the exchange offer.
We expressly reserve the right to amend or terminate the exchange offer, and to reject for exchange any old notes not previously accepted for exchange, upon the occurrence of any of the conditions of the exchange offer specified above. We will give oral or written notice or public announcement of any extension, amendment, non-acceptance or termination to the registered holders of the old notes as promptly as practicable. In the case of any extension, such notice will be issued no later than 9:00 a.m., New York City time, on the business day after the previously scheduled expiration time.
These conditions are for our sole benefit, and we may assert them regardless of the circumstances that may give rise to them or waive them in whole or in part at any or at various times in our sole discretion; provided that any waiver of a condition of tender will apply to all old notes and not only to particular old notes. If we fail at any time to exercise any of the
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foregoing rights, that failure will not constitute a waiver of such right. Each such right will be deemed an ongoing right that we may assert at any time or at various times.
In addition, we will not accept for exchange any old notes tendered, and will not issue exchange notes in exchange for any such old notes, if at such time any stop order will be threatened or in effect with respect to the registration statement of which this prospectus constitutes a part or the qualification of the indenture under the Trust Indenture Act of 1939.
Procedures for Tendering the Old Notes
Only a holder of old notes may tender such old notes in the exchange offer. To tender in the exchange offer, a holder must:
·complete, sign and date the letter of transmittal, or a facsimile of the letter of transmittal; have the signature on the letter of transmittal guaranteed if the letter of transmittal so requires; and mail or deliver such letter of transmittal or facsimile to the exchange agent prior to the expiration time;
·comply with DTC’s Automated Tender Offer Program procedures described below; or
·comply with the guaranteed delivery procedures described below.
In addition, either:
·the exchange agent must receive old notes along with the letter of transmittal;
·the exchange agent must receive, prior to the expiration time, a timely confirmation of book-entry transfer of such old notes into the exchange agent’s account at DTC according to the procedures for book-entry transfer described below or a properly transmitted agent’s message; or
·the exchange agent must receive, prior to the expiration time, the notice of guaranteed delivery.
To be tendered effectively, the exchange agent must receive any physical delivery of the letter of transmittal and other required documents at the address set forth below under “—Exchange Agent” prior to the expiration time.
The tender by a holder that is not withdrawn prior to the expiration time will constitute an agreement between such holder and us in accordance with the terms and subject to the conditions set forth in this prospectus and in the letter of transmittal.
The method of delivery of old notes, the letter of transmittal and all other required documents to the exchange agent is at the holder’s election and risk. Rather than mail these items, we recommend that holders use an overnight or hand delivery service. In all cases, holders should allow sufficient time to assure delivery to the exchange agent before the expiration time. Holders should not send us the letter of transmittal, the notice of guaranteed delivery or old notes. Holders may request their respective brokers, dealers, commercial banks, trust companies or other nominees to effect the above transactions for them.
We will determine in our sole discretion all questions as to the validity, form, eligibility (including time of receipt) and acceptance of tendered old notes and withdrawal of tendered old notes. Our determination will be final and binding. We reserve the absolute right to reject any old notes not properly tendered or any old notes, the acceptance of which would, in the opinion of our counsel, be unlawful. We also reserve the right to waive any defects, irregularities or conditions of tender as to particular old notes; provided that any waiver of a condition of tender will apply to all old notes and not only to particular old notes. Our interpretation of the terms and conditions of the exchange offer (including the instructions in the letter of transmittal) will be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of old notes must be cured within such time as we shall determine. However, all conditions must be satisfied or waived prior to the expiration of the exchange offer (as extended, if applicable). Although we intend to notify holders of defects or irregularities with respect to tenders of old notes, neither we, the exchange agent nor any other person will incur any liability for failure to give such notification. Tenders of old notes will not be deemed made until such defects or irregularities have been cured or waived. Any old notes received by the exchange agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned by the exchange agent without cost to the tendering holder, unless otherwise provided in the letter of transmittal, promptly following the expiration of the exchange offer.
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In all cases, we will issue exchange notes for old notes that we have accepted for exchange under the exchange offer only after the exchange agent timely receives:
·old notes or a timely book-entry confirmation of such old notes into the exchange agent’s account at DTC; and
·properly completed and duly executed letter of transmittal and all other required documents, a properly transmitted agent’s message or properly completed notice of guaranteed delivery and all other required documents.
By signing the letter of transmittal, each tendering holder of the old notes represents, among other things, that:
(i)any exchange notes that the holder receives will be acquired in the ordinary course of its business;
(ii)the holder has no arrangement or understanding with any person or entity to participate in the distribution of the exchange notes;
(iii)if the holder is a broker-dealer that will receive exchange notes for its own account in exchange for old notes that were acquired as a result of market-making activities, that it will deliver a prospectus, as required by law, in connection with any resale of such exchange notes; and
(iv)the holder is not an “affiliate” of us or any of our subsidiary guarantors, as defined in Rule 405 of the Securities Act.
Any beneficial owner whose old notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and who wishes to tender should contact the registered holder promptly and instruct it to tender on the owners’ behalf. If such beneficial owner wishes to tender on its own behalf, it must, prior to completing and executing the letter of transmittal and delivering its old notes, either make appropriate arrangements to register ownership of the old notes in such owner’s name or obtain a properly completed bond power from the registered holder of old notes. The transfer of registered ownership may take considerable time and may not be completed prior to the expiration time.
Signatures on a letter of transmittal, a notice of guaranteed delivery or a notice of withdrawal described below must be guaranteed by a member firm of a registered national securities exchange or of the Financial Industry Regulatory Authority, a commercial bank or trust company having an office or correspondent in the United States or another “eligible guarantor institution” within the meaning of Rule 17Ad-15 under the Exchange Act, unless the old notes tendered pursuant thereto are tendered by a registered holder who has not completed the box entitled “Special Issuance Instructions” or “Special Delivery Instructions” on the letter of transmittal or for the account of an eligible guarantor institution.
If the letter of transmittal or the notice of guaranteed delivery is signed by a person other than the registered holder of any old notes listed on the old notes, such old notes must be endorsed or accompanied by a properly completed bond power. The bond power must be signed by the registered holder as the registered holder’s name appears on the old notes and an eligible guarantor institution must guarantee the signature on the bond power.
If the letter of transmittal, the notice of guaranteed delivery or any old notes or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing. Unless waived by us, they should also submit evidence satisfactory to us of their authority to deliver the letter of transmittal or the notice of guaranteed delivery.
The exchange agent and DTC have confirmed that any financial institution that is a participant in DTC’s system may use DTC’s Automated Tender Offer Program to tender. Participants in the program may, instead of physically completing and signing the letter of transmittal and delivering it to the exchange agent, transmit their acceptance of the exchange offer electronically. They may do so by causing DTC to transfer the old notes to the exchange agent in accordance with its procedures for transfer. DTC will then send an agent’s message to the exchange agent. The term “agent’s message” means a message transmitted by DTC, received by the exchange agent and forming part of the book-entry confirmation to the effect that: (1) DTC has received an express acknowledgement from a participant in its Automated Tender Offer Program that is tendering old notes that are the subject of such book-entry confirmation; (2) such participant has received and agrees to be bound by the terms of this prospectus and the letter of transmittal (or in the case of an agent’s message relating to guaranteed delivery, that the participant has received and agrees to be bound by the applicable notice of guaranteed delivery); and (3) the agreement may be enforced against such participant.
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Each broker-dealer that receives exchange notes for its own account in exchange for old notes, where such old notes were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Securities. See “Plan of Distribution.”
Book-Entry Transfer
The exchange agent will make a request to establish an account with respect to the old notes at DTC for purposes of the exchange offer promptly after the date of this prospectus, and any financial institution participating in DTC’s system may make book-entry delivery of old notes by causing DTC to transfer such old notes into the exchange agent’s account at DTC in accordance with DTC’s procedures for transfer. Holders of old notes who are unable to deliver confirmation of the book-entry tender of their old notes into the exchange agent’s account at DTC or all other documents required by the letter of transmittal to the exchange agent prior to the expiration time must tender their old notes according to the guaranteed delivery procedures described below.
Guaranteed Delivery Procedures
If you wish to tender your old notes and:
·your old notes are not immediately available;
·you are unable to deliver on time your old notes or any other document that you are required to deliver to the exchange agent; or
·you cannot complete the procedures for delivery by book-entry transfer on time;
you may tender your old notes according to the guaranteed delivery procedures described in the letter of transmittal. Those procedures require that:
·tender must be made by or through an eligible institution and a notice of guaranteed delivery must be signed by the holder;
·prior to the expiration time, the exchange agent must receive from the holder and the eligible institution a properly completed and executed notice of guaranteed delivery by mail or hand delivery setting forth the name and address of the holder, the certificate number or numbers of the tendered old notes and the principal amount of tendered old notes; and
·properly completed and executed documents required by the letter of transmittal and the tendered old notes in proper form for transfer or confirmation of a book-entry transfer of such old notes into the exchange agent’s account at DTC must be received by the exchange agent prior to 5:00 p.m., New York City time, within three business days after the expiration time of the exchange offer.
Any holder who wishes to tender old notes pursuant to the guaranteed delivery procedures must ensure that the exchange agent receives the notice of guaranteed delivery and letter of transmittal relating to such old notes before the expiration time.
Withdrawal of Tenders
Except as otherwise provided in this prospectus, holders of old notes may withdraw their tenders at any time prior to the expiration of the exchange offer. For a withdrawal to be effective, the exchange agent must receive a written notice (which may be by telegram, telex, facsimile transmission or letter) of withdrawal at one of the addresses set forth below under “—Exchange Agent”, or the holder must comply with the appropriate procedure of DTC’s Automated Tender Offer Program system.
Any such notice of withdrawal must specify the name of the person who tendered the old notes to be withdrawn, identify the old notes to be withdrawn (including the principal amount of such old notes and, if applicable, the registration numbers and total principal amount of such old notes) and, where certificates for old notes have been transmitted, specify the name in which such old notes were registered if different from that of the withdrawing holder. Any such notice of withdrawal must also be signed by the person having tendered the old notes to be withdrawn in the same manner as the original signature
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on the letter of transmittal by which these old notes were tendered, including any required signature guarantees, or be accompanied by documents of transfer sufficient to permit the trustee for the old notes to register the transfer of these notes into the name of the person having made the original tender and withdrawing the tender and, if applicable because the old notes have been tendered through the book-entry procedure, specify the name and number of the participant’s account at DTC to be credited if different than that of the person having tendered the old notes to be withdrawn.
If certificates for old notes have been delivered or otherwise identified to the exchange agent, then, prior to the release of such certificates, the withdrawing holder must also submit the serial numbers of the particular certificates to be withdrawn and a signed notice of withdrawal with signatures guaranteed by an eligible guarantor institution unless such holder is an eligible guarantor institution.
If old notes have been tendered pursuant to the procedure for book-entry transfer described above, any notice of withdrawal must specify the name and number of the account at DTC to be credited with the withdrawn old notes and otherwise comply with the procedures of such facility. We will determine all questions as to the validity, form and eligibility (including time of receipt) of such notices, and our determination shall be final and binding on all parties. We will deem any old notes so withdrawn not to have been validly tendered for exchange for purposes of the exchange offer. Any old notes that have been tendered for exchange but that are not exchanged for any reason will be returned to their holder without cost to the holder (or, in the case of old notes tendered by book-entry transfer into the exchange agent’s account of DTC according to the procedures described above, such old notes will be credited to an account maintained with DTC for old notes) promptly after withdrawal, rejection of tender or termination of the exchange offer. Properly withdrawn old notes may be retendered by following one of the procedures described under “—Procedures for Tendering the Old Notes” above at any time prior to the expiration time.
Acceptance of Old Notes for Exchange and Delivery of Exchange Notes
Your tender of old notes will constitute an agreement between you and us governed by the terms and conditions provided in this prospectus and in the related letter of transmittal.
By tendering old notes pursuant to the exchange offer, you will represent to us that, among other things:
·you are not our “affiliate” or an “affiliate” of any subsidiary guarantor of the notes within the meaning of Rule 405 under the Securities Act;
·you do not have an arrangement or understanding with any person or entity to participate in a distribution of the exchange notes; and
·you are acquiring the exchange notes in the ordinary course of your business.
We will be deemed to have received your tender as of the date when your duly signed letter of transmittal accompanied by your old notes tendered or a timely confirmation of a book-entry transfer of these notes into the exchange agent’s account at DTC with an agent’s message is received by the exchange agent.
All questions as to the validity, form, eligibility, including time of receipt, acceptance and withdrawal of tenders will be determined by us in our sole discretion. Our determination will be final and binding.
We reserve the absolute right to reject any and all old notes not properly tendered or any old notes that, if accepted, would, in our judgment or our counsel’s judgment, be unlawful. We also reserve the absolute right to waive any conditions of this exchange offer or irregularities or defects in tender as to particular old notes; provided that any waiver of a condition of tender will apply to all old notes and not only to particular old notes. Our interpretation of the terms and conditions of this exchange offer, including the instructions in the letter of transmittal, will be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of old notes must be cured within such time as we shall determine. However, all conditions must be satisfied or waived prior to the expiration of the exchange offer (as extended, if applicable). We, the subsidiary guarantors, the exchange agent or any other person will be under no duty to give notification of defects or irregularities with respect to tenders of old notes. We, the subsidiary guarantors, the exchange agent or any other person will incur no liability for any failure to give notification of these defects or irregularities. Tenders of old notes will not be deemed to have been made until such irregularities have been cured or waived. The exchange agent will return without cost to their holders any old notes that are not properly tendered and as to which the defects or irregularities have not been cured or waived promptly following the expiration time.
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If all the conditions to the exchange offer are satisfied or waived on the expiration time, we will accept all old notes properly tendered and will issue the exchange notes promptly thereafter. Please refer to the section of this prospectus entitled “—Conditions to the Exchange Offer” above. For purposes of this exchange offer, old notes will be deemed to have been accepted as validly tendered for exchange when, as and if we give oral or written notice of acceptance to the exchange agent.
If any tendered old notes are not accepted for any reason provided by the terms and conditions of this exchange offer or if old notes are submitted for a greater principal amount than the holder desires to exchange, the unaccepted or non-exchanged old notes will be returned without expense to the tendering holder or, in the case of old notes tendered by book-entry transfer procedures described above, will be credited to an account maintained with the book-entry transfer facility, promptly after withdrawal, rejection of tender or the expiration or termination of the exchange offer.
By tendering into this exchange offer, you will irrevocably appoint our designees as your attorney-in-fact and proxy with full power of substitution and resubstitution to the full extent of your rights on the old notes tendered, subject to the indenture. This proxy will be considered coupled with an interest in the tendered old notes. This appointment will be effective only when and to the extent that we accept your old notes in this exchange offer. All prior proxies on these old notes will then be revoked, and you will not be entitled to give any subsequent proxy. Any proxy that you may give subsequently will not be deemed effective.
Exchange Agent
U.S. Bank National Association has been appointed as exchange agent for the exchange offer. You should direct questions and requests for assistance or requests for additional copies of this prospectus, the letter of transmittal or the notice of guaranteed delivery to the exchange agent addressed as follows:
By Facsimile Transmission
(for eligible institutions only):
(651) 466-7372
Attn: Specialized Finance
To Confirm by Telephone:
(800) 934-6802
By Overnight Courier, Registered/ Certified Mail and by Hand:
U.S. Bank National Association
Corporate Trust Services
60 Livingston Avenue
St. Paul, Minnesota 55107
Attn: Specialized Finance
Isle of Capri Casinos, Inc.
5.875% Senior Notes due 2021
Delivery to an address other than as set forth above or transmission via facsimile other than as set forth above does not constitute a valid delivery to the exchange agent.
Fees and Expenses
We will bear the expenses of soliciting tenders. The principal solicitation is being made by mail; however, we may make additional solicitations by telegraph, telephone or in person by our officers and regular employees and those of our affiliates.
We have not retained any dealer-manager in connection with the exchange offer and will not make any payments to broker-dealers or others soliciting acceptances of the exchange offer. We will, however, pay the exchange agent reasonable and customary fees for its services and reimburse it for its related reasonable out-of-pocket expenses. We will also pay brokerage houses and other custodians, nominees and fiduciaries their reasonable out-of-pocket expenses for forwarding copies of the prospectus, letters of transmittal and related documents to the beneficial owners of the old notes and for handling or forwarding tenders for exchange to their customers.
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Our expenses in connection with the exchange offer include Commission registration fees, fees and expenses of the exchange agent and trustee, accounting and legal fees, printing costs, transfer taxes and related fees and expenses.
Transfer Taxes
We will pay all transfer taxes, if any, applicable to the exchange of old notes under the exchange offer. The tendering holder, however, will be required to pay any transfer taxes (whether imposed on the registered holder or any other person) if:
·certificates representing old notes for principal amounts not tendered or accepted for exchange are to be delivered to, or are to be issued in the name of, any person other than the registered holder of old notes tendered;
·tendered old notes are registered in the name of any person other than the person signing the letter of transmittal; or
·transfer tax is imposed for any reason other than the exchange of old notes under the exchange offer.
If satisfactory evidence of payment of such taxes is not submitted with the letter of transmittal, the amount of such transfer taxes will be billed to that tendering holder.
Consequences of Failure to Exchange
Holders of old notes who do not exchange their old notes for exchange notes under the exchange offer will remain subject to the restrictions on transfer of such old notes as set forth in the legend printed on the old notes as a consequence of the issuance of the old notes pursuant to the exemptions from, or in transactions not subject to, the registration requirements of the Securities Act and applicable state securities laws, and otherwise as set forth in the offering memorandum distributed in connection with the private placement offering of the old notes.
In general, you may not offer or sell the old notesExchange Notes in any state unless they arehave been registered underor qualified for sale in that state or an exemption from registration or qualification is available and is complied with. The offer and sale of the Exchange Notes to “qualified institutional buyers” (as defined in Rule 144A of the Securities Act or if the offer or saleAct) is generally exempt from registration or qualification under the Securities Act and applicable state securities laws. Except as required by the registration rights agreement related to the old notes, we do not intend to register resales of the old notes under the Securities Act. Based on interpretations of the Commission staff, exchange notes issued pursuant to the exchange offer may be offered for resale, resold or otherwise transferred by their holders (other than any such holder that is our or our subsidiary guarantor’s “affiliate” within the meaning of Rule 405 under the Securities Act) without compliance with the registration and prospectus delivery provisions of the Securities Act; provided that the holders acquired the exchange notes in the ordinary course of the holders’ business and the holders have no arrangement or understanding with respect to the distribution of the exchange notes to be acquired in the exchange offer. Any holder who tenders in the exchange offer for the purpose of participating in a distribution of the exchange notes could not rely on the applicable interpretations of the Commission and must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction.
We do not currently anticipate that we willplan to register underor qualify the Securities Act any old notes that remain outstanding after completionsale of the exchange offer.Exchange Notes in any state where an exemption from registration or qualification is required and not available.
Accounting Treatment
We will record the exchange notes in our accounting records at the same carrying value as the old notes, as reflected in our accounting records on the date of exchange. Accordingly, we will not recognize any gain or loss for accounting purposes in connection with the exchange offer. We will amortize the costs of the exchange offer and the unamortized expenses related to the issuance of the exchange notes over the term of the exchange notes.
Other
Participation in the exchange offer is voluntary, and you should carefully consider whether to accept. You are urged to consult your financial and tax advisors in making your own decision on what action to take.
We may in the future seek to acquire untendered old notes in the open market or privately negotiated transactions, through subsequent exchange offers or otherwise. We have no present plans to acquire any old notes that are not tendered in the exchange offer or to file a registration statement to permit resales of any untendered old notes.
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DESCRIPTION OF THE EXCHANGE NOTES
You can find the definitions of certain terms used in this description under the subheading “Certaincaption “—Certain Definitions.” In this description, “the Company,”the words “we,” “us” and“us,” “our” or “Issuer” refer only to Isle of Capri Casinos,Eldorado Resorts, Inc. and not to any of its Subsidiaries.
The CompanyEscrow Issuer issued the old notesExisting Notes under the Indenture. On May 1, 2017, we executed a Supplemental Indenture to the Indenture, pursuant to which we assumed all of Escrow Issuer’s obligations under the Existing Notes and the Indenture. We will issue the exchange notesExchange Notes under an Indenture, dated as of March 5, 2013, as supplemented from time to time, among itself, the Guarantors and U.S. Bank National Association, as trustee.Indenture. The terms of the exchange notes willExchange 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 (the “Trust Indenture Act”“TIA”).
On April 14, 2015, we issued $150,000,000 aggregate principal amount of old notes under the Indenture. The old notes are an additional issuance of our existing 5.875% Senior Notes due 2021, of which $350.0 million aggregate principal amount were originally issued on March 5, 2013 in a private offering and subsequently all exchanged for an equivalent principal amount of registered notes issued on June 4, 2013. The old notes have the same terms and are treated as the same class as the existing notes, other than the issue date and offering price and, following the completion of this exchange offer, the exchange notes will be fungible with, and have the same CUSIP number as, the existing notes. The aggregate principal amount of notes is $500,000,000.
The terms of the exchange notes will beExchange Notes are identical in all material respects to the old notes,Existing Notes except that, upon completion of the exchange notes will not containoffer, the transfer restrictions and holders of exchange notes will no longer have any registration rights or any other rights under the registration rights agreement. The trustee will authenticate and deliver exchange notes for original issue only in exchange for a like principal amount of old notes.
Used in this “Description of Notes,” except as the context otherwise requires, the term “Notes” means all 5.875% Senior Notes due 2021 issued by the Company pursuantrelating to the Indenture (includingExisting Notes will not apply to the exchange notes offered for exchange hereby, the $150,000,000 of old notes, the $350,000,000 of existing notes and any additional notes that the Company may issue from time to time under the Indenture).
Exchange Notes.
The following description is a summary of the material provisions of the Indenture and the Registration Rights Agreement.Indenture. It does not restate those agreementssuch agreement in theirits entirety. We urge you to read the Indenture and the Registration Rights Agreement because they,it, and not this description, definedefines your rights as Holdersholders of the Exchange Notes. Copies of the Indenture and the Registration Rights Agreement are available as set forth below under “— Additional Information.” Certain defined terms used in this description but not defined below under “—Certain Definitions” have the meanings assigned to them in the Indenture and the Registration Rights Agreement.
Indenture.
The registered Holderholder of a Note will be treated as the owner of it for all purposes. Only registered Holdersholders will have rights under the Indenture.
Brief Descriptiondescription of the Exchange Notes and the Note Guarantees
The Exchange Notes
The Notes
The Notes:
·arewill be general senior unsecured obligations of the Company;Issuer;
·are will rank pari passu in right of payment with all of our existing and future unsecured senior Indebtedness, ofincluding the Company;ERI Credit Facility and the 7% Notes;
·arewill rank senior in right of payment to allany existing and future subordinated Indebtedness of the Company; andIssuer;
·are fully and unconditionally guaranteed by the Guarantors.
However, the Notes
will be effectively subordinated in right of payment to all of our existing and future secured Indebtedness, ofincluding the CompanyERI Credit Facility, to the extent of the value of the assets securing such Indebtedness, including Obligations underIndebtedness; and
will be unconditionally guaranteed by the Bank Credit Facility, which are secured by substantially all of the assets of the Company and the Guarantors. See “Risk Factors — Risks Related to the Old Notes and
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the Exchange Notes — The notes and the related guarantees are effectively subordinated to our and our subsidiary guarantors’ senior secured indebtedness and the indebtedness of our subsidiaries that do not guarantee the notes.”
The Note Guarantees
The Exchange Notes will be jointly and severally guaranteed by eachthe Guarantors. The Exchange Note Guarantees:
will be general senior unsecured obligations of the Company’s existing and, subject to any applicable restrictions thereon under any Gaming Laws or by any Gaming Authority, future Significant Restricted Subsidiaries, which as of the date of this prospectus are all of the Subsidiaries of the Company except Unrestricted Subsidiaries.Guarantor;
Each Note Guarantee of the Notes:
·is a general unsecured obligation of the Guarantor;
·iswill rank pari passu in right of payment withto all of the applicable Guarantor’s existing and future unsecured senior Indebtedness, of that Guarantor;including the applicable Guarantor’s guarantees under the ERI Credit Facility and the 7% Notes;
·iswill rank senior in right of payment to allany existing and future subordinated Indebtedness of the Guarantor.applicable Guarantor;
However, the Guarantees are
will be effectively subordinated to all secured Indebtedness of each Guarantor, including the applicable Guarantor’s guarantees under the ERI Credit Facility, to the extent of the value of the assets securing such Indebtedness, including Obligations underIndebtedness; and
will be structurally subordinated to all liabilities of any Subsidiary of a Guarantor that is not a Guarantor.
The 7% Notes Indenture, the BankIndenture and the ERI Credit Facility which are secured by substantially all of the assets of the Company and the Guarantors. See “Risk Factors — Risks Related to the Old Notes and the Exchange Notes — The notes and the related guarantees are effectively subordinated to our and our subsidiary guarantors’ senior secured indebtedness and the indebtedness of our subsidiaries that do not guarantee the notes.”
The Indenture permitspermit us and the Guarantors to incur additional indebtedness, including secured indebtedness.
Not all of our Subsidiaries will guarantee The Notes and the Notes. In the event of a bankruptcy, liquidation or reorganization of any of these non-guarantor Subsidiaries, the non-guarantor Subsidiaries will pay the holders of their debt and other obligations, including trade payables, before they will be able to distribute any of their assets to us. For the nine months ended January 25, 2015, our non-guarantor Subsidiaries accounted for approximately 3.6% of our consolidated net revenues, and, as of such date, our non-guarantor Subsidiaries had total consolidated assets of $92.2 million and had total consolidated liabilities of $33.6 million outstanding, including $0.1 million of Indebtedness. See note 18Note Guarantees are effectively subordinated to our consolidated financial statements in our Annual Report on Form 10-K forobligations and the fiscal year ended April 27, 2014 and note 10 to our consolidated financial statements in our Quarterly Report on Form 10-Q for the quarter ended January 25, 2015, which are incorporated herein by reference, for more detail about the division of our consolidated revenues and assets between our guarantor and non- guarantor Subsidiaries.
Asobligations of the dateGuarantors under the ERI Credit Facility and any future secured indebtedness that we or the Guarantors incur, to the extent of this prospectus, allthe value of the collateral securing the ERI Credit Facility or such other indebtedness. See “Risk Factors—Risks Related to the Notes and Our Substantial Indebtedness—Despite our Subsidiaries are Restricted Subsidiaries, except forcurrent indebtedness levels, we and our subsidiaries may still incur significant additional indebtedness. Incurring more indebtedness could increase the Subsidiaries listed as Unrestricted Subsidiaries in the definition thereof. However, underrisks associated with our substantial indebtedness.”
Under the circumstances described below under the caption “—Certain Covenants — covenants—Designation of Restricted and Unrestricted Subsidiaries,” we will be permitted to designate certain of ourthe Restricted Subsidiaries as “Unrestricted Subsidiaries.” Our Unrestricted Subsidiaries. In addition,Subsidiaries and subsidiaries or other entities owned by our Unrestricted Subsidiaries will not be subject to many of the restrictive covenants in the Indenture. Our Unrestricted Subsidiaries, as well as Restricted Subsidiaries that are not Significant Restricted Subsidiaries,Indenture and will not guarantee the Notes.
Principal, Maturitymaturity and Interest
interest
The CompanyNotes are issued $150,000,000 in the aggregate principal amount of old notes on April 14, 2015, which are treated as the same series as the $350.0 million aggregate principal amount of existing notes that are currently outstanding. Exchange notes in a like principal amount will be issued in exchange for all old notes properly tendered and not withdrawn in the exchange offer.$375.0 million. The CompanyIssuer may issue additional Notes (“Additional Notes”) under the Indenture from time to time after this exchange offer.offering. Any issuance of additionalAdditional Notes is subject to compliance with all of the covenants in the Indenture, including the covenant described below under the caption “—Certain Covenants — covenants—Incurrence of Indebtednessindebtedness and Issuanceissuance of Preferred Stock.preferred stock.” The Exchange Notes offered hereby and any additionalAdditional Notes subsequently issued under the Indenture will be treated as a single class for all purposes under the Indenture, including, without limitation, waivers, amendments, redemptions and offers to purchase. The CompanyNotes and any Additional Notes will be substantially identical with respect to redemption and matters requiring approval of the holders of the Notes and will benefit on apari passu basis from the Note Guarantees. The Issuer will issue Notes in minimum denominations of $2,000 and integral multiples of $1,000 in excess of $2,000. The Notes will mature on March 15, 2021.
April 1, 2025. Interest on the Notes will accrue at the rate of 5.875%6.000% per annum and will be payablesemi-annually in arrears on March 15April 1 and September 15, with the first interest payment date for the old notes and the exchange notes being September
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15, 2015.October 1, commencing on October 1, 2017. Interest on overdue principal interest and Special Interest, if any,interest will accrue at a rate that is 1% per annum higher than the then applicable interest rate on the Notes. The CompanyIssuer will make each interest payment to the Holdersholders of record on the immediately preceding March 115 and September 1.15, respectively.
Each exchange noteInterest on the Notes will bear interestaccrue from March 15, 2015. The holders of old notes that are accepted for exchange will be deemed to have waived the right to receive payment of accrued interest on those old notes from March 15, 2015 to the date of original issuance ofor, if interest has already been paid, from the exchange notes. Interest on the old notes accepted for exchange will cease to accrue upon issuance of the exchange notes. Consequently, if you exchange your old notes for exchange notes, you will receive the same interest payment on September 15, 2015 that you would have received if you had not accepted this exchange offer.date it was most recently paid. Interest will be computed on the basis of a360-day year comprised of twelve30-day months.
Methods of Receiving Paymentsreceiving payments on the Notes
If a Holderholder of Notes has given wire transfer instructions to the Company,Issuer, the CompanyIssuer will pay all principal, of, premium on, if any, interest and Special Interest,premium, if any, on that Holder’sholder’s Notes in accordance with those instructions. All other payments on the Notes will be made at the office or agency of the paying agent and registrar within the City and State of New Yorkcontiguous United States unless the CompanyIssuer elects to make interest payments by check mailed to the noteholders at their addressaddresses set forth in the register of Holders.holders.
Paying Agentagent and Registrarregistrar for the Notes
The trustee will initially act as paying agent and registrar. The CompanyIssuer may change the paying agent or registrar without prior notice to the Holdersholders of the Notes, and the CompanyIssuer or any of its Subsidiaries may act as paying agent or registrar.
Transfer and Exchange
exchange
A Holderholder may transfer or exchange Notes in accordance with the provisions of the Indenture. The registrar and the trustee may require a Holder,holder, among other things, to furnish appropriate endorsements and transfer documents in connection with a transfer of Notes. Holders will be required to pay all taxes due on transfer. The CompanyIssuer and the registrar will not be required to transfer or exchange any Notenote selected for redemption. Also, the CompanyIssuer and the registrar will not be required to transfer or exchange any Notenote for a period of 15 days before a selection of Notes to be redeemed. Any transferred Notes may be subject to mandatory disposition pursuant to Gaming Laws in certain circumstances. See “—Gaming redemption.”
Note Guarantees
The Existing Notes are guaranteed, and the Exchange Notes will be fully and unconditionally guaranteed, on a senior unsecured basis by each of our Restricted Subsidiaries that guarantee the Company’s existing and, subjectERI Credit Facility. In the future, any Restricted Subsidiary that is a Domestic Subsidiary, other than any Immaterial Subsidiary, will become a Guarantor, as described under “—Certain covenants—Additional Note guarantees.” A Subsidiary will not be an Immaterial Subsidiary to the extent it guarantees or otherwise provides credit support for any applicable restrictions thereon under any Gaming LawsIndebtedness of the Issuer or by any Gaming Authority, future Significant Restricted Subsidiaries. Theanother Guarantor. These Note Guarantees will be joint and several Obligationssenior unsecured obligations of the Guarantors. The Obligations of each Guarantor under its Note Guarantee will be limited as necessary to prevent that Note Guarantee from constituting a fraudulent conveyance under applicable law. See “Risk Factors — Risks Related to the Old Notes and the Exchange Notes — The guarantees may be unenforceable due to fraudulent conveyance statutes.”
A Guarantor may not sell or otherwise dispose of all or substantially all of its assets to, or consolidate with or merge with or into (whether or not such Guarantor is the surviving Person), another Person, other than the CompanyIssuer or another Guarantor, unless:
(1)immediately after giving effect to suchthat transaction, no Default or Event of Default exists; and
(2) either:
(2)either:
(a)the Person acquiring the property in any such sale or disposition or the Person formed by or surviving any such consolidation or merger (if other than such Guarantor) unconditionally assumes all the Obligationsobligations of that Guarantor under its Note Guarantee the Indenture and the Registration Rights AgreementIndenture pursuant to a supplemental indenture in form satisfactory to the trustee; or
(b)the Net Proceeds of such sale or other disposition are applied in accordance with the applicable provisions of the Indenture.
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The Note Guarantee of a Guarantor will be released:
(1)in connection with any sale or other disposition of all or substantially all of the assets of that Guarantor (including by way of merger consolidation or otherwise,consolidation) to a Person that is not (either before or after giving effect to such transaction) the CompanyIssuer or a Restricted Subsidiary of the Company,Issuer, if the sale or other disposition is in compliance withdoes not violate the first paragraph“Asset Sale” provisions of the covenant described below under the caption “— Repurchase at the Option of Holders — Asset Sales;”Indenture;
(2)in connection with any sale or other disposition of Capital Stock of that Guarantor to a Person that is not (either before or after giving effect to such transaction) the CompanyIssuer or a Restricted Subsidiary of the Company,Issuer, if the sale or other disposition is in compliance withdoes not violate the first paragraph“Asset Sale” provisions of the covenant described below underIndenture and the caption “Repurchase atGuarantor ceases to be a Restricted Subsidiary of the OptionIssuer as a result of Holders — Asset Sales;”the sale or other disposition;
(3)if the CompanyIssuer designates any Restricted Subsidiary that is a Guarantor to be an Unrestricted Subsidiary in accordance with the applicable provisions of the Indenture;
(4)if the Guarantor is no longer a Significant Restricted Subsidiary; or
(5)upon legal defeasance, covenant defeasance or satisfaction and discharge of the Indenture as provided below under the captions “—Legal Defeasance and Covenant Defeasance” and “—Satisfaction and Discharge.”discharge”; or
(5) upon the dissolution of a Guarantor if its assets are distributed to the Issuer or another Guarantor.
See “—Repurchase at the Optionoption of Holders — holders—Asset Sales” and “— Certain Covenants — Designation of Restricted and Unrestricted Subsidiaries.sales.”
Optional redemption
Optional Redemption
At any time prior to March 15, 2016,April 1, 2020, the CompanyIssuer may on any one or more occasions redeem up to 35% of the aggregate principal amount of Notes issued under the Indenture, upon not less than 30 nor more than 60 days’ prior written notice to the holders and the trustee, at a redemption price equal to 105.875%106.000% of the principal amount of the Notes redeemed, plus accrued and unpaid interest and SpecialAdditional Interest, if any, to the date of redemption (subject to the rights of Holdersholders of Notes on the relevant record date to receive interest on the relevant interest payment date), with the net cash proceeds of an Equity Offering by the Company; Issuer;provided that:
(1)at least 65% of the aggregate principal amount of Notes originally issued under the Indenture (excluding Notes held by the CompanyIssuer and its Subsidiaries) remains outstanding immediately after the occurrence of such redemption; and
(2)the redemption occurs within 90prior to 180 days ofafter the date of the closing of such Equity Offering.
At any time prior to March 15, 2016,April 1, 2020, the CompanyIssuer, at its option, may on one or more occasions redeem all or a part of the Notes, upon not less than 30 nor more than 60 days’ prior written notice to the holders and the trustee, at a redemption price equal to 100% of the principal amount of Notes redeemedplus the Applicable Premium as of, and accrued and unpaid interest and Additional Interest, if any, to the date of redemption (subject to the rights of holders of Notes on the relevant record date to receive interest due on the relevant payment date).
Except pursuant to the two preceding paragraphs, the Notes will not be redeemable at the Issuer’s option prior to April 1, 2020.
On or after April 1, 2020, the Issuer may on any one or more occasions redeem all or a part of the Notes, upon not less than 30 nor more than 60 days’ prior written notice at a redemption price equal to 100% of the principal amount of the Notes redeemed, plus the Applicable Premium as of, and accrued and unpaid interest and Special Interest, if any, to the date of redemption, subject toholders and the rights of Holders of Notes on the relevant record date to receive interest due on the relevant interest payment date.
Except pursuant to the preceding paragraphs, the Notes will not be redeemable at the Company’s option prior to March 15, 2016.
On or after March 15, 2016, the Company may on any one or more occasions redeem all or a part of the Notes, upon not less than 30 nor more than 60 days’ notice,trustee, at the redemption prices (expressed as percentages of principal amount) set forth below, plus accrued and unpaid interest and SpecialAdditional Interest, if any, on the Notes redeemed, to the applicable date of redemption, if redeemed during thetwelve-month period beginning on March 15April 1 of the years indicated below subject(subject to the rights of Holdersholders of Notes on the relevant record date to receive interest on the relevant interest payment date:date):
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Year | | Percentage | |
2016 | | 104.406 | % |
2017 | | 102.938 | % |
2018 | | 101.469 | % |
2019 and thereafter. | | 100.0 | % |
| | | | |
Year | | Percentage | |
2020 | | | 104.500 | % |
2021 | | | 103.000 | % |
2022 | | | 101.500 | % |
2023 and thereafter | | | 100.000 | % |
Unless the CompanyIssuer defaults in the payment of the redemption price, interest will cease to accrue on the Notes or portions thereof called for redemption on the applicable redemption date.
Notice of redemption of any Notes given under the Indenture may be conditional.
Mandatory Redemptionredemption
Except as described below under “— Gaming Redemption” and “— Repurchase at the Option of Holders,” the CompanyThe Issuer is not required to make mandatory redemptionrepayments or sinking fund payments with respect to the Notes.
Gaming Redemption
redemption
Notwithstanding any other provision hereof,Each holder, by accepting a Note, shall be deemed to have agreed that, if any Gaming Authority requires that a Holderperson who is a holder or Beneficial Ownerthe beneficial owner of Notes must be registered, licensed, qualified or found suitable under any applicable Gaming Law andLaws, such Holderholder or Beneficial Owner (1) fails tobeneficial owner, as the case may be, shall apply for a license, qualification or a finding of suitability within 30 days after being requiredin accordance with such Gaming Laws. If such Person fails to do so (or such lesser period as required by the Gaming Authority) by the Gaming Authorityapply or by the Company pursuant to an order of the Gaming Authority,become registered, licensed or (2) if such Holder or such Beneficial Owner is not so licensed, qualified or is found suitable,unsuitable, the Company willIssuer shall have the right, at its option:
(1)to require such Holder or Beneficial OwnerPerson to dispose of such Holder’sits Notes or Beneficial Owner’s Notesbeneficial interest therein within 30 days of receipt of such notice or such finding byof the applicable Gaming AuthorityIssuer’s election or such earlier date as may be orderedrequested or prescribed by such Gaming Authority; or
(2)to redeem such Notes, upon not less than 30 days’ prior written notice to the Notes ofholders and the trustee (or such Holderearlier date as may be requested or Beneficial Ownerprescribed by such Gaming Authority), at a redemption price equal toto:
(a) the lesser of:
(a)(i) the principal amount thereof, and
(b)the price at whichPerson’s cost for such Holder or Beneficial Owner acquired the new Notes,
together with, in either case, plus accrued and unpaid interest and Additional Interest, if any, to the earlier of the date of redemption or the date of the finding of unsuitability or failure to comply; and
(ii) 100% of the principal amount thereof, plus accrued and unpaid interest and Additional Interest, if any, byto the earlier of the date of redemption or the date of the finding of unsuitability or failure to comply; or
(b) such Gaming Authority, whichother amount as may be less than 30 days followingrequired by applicable law or order of the notice of redemption, if so ordered by such Gaming Authority.
The CompanyIssuer shall notify the trustee in writing of any such disqualified holder status or redemption as soon as practicable. The HolderNeither the Issuer nor the trustee shall be responsible for any costs or Beneficial Owner of Notes applyingexpenses any holder or beneficial owner may incur in connection with its registration, application for a license, qualification or a finding of suitability, is obligated to pay all costsor any renewal or continuation of the licensureforegoing or investigation for such qualificationcompliance with any other requirement of a Gaming Authority. Those costs and expenses will be the obligations of the holder or finding of suitability.beneficial owner, as applicable.
Repurchase at the Optionoption of Holders
holders
Change of Controlcontrol
If a Change of Control occurs, each Holderholder of Notes will have the right to require the CompanyIssuer to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of that Holder’sholder’s Notes pursuant to a Change of Control Offer on the terms set forth in the Indenture. In the Change of Control Offer, the CompanyIssuer will offer a Change of Control Payment in cash equal to 101% of the aggregate principal amount of Notes repurchased, plus accrued and unpaid interest and SpecialAdditional Interest, if any, on the Notes repurchased to the date of purchase, subject to the rights of Holdersholders of Notes on the relevant record date to receive interest due on the relevant interest payment date. Within 30ten business days following any Change of Control, the CompanyIssuer will mail a notice to each Holderholder and the trustee (or send electronically in accordance with the applicable procedures of DTC in the case of notes in global form) describing the transaction or transactions that constitute the Change of Control and offering to repurchase Notes on the Change of Control Payment Date specified in the notice, which date will be no earlier than 30 days and no later than 60 days from the date such notice is mailed,sent, pursuant to the procedures required by the Indenture and described in such notice. The CompanyIssuer will comply with the requirements ofRule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the repurchase of the Notes as a result of a Change of Control. To the extent that the provisions of any securities
laws or regulations conflict with the Change of Control provisions of the Indenture, relating to a Change of Control Offer, the CompanyIssuer will comply with the applicable securities laws and regulations and will not be deemed to have
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breached its obligations under the Change of Control provisions of the Indenture relating to a Change of Control Offer by virtue of such compliance.
On the Change of Control Payment Date, the CompanyIssuer will, to the extent lawful:
(1)accept for payment all Notes or portions of Notes 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 of Notes properly tendered; and
(3)deliver or cause to be delivered to the trustee the Notes properly accepted together with an officers’ certificateOfficer’s Certificate stating the aggregate principal amount of Notes or portions of Notes being purchased by the Company.
Issuer.
The paying agent will promptly mailsend to each Holderholder of Notes properly 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)book-entry in accordance with the applicable procedures of DTC) to each Holderholder a new Notenote equal in principal amount to any unpurchased portion of the Notes surrendered, if any. The CompanyIssuer 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 provisions described above that require the CompanyIssuer to make a Change of Control Offer following a Change of Control will be applicable whether or not any other provisions of the Indenture are applicable. Except as described above with respect to a Change of Control, the Indenture does not contain provisions that permit the Holdersholders of the Notes to require that the CompanyIssuer repurchase or redeem the Notes in the event of a takeover, recapitalization or similar transaction.
The CompanyIssuer will not be required to make a Change of Control Offer upon a Change of Control if (1) a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in the Indenture applicable to a Change of Control Offer made by the CompanyIssuer and purchases all Notes properly tendered and not withdrawn under the Change of Control Offer, or (2) notice of redemption has been given pursuant to the Indenture as described above under the caption “—Optional Redemption,redemption,” unless and until there is a default in payment of the applicable redemption price. Notwithstanding anything to the contrary contained herein, a Change of Control Offer may be made in advance of a Change of Control, conditioned upon the consummation of such Change of Control, if a definitive agreement is in place for the Change of Control at the time the Change of Control Offer is made.
If holders of not less than 90% in aggregate principal amount of the outstanding Notes validly tender and do not withdraw such Notes in a Change of Control Offer and the Issuer, or any third party making a Change of Control Offer in lieu of the Issuer as described above, purchases all of the Notes validly tendered and not withdrawn by such holders, the Issuer or such third party will have the right, upon not less than 30 nor more than 60 days’ prior notice, given not more than 30 days following such purchase pursuant to the Change of Control Offer described above, to redeem all Notes that remain outstanding following such purchase at a price in cash equal to 101% of the principal amount thereof plus accrued and unpaid interest to, but not including, the date of redemption (subject to the right of holders of record of Notes on the relevant record date to receive interest due on the relevant interest payment date).
The definition of Change“Change of ControlControl” includes a phrase relating to the direct or indirect sale, lease, transfer, conveyance or other disposition of “all or substantially all” of the properties or assets of the CompanyIssuer and its Subsidiaries taken as a whole. Although there is a limited body of case law interpreting the phrase “substantially all,” there is no precise established definition of the phrase under applicable law.
Accordingly, the ability of a Holderholder of Notes to require the CompanyIssuer to repurchase its Notes as a result of a sale, lease, transfer, conveyance or other disposition of less than all of the assets of the CompanyIssuer and its Subsidiaries taken as a whole to another Person or group may be uncertain.
Asset Salessales
The CompanyIssuer will not, and will not permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless:
(1)no Default or Event of Default has occurred and is continuing or would occur at the time of or after giving pro forma effect toIssuer (or such Asset Sale;
(2)the Company (or the Restricted Subsidiary, as the case may be) receives consideration at the time of the Asset Sale at least equal to the Fair Market Value (measured as of the date of the definitive agreement with respect to such Asset Sale) of the assets or Equity Interests issued or sold or otherwise disposed of; and
(3)(2) at least 75% of the consideration received in the Asset Sale by the CompanyIssuer or such Restricted Subsidiary is in the form of cash or Cash Equivalents. For purposes of this provision, each of the following will be deemed to be cash:
(a)any liabilities, as shown on the Company’sIssuer’s most recent consolidated balance sheet, of the CompanyIssuer or any Restricted Subsidiary (other than contingent liabilities and liabilities that are by their
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terms subordinated to the Notes or any Note Guarantee) that are assumed by the transferee of any such assets pursuant to a customary novation or indemnity agreement that releases the CompanyIssuer or such Restricted Subsidiary from or indemnifies against further liability;
(b)any securities, notes or other Obligationsobligations received by the CompanyIssuer or any such Restricted Subsidiary from such transferee that are within 180 days following the closing of such Asset Sale converted by the CompanyIssuer or such Restricted Subsidiary into cash, or Cash Equivalents with 180 days after consummation of such Asset Sale, to the extent of the cash actually so received;
(c) any Designated Non-Cash Consideration received by the Issuer or such Restricted Subsidiary in such Asset Sale having an aggregate fair market value, taken together with all other Designated Non-Cash Consideration received pursuant to this clause (c) that is at the time outstanding, not to exceed $100.0 million at the time of the receipt of such Designated Non-Cash Consideration, with the fair market value of each item of Designated Non-Cash Consideration being measured at the time received and Cash Equivalents receivedwithout giving effect to subsequent changes in that conversion;value; and
(c)(d) any stock or assets of the kind referred to in clausesclause (2), (3) or (4) of the next paragraph of this covenant.
Within 360365 days after the receipt of any Net Proceeds from an Asset Sale, the CompanyIssuer (or the applicable Restricted Subsidiary, as the case may be) mustmay apply such Net Proceeds:
(1)to permanently repay, prepay, repay, redeem or purchase (and reducepurchase:
(a) obligations under (i) the commitments under) any senior secured Indebtedness, including Indebtedness under the BankERI Credit Facility and, if the Indebtedness repaid is revolving credit Indebtedness,(and other than with respect to correspondinglyproceeds from a Designated Asset Sale, permanently reduce commitments with respect thereto;thereto) and (ii) other secured Indebtedness of the Issuer, if applicable (other than any Disqualified Stock), or secured Indebtedness of a Guarantor; and/or
(b) Obligations under the Indenture, the Notes and the Note Guarantees or any other Pari Passu Debt of the Issuer or any Guarantor;provided that if the Issuer or any Restricted Subsidiary shall so repay or prepay any such other Pari Passu Debt, the Issuer will reduce (or offer to reduce) Obligations under the Indenture, the Notes and the Note Guarantees on apro rata basis (based on the amount so applied to such repayments or prepayments) by, at its option, (i) redeeming Notes pursuant to Article 3 of the Indenture, (ii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all holders to purchase their Notes at a purchase price of at
least 100% of the principal amount thereof, plus the amount of accrued but unpaid interest and Additional Interest, if any, thereon up to the principal amount of Notes to be repurchased or (iii) purchasing Notes through privately negotiated transactions or open market purchases, in a manner that complies with the Indenture and applicable securities law;
(2)
to acquire all or substantially all of the assets of, or any Capital Stock of, another Permitted Business, if, after giving effect to any such acquisition of Capital Stock, the Permitted Business is or becomes a Restricted Subsidiary of the Company;Issuer;
(3)to improve real property or make a capital expenditure; and/or
(4)to acquire other assets that are not classified as current assets under GAAP and that are used or useful in a Permitted Business; or
(5) any combination of the foregoing;
provided,, however, that if the CompanyIssuer or any Restricted Subsidiary contractually commits within such 360-day365-day period to apply suchthe Net Proceeds within 180 days of such contractual commitment in accordance with clause (2)any of the above clauses (1) through (5), (3) or (4) above, and such Net Proceeds are subsequently applied as contemplated inby such contractual commitment, then the requirement for the application of Net Proceeds set forth in this paragraph shall be considered satisfied.
Pending the final application of any Net Proceeds, the CompanyIssuer (or the applicable Restricted Subsidiary) may temporarily reduce revolving credit borrowings or otherwise invest the Net Proceeds from Asset Sales in any manner that is not prohibited by the Indenture.
Any Net Proceeds from Asset Sales that are not applied or invested as provided in the second paragraph of this covenant will constitute ““Excess ProceedsExcess Proceeds..” WhenWithin 20 business days after the aggregate amount of Excess Proceeds exceeds $20.0$25.0 million, within five days thereof, the CompanyIssuer will make an offer (an “Asset“Asset Sale Offer”) to all Holdersholders of Notes (with a copy to the trustee) and all holders of other Indebtedness that is pari passu with the NotesPari Passu Debt containing provisions similar to those set forth in the Indenture with respect to offers to purchase, prepay or redeem with the proceeds of sales of assets to purchase, prepay or redeem the maximum principal amount of Notes and such other pari passu IndebtednessPari Passu Debt (plus all accrued interest on the Indebtedness and the amount of all fees and expenses, including premiums, incurred in connection therewith) that may be purchased, prepaid or redeemed out of the Excess Proceeds. The offer price in any Asset Sale Offer will be equal to 100% of the principal amount, plus accrued and unpaid interest and SpecialAdditional Interest, if any, to the date of purchase, prepayment or redemption, subject to the rights of Holdersholders of Notes on the relevant record date to receive interest due on the relevant interest payment date, and will be payable in cash. If any Excess Proceeds remain after consummation of an Asset Sale Offer, the CompanyIssuer may use those Excess Proceeds for any purpose not otherwise prohibited by the Indenture. If the aggregate principal amount of Notes and other pari passu IndebtednessPari Passu Debt tendered ininto (or required to be prepaid or redeemed in connection with) such Asset Sale Offer exceeds the amount of Excess Proceeds, subject to the rules of any depositary holding the Notes in global form, the trustee will select the Notes and such other pari passu IndebtednessPari Passu Debt to be purchased on apro rata basis or by lot (and, in the case of notes in global form, in accordance with the applicable procedures of DTC), based on the amounts tendered or required to be prepaid or redeemed (with such adjustments as may be deemed appropriate by the CompanyIssuer so that only Notes in minimum denominations of $2,000, or an integral multiple of $1,000 in excess thereof, will be purchased)left outstanding). Upon completion of each Asset Sale Offer, the amount of Excess Proceeds will be reset at zero.
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Events of Loss
Within 360 days after the receipt of any Net Proceeds from an Event of Loss, the Company (or the applicable Restricted Subsidiary, as the case may be) may apply such Net Proceeds:
(1)to prepay, repay, redeem or purchase (and reduce the commitments under) any senior secured Indebtedness, including Indebtedness under the Bank Credit Facility, and, if the Indebtedness repaid is revolving credit Indebtedness, to correspondingly permanently reduce commitments with respect thereto;
(2)to acquire all or substantially all of the assets of, or any Capital Stock of, another Permitted Business, if, after giving effect to any such acquisition of Capital Stock, the Permitted Business is or becomes a Restricted Subsidiary of the Company;
(3)to make a capital expenditure; and/or
(4)to acquire other assets that are not classified as current assets under GAAP and that are used or useful in a Permitted Business;
provided, however, that if the Company or any Restricted Subsidiary contractually commits within such 360-day period to apply such Net Proceeds within 180 days of such contractual commitment in accordance with clause (2), (3) or (4) above, and such Net Proceeds are subsequently applied as contemplated in such contractual commitment, then the requirement for application of Net Proceeds set forth in this paragraph shall be considered satisfied.
Any Net Proceeds from an Event of Loss that are not applied or invested as provided in the first paragraph of this covenant will constitute “Excess Loss Proceeds.” When the aggregate amount of Excess Loss Proceeds exceeds $20.0 million, within five days thereof, the Company will make an offer (an “Event of Loss Offer”) to all Holders of Notes and all holders of other Indebtedness that is pari passu with the Notes containing provisions similar to those set forth in the Indenture with respect to offers to purchase, prepay or redeem with the proceeds of sales of assets to purchase, prepay or redeem the maximum principal amount of Notes and such other pari passu Indebtedness (plus all accrued interest on the Indebtedness and the amount of all fees and expenses, including premiums, incurred in connection therewith) that may be purchased, prepaid or redeemed out of the Excess Loss Proceeds. The offer price in any Event of Loss Offer will be equal to 100% of the principal amount, plus accrued and unpaid interest and Special Interest, if any, to the date of purchase, prepayment or redemption, subject to the rights of Holders of Notes on the relevant record date to receive interest due on the relevant interest payment date, and will be payable in cash. If any Excess Loss Proceeds remain after consummation of an Event of Loss Offer, the Company may use those Excess Loss Proceeds for any purpose not otherwise prohibited by the Indenture. If the aggregate principal amount of Notes and other pari passu Indebtedness tendered in (or required to be prepaid or redeemed in connection with) such Event of Loss Offer exceeds the amount of Excess Loss Proceeds, subject to the rules of any securities depositary holding the Notes in global form, the trustee will select the Notes and such other pari passu Indebtedness to be purchased on a pro rata basis, based on the amounts tendered or required to be prepaid or redeemed (with such adjustments as may be deemed appropriate by the Company so that only Notes in denominations of $2,000, or an integral multiple of $1,000 in excess thereof, will be purchased). Upon completion of each Event of Loss Offer, the amount of Excess Loss Proceeds will be reset at zero.
The CompanyIssuer will comply with the requirements ofRule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with each repurchase of Notes pursuant to a Change of Control Offer or an Asset Sale Offer or an Event of Loss Offer. To the extent that the provisions of any securities laws or regulations conflict with the Change of Control or Asset Sale or Event of Loss provisions of the Indenture, the CompanyIssuer will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the Change of Control or Asset Sale or Event of Loss provisions of the Indenture by virtue of such compliance.
The agreements governing other Indebtedness of the Company’s other outstanding IndebtednessIssuer and its Restricted Subsidiaries, including the ERI Credit Facility, the Indenture and the 7% Notes Indenture contain, and future agreements maywill likely contain, prohibitions of certain events, including events that would constitute a Change of Control or an Asset Sale and including repurchases of or other prepayments in respect of the Notes.Sale. The exercise by the Holdersholders of Notes of their right to require the CompanyIssuer to repurchase the Notes upon a Change of Control anor Asset Sale or an Event of Loss could cause a default under these other agreements, even if the Change of Control or Asset Sale or Event of Loss itself does not, due to the financial effect of such repurchases on the Company.Issuer. In the event a Change of Control or Asset Sale or Event of Loss occurs at a time when the CompanyIssuer is prohibited from purchasing Notes, the CompanyIssuer could seek the consent of its senior lenders to the purchase of Notes or could attempt to refinance the borrowings that contain such prohibition. If the CompanyIssuer does not
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obtain such a consent or repay those borrowings, the CompanyIssuer will remain prohibited from purchasing Notes. In that case, the Company’sIssuer’s failure to purchase tendered Notes would constitute an Event of Default under the Indenture which could, in turn, constitute a default under the other Indebtedness.indebtedness. Finally, the Issuer’s ability to pay cash to the holders of Notes upon a repurchase may be limited by the Issuer’s then existing financial resources. See “Risk Factors—Risks Related to the Notes and Our Substantial Indebtedness—We may not be able to repurchase the Notes upon a change of control or pursuant to an asset sale offer.”
Selection and Noticenotice
If less than all of the Notes are to be redeemed at any time, the trustee will select notesNotes for redemption on apro rata basis or by lot (or, in the case of Notes issued in global form as discussed under “— Book-Entry, Delivery“—Book-entry, delivery and Form,form,” based on a method that most nearly approximates apro rata selection as the trustee deems fair and appropriate in accordance with the rulesapplicable procedures of the applicable securities depositary)DTC) unless otherwise required by law or applicable stock exchange or depositary requirements.
No Notes of $2,000 or less can be redeemed in part. NoticesThe Issuer will mail notices of redemption will be mailed by first class mail (or send such notices electronically in accordance with the applicable procedures in the case of Notes in global form) at least 30 but not more than 60 days before the redemption date to each Holderholder of Notes to be redeemed at its registered address (with a copy to the trustee), except that redemption notices may be mailedsent more than 60 days prior to a redemption date if the notice is issued in connection with a defeasance of the Notes or a satisfaction and discharge of the Indenture. Notices of redemption may not be conditional.
If any Note is to be redeemed in part only, the notice of redemption that relates to that Note will state the portion of the principal amount of that Note that is to be redeemed. A new Note in principal amount equal to the unredeemed portion of the original noteNote will be issued in the name of the Holderholder of Notes 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 Notes or portions of Notes called for redemption.redemption unless the Issuer defaults in the payment of the redemption price.
Financial Calculations for Limited Condition Acquisitions
When calculating the availability under any basket or ratio under the Indenture, in each case in connection with a Limited Condition Acquisition and other transactions in connection therewith (including any incurrence or issuance of Indebtedness, Disqualified Stock or preferred stock and the use of proceeds thereof), the date of determination of such basket or ratio and of any Default or Event of Default may, at the option of the Issuer, be the date the definitive agreement(s) for such Limited Condition Acquisition is entered into. Any such ratio or basket shall be calculated on a pro forma basis, including with such adjustments as are appropriate and consistent with the pro forma adjustment provisions set forth in the definition of “Fixed Charge Coverage Ratio,” after giving effect to such Limited Condition Acquisition and other transactions in connection therewith (including any incurrence or issuance of Indebtedness, Disqualified Stock or preferred stock and the use of proceeds thereof) as if they had been consummated at the beginning of the applicable period for purposes of determining the ability to consummate any such Limited Condition Acquisition;
provided that if the Issuer elects to make such determination as of the date of such definitive agreement(s), then (x) the Issuer shall be deemed to be in compliance with such ratios or baskets solely for purposes of determining whether the Limited Condition Acquisition and other transactions in connection therewith (including any incurrence or issuance of Indebtedness, Disqualified Stock or preferred stock and the use of proceeds thereof), is permitted under the Indenture, and (y) such ratios or baskets shall not be tested at the time of consummation of such Limited Condition Acquisition or related transactions;provided, further, that if the Issuer elects to have such determinations occur at the time of entry into such definitive agreement(s), any such transactions (including any incurrence or issuance of Indebtedness, Disqualified Stock or preferred stock and the use of proceeds thereof) shall be deemed to have occurred on the date the definitive agreement(s) is entered into and shall be deemed outstanding thereafter for purposes of calculating any ratios or baskets under the Indenture after the date of such definitive agreement(s) and before the consummation of such Limited Condition Acquisition, unless such definitive agreement(s) is terminated or such Limited Condition Acquisition or incurrence or issuance of Indebtedness, Disqualified Stock or preferred stock or such other transaction to which pro forma effect is being given does not occur.
Certain Covenants
covenants
Restricted Paymentspayments
The CompanyIssuer will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly:
(1)declare or pay any dividend or make any other payment or distribution on account of the Company’sIssuer’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation involving the CompanyIssuer or any of its Restricted Subsidiaries) or to the direct or indirect holders of the Company’sIssuer’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the CompanyIssuer and other than dividends or distributions payable to the CompanyIssuer or a Restricted Subsidiary of the Company)Issuer);
(2)purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation involving the Company)Issuer, any direct or indirect parent of the Issuer or any Restricted Subsidiary) any Equity Interests of the Company;Issuer or any Restricted Subsidiary (other than Disqualified Stock within one year of the Stated Maturity thereof or any such Equity Interests held by the Issuer, any direct or indirect parent of the Issuer or a Restricted Subsidiary of the Issuer);
(3)make any payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Subordinated Indebtedness of the Companyan Issuer or any Guarantor that is contractually subordinated to the Notes or to any Note Guarantee (excluding any intercompany Indebtedness between or among the CompanyIssuer and any of its Restricted Subsidiaries), except (x) a payment of interest or principal at the Stated Maturity thereof and (y) with respector a purchase, repurchase, or other acquisition of Indebtedness subordinated in right of payment to the 2020 Subordinated Notes or any Note Guarantee made in contemplation of satisfying a paymentsinking fund obligation, principal installment or final maturity, in each case due within one year of interestthe date of such purchase, redemption or principal (and any pre-payment premium thereon) at the Stated Maturityother acquisition; or within 15 months prior to the Stated Maturity thereof; or
(4)make any Restricted Investment
(all such payments and other actions set forth in these clauses (1) through (4) above being collectively referred to as “Restricted Payments”“Restricted Payments”),
unless, at the time of and after giving effect to such Restricted Payment:
(a)no Default or Event of Default hasshall have occurred and isbe continuing or would occur as a consequence of such Restricted Payment;
(b)the CompanyIssuer would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicablefour-quarter period, have
been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test
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set forth in the first paragraph of the covenant described below under the caption “—Incurrence of Indebtednessindebtedness and Issuanceissuance of Preferred Stock;”preferred stock”; and
(c)such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the CompanyIssuer and its Restricted Subsidiaries since the date of the Indenture (excluding Restricted Payments permitted by clauses (2), (4), (6), (7), (8) and (10) through (15) of the next succeeding paragraph), is less than the sum, without duplication, of:
(1)50% of the Consolidated Net Income of the CompanyIssuer for the period (taken as one accounting period) from the beginning of the fiscal quarter commencing immediately prior toin which the date of the IndentureNotes are initially issued to the end of the Company’sIssuer’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
(2)100% of the fair market value of the aggregate net cash proceeds received by the Company from any Person (other than from a Subsidiary of the Company)Issuer since the beginning of the fiscal quarter commencing immediately prior to the date of the Indenture as a contribution to its common equity capital or from the issue or sale of Qualifying Equity Interests of the CompanyIssuer or from the amount by which Indebtednessissue or sale of convertible or exchangeable Disqualified Stock of the CompanyIssuer or convertible or exchangeable debt securities of the Issuer, in each case that have been converted into or exchanged for Qualifying Equity Interests of the Issuer (other than Qualifying Equity Interests and convertible or exchangeable Disqualified Stock or debt securities sold to a Subsidiary of the Issuer);plus
(3) to the extent that any Restricted Subsidiary is reduced on the Company’s balance sheet upon the conversion or exchangeInvestment that was made after the date of the Indenture of such Indebtedness intois (a) sold or otherwise cancelled, liquidated or repaid for Qualifying Equity Interests of the Company; plus
(3)the amount equal to the net reductionvalue, or results in, Investments that were treated as Restricted Investments subsequent to the date of the Indenture resulting from:
(a)the sale or liquidation of such Investment,is otherwise returned or reduced by, the payment of principal, interest, dividends or interest,distributions, or repayments of principal loans or advances, or other distributions or transfers of assets, to the Company or any of its Restricted Subsidiaries or the termination,satisfaction, release, expiration, cancellation satisfaction or reduction (other than by means of payments by the CompanyIssuer or a Restricted Subsidiary) of Indebtedness or other obligations (including any such Indebtedness or other obligations guaranteed by the Issuer or any of its Restricted Subsidiaries) of obligations of other Persons which have been Guaranteed by the Company, or any of its Restricted Subsidiaries;
payments under management contracts or services agreements, or (b)the redesignation of Unrestricted Subsidiaries as Restricted Subsidiaries;
(c)a Person made in which the Company or any Restricted Subsidiary had made a Restricted Investmentan entity that subsequently becomes a Restricted Subsidiary
of the Issuer or has been merged, consolidated or amalgamated with or into, or transfers or conveys its assets to, or is liquidated into, the Issuer or a Restricted Subsidiary, the amount of any such cash payment or the Fair Market Value of any such Property so received in each case such net reductiona transaction described in Investments being:
(x)valued as providedclause (a) and, in the last paragraphcase of this covenant,clause (b) the Fair Market Value of such Restricted Investment;plus
(y)an amount not(4) to exceed the aggregate amountextent that any Unrestricted Subsidiary of Investments previously made by the Company or anyIssuer designated as such after the date of its Restricted Subsidiaries which were treatedthe Indenture is redesignated as a Restricted Payment when made,Subsidiary after the date of the Indenture, the Fair Market Value of the Issuer’s Restricted Investment in such Subsidiary as of the date of such redesignation;plus
(5) 100% of any dividends or distributions received in cash and
(z)included 100% of the Fair Market Value of any Property received in this clause (3) onlyany such dividend or distribution by the Issuer or a Restricted Subsidiary after the date of the Indenture from an Unrestricted Subsidiary of the Issuer, to the extent that such dividends were not otherwise included in the Consolidated Net Income of the Company; plus
(4)to the extent not included in the Consolidated Net Income of the Company, and after the entire amount of the Restricted Investment in any Unrestricted Subsidiary or any other Investment has been returned, received or reduced pursuant to the immediately preceding clause (3), 50% of the amount of dividends, distributions and payments of principal and interest received by the Company or any Restricted Subsidiary since the date of the Indenture from or in respect ofIssuer for such Unrestricted Subsidiary or such other Investment.
period.
The preceding provisions will not prohibit:
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(1)the payment of any dividend or the consummation of any irrevocable repurchase, redemption, defeasance or other acquisition or retirement within 60 days after the date of declaration of the dividend or giving of the notice of repurchase, redemption, notice,defeasance or other acquisition or retirement, as the case may be, if at the date of declaration or notice, the dividend or repurchase, redemption, paymentdefeasance or other acquisition or retirement would have complied with the provisions of the Indenture;
(2)the making of any Restricted Payment in exchange for, or out of or with the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company)Issuer) of, Equity Interests of the Company
Issuer (other than Disqualified Stock) or from the substantially concurrent contribution of common equity capital to the Company; Issuer;provided that the amount of any such net cash proceeds that are utilized for any such Restricted Payment will not be considered to be net proceeds of Qualifying Equity Interests for purposes of clause (c)(2) of the preceding paragraph;paragraph and will not be considered to be net cash proceeds from an Equity Offering for purposes of the “Optional Redemption” provisions of the Indenture;
(3)so long as no Default or Event of Default has occurred and is continuing, the payment of any dividend (or, in the case of any partnership or limited liability company, any similar distribution) by a Restricted Subsidiary of the CompanyIssuer to the holders of its Equity Interests on apro rata basis;
(4)the repurchase, redemption, defeasance or other acquisition or retirement for value of Subordinated Indebtedness of the Companyan Issuer or any Guarantor that is contractually subordinated to the Notes or to any Note Guarantee or any Disqualified Stock of the Issuer or any Restricted Subsidiary thereof (including all accrued interest on the Indebtedness, all accrued and unpaid dividends on Disqualified Stock, and the amount of all penalties, fees, costs, expenses, discounts and premiums incurred in connection therewith and any original issue discount or debt issuance costs with respect thereto) in exchange for or with the net cash proceeds from a substantially concurrent incurrence of subordinated Permitted Refinancing Indebtedness;
(5)so long as no Default or Event the payment of Default has occurred and is continuing, theamounts necessary to repurchase redemptionIndebtedness or other acquisition or retirement for value of any Equity Interests of the CompanyIssuer or any Restricted Subsidiary of the Company held by any current or former officer, director or employee of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement, stock option agreement, shareholders’ agreement or similar agreement; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $5.0 million in any twelve-month period with unused amounts in any twelve- month period permitted to be carried forward to the next succeeding twelve-month period until used;
(6)the payment of any amounts in respect of Equity Interests by any Restricted Subsidiary organized as a partnership or a limited liability company or other pass-through entity:
(a)to the extent of capital contributions made to such Restricted Subsidiary (other than capital contributions made to such Restricted Subsidiary by the Company or any Restricted Subsidiary),
(b)to the extent required by applicable law,any Gaming Authority having jurisdiction over the Issuer or
(c)to the extent necessary for holders thereof to pay taxes with respect to the net income of such Restricted Subsidiary, the payment of which amounts under this clause (c) is required by the terms of the relevant partnership agreement, limited liability company operating agreement or other governing document;
provided that, except in the case of clauses (b) and (c), no Default or Event of Default has occurred and is continuing at the time of such Restricted Payment or would result therefrom, and provided further that, except in the case of clause (b) and (c), such distributions are made pro rata in accordance with the respective Equity Interests contemporaneously with the distributions paid to the Company or a any Restricted Subsidiary or their Affiliates holding an interestdeemed necessary by the Board of Directors of the Issuer in such Equity Interests;order to avoid the suspension, revocation or denial of a gaming license by that Gaming Authority;
(7)(6) the repurchase of Equity Interests deemed to occur upon the exercise, conversion or exchange of stock options, warrants, other rights to acquire Equity Interests or warrants to the extentother convertible or exchangeable securities if such Equity Interests represent all or a portion of the exercise price of those stock optionsthereof or warrants or the repurchase of Equity Interests upon the grant, vesting or exercise of restricted stock, restricted stock units or performance share units to the extent necessarysimilar equity incentives to satisfy tax withholding or similar tax obligations attributable to such vesting;with respect thereto;
(7) the payment, by the Issuer, of cash in lieu of the issuance of fractional shares upon the exercise of any option, warrant or similar instrument or upon the conversion or exchange of Equity Interests of the Issuer;
(8)so long as no Default or Event of Default has occurred and is continuing, the declaration and payment of regularly scheduled or accrued dividends to holders of any class or series of Disqualified Stock of the CompanyIssuer or any preferred stock of any Restricted Subsidiary of the CompanyIssuer issued on or after the date of the Indenture in accordance with the covenantFixed Charge Coverage Ratio test described below under the caption “—Incurrence of Indebtednessindebtedness and Issuanceissuance of Preferred Stock;”preferred stock”;
(9)so long as no Default or Event of Default has occurred and is continuing, the repurchase, redemption or other acquisition or retirement for value of any Subordinated Indebtedness of an Issuer or any Guarantor that is unsecured or is contractually subordinated to the Notes or to any Note Guarantee or Disqualified Stock or preferred stock, in each case that is required to be repurchased or redeemed pursuant to provisions similar to those described under the captionscaption “Repurchase at the Optionoption of Holders — holders—Change of Control,” “Repurchasecontrol” or “—Repurchase at the Optionoption of Holders — holders—Asset Sales” or “Repurchase at the Option of Holders — Events of Loss;” sales”;provided that, all Notes tendered by Holders in
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connection withprior to such repurchase, a Change of Control Offer,redemption or other acquisition or retirement for value, an Asset Sale Offer or an EventChange of LossControl Offer shall have been made and all Notes tendered and not withdrawn by holders in such Change of Control Offer or Asset Sale Offer, as applicable, have been repurchased redeemed or acquired for value;(up to the maximum amount of Notes required to be so purchased, in the case of an Asset Sale Offer);
(10)payments of cash, dividends, distributions, advances the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Restricted PaymentsSubsidiary of the Issuer held by any current or former officer, director, employee or consultant (or family members, spouses or former spouses, heirs of, estates of or trusts formed by such persons) of the CompanyIssuer or any of its Restricted Subsidiaries pursuant to allowany equity subscription agreement, stock option agreement, employment agreement, severance agreement, shareholders’ agreement or similar agreement;provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $10.0 million in anytwelve-month period;
(11) any payments made, or the performance of any transactions, in each case, as described in this offering memorandum under the heading “Use of Proceeds”;
(12) the distribution, as a dividend or otherwise, of Equity Interests of, or Indebtedness owed to the Issuer or a Restricted Subsidiary by, Unrestricted Subsidiaries;
(13) payment of cash in lieuconsideration pursuant to, and the performance of all other transactions contemplated by, the terms of the issuanceMerger Agreement;
(14) any Restricted Payment, so long as (i) immediately before and after giving effect to such Restricted Payment no Event of fractional shares upon (i)Default has occurred and is continuing and (ii) after giving effect to such Restricted Payment, the exercise of options or warrants or (ii) the conversion or exchange of Capital Stock of any such Person;
(11)the redemption, repurchase or repayment of any Capital Stock or IndebtednessConsolidated Leverage Ratio of the Company or any Restricted Subsidiary, if required by any Gaming Authority or if determined, in the good faith judgment of the Board of Directors,Issuer on a pro forma basis is less than 3.0 to be necessary to prevent the loss or to secure the grant or reinstatement of any gaming license or other right to conduct lawful gaming operations;1.0; and
(12)(15) so long as no Default or Event of Default has occurred and is continuing, other Restricted Payments in an aggregate amount not to exceed $125.0$200.0 million since the date of the Indenture.
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 CompanyIssuer or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The Fair Market Value
For purposes of any assets or securities that are required to be valued bydetermining compliance with this covenant, in the event that a Restricted Payment or Investment meets the criteria of more than one of the categories described in clauses (1) through (15) above, or is permitted pursuant to the first paragraph of this covenant or pursuant to any of clauses (1) through (21) of the definition of “Permitted Investments,” the Issuer will be determined byentitled to classify such Restricted Payment (or, in each case, portion thereof) on the Boarddate of Directors of the Company whose resolutionits payment or later reclassify such Restricted Payment (or, in each case, portion thereof) in any manner that complies with respect thereto will be delivered to the trustee. The Board of Directors’ determination must be based upon an opinion or appraisal issued by an accounting, appraisal or investment banking firm of national standing if the Fair Market Value exceeds $20.0 million.
this covenant.
Incurrence of Indebtednessindebtedness and Issuanceissuance of Preferred Stockpreferred stock
The CompanyIssuer will not, and will not permit any of its Restricted 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”“incur”) any Indebtedness (including Acquired Debt), and the CompanyIssuer will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock;provided,however, that the CompanyIssuer may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue preferred stock, if the Fixed Charge Coverage Ratio for the Company’sIssuer’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 Disqualified Stock or such preferred stock is issued, as the case may be, would have been at least 2.0 to 1.0, determined on a pro forma consolidated basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.
The first paragraph of this covenant will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”“Permitted Debt”):
(1)the incurrence by the Company andIssuer or any Guarantor (and/or the guarantee thereof by the Issuer or any Guarantor) of additional Indebtedness pursuant toand letters of credit under the BankERI Credit Facility or other Indebtedness constituting senior Indebtedness; Credit Facilities;provided that the aggregate principal amount of all such Indebtedness outstanding under this clause (1) as of any date of incurrence (after giving pro forma effect to the application of the proceeds of such incurrence), including all Permitted Refinancing Indebtedness incurred to repay, redeem, extend, refinance, renew, replace, defease or refund any Indebtedness incurred pursuant to this clause (1), shall not exceed the greater of (x) $825.0(i) $1,750.0 million and (y) 3.5(ii) 4.0 times the Company’s Consolidated EBITDA of the Issuer and its Restricted Subsidiaries for the twelve-month period ended at the end of fourthe most recent fiscal quarters most recently ended prior to such date quarter
for which internal financial reportsstatements are available, ended not more than 135 days prior to such date (using the pro forma calculation conventions for Consolidated EBITDA referenced in the definition of Fixed Charge Coverage Ratio), in each case, to be reduced dollar-for-dollar by the amount of the aggregate amount of all Net Proceeds offrom Asset Sales applied by the Issuer or any of its Restricted Subsidiaries to permanently prepay or repay Indebtedness under the Bank Credit Facility or any other Indebtedness constituting senior IndebtednessFacilities pursuant to the covenant described above under the caption “—Repurchase at the Optionoption of Holders — holders—Asset Sales” or “— Events of Loss;”sales”;
(2)the incurrence by the CompanyIssuer and its Restricted Subsidiaries of the Existing Indebtedness;
(3)the incurrence by the CompanyIssuer and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of the Indenture and the exchange notes and the related Note Guarantees to beand any Exchange Notes (and guarantees thereof) issued in exchange for the initial Notes pursuant to the Registration Rights Agreement;Agreement (other than any Additional Notes and the related Note Guarantees);
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(4)the incurrence by the CompanyIssuer or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, FF&E Financing, mortgage financings or purchase money obligations or other Indebtedness, in each case, to financeincurred in connection with capital expenditures or for the purpose of financing all or any part of the purchase price or cost of design, construction, acquisitioninstallation, renovation, repair, expansion, refurbishment or improvement of capital assetsproperty, plant or equipment used or useful in the Company’sbusiness of the Issuer or suchany of its Restricted Subsidiaries, business and incurred prior to or within 180 days after the construction, acquisition, improvement or leasing of the subject assets, in an aggregate principal amount, outstanding (includingincluding all Permitted Refinancing Indebtedness incurred to repay, redeem, extend,renew, refund, refinance, renew, replace, defease or refunddischarge any Indebtedness incurred pursuant to this clause (4)) not to exceed the greater of $25.0$200.0 million or 4.0%and 12% of Consolidated Tangible Assets;
(5)the incurrence by the CompanyIssuer or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge, any Indebtedness (other than intercompany Indebtedness) that was permitted by the Indenture to be incurred under the first paragraph of this covenant or clauses (1),clause (2), (3), (4), (5), (11) or (13)(15) of this paragraph;
(6)the incurrence by the CompanyIssuer or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the CompanyIssuer and any of its Restricted Subsidiaries;provided,however, that:
(a)if the CompanyIssuer or any Guarantor is the obligor on such Indebtedness and the payee is not the CompanyIssuer or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company,an Issuer, or the Note Guarantee, in the case of a Guarantor; and
(b)(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the CompanyIssuer or a Restricted Subsidiary of the CompanyIssuer and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the CompanyIssuer or a Restricted Subsidiary of the Company,Issuer, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the CompanyIssuer or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7)the issuance by any of the Company’sIssuer’s Restricted Subsidiaries to the CompanyIssuer or to any of its Restricted Subsidiaries of shares of preferred stock;provided,however, that:
that (a)any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the CompanyIssuer or a Restricted Subsidiary of the Company;Issuer and
(b)any sale or other transfer of any such preferred stock to a Person that is not either the CompanyIssuer or a Restricted Subsidiary of the Company,
Issuer, will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8)the incurrence by the CompanyIssuer or any of its Restricted Subsidiaries of Hedging Obligations entered into in the ordinary course of business and not as speculative Investments, but as hedging transactions designed to protect the Company and its Restricted Subsidiaries against fluctuations in interest rates in connection with Indebtedness otherwise permitted under the Indenture or against exchange rate risk or commodity pricing risk;business;
(9)the guarantee by an Issuer or any of the Guarantors of Indebtedness of the CompanyIssuer or of any other Guarantor, or the guarantee by a Restricted Subsidiary of Indebtedness of the Company or any other Restricted Subsidiary,Issuer to the extent that the guaranteed Indebtedness was permitted to be incurred by
another provision of this covenant;provided that if the Indebtedness being guaranteed is subordinated to orpari passu with the Notes, then the Guarantee may only be incurred by a Guarantor and must be subordinated to, orpari passu with,, as applicable, the Notes to the same extent as the Indebtedness guaranteed;
(10)the incurrence by the CompanyIssuer or any of the Guarantors of Indebtedness in respect of bid, payment or other performance bonds, surety bonds, release, appeal and similar bonds, statutory obligations, workers’ compensation claims, self-insurance obligations and bankers’ acceptances in the ordinary course of business, and reimbursement obligations in respect of the foregoing;
(11) the incurrence by the Issuer or any of the Guarantors of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five business days;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, performance bonds, surety and appeal bonds and other similar arrangements and letters of credit provided by the Company and its Restricted Subsidiaries incurred in the ordinary course of business (including to support the Company’s and its Restricted Subsidiaries’ application for gaming licenses or such workers’ compensation claims, self-insurance obligations, bonds or guarantees) and in amounts customary in the industry in which the Company and its Restricted Subsidiaries operate; provided, however, that upon drawing of such letters of credit or the incurrence of any such Indebtedness for borrowed money, any reimbursement obligations with respect to such Indebtedness are reimbursed within 30 days following such incurrence;
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(11)Indebtedness arising in connection with the endorsement of instruments for deposit in the ordinary course of business;
(13) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness deemed to exist pursuant to the terms of a joint venture agreement as a result of a failure of the Issuer or such Restricted Subsidiary to make a required capital contribution therein;provided that the only recourse on such Indebtedness is limited to the Issuer’s or such Restricted Subsidiary’s equity interests in the related joint venture;
(12)(14) Indebtedness arising from agreements of the CompanyIssuer or any of its Restricted Subsidiaries providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or subsidiary for the purpose of financing that acquisition;provided that:
(a)such Indebtedness is not reflected at the time of such incurrence or assumption on the balance sheet of the CompanyIssuer or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b)in the case of a disposition, the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds includingnon-cash proceeds (the fair market value of thosenon-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value), actually received by the CompanyIssuer and/or that Restricted Subsidiary in connection with that disposition;
(13)(15) Acquired Debt and any other Indebtedness of Persons outstanding on the date on which such Person became a Restricted Subsidiary or was acquired by, or merged into, the Issuer or any of its Restricted Subsidiaries or incurred or issued to finance a merger consolidation or other acquisition;provided, however, that (x) immediatelyat the time such Person is acquired, either (i) the Issuer would have been able to incur at least $1.00 of additional Indebtedness pursuant to the first paragraph of this covenant on a pro forma basis after giving effect to the incurrence of such Acquired Debt and such otheror Indebtedness as the case may be,pursuant to this clause (15) or (ii) on a pro forma basis, as if such incurrence (and the related merger, consolidation or other acquisition) had occurred at the beginning of the applicable four-quarter period, the Fixed Charge Coverage Ratio forof the CompanyIssuer and its Restricted Subsidiaries would be greaterhigher than the Fixed Charge Coverage Ratio for the Company and its Restricted Subsidiariessuch ratio immediately prior to such merger, consolidationacquisition or other acquisition and (y)(i) in the case of Acquired Debt, has a Weighted Average Life to Maturity equal to or greater than three years and (ii) in the case of any such other Indebtedness, has a final maturity date at least 91 days after the Stated Maturity of the Notes and has a Weighted Average Life to Maturity greater than the Weighted Average Life to Maturity of the Notes; andmerger;
(14)(16) the incurrence by the CompanyIssuer or any of its Restricted SubsidiarySubsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, under this clause (14), including all Permitted Refinancing Indebtedness incurred to repay, redeem, extend, renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (14),(16) not to exceed $100.0 million;
(17) (i) Indebtedness representing deferred compensation to employees of the greaterIssuer or any of (i) $60.0 millionits Restricted Subsidiaries incurred in the ordinary course of business, and (ii) 5.0%Indebtedness consisting of Consolidated Tangible Assets.
The Company will not incur, and will not permit any Guarantor to incur, any Indebtedness (including Permitted Debt) that is subordinated in right of payment to any other Indebtednessobligations of the CompanyIssuer or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Guarantor unless suchPerson in connection with any Investment permitted under “—Restricted payments” above;
(18) Indebtedness is also Subordinated Indebtedness that is subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be subordinated in right of payment to any other Indebtednessconsisting of the financing of insurance premiums; and
(19) Indebtedness owed to Capri Insurance Company solely by virtuein respect of being unsecured or by virtue of being secured on a junior priority basis or by virtue ofpremiums and reserves in an aggregate principal amount not having the benefit ofto exceed $25.0 million at any guarantee.one time outstanding.
For purposes of determining compliance with this “Incurrence of Indebtednessindebtedness and Issuanceissuance of Preferred Stock”preferred stock” covenant, in the event that an item of Indebtedness or any portion thereof meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (14)(19) above, or is entitled to be incurred pursuant to the first paragraph of this covenant, the CompanyIssuer will be permitted to classify such item of Indebtedness or any portion thereof on the date of its incurrence, and mayor later reclassify all or anya portion of such item of Indebtedness, in any manner that complies with this covenant. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under the Indenture, including the BankERI Credit Facility will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted“Permitted Debt.” If obligations in respect of letters of credit are incurred pursuant to a Credit Facility and relate to other Indebtedness, then such letters of credit shall be treated as incurred pursuant to clause (1) of the definition of “Permitted Debt.” Except as provided in the preceding sentence, Guarantees of, or obligations in respect of letters of credit relating to, Indebtedness that is otherwise included in the determination of a particular amount of Indebtedness shall not be included.
In connection with the incurrence or issuance, as applicable, of (x) revolving loan Indebtedness under this covenant or (y) any commitment relating to the incurrence or issuance of Indebtedness, Disqualified Stock or preferred stock under this covenant and the granting of any Lien to secure any such Indebtedness, the Issuer or the applicable Restricted Subsidiary may designate such incurrence or issuance and the granting of any such Lien as having occurred on the date of first incurrence or issuance of such revolving loan Indebtedness or commitment (such date, the “Deemed Date”), and any related subsequent actual incurrence or issuance or granting of any such Lien therefor will be deemed for all purposes under the Indenture to have been incurred or issued and granted on such Deemed Date, including, without limitation, for purposes of calculating the Fixed Charge Coverage Ratio and usage of any other baskets or ratios under the Indenture (as applicable).
The accrual of interest or preferred stock dividends, the accretion or amortization of original issue discount, the payment of interest on, or fees with respect to, any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on preferred stock or Disqualified Stock in the form of additional shares of the same class of preferred stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of preferred stock or Disqualified Stock for purposes of this covenant;provided, in each such case, that the amount thereof isof any such accrual, accretion or payment shall be included in Fixed Charges of the CompanyIssuer as accrued. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be utilized, calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred. Notwithstanding any other provision of this covenant, the maximum amount of
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Indebtedness that the CompanyIssuer or any Restricted Subsidiary may incur pursuant to this covenant shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.
The amount of any Indebtedness outstanding as of any date will be:
(1)the accreted value of the Indebtedness determined on a constant yield to maturity basis over time, in the case of any Indebtedness issued with original issue discount;
(2)the principal amount of the Indebtedness, in the case of any other Indebtedness;
(3) in the case of a Guarantee of Indebtedness, the maximum amount of the Indebtedness guaranteed under such Guarantee; and
(3)(4) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(a)the Fair Market Value of such assets subject to such Lien at the date of determination; and
(b)the amount of the Indebtedness of the other Person.
Person secured by such Lien.
Liens
The CompanyIssuer will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur assume or otherwise cause or suffer to exist or become effectiveassume any Lien, of any kind (other thanexcept a Permitted Liens) securing Indebtedness uponLien on or with respect to any of theirits property or assets nowincluding any shares of stock or Indebtedness of any Restricted Subsidiary, whether owned on the issue date or hereafterthereafter acquired, unless all payments due underor any income, profits or proceeds therefrom, unless: in the Indenture andcase of any Lien securing Indebtedness that is subordinate in right of payment to the Notes or the Guarantees, the Notes or the Guarantees are secured by a Lien on such property, assets or proceeds that is senior in priority to such Lien, as long as such Indebtedness is secured by such Lien; and in all other cases, the Notes or the Guarantees, as the case may be, are secured on an equal and ratable basis with the Obligationsobligations secured by such Lien for so secured until such timelong as such Obligationsobligations are no longer secured by asuch Lien.
For purposes of determining compliance with this covenant, (A) a Lien securing an item of Indebtedness need not be permitted solely by reference to one category of permitted Liens (or any portion thereof) described in the definition of “Permitted Liens” or pursuant to the first paragraph of this covenant but may be permitted in part under any combination thereof and (B) in the event that a Lien securing an item of Indebtedness (or any portion thereof) meets the criteria of one or more of the categories of permitted Liens (or any portion thereof) described in the definition of “Permitted Liens” or pursuant to the first paragraph of this covenant, the Issuer may, in its sole discretion, classify or reclassify, or later divide, classify or reclassify (as if incurred or issued at such later time), such Lien securing such item of Indebtedness (or any portion thereof) in any manner that complies with this covenant and at the time of incurrence, issuance, classification or reclassification will be entitled to only include the amount and type of such Lien or such item of Indebtedness secured by such Lien (or any portion thereof) in one of the categories of permitted Liens (or any portion thereof) described in the definition of “Permitted Liens” or pursuant to the first paragraph of this covenant and, in such event, such Lien securing such item of Indebtedness (or any portion thereof) will be treated as being incurred, issued or existing pursuant to only such clause or clauses (or any portion thereof) or pursuant to the first paragraph hereof without giving pro forma effect to such item (or portion thereof) when calculating the amount of Liens or Indebtedness that may be incurred or issued pursuant to any other clause or paragraph (or portion thereof) at such time. In addition, with respect to any revolving loan Indebtedness or commitment relating to the incurrence or issuance of Indebtedness that is designated to be incurred or issued on any date pursuant to the fourth paragraph of the covenant described under “Incurrence of indebtedness and issuance of preferred stock,” any Lien that does or that shall secure such Indebtedness may also be designated by the Issuer or any Restricted Subsidiary to be incurred on such date and, in such event, any related subsequent actual incurrence of such Lien shall be deemed for all purposes under the Indenture to be incurred on such prior date, including for purposes of calculating usage of any “Permitted Lien.”
With respect to any Lien securing Indebtedness that was permitted to secure such Indebtedness at the time of the incurrence or issuance of such Indebtedness, such Lien shall also be permitted to secure any Increased Amount of such Indebtedness. The “Increased Amount” of any Indebtedness shall mean any increase in the amount of such Indebtedness that is not deemed to be an incurrence of Indebtedness for purposes of the covenant entitled “Incurrence of indebtedness and issuance of preferred stock.”
Dividend and Other Payment Restrictions Affecting Restricted Subsidiariesother payment restrictions affecting restricted subsidiaries
The CompanyIssuer will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create or permit to exist or become effective any consensual encumbrance or restriction on the ability of any Restricted Subsidiary to:
(1)pay dividends or make any other distributions on its Capital Stock to the CompanyIssuer or any of its Restricted Subsidiaries, or with respect to any other interest or participation in, or measured by, its profits, or pay any Indebtednessindebtedness owed to the CompanyIssuer or any of its Restricted Subsidiaries;
(2)make loans or advances to the CompanyIssuer or any of its Restricted Subsidiaries; or
(3)sell, lease or transfer any of its properties or assets to the CompanyIssuer or any of its Restricted Subsidiaries.
However, the preceding restrictions will not apply to encumbrances or restrictions existing under or by reason of:
(1)agreements governing Existing Indebtedness, including the Bank Credit Facility as in effect on the date of the Indenture and any amendments, restatements, modifications, renewals, supplements, refundings, replacements or refinancings of those agreements;provided that in the determination of the Board of Directors made in good faith (which determination shall be conclusive and binding absent manifest error), the amendments, restatements, modifications, renewals, supplements, refundings, replacements or refinancings are not, in the good faith determination of the Board of Directors of the Issuer, materially more restrictive, taken as a whole, with respect to such dividend and other payment restrictions than those contained in those agreements on the date of the Indenture;
(2)the Indenture, the Notes and the Note Guarantees;
(3)agreements governing other Indebtedness permitted to be incurred under the provisions of the covenant described above under the caption “—Incurrence of Indebtednessindebtedness and Issuanceissuance of Preferred Stock”preferred stock” and any amendments, restatements, modifications, renewals, supplements, refundings, replacements or refinancings of those agreements;provided that the restrictions therein are not, in the good faith determination of the Board of Directors of the Issuer, materially more restrictive, taken as a whole, than those contained in the Indenture, the Notes and the Note Guarantees as determined by the Board of Directors of the Company in good faith, which determination shall be conclusive and binding absent manifest error;Guarantees;
(4)applicable law, rule, regulation or order, including without limitation restrictions imposed by Gaming Authorities;
(5) any Gaming Law,instrument governing Indebtedness or as otherwise required by any Gaming Authority;
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(5)restrictions under any agreement relating to anya Person property, assets or business acquired by the CompanyIssuer or any of its Restricted Subsidiaries as in effect at the time of such acquisition (except to the extent such restrictionIndebtedness or Capital Stock was incurred in connection with or in contemplation of such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets or businessof any Person, other than the Person, or the property or assets or business,of the Person, so acquired;provided that, in the case of Indebtedness, such Indebtedness was permitted by the terms of the Indenture to be incurred;
(6) customary(6)non-assignment customary restrictions on subletting or assignmentprovisions in contracts, leaseslicenses and licensesleases entered into in the ordinary course of business;
(7)any such contractual encumbrance purchase money obligations for property acquired in existence asthe ordinary course of business and Capital Lease Obligations that impose restrictions on the property purchased or leased of the Issue Date or imposed by ornature described in connection with the incurrence of any FF&E Financing or Capitalized Lease Obligations incurred pursuant to clause (4)(3) of the second paragraph of the covenant described under the subheading “Incurrence of Indebtedness and Issuance of Preferred Stock,” provided such encumbrance does not have the effect of restricting the payment of dividends to the Company or any Restricted Subsidiary or the payment of Indebtedness owed to the Company or any Restricted Subsidiary or reducing the amount of any such dividends or payments;preceding paragraph;
(8)any agreement for the sale or other disposition of a Restricted Subsidiary that restricts distributions by that Restricted Subsidiary pending its sale or other disposition;
(9)any restriction or encumbrance contained in contracts for the sale of assets to be consummated in accordance with the Indenture solely in respect of the assets to be sold pursuant to such contract;
(10)Permitted Refinancing Indebtedness;provided that the restrictions contained in the agreements governing such Permitted Refinancing Indebtedness are not, in the good faith determination of the Board
of Directors of the Issuer, materially more restrictive, taken as a whole, than those contained in the agreements governing the Indebtedness being refinanced as determined by the Board of Directors of the Company in good faith, which determination shall be conclusive and binding absent manifest error;refinanced;
(11)Liens permitted to be incurred under the provisions of the covenant described above under the caption “—Liens” that limit the right of the debtor to dispose of the assets subject to such Liens;
(12) agreements in existence with respect to a Restricted Subsidiary at the time it becomes a Restricted Subsidiary;provided, however, that such agreements are not entered into in anticipation or contemplation thereof;
(12)(13) provisions limiting the disposition or distribution of assets or property in joint venture agreements, asset sale agreements,sale-leaseback agreements, stock sale agreements and other similar agreements (including agreements entered into in connection with a Restricted Investment) entered into with the approval of the Board of Directors of the Company,, which limitation is applicable only to the assets that are the subject of such agreements;
(13)(14) restrictions on cash or other deposits or net worth made to secure letters of credit or surety or other bonds issued in connection therewith or imposed by customers vendors or lessorssuppliers under contracts entered into in the ordinary course of business; and
(14)agreements in existence with respect to(15) Credit Facilities that, taken as a Restricted Subsidiary at the time it becomes a Restricted Subsidiary, provided, however that such agreementswhole, are, not entered into in anticipation or contemplation thereof;
(15)restrictions imposed by Indebtedness incurred under Credit Facilities; provided that, in the good faith determination of the Board of Directors made in good faith (which determination shall be conclusive and binding absent manifest error), such restrictions are no more restrictive taken as a whole than those imposed by the Bank Credit Facility as of the dateIssuer, customary for Credit Facilities of the Indenture; and
(16)replacements of restrictions imposed pursuant to clauses (1) through (15) that are no more restrictive than those being replaced.
Persons engaged in a Permitted Business.
Merger, Consolidationconsolidation or Salesale of Assetsassets
The CompanyIssuer will not, directly or indirectly: (1) consolidate or merge with or into another Person (whether or not the CompanyIssuer is the surviving corporation)entity), or (2) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of the CompanyIssuer and its Restricted Subsidiaries taken as a whole, in one or more related transactions, to another Person, unless:
(1)either: (a) the CompanyIssuer is the surviving corporation;entity; or (b) the Person formed by or surviving any such consolidation or merger (if other than the Company)Issuer) or to which such sale, assignment, transfer, conveyance or other disposition has been made (the “Successor”) is an entity organized or existing under the laws of the United States, any state of the United States
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or the District of Columbia; and, if such entity is not a corporation, aco-obligor of the Notes is a corporation organized or existing under any such laws;
(2)the Person formed by or surviving any such consolidation or mergerSuccessor (if other than the Company) or the Person to which such sale, assignment, transfer, conveyance or other disposition has been madeIssuer), assumes all the obligations of the CompanyIssuer under the Notes, the Indenture and the Registration Rights Agreement pursuant to agreements in form reasonably satisfactory to the trustee;
(3)immediately after such transaction, no Default or Event of Default exists; and
(4)the CompanyIssuer or the Person formed by or surviving any such consolidation or merger (if other than the Company), or to which such sale, assignment, transfer, conveyance or other disposition has been madeSuccessor would, on the date of such transaction after givingpro forma effect thereto and any related financing transactions as if the same had occurred at the beginning of the applicablefour-quarter period (i)(a) 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 the covenant described above under the caption “—Incurrence of Indebtednessindebtedness and Issuanceissuance of Preferred Stock”preferred stock”; or (ii)(b) have had a Fixed Charge Coverage Ratio equal to or greater than the Company’sactual Fixed Charge Coverage Ratio immediately prior to such transaction or series of transactions; and
(5)such transaction will not result in the loss or impairment of any gaming or other license necessary for the continued conduct of operations of the Company or any Restricted Subsidiary as conducted immediately prior toIssuer for such transaction.
four quarter period.
In addition, the CompanyIssuer will not, directly or indirectly, lease all or substantially all of the properties and assets of it and its Restricted Subsidiaries taken as a whole, in one or more related transactions, to any other Person.
Upon any sale, assignment, transfer, conveyance or other disposition of all or substantially all of the Issuer’s and its Restricted Subsidiaries’ assets, taken as a whole, in compliance with the provisions of this “Merger, consolidation or sale of assets” covenant, the Issuer will be released from the obligations under the
Notes and the Indenture except with respect to any obligations that arise from, or are related to, such transaction.
This “Merger, Consolidationconsolidation or Salesale of Assets”assets” covenant will not apply to any sale, assignment, transfer, conveyance, lease or other disposition of assets between or among the CompanyIssuer and its Restricted Subsidiaries. Clauses (3) and (4) of the first paragraph of this covenant will not apply to (1) any merger or consolidation of the CompanyIssuer with or into one of its Restricted Subsidiaries for any purpose or (2) with or into an Affiliate solely for the purpose of reincorporating the CompanyIssuer in another jurisdiction.
Transactions with Affiliatesaffiliates
The CompanyIssuer will not, and will 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 of the CompanyIssuer involving aggregate payments or consideration in excess of $5.0 million (each, an “Affiliate Transaction”“Affiliate Transaction”), unless:
(1)the Affiliate Transaction is set forth in writing and entered into in good faith on terms that are no less favorable to the CompanyIssuer or the relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by the CompanyIssuer or such Restricted Subsidiary with an unrelated Person, or, if inPerson; and
(2) the reasonable opinion of a majority of the disinterested directors of the Company, such standard is inapplicable to the subject Affiliate Transaction, then such Affiliate Transaction is fair to the Company or the relevant Restricted Subsidiary, as the case may be (or to the stockholders as a group in the case of a pro rata dividend or other distribution to stockholders permitted under the caption “— Restricted Payments”), from a financial point of view; and
(2)the CompanyIssuer delivers to the trustee:
(a)trustee with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $5.0$20.0 million, a resolution of the Board of Directors of the CompanyIssuer set forth in an officers’ certificateOfficer’s Certificate certifying that such Affiliate Transaction complies with this covenant and that such Affiliate Transaction has been approved by a majority of the disinterested members of the Board of Directors of the Company; and
(b)with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $15.0 million, an opinion as to the fairness to the Company or such Restricted Subsidiary of such Affiliate Transaction from a financial point of view issued by an accounting, appraisal or investment banking firm of national standing.
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Issuer.
The following items will not be deemed to be Affiliate Transactions and, therefore, will not be subject to the provisions of the prior paragraph:
(1)any indemnification or employment, consultancy, advisory, severance or separation agreement, employee benefit plan officer or director indemnification agreement or any similar arrangement, including any issuances of securities, loans or other payments, grants or awards, in each case in respect of or to employees, officers, directors, advisors or consultants entered into by the CompanyIssuer or any of its Restricted Subsidiaries in the ordinary course of business and payments pursuant thereto;
(2)transactions between or among the CompanyIssuer and/or its Restricted Subsidiaries;
(3)management agreements (including tax management arrangements arising out of, or related to, the filing of a consolidated tax return) entered into, consistent with past practice, by the Company or any Restricted Subsidiary, on the one hand, and an Unrestricted Subsidiary or other entity, on the other hand, pursuant to which the Company or such Restricted Subsidiary controls theday-to-day gaming operations of such entity;
(4)transactions with a Person (other than an Unrestricted Subsidiary of the Company)Issuer) that is an Affiliate of the CompanyIssuer solely because the CompanyIssuer owns, directly or through a Restricted Subsidiary, an Equity Interest in, or controls, such Person;
(5)payment of reasonable and customary fees and reimbursements of expenses (pursuant to indemnity arrangements or otherwise) of officers, directors, employees or consultants of the CompanyIssuer or any of its Restricted Subsidiaries;
(6)any issuance of Equity Interests (other than Disqualified Stock) of the CompanyIssuer to Affiliates of the Company;Issuer;
(7) Permitted Investments and Restricted Payments that do not violate the provisions of the Indenture described above under the caption “—Restricted Payments”payments”;
(8) loans or advances to employees in the ordinary course of business not to exceed $1.0 million in the aggregate at any one time outstanding;
(9) so long as no Event of Default has occurred and is continuing, (x) the payment of any Permitted Investment;management, consulting or other fees for similar services for the management of the Issuer or any of its Subsidiaries due under any management agreement in an aggregate amount not to exceed $1.5 million per fiscal year and (y) any consulting agreements with any Person that is an Affiliate of the Issuer or any of its Subsidiaries; that any such consulting agreement includes fair and reasonable terms no less favorable to the Issuer or such Subsidiary, as the case may be, than the Issuer or such Subsidiary would obtain in a comparable arm’s length transaction with a Person that is not an Affiliate;
(8)reasonable and customary compensation and indemnification of directors, officers and employees; and
(9)transactions(10) any transaction pursuant to agreements existingany contract or arrangement in existence on the date of the IndentureNotes were first issued, including the Merger Agreement, or any amendment thereto or any transaction contemplated thereby (including pursuant to any amendment thereto) or by any renewal, replacement, agreement theretosupplement or modification thereof so long as any such amendment, renewal, replacement, supplement or replacement agreementmodification is not more disadvantageous to the Holdersholders in any material respect thantaken as a whole as compared to the original agreement or arrangement as in effect on the date of the IndentureNotes are first issued as determined in good faith by the Board of Directors of the Company,Issuer;
(11) transactions with persons who have entered into an agreement, contract or arrangement with the Issuer or any of its Restricted Subsidiaries to manage, own or operate a Gaming Facility because the Issuer and its Restricted Subsidiaries have not received the requisite approvals of the Gaming Authorities or are otherwise not permitted to manage, own or operate such Gaming Facility under applicable Gaming Laws;provided that such transactions shall have been approved by a majority of the disinterested members of the Issuer’s Board of Directors (or by the audit committee or any committee of the Board of Directors consisting of disinterested members of the Board of Directors) and determined by them to be in the best interests of the Issuer;
(12) transactions with customers, clients, suppliers, contractors, landlords, lessors, lessees, licensors, licensees, joint venture or development partners or purchasers or sellers of goods or services, in each case in the ordinary course of business and otherwise in compliance with the terms of the Indenture which are fair to the Issuer and its Restricted Subsidiaries taken as a whole, in the determination of the Issuer’s Board of Directors (or by the audit committee or any committee of the Board of Directors) or management, or are on terms at least as favorable as might reasonably have been obtained at such time from an unaffiliated party;
(13) transactions with joint ventures and Subsidiaries thereof and Unrestricted Subsidiaries relating to the provision of management services, overhead, sharing of customer lists and customer loyalty programs or that are approved by a majority of the disinterested members of the Issuer’s Board of Directors (or by the audit committee or any committee of the Board of Directors consisting of disinterested members of the Board of Directors) (a director shall be conclusivedisinterested if he or she has no interest in such joint venture or Unrestricted Subsidiary other than through the Issuer and binding absent manifest error.its Restricted Subsidiaries);provided that no Affiliate of the Issuer (other than the Issuer’s Restricted Subsidiaries) has an interest (other than indirectly through the Issuer and other than Unrestricted Subsidiaries or such joint ventures) in any such joint venture or Unrestricted Subsidiary;
(14) any transaction with respect to which the Issuer or any of its Restricted Subsidiaries obtains an opinion as to the fairness to the Issuer or such Restricted Subsidiary, as applicable, of such Affiliate Transaction from a financial point of view issued by an accounting, appraisal or investment banking firm of national standing;
(15) any investments in and other customary transactions with (a) Capri Insurance Company to the extent the same pertain to the provision of insurance coverage, historical practice, are required by applicable law or prudent insurance underwriting principles or (b) IOC-PA, L.L.C. consistent with historical practice; and
(16) transactions between the Issuer or any Restricted Subsidiary and any Person, which is an Affiliate solely due to a director or directors of such Person (or a parent company of such Person) also being a director of the Issuer;provided, however, that any such director abstains from voting as a director of the Issuer on any matter involving such other Person.
Business Activitiesactivities
The CompanyIssuer will not, and will not permit any of its Restricted Subsidiaries to, engage in any business other than Permitted Businesses, except to such extent as would not be material to the CompanyIssuer and its Restricted Subsidiaries taken as a whole.
No layering
The Issuer will not, and will not permit any Guarantor to, incur or suffer to exist Indebtedness that is contractually subordinated in right of payment to any other Indebtedness of the Issuer or such Guarantor, as the case may be, unless such Indebtedness is also contractually subordinated in right of payment to the Notes or such Guarantor’s Note Guarantee, as the case may be.
Additional Note Guaranteesguarantees
If the CompanyIssuer or any of its Restricted Subsidiaries acquires or creates another Domestic Subsidiary after the date of the Indenture, (other than a Subsidiary of an Unrestricted Subsidiary) that becomes a Significant Restricted Subsidiary or any Restricted Subsidiary of the Company that was not initially a Significant Restricted Subsidiary becomes a Significant Restricted Subsidiary, then that Significant Restrictednewly acquired or created Domestic Subsidiary will become a Guarantor and execute a supplemental indenture and deliver an opinion of counselin form satisfactory to the trustee within 1015 business days ofafter the date on which it becamewas acquired or created (or such longer period of time as may be required to obtain any necessary approvals under applicable Gaming Laws or other regulatory requirements). The Issuer shall use commercially reasonable efforts to obtain all approvals of any Gaming Authority necessary to permit a Significant Restricted Subsidiary.
Domestic Subsidiary to become a Guarantor as promptly as practicable.
Designation of Restrictedrestricted and Unrestricted Subsidiariesunrestricted subsidiaries
The Board of Directors of the CompanyIssuer may designate any Restricted Subsidiary to be an Unrestricted Subsidiary if that designation would not cause a Default. If a Restricted Subsidiary is designated as an Unrestricted Subsidiary, the aggregate Fair Market Value of all outstanding Investments owned by the CompanyIssuer and its Restricted Subsidiaries in the Subsidiary designated as an Unrestricted Subsidiary will be deemed to be an Investment made as of the time of the designation and will reduce the amount available for Restricted Payments under the covenant described above under the
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caption “—Restricted Payments”payments” or under one or more clauses of the definition of Permitted“Permitted Investments,” as determined by the Company.Issuer. That designation will only be permitted if the Investment would be permitted at that time and if the Restricted Subsidiary otherwise meets the definition of an Unrestricted Subsidiary. The Board of Directors of the CompanyIssuer may redesignate any Unrestricted Subsidiary to be a Restricted Subsidiary if that redesignation would not cause a Default.
Other than the Subsidiaries of the Company that are designated as Unrestricted Subsidiaries on the date of the Indenture as set forth in the definition of “Unrestricted Subsidiary,” any designation of a Subsidiary of the Company as an Unrestricted Subsidiary will be evidenced to the trustee by filing with the trustee a certified copy of a resolution of the Board of Directors giving effect to such designation and an officers’ certificate certifying that such designation complied with the preceding conditions and was permitted by the covenant described above under the caption “— Restricted Payments.” If, at any time, any Unrestricted Subsidiary would fail to meet the preceding requirements as an Unrestricted Subsidiary, it will thereafter cease to be an Unrestricted Subsidiary for purposes of the Indenture and any Indebtedness of such Subsidiary will 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 the covenant described under the caption “— Incurrence of Indebtedness and Issuance of Preferred Stock,” the Company will 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 of the Company; provided that such designation will 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 will only be permitted if (1) such Indebtedness is permitted under the covenant described under the caption “— Incurrence of Indebtedness and Issuance of Preferred Stock,” calculated on a pro forma basis as if such designation had occurred at the beginning of the applicable reference period; and (2) no Default or Event of Default would be in existence following such designation.
No Amendment to Subordination ProvisionsReports
Without the consent of the Holders of at least two-thirds in aggregate principal amount of the Notes then outstanding, the Company will not amend, modify or alter the terms of any Subordinated Indebtedness, including the indenture governing the 2020 Subordinated Notes, in any way that will:
(1)increase the rate of or advance the time for payment of interest on any such Subordinated Indebtedness;
(2)increase the principal of, advance the final maturity date of or shorten the Weighted Average Life to Maturity of any such Subordinated Indebtedness;
(3)alter the redemption provisions or increase the redemption price or terms at which the Company is required to offer to purchase any such Subordinated Indebtedness; or
(4)amend any other subordination provisions of any documents, instruments or agreements governing any such Subordinated Indebtedness, including Article 10 (“Subordination”) of the indenture governing the 2020 Subordinated Notes, in any manner that is adverse to the interests of the Holders of the Notes in any material respect.
For the avoidance of doubt, nothing in the above provision will prohibit or limit the ability of the Company from repurchasing, redeeming, refinancing or defeasing any Subordinated Indebtedness provided that such repurchase, redemption, refinancing or defeasance is in accordance with the covenant described above under the caption “Certain Covenant — Restricted Payments.”
Payments for Consent
The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, pay or cause to be paid any consideration to or for the benefit of any Holder of Notes for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of the Indenture or the Notes unless such consideration is offered to be paid and is paid to all Holders of the Notes that consent, waive or agree to amend in the time frame set forth in the solicitation documents relating to such consent, waiver or agreement.
Reports
Whether or not required by the rules and regulations of the SEC, so long as any Notes are outstanding, the CompanyIssuer will furnish to the Holderstrustee:
(1) within 90 days after the end of Notes or causeeach fiscal year, annual reports of the trustee to furnish toIssuer containing the Holders of Notes (or file with the SEC for public availability), within the time periods specified in the SEC’s rules and regulations:
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(1)all quarterly and annual financial information that would behave been required to be filed withcontained in an Annual Report onForm 10-K under the SEC on Forms 10-Q and 10-KExchange Act if the Company were required to file such reports,Issuer had been a reporting company under the Exchange Act, including a Management’s(A) “Management’s Discussion and Analysis of Financial Condition and Results of Operations that describesOperations” and (B) audited financial statements prepared in accordance with GAAP;
(2) within 45 days after the financial condition and resultsend of operationseach of the Companyfirst three fiscal quarters of each fiscal year, quarterly reports of the Issuer containing the information that would have been required to be contained in a Quarterly Report onForm 10-Q under the Exchange Act if the Issuer had been a reporting company under the Exchange Act, including (A) “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and (B) unaudited quarterly financial statements prepared in accordance with GAAP and reviewed pursuant to Statement on Auditing Standards No. 100 (or any successor provision); and
(3) within five business days after the occurrence of each event that would have been required to be reported in a Current Report onForm 8-K under the Exchange Act if the Issuer had been a reporting company under the Exchange Act, current reports containing substantially all of the information that would have been required to be contained in a Current Report onForm 8-K under the Exchange Act if the Issuer had been a reporting company under the Exchange Act;provided,however, that no such current report will be required to be furnished if the Issuer determines in its good faith judgment that such event is not material to noteholders or the business, assets, operations, financial positions or prospects of the Issuer and its consolidatedRestricted Subsidiaries, (taken as a whole;
provided, that such distribution requirements shall be deemed to have been satisfied if the Issuer files all such information shall show in reasonable detail, either onmeeting the faceabove requirements within the applicable time periods with the SEC through the SEC’s Electronic Data Gathering, Analysis, and Retrieval System (EDGAR) (or any successor system);
provided further,however, that all such reports (A) will not be required to comply with Section 302 or Section 404 of the financial statementsSarbanes-Oxley Act of 2002, or in the footnotes thereto, the financial conditionrelated Items 307 and results308 of operations of the Company and the Guarantors separate from the financial condition and results of operations of the Subsidiaries of the Company that are not Guarantors with such reasonable detail as requiredRegulation S-K promulgated by the SEC, or as wouldItem 10(e) ofRegulation S-K (with respect to anynon-GAAP financial measures contained therein), (B) will not be required to contain the separate financial information for Guarantors contemplated byRule 3-10 orRule 3-16 ofRegulation S-X promulgated by the SEC, if the Company was subject(C) will only be required to the periodic reporting requirementsinclude limited executive compensation disclosure consisting of the Exchange Act)a summary compensation table (including any equity awards), a description of employment agreements with officers and with respecta description of any incentive plans and (D) will not be required to the annual information only, a report thereon by the Company’s certified independent accountants; and
(2)all current reportsinclude exhibits that would otherwise be required to be filed with the SEC on Form 8-K if the Company were required to file such reports.
In addition, the Company will file a copy of the information and reports referred to in clauses (1) and (2) above with the SEC for public availability within the time periods specified in the rules and regulations applicable to such reports (unless the SEC will not accept such a filing) and will post the reports on its website within those time periods. The Company will at all times comply with Section 314(a) of the Trust Indenture Act.
The Company and the Guarantors agree that, for so long as any Notes remain outstanding, if at any time they are not required to file with the SEC the reports required by the preceding paragraphs, they will furnish to the Holders of Notes and to securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.Item 601 ofRegulation S-K.
Notwithstanding the foregoing, the Company will be deemed to have furnished such reports referred to above to the trustee and the Holders of the Notes if the Company has filed such reports with the SEC via the EDGAR filing system and such reports are publicly available.
Events of Defaultdefault and Remediesremedies
Each of the following is an “Event“Event of Default”Default”:
(1)default for 30 days in the payment when due of interest and Special Interest, if any,(including Additional Interest) on the Notes;
(2)default in the payment when due (at maturity, upon redemption or otherwise) of the principal of, or premium, if any, on, the Notes;
(3)failure by the CompanyIssuer or any of its Restricted Subsidiaries to comply with the provisions described under the caption “—Certain covenants—Merger, consolidation or sale of assets”;
(4) subject to the last paragraph of this covenant, failure by the Issuer or any of its Restricted Subsidiaries for 3060 days after notice to the CompanyIssuer by the trustee or the Holdersholders of at least 25% in aggregate principal amount of the Notes then outstanding voting as(with a single classcopy to comply with the provisions described under the captions “— Repurchase at the Option of Holders — Change of Control,” “— Repurchase at the Option of Holders — Asset Sales,” “— Repurchase at the Option of Holders — Events of Loss,” and “— Certain Covenants — Merger, Consolidation or Sale of Assets;”
(4)failuretrustee if given by the Company or any of its Restricted Subsidiaries for 60 days after notice to the Company by the trustee or the Holders of at least 25% in aggregate principal amount of the Notes then outstandingholders) voting as a single class to comply with any of the other agreements in the Indenture;
(5)default under any mortgage, indentureIndenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the CompanyIssuer or any of its Restricted Subsidiaries (or the payment of which is guaranteed by the CompanyIssuer or any of its Restricted
Subsidiaries), whether such Indebtedness or Guarantee now exists, or is created after the date of the Indenture, if that default:
(a)is caused by a failure to pay principal of, premium on, if any, or interest or premium, if any, on, such Indebtedness afterprior to the expiration of the grace period provided in such Indebtedness on the date of such default (a “Payment Default”“Payment Default”); or
(b)results in the acceleration of such Indebtedness prior to its express maturity;maturity, and,
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in each case, the principal amount of any 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 $35.0$50.0 million or more;
(6)failure by the CompanyIssuer or any of its Restricted Subsidiaries to pay final judgments entered by a court or courts of competent jurisdiction in an uninsured aggregate amount in excess of $35.0$50.0 million, which judgments are not paid, waived, satisfied, discharged or stayed for a period of 60 days;
(7)except as permitted by the Indenture, any Note Guarantee is held in any judicial proceeding to be unenforceable or invalid or ceases for any reason to be in full force and effect, or any Guarantor, or any Person acting on behalf of any Guarantor, denies or disaffirms its obligations under its Note Guarantee; and
(8)the revocation, termination, suspension or cessation to be effective of any gaming license or other right to conduct lawful gaming operations at one or more Casinos of the Company or any Restricted Subsidiary which shall continue for more than 90 consecutive days and which Casinos, taken together, contribute more than 5% of the Company’s Consolidated EBITDA; provided that the voluntary relinquishment of any such gaming license or right will not constitute an Event of Default if, in the reasonable opinion of the Company (as evidenced by an officers’ certificate) such relinquishment (a) is in the best interest of the Company and its Subsidiaries, taken as a whole, (b) does not adversely affect the Holders of the Notes in any material respect and (c) is not reasonably expected to have, nor are the reasons therefor reasonably expected to have, any material adverse effect on the effectiveness of any gaming license or similar right, or any right to renewal thereof, or on the prospective receipt of any such license or right, in each case, in any jurisdiction in which the Company or any of its Subsidiaries is located or operates; and
(9)certain events of bankruptcy or insolvency described in the Indenture with respect to the CompanyIssuer or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of its Restricted Subsidiaries that, taken together, would constitute a Significant Subsidiary.
In the case of an Event of Default arising from certain events of bankruptcy or insolvency, with respect to the Company,Issuer, any Restricted Subsidiary of the CompanyIssuer that is a Significant Subsidiary or any group of Restricted Subsidiaries of the CompanyIssuer that, taken together, would constitute a Significant Subsidiary, all outstanding Notes will become due and payable immediately without further action or notice. If any other Event of Default occurs and is continuing, the trustee or the Holdersholders of at least 25% in aggregate principal amount of the then outstanding Notes (with a copy to the trustee if given by the holders) may declare all the Notes to be due and payable immediately.
Subject to certain limitations, Holdersholders of a majority in aggregate principal amount of the then outstanding Notes may direct the trustee in its exercise of any trust or power. The trustee may withhold from Holdersholders of the Notes notice of any continuing Default or Event of Default if it determines that withholding notice is in their interest, except a Default or Event of Default relating to the payment of principal, of,interest or premium, on, if any, interest and Special Interest, if any.
Subject to the provisions of the Indenture relating to the duties of the trustee, in case an Event of Default occurs and is continuing, the trustee will be under no obligation to exercise any of the rights or powers under the Indenture at the request or direction of any Holdersholders of Notes unless such Holdersholders have offered to the trustee reasonable indemnity or security satisfactory to the Trusteetrustee against any loss, liability or expense.
Except to enforce the right to receive payment of principal, premium, if any, interest or Special Interest, if any,interest when due, no Holderholder of a Note may pursue any remedy with respect to the Indenture or the Notes unless:
(1)such Holderholder has previously given the trustee written notice that an Event of Default is continuing;
(2)Holders holders of at least 25% in aggregate principal amount of the then outstanding Notes make a written request tohave requested the trustee to pursue the remedy;
(3)such Holder or Holders offer and, if requested, provide toholders have offered the trustee reasonable security or indemnity reasonably satisfactory to the trustee against any loss, liability or expense;
(4)the trustee doeshas not complycomplied with such request within 60 days after the receipt of the request and the offer of security or indemnity; and
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(5)during such 60-day period, Holders holders of a majority in aggregate principal amount of the then outstandingthen-outstanding Notes dohave not givegiven the trustee a direction inconsistent with such request.request within such60-day
period.
The Holdersholders of a majority in aggregate principal amount of the then outstandingthen-outstanding Notes by written notice to the trustee may, on behalf of the Holdersholders of all of the Notes, rescind an acceleration or waive any existing Default or Event of Default and its consequences under the Indenture if the rescission would not conflict with any judgment or decree, except a continuing Default or Event of Default in the payment of principal of, premium on, if any, interest or Special Interest,premium, if any, on, or the principal of, the Notes.
Notwithstanding any other provision of the Indenture, the sole remedy for an Event of Default relating to the failure to comply with the reporting obligations described above under the heading “— Certain Covenants — Reports,” and for any failure to comply with the requirements of Section 314(a) of the Trust Indenture Act, will for the 365 days after the occurrence of such an Event of Default consist exclusively of the right to receive Special Interest on the principal amount of the Notes at a rate equal to 0.50% per annum. The Special Interest will be payable in the same manner and subject to the same terms as other interest payable under the Indenture. The Special Interest will accrue on all outstanding Notes from and including the date on which an Event of Default relating to a failure to comply with the reporting obligations described above under the heading “— Certain Covenants — Reports” or Section 314(a) of the Trust Indenture Act first occurs to but excluding the 365th day thereafter (or such earlier date on which the Event of Default relating to such reporting obligations is cured or waived). If the Event of Default resulting from such failure to comply with the reporting obligations is continuing on such 365th day, such Special Interest will cease to accrue and the Notes will be subject to the other remedies provided under the heading “— Events of Default and Remedies.”
The CompanyIssuer is required to deliver to the trustee annually a statement regarding compliance with the Indenture. Upon becoming aware of any Default or Event of Default, the CompanyIssuer is required to deliver to the trustee a statement specifying such Default or Event of Default.
Notwithstanding clause (4) of the first paragraph of this covenant, except as provided in the second to last sentence of this paragraph, the sole remedy for any failure to comply by the Issuer with the covenant described under the caption “—Reports” shall be the payment of liquidated damages as described in the following sentence, such failure to comply shall not constitute an Event of Default, and Holders of the Notes shall not have any right under the Indenture to accelerate the maturity of the Notes as a result of any such failure to comply. If a failure to comply by the Issuer with the covenant described under the caption “—Reports” continues for 60 days after the Issuer receives notice of such failure to comply in accordance with clause (4) of the first paragraph of this covenant (such notice, the “Reports Default Notice”), and is continuing on the 60th day following the Issuer’s receipt of the Reports Default Notice, the Issuer will pay liquidated damages to all Holders of Notes at a rate per annum equal to 0.25% of the principal amount of the Notes from the 60th day following the Issuer’s receipt of the Reports Default Notice to but not including the earlier of (x) the 121st day following the Issuer’s receipt of the Reports Default Notice and (y) the date on which the failure to comply by the Issuer with the covenant described under the caption “—Reports” shall have been cured or waived. On the earlier of the dates specified in the immediately preceding clauses (x) and (y), such liquidated damages will cease to accrue. If the failure to comply by the Issuer with the covenant described under the caption “—Reports” shall not have been cured or waived on or before the 121st day following the Issuer’s receipt of the Reports Default Notice, then the failure to comply by the Issuer with the covenant described under the caption “—Reports” shall on such 121st day constitute an Event of Default. A failure to comply with the covenant described under the caption “—Reports” automatically shall cease to be continuing and shall be deemed cured at such time as the Issuer furnishes to the trustee the applicable information or report (it being understood that the availability of such information or report on the Commission’s EDGAR service (or any successor thereto) shall be deemed to satisfy the Issuer’s obligation to furnish such information or report to the trustee);provided, however, that the trustee shall have no obligation whatsoever to determine whether or not such information, documents or reports have been filed pursuant to the EDGAR service (or its successor).
No Personal Liabilitypersonal liability of Directors, Officers, Employeesdirectors, partners, members, officers, employees and Stockholders
stockholders
No director, partner, member, officer, employee, incorporator or stockholder of the CompanyIssuer or any Guarantor, as such, will have any liability for any obligations of the CompanyIssuer or the Guarantors under the Notes, the Indenture, the Note Guarantees or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holderholder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. The waiver may not be effective to waive liabilities under the federal securities laws.
Legal Defeasance and Covenant Defeasance
The CompanyIssuer may at any time, at the option of its Board of Directors evidenced by a resolution set forth in an officers’ certificate,Officer’s Certificate, elect to have all of its obligations discharged with respect to the outstanding Notes
and all obligations of the Guarantors discharged with respect to their Note Guarantees (“Legal Defeasance”Defeasance”) except for:
(1)the rights of Holdersholders of outstanding Notes to receive payments in respect of the principal of, premium on, if any,or interest or Special Interest,premium, if any, on, such Notes when such payments are due from the trust referred to below;
(2)the Company’sIssuer’s obligations with respect to the Notes concerning issuing temporary Notes, registration of Notes, mutilated, destroyed, lost or stolen Notes and the maintenance of an office or agency for payment and money for security payments held in trust;
(3)the rights, powers, trusts, duties and immunities of the trustee, under the Indenture, and the Company’sIssuer’s and the Guarantors’ obligations in connection therewith; and
(4)the Legal Defeasance and Covenant Defeasance provisions of the Indenture.
In addition, the CompanyIssuer may, at its option and at any time, elect to have the obligations of the CompanyIssuer and the Guarantors released with respect to certain covenants (including its obligation to make Change of Control Offers and Asset Sale Offers and Event of Loss Offers) that are described in the Indenture (“Covenant Defeasance”Defeasance”) and thereafter any omission to comply with those covenants will not constitute a Default or Event of Default with respect to the Notes. In the event of a Covenant Defeasance, occurs, all Events of Default described under “—Events of Default and Remedies” above (except those
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relating to payments on the Notes or bankruptcy, receivership, rehabilitation or insolvency events) will no longer constitute an Event of Default with respect to the Notes.
In order to exercise either Legal Defeasance or Covenant Defeasance:
(1)the CompanyIssuer must irrevocably deposit with the trustee, in trust, for the benefit of the Holdersholders of the Notes, cash in U.S. dollars,non-callable Government Securities, or a combination thereof,of cash in U.S. dollars andnon-callable Government Securities, in amounts as will be sufficient, in the opinion of a nationally recognized investment bank, appraisal firm or firm of independent public accountants, to pay the principal of, premium on, if any,or interest and Special Interest,premium, if any, on, the outstanding Notes on the stated date for payment thereof or on the applicable redemption date, as the case may be, and the CompanyIssuer must specify whether the Notes are being defeased to such stated date for payment or to a particular redemption date;
(2)in the case of Legal Defeasance, the CompanyIssuer must deliver to the trustee an opinion of counsel who is reasonably acceptable to the trustee confirming that (a) the CompanyIssuer has received from, or there has been published by, the Internal Revenue Service a ruling or (b) since the date of the 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 will confirm that, the Holdersholders 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;
(3)in the case of Covenant Defeasance, the CompanyIssuer must deliver to the trustee an opinion of counsel who is reasonably acceptable to the trustee confirming that the Holdersholders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;
(4)no Default or Event of Default has occurred and is continuing on the date of such deposit (other than a Default or Event of Default resulting from transactions occurring substantially contemporaneously with the borrowing of funds, or from the borrowing of funds to be applied to such deposit (and any similar concurrent deposit relating to other Indebtedness), and the granting of Liens to secure such borrowings);
(5)such Legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than the Indenture and the
agreements governing any other Indebtedness being defeased, discharged or replaced) to which the CompanyIssuer or any of the Guarantors is a party or by which the CompanyIssuer or any of the Guarantors is bound;
(6)the CompanyIssuer must deliver to the trustee an officers’ certificateOfficer’s Certificate stating that the deposit was not made by the CompanyIssuer with the intent of preferring the Holdersholders of Notes over the other creditors of the CompanyIssuer with the intent of defeating, hindering, delaying or defrauding any creditors of the CompanyIssuer or others; and
(7)the CompanyIssuer must deliver to the trustee an officers’ certificateOfficer’s Certificate and an opinion of counsel, each stating that all conditions precedent relating to the Legal Defeasance or the Covenant Defeasance have been complied with.
Amendment, Supplementsupplement and Waiver
waiver
Except as provided in the next two succeeding paragraphs, the Indenture or the Notes or the Note Guarantees may be amended or supplemented with the consent of the Holdersholders of at least a majority in aggregate principal amount of the Notes then outstanding Notes (including, without limitation, Additional Notes, if any) voting as a single class (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, or purchase of, the Notes), and any existing Default or Event of Default (other than a Default or Event of Default in the payment of the principal of, premium on, if any, interest or Special Interest, if any, on, the Notes, except a payment default resulting from an acceleration that has been rescinded) or compliance with any provision of the Indenture or the Notes or the Note Guarantees may be waived with the consent of the Holdersholders of a majority in aggregate principal amount of the then outstanding Notes (including, without limitation, Additional Notes, if any) voting as a single class (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes).
Without the consent of each Holderholder of Notes affected, an amendment, supplement or waiver may not (with respect to any Notes held by anon-consenting Holder) holder):
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(1)reduce the principal amount of Notes whose Holdersholders must consent to an amendment, supplement or waiver;
(2)reduce the principal of or change the fixed maturity of any Note or alter or waive any of the provisionspremium payable in connection with respect to thea redemption of the Notes (except those provisions relating to the covenants described above under the caption “— Repurchase at the Option of Holders”);Notes;
(3)reduce the rate of or change the time for payment of interest, including default interest, on any Note;
(4)waive a Default or Event of Default in the payment of principal of, premium on, if any,or interest or Special Interest,premium, if any, on, the Notes (except a rescission of acceleration of the Notes by the Holdersholders 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);
(5)make any Note payable in money other than that stated in the Notes;
(6)make any change in the provisions of the Indenture relating to waivers of past Defaults or the rights of Holdersholders of Notes to receive payments of principal of, premium on, if any,or interest or Special Interest,premium, if any, on, the Notes;
(7)waive a redemption payment with respect to any Note (other than a payment required by one of the covenants described above under the caption “—Repurchase at the Optionoption of Holders”holders”);
(8)release any Guarantor from any of its obligations under its Note Guarantee contractually subordinate the Notes or the Indenture, except in accordance with the terms of the Indenture;Guarantees to any other Indebtedness; or
(9)make any change in the preceding amendment and waiver provisions.
Notwithstanding the preceding, without the consent of any Holderholder of Notes, the Company,Issuer, the Guarantors and the trustee may amend or supplement the Indenture, the Notes or the Note Guarantees:
(1)to cure any ambiguity, defect or inconsistency;
(2)to provide for uncertificated Notes in addition to or in place of certificated Notes;
(3)to provide for the assumption of the Company’sIssuer’s or a Guarantor’s obligations to Holdersholders of Notes and Note Guarantees in the case of a merger or consolidation or sale of all or substantially all of the Company’sIssuer’s or such Guarantor’s assets, as applicable;
(4) to comply with the rules of any applicable securities depository;
(4)(5) to make any change that would provide any additional rights or benefits to the Holdersholders of Notes and, in each case, the release, suspension or termination thereof, or that does not adversely affect the legal rights under the Indenture of any Holder;such holder;
(5)to comply with requirements of the SEC in order to effect or maintain the qualification of the Indenture under the Trust Indenture Act;
(6)to conform the text of the Indenture, the Notes or the Note Guarantees to any provision of thisthe Description of the Notes contained in the Final Offering Memorandum dated as March 15, 2017 delivered in connection with the Existing Notes to the extent that such provision in thissuch Description of the Notes was intended to be a verbatim recitation of a provision of the Indenture, the Notes or the Note Guarantees which intent may be evidenced by an officers’ certificateOfficer’s Certificate to that effect;
(7) to release the Note Guarantee of a Guarantor in accordance with the terms of the Indenture;
(7)(8) to allow any Guarantor to execute a supplemental indenture and/or a Note Guarantee with respect to the Notes;
(9) to provide for the issuance of Additional Notes in accordance with the limitations set forth in the Indenture as of the date of the Indenture;
(10) to comply with requirements of the SEC in order to effect or maintain the qualification of the Indenture under the TIA;
(8)(11) to comply with requirements of applicable Gaming Laws or to provide for requirements imposed by applicable Gaming Authorities; or
(12) to provide for the acceptance or appointment of a successor trustee.
(9)to allow any Guarantor to execute a supplemental indenture and/or a Note Guarantee with respect to the Notes.
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Satisfaction and Discharge
discharge
The Indenture will be discharged and will cease to be of further effect as to all Notes issued thereunder when:
(1) either:
(1)either:
(a)all Notes that have been authenticated, except lost, stolen or destroyed Notes that have been replaced or paid and Notes for whose payment money has been deposited in trust and thereafter repaid to the Company,Issuer, have been delivered to the trustee for cancellation; or
(b)all Notes that have not been delivered to the trustee for cancellation have become due and payable by reason of the mailing of a notice of redemption or otherwise or will become due and payable within one year (or are to be irrevocably called for redemption within one year) and the CompanyIssuer or any Guarantor has irrevocably deposited or caused to be deposited with the trustee as trust funds in trust solely for the benefit of the Holders,holders, cash in U.S. dollars,non-callable Government Securities, or a combination thereof,of cash in U.S. dollars andnon-callable Government Securities, in amounts as will be sufficient, without consideration of any reinvestment of interest, to pay and discharge the entire Indebtedness on the Notes not delivered to the trustee for cancellation for principal, of, premium, on, if any, interest and Special Interest, if any, on, the Notesaccrued interest to the date of maturity or redemption;
(2)in respect of clause 1(b), no Default or Event of Default has occurred and is continuing on the date of the deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit and any similar deposit relating to other Indebtedness and, in each case, the granting of Liens to secure such borrowings) and the deposit will not result in a breach or violation of, or constitute a default under, any other instrument to which the Company or any Guarantor is a party or by which the Company or any Guarantor is bound (other than with respect to the borrowing of funds to be applied concurrently to make the deposit required to effect such satisfaction and discharge and any similar concurrent deposit relating to other Indebtedness, and in each case the granting of Liens to secure such borrowings);
(3)the CompanyIssuer has or any Guarantor has paid or caused to be paid all sums payable by it under the Indenture; and
(4)(3) the CompanyIssuer has delivered irrevocable instructions to the trustee under the Indenture to apply the deposited money toward the payment of the Notes at maturity or on the redemption date, as the case may be.
In addition, the CompanyIssuer must deliver an officers’ certificateOfficer’s Certificate and an opinion of counsel to the trustee stating that all conditions precedent to satisfaction and discharge have been satisfied.complied with.
The satisfaction and discharge will be effective on the day on which all the applicable conditions above have been satisfied. Upon compliance with the foregoing, the trustee shall execute proper instrument(s) acknowledging the satisfaction and discharge of all of the Issuer’s obligations under the Notes and the Indenture.
Concerning the Trustee
trustee
If the trustee becomes a creditor of the CompanyIssuer or any Guarantor, the Indenture limits the right of the trustee to obtain payment of claims in certain cases, or to realize on certain property received in respect of any such claim as security or otherwise. The trustee will be permitted to engage in other transactions; however, if it acquires any conflicting interest it must eliminate such conflict within 90 days, apply to the SEC for permission to continue as trustee under the Indenture (if the Indenture has been qualified under the Trust Indenture Act)TIA) or resign.
The Holdersholders of a majority in aggregate principal amount of the then outstanding Notes will have the right to direct the time, method and place of conducting any proceeding for exercising any remedy available to the trustee, subject to certain exceptions. The Indenture provides that in case an Event of Default has occurredoccurs and is continuing, the trustee will be required, in the exercise of its power, to use the degree of care of a prudent man in the conduct of his own affairs. Subject to such provisions, the trustee will be under no obligation to exercise any of its rights or powers under the Indenture at the request of any Holderholder of Notes, unless such Holderholder has offered to the trustee reasonablesecurity and indemnity or security satisfactory to itthe trustee against any loss, liability or expense.
The trustee shall not be responsible for, and makes no representation as to any Gaming Law or any Gaming Authority, whether any holder or beneficial owner of Notes could be licensed, qualified or found suitable under any Gaming Law or by any Gaming Authority, and any consequence to any holder or beneficial owner of Notes under any Gaming Law or by any Gaming Authority.
Additional InformationBook-entry, delivery and form
Anyone who receives this prospectus may obtain a copy of the Indenture and the Registration Rights Agreement without charge by writing to Isle of Capri Casinos, Inc., 600 Emerson Road, Suite 300, St. Louis, Missouri 63141, Attention: Chief Legal Officer, Phone: (314) 813-9200. A copy of the Indenture and the Registration Rights Agreement is filed as an exhibit to the registration statement of which this prospectus is a part.
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Book-Entry, Delivery and Form
Except as set forth below, the exchange notes will be issued in registered, global form in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof.The Exchange notes will be issued promptly after the expiration time of this exchange offer.
Exchange notes initiallyNotes will be represented by one or more global notes in registered global form without interest coupons (the “Global Notes”attached (collectively, the “Global Notes”). The Global Notes representing the Notes will be deposited upon issuance with the trustee asa custodian for The Depository Trust Company (“DTC,”), in New York, New York, and registered in the name of DTC or its nominee, in each case, for credit to an account of a direct or indirect participant in DTCCede & Co., as described below.
Except as set forth below, the Global Notes may be transferred, in whole and not in part, only to another nominee of DTC or to a successorDTC.
Ownership of DTC or its nominee. Beneficial interests in the Global Notes(“Book-Entry Interests”) will be limited to persons that have accounts with DTC, or persons that hold interests through such participants.
Book-Entry Interests will be shown on, and transfers thereof will be done only through, records maintained inbook-entry form by DTC and its participants. The laws of some jurisdictions, including certain states of the U.S., may require that certain purchasers of securities take physical delivery of such securities in definitive form. The foregoing limitations may impair your ability to own, transfer or pledgeBook-Entry Interests. In addition, while the notes are in global form, holders ofBook-Entry Interests are not considered the owners or “holders” of Notes for any purpose.
So long as the Notes are held in global form, DTC (or its nominees) will be exchanged for definitive notes in registered certificated form (“Certificated Notes”) except inconsidered the limited circumstances described below. See “— Exchangesole holders of Global Notes for Certificated Notes.” Exceptall purposes under the Indenture. In addition, participants in DTC must rely on the limited circumstances described below, ownersprocedures of beneficialDTC and indirect participants must rely on the procedures of DTC and the participants through which they ownBook-Entry Interests, to transfer their interests inor to exercise any rights of holders under the Global Notes will not be entitledIndenture.
Neither the Company nor the Trustee has any responsibility or liability for any aspect of the records relating to receive physical delivery of Notes in certificated form.theBook-Entry Interests.
Depository procedures
Depository Procedures
The following description of the operations and procedures of DTC, Euroclear System (“Euroclear”) and Clearstream Banking, S.A. (“Clearstream”) are provided solely as a matter of convenience. These operations and procedures are solely within the control of the respective settlement systems and are subject to changes by them. The CompanyIssuer takes no responsibility for these operations and procedures and urges investors to contact the system or their participants directly to discuss these matters.
DTC has advised the CompanyIssuer that DTC is alimited-purpose trust company created to hold securities for its participating organizations (collectively, the “Participants”“Participants”) and to facilitate the clearance and settlement of transactions in those securities between the Participants through electronicbook-entry changes in accounts of its Participants. The Participants include securities brokers and dealers (including the Initial Purchasers)initial purchasers), banks, trust companies, clearing corporations and certain other organizations. Access to DTC’s system is also available to other entities such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a Participant, either directly or indirectly (collectively, the “Indirect Participants”“Indirect Participants”). Persons who are not Participants may Beneficially Ownbeneficially own securities held by or on behalf of DTC only through the Participants or the Indirect Participants. The ownership interests in, and transfers of ownership interests in, each security held by or on behalf of DTC are recorded on the records of the Participants and Indirect Participants.
DTC has also advised the CompanyIssuer that, pursuant to procedures established by it:
(1)upon deposit of the Global Notes, DTC will credit the accounts of the Participants designated by the Initial Purchasers with portions of the principal amount of the Global Notes; and
(2)it, ownership of these interests in the Global Notes will be shown on, and the transfer of ownership of these interests will be effected only through, records maintained by DTC (with respect to the Participants) or by the Participants and the Indirect Participants (with respect to other owners of beneficial interest in the Global Notes).
Investors in the Global Notes who are Participants may hold their interests therein directly through DTC. Investors in the Global Notes who are not Participants may hold their interests therein indirectly through organizations (including Euroclear and Clearstream) which are Participants. Investors in the Global Notes may also initially hold their interests therein through Euroclear or Clearstream, if they are participants in such systems, or indirectly through organizations that are participants. Investors may also hold interests in the Global Notes through Participants in the DTC system other than Euroclear and Clearstream. Euroclear and Clearstream will hold interests in the Global Notes on behalf of their participants through customers’ securities accounts in their respective names on the books of their respective depositories, which are Euroclear Bank S.A./ N.V., as operator of Euroclear, and Citibank, N.A., as operator of Clearstream. All interests in a Global Note, including those held through Euroclear or Clearstream, may be subject to the procedures and requirements of DTC. Those interests held through Euroclear or Clearstream may also be subject to the procedures and requirements of such systems. The laws of some states require that certain Persons take physical delivery in definitive form of securities that they own. Consequently, the ability to transfer beneficial interests in a Global Note to such Persons will be limited to that extent. Because DTC can act only on behalf of the Participants, which in turn act on behalf of the Indirect Participants, the ability of a Person having beneficial interests in a Global Note to pledge such interests to Persons that do not participate in the DTC
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system, or otherwise take actions in respect of such interests, may be affected by the lack of a physical certificate evidencing such interests.
Except as described below, owners of interests in the Global Notes will not have Notes registered in their names, will not receive physical delivery of Notes in certificated form and will not be considered the registered owners or “holders” thereof under the Indenture for any purpose.purpose
.
Payments in respect of the principal of, premium on, if any,and interest and Special Interest,premium, if any, on, a Global Note registered in the name of DTC or its nominee will be payable to DTC in its capacity as the registered holder under the Indenture. Under the terms of the Indenture, the CompanyIssuer and the trustee will treat the Persons in whose names the Notes, including the Global Notes, are registered as the owners of the Notes for the purpose of receiving payments and for all other purposes. Consequently, neither the Company,Issuer, the trustee nor any agent of the CompanyIssuer or the trustee has or will have any responsibility or liability for:
(1)any aspect of DTC’s records or any Participant’s or Indirect Participant’s records relating to or payments made on account of beneficial ownership interest in the Global Notes or for maintaining, supervising or reviewing any of DTC’s records or any Participant’s or Indirect Participant’s records relating to the beneficial ownership interests in the Global Notes; or
(2)any other matter relating to the actions and practices of DTC or any of its Participants or Indirect Participants.
DTC has advised the CompanyIssuer that its current practice, upon receipt of any payment in respect of securities such as the Notes (including principal and interest), is to credit the accounts of the relevant Participants with the payment on the payment date unless DTC has reason to believe that it will not receive payment on such payment date. Each relevant Participant is credited with an amount proportionate to its beneficial ownership of an interest in the principal amount of the relevant security as shown on the records of DTC. Payments by the
Participants and the Indirect Participants to the Beneficial Ownersbeneficial owners of Notes will be governed by standing instructions and customary practices and will be the responsibility of the Participants or the Indirect Participants and will not be the responsibility of DTC, the trustee or the Company.Issuer. Neither the CompanyIssuer nor the trustee will be liable for any delay by DTC or any of the Participants or the Indirect Participants in identifying the Beneficial Ownersbeneficial owners of the Notes, and the CompanyIssuer and the trustee may conclusively rely on and will be protected in relying on instructions from DTC or its nominee for all purposes.
TransfersSubject to the transfer restrictions applicable to the Existing Notes described herein, transfers between the Participants will be effected in accordance with DTC’s procedures, and will be settled insame-day funds, and transfers between participants in Euroclear and Clearstream will be effected in accordance with their respective rules and operating procedures.
Cross-marketSubject to compliance with the transfer restrictions applicable to the Existing Notes described herein,cross-market transfers between the Participants, on the one hand, and Euroclear or Clearstream participants, on the other hand, will be effected through DTC in accordance with DTC’s rules on behalf of Euroclear or Clearstream, as the case may be, by their respective depositaries; however, suchcross-market transactions will require delivery of instructions to Euroclear or Clearstream, as the case may be, by the counterparty in such system in accordance with the rules and procedures and within the established deadlines (Brussels time) of such system. Euroclear or Clearstream, as the case may be, will, if the transaction meets its settlement requirements, deliver instructions to its respective depositary to take action to effect final settlement on its behalf by delivering or receiving interests in the relevant Global Note in DTC, and making or receiving payment in accordance with normal procedures forsame-day funds settlement applicable to DTC. Euroclear participants and Clearstream participants may not deliver instructions directly to the depositories for Euroclear or Clearstream.
DTC has advised the CompanyIssuer that it will take any action permitted to be taken by a Holderholder of Notes only at the direction of one or more Participants to whose account DTC has credited the interests in the Global Notes and only in respect of such portion of the aggregate principal amount of the Notes as to which such Participant or Participants has or have given such direction. However, if there is an Event of Default under the Notes, DTC reserves the right to exchange the Global Notes for legended Notes in certificated form, and to distribute such Notes to its Participants.
Although DTC, Euroclear and Clearstream have agreed to the foregoing procedures to facilitate transfers of interests in the Global Notes among participants in DTC, Euroclear and Clearstream, they are under no obligation to perform or to continue to perform such procedures, and may discontinue such procedures at any time. None of the Company, the trustee and any of their respective agents will have any responsibility for the performance by DTC, Euroclear or Clearstream or their respective participants or indirect participants of their respective obligations under the rules and procedures governing their operations.
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Exchange of Global Notes for Certificated Notes
A Global Note is exchangeable for Certificated Notes if:
(1)DTC (a) notifies the CompanyIssuer that it is unwilling or unable to continue as depositary for the Global Notes or (b) has ceased to be a clearing agency registered under the Exchange Act and, in either case, the CompanyIssuer fails to appoint a successor depositary;
(2)the Company,Issuer, at its option, notifies the trustee in writing that it elects to cause the issuance of the Certificated Notes; or
(3)there has occurred and is continuing a Default or Event of Default with respect to the Notes.
In addition, beneficial interests in a Global Note may be exchanged for Certificated Notes upon prior written notice given to the trustee by or on behalf of DTC in accordance with the Indenture. In all cases, Certificated Notes delivered in exchange for any Global Note or beneficial interests in Global Notes will be registered in the names, and issued in any approved denominations, requested by or on behalf of the depositary (in accordance with its customary procedures).
Same-day settlement and will bear the applicable restrictive legend, unless that legend is not required by applicable law.
Exchange of Certificated Notes for Global Notes
Certificated Notes may not be exchanged for beneficial interests in any Global Note unless the transferor first delivers to the trustee a written certificate (in the form provided in the Indenture) to the effect that such transfer will comply with the appropriate transfer restrictions applicable to such Notes.
Same Day Settlement and Payment
payment
The CompanyIssuer will make payments in respect of the Notes represented by the Global Notes, including principal, premium, if any, interest and Special Interest, if any,interest, by wire transfer of immediately available funds to the accounts
specified by DTC or its nominee. The CompanyIssuer will make all payments of principal, premium, if any, interest and Special Interest,premium, if any, with respect to Certificated Notes by wire transfer of immediately available funds to the accounts specified by the Holdersholders of the Certificated Notes or, if no such account is specified, by mailing a check to each such Holder’sholder’s registered address. The Notes represented by the Global Notes are expected to be eligible to trade in DTC’sSame-Day Funds Settlement System, and any permitted secondary market trading activity in such Notes will, therefore, be required by DTC to be settled in immediately available funds. The CompanyIssuer expects that secondary trading in any Certificated Notes will also be settled in immediately available funds.
Because of time zone differences, the securities account of a Euroclear or Clearstream participant purchasing an interest in a Global Note from a Participant will be credited, and any such crediting will be reported to the relevant Euroclear or Clearstream participant, during the securities settlement processing day (which must be a business day for Euroclear and Clearstream) immediately following the settlement date of DTC. DTC has advised the CompanyIssuer that cash received in Euroclear or Clearstream as a result of sales of interests in a Global Note by or through a Euroclear or Clearstream participant to a Participant will be received with value on the settlement date of DTC but will be available in the relevant Euroclear or Clearstream cash account only as of the business day for Euroclear or Clearstream following DTC’s settlement date.
Registration Rights; Special Interest
The following description is a summary of the material provisions of the Registration Rights Agreement. It does not restate that agreement in its entirety. We urge you to read the Registration Rights Agreement in its entirety because it, and not this description, defines your registration rights as Holders of these Notes. See “— Additional Information.”
The Company, the Guarantors and the Initial Purchasers with respect to the old notes entered into the Registration Rights Agreement on April 14, 2015. Pursuant to the Registration Rights Agreement, the Company and the Guarantors agreed to file with the SEC the Exchange Offer Registration Statement (as defined in the Registration Rights Agreement) on the appropriate form under the Securities Act with respect to the Exchange Notes (as defined in the Registration Rights Agreement). Upon the effectiveness of the Exchange Offer Registration Statement, the Company and the Guarantors will offer to the Holders of Entitled Securities pursuant to the Registered Exchange Offer (as defined in the Registration Rights
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Agreement) who are able to make certain representations the opportunity to exchange their Entitled Securities for Exchange Notes.
If:
(1)the Company and the Guarantors are not
(a)required to file the Exchange Offer Registration Statement; or
(b)permitted to consummate the Registered Exchange Offer because the Registered Exchange Offer is not permitted by applicable law or SEC policy;
(2)any Initial Purchaser requests with respect to the Entitled Securities (or Private Exchange Securities, as defined in the Registration Rights Agreement) not eligible to be exchanged for Exchange Notes in the Registered Exchange Offer and held by it following consummation of the Registered Exchange Offer; or
(3)any Holder of Entitled Securities notifies the Company prior to the 20th business day following consummation of the Exchange Offer that:
(a)it is prohibited by law or SEC policy from participating in the Registered Exchange Offer;
(b)it may not resell the Exchange Notes acquired by it in the Registered Exchange Offer to the public without delivering a prospectus and the prospectus contained in the Exchange Offer Registration Statement is not appropriate or available for such resales; or
(c)it is a broker-dealer and owns Notes acquired directly from the Company or an Affiliate of the Company,
��
the Company and the Guarantors will file with the SEC a Shelf Registration Statement (as defined in the Registration Rights Agreement) to cover resales of the old notes by the Holders of the Notes who satisfy certain conditions relating to the provision of information in connection with the Shelf Registration Statement.
For purposes of the preceding, “Entitled Securities” means each old note until the earliest to occur of:
(1)the date on which such note has been exchanged by a Person other than a broker-dealer for an Exchange Note in the Registered Exchange Offer;
(2)following the exchange by a broker-dealer in the Registered Exchange Offer of a Note for an Exchange Note, the date on which such Exchange Note is sold to a purchaser who receives from such broker-dealer on or prior to the date of such sale a copy of the prospectus contained in the Exchange Offer Registration Statement;
(3)the date on which such note has been effectively registered under the Securities Act and disposed of in accordance with the Shelf Registration Statement; or
(4)the date on which such note is actually sold pursuant to Rule 144 under the Securities Act.
The Registration Rights Agreement provides that:
(1)the Company and the Guarantors will file an Exchange Offer Registration Statement with the SEC on or prior to 180 days after the closing of the offering of the old notes;
(2)the Company and the Guarantors will use all commercially reasonable efforts to have the Exchange Offer Registration Statement declared effective by the SEC on or prior to 240 days after the closing of the offering of the old notes;
(3)unless the Registered Exchange Offer would not be permitted by applicable law or SEC policy, the Company and the Guarantors will:
(a)commence the Registered Exchange Offer; and
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(b)use all commercially reasonable efforts to issue on or prior to 30 business days, or longer, if required by applicable securities laws, after the date on which the Exchange Offer Registration Statement was declared effective by the SEC, Exchange Notes in exchange for all old notes tendered prior thereto in the Registered Exchange Offer; and
(4)if obligated to file the Shelf Registration Statement, the Company and the Guarantors will use all commercially reasonable efforts to file the Shelf Registration Statement with the SEC on or prior to 60 days after such filing obligation arises and to cause the Shelf Registration to be declared effective by the SEC on or prior to 120 days after such obligation arises.
If:
(1)the Company and the Guarantors fail to file any of the registration statements required by the Registration Rights Agreement on or before the date specified for such filing;
(2)any of such registration statements is not declared effective by the SEC on or prior to the date specified for such effectiveness (the “Effectiveness Target Date”);
(3)the Company and the Guarantors fail to consummate the Registered Exchange Offer within 30 business days of the Effectiveness Target Date with respect to the Exchange Offer Registration Statement; or
(4)the Shelf Registration Statement or the Exchange Offer Registration Statement is declared effective but thereafter ceases to be effective or usable in connection with resales of Entitled Securities during the periods specified in the Registration Rights Agreement (each such event referred to in clauses (1) through (4) above, a “Registration Default”),
then the Company and the Guarantors will pay Special Interest to each holder of Entitled Securities until all Registration Defaults have been cured.
With respect to the first 90-day period immediately following the occurrence of the first Registration Default, Special Interest will be paid in an amount equal to 0.25% per annum of the principal amount of Entitled Securities outstanding. The amount of the Special Interest will increase by an additional 0.25% per annum with respect to each subsequent 90-day period until all Registration Defaults have been cured, up to a maximum amount of Special Interest for all Registration Defaults of 1.0% per annum of the principal amount of the Entitled Securities outstanding.
All accrued Special Interest will be paid by the Company and the Guarantors on the next scheduled interest payment date to DTC or its nominee by wire transfer of immediately available funds or by federal funds check and to holders of Certificated Notes by wire transfer to the accounts specified by them or by mailing checks to their registered addresses if no such accounts have been specified.
Following the cure of all Registration Defaults, the accrual of Special Interest will cease.
Holders of old notes will be required to make certain representations to the Company (as described in the Registration Rights Agreement) in order to participate in the Registered Exchange Offer and will be required to deliver certain information to be used in connection with the Shelf Registration Statement and to provide comments on the Shelf Registration Statement within the time periods set forth in the Registration Rights Agreement in order to have their Notes included in the Shelf Registration Statement and benefit from the provisions regarding Special Interest set forth above. By acquiring Entitled Securities, a Holder will be deemed to have agreed to indemnify the Company and the Guarantors against certain losses arising out of information furnished by such Holder in writing for inclusion in any Shelf Registration Statement. Holders of old notes will also be required to suspend their use of the prospectus included in the Shelf Registration Statement under certain circumstances upon receipt of written notice to that effect from the Company.
Certain Definitions
definitions
Set forth below are certain defined terms used in the Indenture. Reference is made to the Indenture for a full disclosure of all defined terms used therein, as well as any other capitalized terms used herein for which no definition is provided.
“2020 Subordinated7% Notes” means the 8.875%7% Senior Subordinated Notes due 2020Due 2023 issued by the Company.Company under the 7% Notes Indenture.
“7% Notes Indenture” means that certain Indenture dated as of July 23, 2015, among the Company, the guarantors party thereto and U.S. Bank National Association, as trustee, as amended from time to time.
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“Acquired Debt” means, with respect to any specified Person:
Person, (1)Indebtedness, Disqualified Stock or preferred stock of any other Person existing at the time such other Person is merged, acquired, consolidated, liquidated or amalgamated with or into or became a Restricted Subsidiary of such specified Person, whether or not such Indebtedness, Disqualified Stock or preferred stock is incurred in connection with, or in contemplation of, such other Person merging with or into, or becoming a Restricted Subsidiary of, such specified Person; and
(2)Indebtedness secured by a Lien encumbering any asset acquired by such specified Person.Person;provided that, for the avoidance of doubt, if such Indebtedness, Disqualified Stock, or preferred stock is redeemed, retired, or defeased (whether by covenant or legal defeasance), repurchased, discharged or otherwise repaid or acquired (or if irrevocable deposit has been made for the purpose of such repurchase, redemption, retirement, defeasance (whether covenant or legal), discharge or repayment or other acquisition) at the time, or substantially concurrently with the consummation, of the transaction by which such Person is merged, acquired, consolidated, liquidated or amalgamated with or into or became a Restricted Subsidiary (including by designation) of such specified Person, then such Indebtedness, Disqualified Stock, or preferred stock shall not constitute Acquired Debt.
“Additional Interest” means all amounts, if any, payable pursuant to the provisions relating to Additional Interest described in the Registration Rights Agreement. The trustee shall have no obligation to determine whether Additional Interest is payable or the amount of Additional Interest payable.
“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,” as used with respect to any Person, means 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 Stock of a Person will be deemed to be control. For purposes of this definition, the terms “controlling,” “controlled by” and “under common control with” have correlative meanings.
“Airplane” means the Citation 5 airplane owned by the Company as of the date of the Indenture.
“Applicable Premium” means, with respect to any Note on any redemption date, the greater of:
(1)1.0% of the principal amount of the Note; or (2) the excess of:
(a)the present value at such redemption date of (i) the redemption price of the Note at March 15, 2016April 1, 2020 (such redemption price being set forth in the table appearing above under the caption “—Optional Redemption”redemption”),plus (ii) all required interest payments due on the Note through March 15, 2016April 1, 2020 (excluding accrued but unpaid interest to the redemption date), computed using a discount rate equal to the Treasury Rate as of such redemption date plus 50 basis points; over
(b)the principal amount of such Note. The trustee shall have no duty to calculate or verify the Note.calculation of the Applicable Premium.
“Assets Held for Sale or Development” means:
(1)the Airplane;
(2)the Real Estate Options; and
(3)the Cripple Creek Land.
“Asset Sale” means:
(1)the sale, lease, conveyance or other disposition of any assets or rights by the CompanyIssuer or any of the Issuer’s Restricted Subsidiaries; provided that the sale, lease, conveyance or other disposition of all or substantially all of the assets of the CompanyIssuer and its Restricted Subsidiaries taken as a whole will be governed by the provisions of the Indenture described above under the caption “—Repurchase at the Optionoption of Holders — holders—Change of Control”control” and/or the provisions described above under the caption “—Certain Covenants — covenants—Merger, Consolidationconsolidation or Salesale of Assets”assets” and not by the provisions of the covenant described above under the caption “—Repurchase at the option of holders—Asset Sale covenant;sales”; and
(2)the issuance of Equity Interests by any of the Issuer’s Restricted Subsidiaries or the sale by the CompanyIssuer or any of the Issuer’s Restricted Subsidiaries of Equity Interests in any of the Subsidiaries.
Issuer’s Subsidiaries (other than preferred stock issued in compliance with the covenant described above under the caption “—Certain covenants—Incurrence of indebtedness and issuance of preferred stock”).
Notwithstanding the preceding, none of the following items will be deemed to be an Asset Sale:
(1)any single transaction or series of related transactions that involves assets having a Fair Market Value of less than $20.0 million;
(2) any transaction that is consummated in accordance with the provisions described under the caption “—Certain covenants—Merger, consolidation or sale of assets”;
(2)(3) a transfer of assets between or among the CompanyIssuer and its Restricted Subsidiaries;
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(3)(4) an issuance of Equity Interests by a Restricted Subsidiary of the CompanyIssuer to the CompanyIssuer or to a Restricted Subsidiary of the Company;Issuer;
(4)(5) the sale, disposition, exchange for replacement items or other items used or useful in a Permitted Business, lease or other transfer of inventory, products, services or accounts receivable or current assets, as defined in accordance with GAAP in the ordinary course of business andor in bankruptcy or similar proceedings;
(6) any sale or other disposition of damaged,worn-out or obsolete assets in the ordinary course of business (including the abandonment or other disposition of damaged, worn-out or obsolete assets, including intellectual property that is, in the reasonable judgment of the Company,Issuer, no longer economically practicable to maintain or useful in the conduct of the business of the CompanyIssuer and its Restricted Subsidiaries taken as whole or property replaced with similar property or similar utility in the ordinary course of business;whole);
(5)(7) licenses and sublicenses by the CompanyIssuer or any of its Restricted Subsidiaries of software or intellectual property in the ordinary course of business;
(6)(8) any surrender or waiver of contract rights or settlement, release, recovery on or surrender of contract, tort or other claims in the ordinary course of business;
(7)(9) the granting of Liens not prohibited by the covenant described above under the caption “—Certain Covenants — Liens;”covenants—Liens”;
(8)the sale or other disposition of Assets Held for Sale or Development;
(9)the sale or other disposition of any Excess Land;
(10)the sale or other disposition of cash or Cash Equivalents;
(11)a Restricted Payment that does not violate the covenant described above under the caption “—Certain Covenants — covenants—Restricted Payments”payments” or a Permitted Investment;
(12)the disposition of receivables in connection with the compromise, settlement or collection thereof;
(13)leases (as lessor or sublessor) of real or personal property and guaranties of any such lease in the ordinary course of business; and
(14)any exchange of like property pursuant to Section 1031 of the Internal Revenue Code of 1986, as amended, for use in a Permitted Business.related business;
(13) foreclosures, condemnations or any similar action on assets;
“Bank Credit Facility” means that certain Credit Agreement, dated as(14) any leases of July 26, 2007, amongretail, restaurant or entertainment venues and other similar spaces in the Company,ordinary course of business;
(15) terminations of Hedging Obligations;
(16) any settlement, release, waiver or surrender of contract rights or contract, tort or other litigation claims, or voluntary terminations of other contracts or assets, in the lenders named thereinordinary course of business;
(17) any disposition of Equity Interests of a Restricted Subsidiary pursuant to an agreement or other obligation with or to a Person (other than the Issuer or any of its Restricted Subsidiaries) from whom such Restricted Subsidiary was acquired, or from whom such Restricted Subsidiary acquired its business and Wells Fargo Bank, National Association (as successor to Credit Suisse AG, Cayman Islands Branch), as administrative agent, as amended by the First Amendment to Credit Agreement, dated as of February 17, 2010, as further amended by the Second Amendment to Credit Agreement and Amendments to Loan Documents, dated as of March 25, 2011, and as further amended by the Third Amendment to Credit Agreement, dated as of November 21, 2012, providing for revolving credit and term loan borrowings, including any related notes, Guarantees, collateral documents, instruments and agreements executedassets (having been newly formed in connection therewith,with such acquisition), made as part of such acquisition and in each case as amended, restated, modified, renewed, refunded,comprising all or a portion of the consideration in respect of such sale or acquisition;
(18) any financing transaction with respect to property constructed, acquired, replaced, repaired or improved (including any reconstruction, refurbishment, renovation and/or development of real property) by the Issuer or any of its Restricted Subsidiaries, including sale and leaseback transactions and asset securitizations, permitted by the Indenture;
(19) sales of Unrestricted Subsidiaries or joint ventures or other development ventures, or issuances or sales of Equity Interests, Indebtedness, other securities or other Investments therein, or assets thereof;
(20) the transactions contemplated by the Paid-Up Oil and Gas Leases and other sales or leases of oil, gas or mineral rights; and
(21) the sale or other disposition of Non-Core Land.
In the event that a transaction (or a portion thereof) meets the criteria of more than one category of an Asset Sale, the Issuer, in its sole discretion, will be entitled to divide and classify or reclassify such transaction (or a portion thereof) between or among such categories.
“Attributable Debt” in respect of a sale and leaseback transaction means, at the time of determination, the present value of the obligation of the lessee for net rental payments during the remaining term of the lease included in such sale and leaseback transaction including any manner (including increasingperiod for which such lease has been extended or may, at the option of the lessor, be extended. Such present value will be calculated using a discount rate equal to the rate of interest implicit in such transaction, determined in accordance with GAAP;provided,however, that if such sale and leaseback transaction results in a Capital Lease Obligation, the amount of available borrowings thereunder and whether upon or after termination or otherwise) or refinanced (including by meansIndebtedness represented thereby will be determined in accordance with the definition of sales of debt securities to institutional investors) in whole or in part from time to time.“Capital Lease Obligation.”
“Beneficial Owner” has the meaning assigned to such term inRule 13d-3 andRule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular “person” (as that term is used in Section 13(d)(3) of the Exchange Act), such “person” will be deemed to have beneficial ownership of
all securities that such “person” has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable or is exercisable only after the passage of time. The terms “Beneficially Owns”“Beneficially Owns,” “Beneficially Owning” and “Beneficially Owned”“Beneficially Owned” have a corresponding meaning.
“Board of Directors” means:
(1)with respect to a corporation, the board of directors of the corporation or any committee thereof duly authorized to act on behalf of such board;
(2)with respect to a partnership, the boardBoard of directorsDirectors of the general partner of the partnership;
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(3)with respect to a limited liability company, the board of managers of such limited liability company or any committee thereof duly authorized to act on behalf of such board or the managing member or members or any controlling committee of managing members thereof;thereof, as applicable, and
(4)with respect to any other Person, the board or committee of such Person serving a similar function.
“Capital Lease Obligation” means, at the time any determination is to be made, the amount of the liability in respect of a capital lease that would at that time be required to be capitalized on a balance sheet prepared in accordance with GAAP, and the Stated Maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be prepaid by the lessee without payment of a penalty.penaltyprovided,however, that for the avoidance of doubt, any lease that is accounted for by any Person as an operating lease as of the Issue Date and any similar lease entered into after the Issue Date by any Person may, in the sole discretion of the Issuer, be accounted for as an operating lease and not as a Capital Lease Obligation.
“Capital Stock” means:
(1)in the case of a corporation, corporate stock;
(2)in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;
(3)in the case of a partnership or limited liability company, partnership interests (whether general or limited) or membership interests; and
(4)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, Person;
but excluding from all of the foregoing any debt securities convertible into Capital Stock, whether or not such debt securities include any right of participation with Capital Stock.
“Cash Equivalents” means:
(1)United States dollars;
(2)securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality of the United States government (provided that the full faith and credit of the United States is pledged in support of those securities) having maturities of not more than twelvesix months from the date of acquisition;
(3) money market deposits, certificates of deposit and Eurodollar time deposits with maturities of twelvesix months or less from the date of acquisition, bankers’ acceptances with maturities not exceeding twelvesix months and overnight bank deposits, in each case, with any lender party to the BankERI Credit Facility or with any domestic commercial bank having capital and surplus in excess of $500.0 million;million and a Thomson Bank Watch Rating of “B” or better;
(4)repurchase obligations with a term of not more than 36530 days for underlying securities of the types described in clauses (2) and (3) above entered into with any financial institution meeting the qualifications specified in clause (3) above;
(5)commercial paper having one of the two highest ratings obtainable from Moody’s or S&P and, in each case, maturing within twelve monthstwo years after the date of acquisition;
(6) marketable short term money market and similar securities having the highest rating obtainable from Moody’s and S&P (or, if neither S&P nor Moody’s shall be rating such securities, then from another nationally recognized rating service) at the time of acquisition and in each case maturing within two years after the date of acquisition;
(7) other dollar denominated securities issued by any Person incorporated in the United States and that at the time of acquisition have an investment grade rating from Moody’s or S&P (or, if neither S&P nor Moody’s shall be rating such securities, then from another nationally recognized rating service) and maturing not more than two years after the date of acquisition; and
(6)(8) money market funds and mutual funds at least 90% of the assets of which constitutethat invest primarily in Cash Equivalents of the kinds described in clauses (1) through (5)(7) of this definition.
“Casino” means a gaming establishment owned by the Company or a Restricted Subsidiary and containing at least 400 slot machines and 10,000 square feet of space dedicated to the operation of games of chance.
“Casino Hotel” means any hotel or similar hospitality facility with at least 100 rooms owned by the Company or a Restricted Subsidiary and serving a Casino.
“Casino Related Facility” means any building, restaurant, theater, amusement park or other entertainment facility, parking or recreational vehicle facilities or retail shops located at or adjacent to, and directly ancillary to, a Casino and used or to be used in connection with such Casino other than a Casino Hotel.
“Change of Control” means an eventthe occurrence of any of the following:
(1) the direct or indirect sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of events by which:
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(1)any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act) (other than the Permitted Equity Holders) is or becomes the Beneficial Owner, directly or indirectly, of securities representing more than 50% of the combined voting power of the Company’s outstanding Voting Stock, but excluding in each case from the percentage of voting power held by any group, the voting power of shares owned by the Permitted Equity Holders who are deemed to be members of the group provided that (i) such Permitted Equity Holders beneficially own a majority of the voting power of the Voting Stock held by such group and (ii) at such time the Permitted Equity Holders together shall fail to Beneficially Own, directly or indirectly, securities representing at least the same percentage of voting power of such Voting Stock as the percentage Beneficially Owned by such person or group; or
(2)during any period of 24 consecutive months, individuals who at the beginning of such period constituted the Board of Directors of the Company (together with any new or replacement directors whose election by the Board of Directors of the Company, or whose nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the directors then in office; or
(3)the Company consolidates with or merges with or into any Person or sells, leases, transfers, conveys or otherwise disposes of, directly or indirectly, all or substantially all of the properties or assets of the CompanyIssuer and its Subsidiaries taken as a whole to any Person pursuant to a transaction(including any “person” (as that term is used in which the outstanding Voting StockSection 13(d)(3) of the Company is changed intoExchange Act)) other than a Principal or exchanged for cash, securitiesa Related Party of a Principal; or other property (other than
(2) the consummation of any such transaction where(including, without limitation, any merger or consolidation), the outstanding Voting Stockresult of the Company is (a) changed only to the extent necessary to reflect a change in the jurisdiction of incorporation of the Company or (b) is exchanged for (i) Voting Stock of the surviving corporation which is not Disqualified Stock or (ii) cash, securities and other property (other than Capital Stock of the surviving corporation) in an amount which could be paid by the Company as a Restricted Payment as described above under the caption “— Certain Covenants — Restricted Payments” (and such amount shall be treated as a Restricted Payment) and no person or group,that any Person (including any “person” (as defined above)), other than Permitted Equity Holders (including any Permitted Equity Holders who are part of a group where such Permitted Equity Holders beneficially own a majority of the voting power ofPrincipals and their Related Parties, becomes the Voting Stock held by such group), owns immediately after such transaction,Beneficial Owner, directly or indirectly, of more than 50% of the combined voting power of the outstanding Voting Stock of the surviving corporation); orIssuer, measured by voting power rather than number of shares.
(4)the Company is liquidated or dissolved or adopts a plan of liquidation or dissolution.
“Change of Control Offer” has the meaning assigned to that term in the Indenture governingIndenture.
“Change of Control Payment” has the Notes.
“Completion Guarantee and Keep-Well Agreement” means:
(1)the guarantee by the Company or a Guarantor of the completion of the development, construction and opening of a new Casino, Casino Hotel or Casino Related Facility by one or more Unrestricted Subsidiaries of the Company;
(2)any Indebtedness of an Unrestricted Subsidiary guaranteed by the Company or any Guarantor pursuantmeaning assigned to a Completion Guarantee and Keep-Well Agreement, prior to the time the Company or such Guarantor makes any principal, interest or comparable debt service payment with respect to such guaranteed Indebtedness;
(3)the agreement by the Company or a Guarantor to advance funds, property or services on behalf of one or more Unrestricted Subsidiaries of the Company in order to maintain the financial condition of such Unrestricted Subsidiary in connection with the development, construction, opening and operation of a new Casino, Casino Hotel or Casino Related Facility by such Unrestricted Subsidiary; or
(4)any agreement, guarantee or Indebtedness of similar nature and effect entered intothat term in the ordinary courseIndenture.
“Change of business and consistent with past practice,
providedControl Payment Date” has the meaning assigned to that such agreement, guarantee or Indebtedness is entered into or incurred, as the case may be, in connection with obtaining financing for such Casino, Casino Hotel or Casino Related Facility or is required by a Gaming Authority.
“Completion Guarantee/Keep-Well Indebtedness” of the Company or any Guarantor means (i) any Indebtedness incurred for money borrowed by the Company or any Guarantor in connection with the performance of any Completion Guarantee and Keep-Well Agreement or (ii) any Indebtedness of one or more Unrestricted Subsidiaries of the Company that is guaranteed by the Company or a Guarantor pursuant to a Completion Guarantee and Keep-Well Agreement,term in the case of guaranteed Indebtedness under this clause (ii), on and after the time the Company or such Guarantor makes any principal, interest or comparable debt service payment with respect to such guaranteed Indebtedness.Indenture.
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“Consolidated EBITDA” means, with respect to any specified Person for any period, the Consolidated Net Income of such Person for such periodplus (without duplication):
(a) in each case to the extent deducted in calculating such Consolidated Net Income:
(1) provisions for taxes, either payable or reasonably estimated to be payable, based on income, profits, margin or capital gains, plus without duplication:
(1)an amount equal to any net loss realized byfranchise or similar taxes, of such Person or any ofand its Restricted Subsidiaries in connection with an Asset Sale, to the extentfor such loss was deducted in computing such Consolidated Net Income; plusperiod;
(2)provision for taxes based on income or profits consolidated interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued and whether or not capitalized (including franchise taxes imposedany amortization or write-off of deferred financing costs or debt issuance costs, original issue discount, non-cash interest payments, the interest component of any deferred payment obligations and the interest component of all payments associated with Capital Lease Obligations, commissions, discounts and other fees and charges incurred in lieurespect of letter of credit or as additional income tax)bankers’ acceptance financings), and net of the effect of all payments made or received pursuant to Hedging Obligations related to interest rates;
(3) any cost, charge, fee or expense (including discounts and commissions, premiums and penalties, original issue discount, debt issuance costs and deferred financing costs and fees and charges incurred in respect of letters of credit or bankers’ acceptance financings) (or any amortization or write-off of the foregoing) associated with any Transaction Activity, to the extent that such provision for taxes was deducted in computing such Consolidated Net Income;plus
(3)the Fixed Charges of such Person and its Restricted Subsidiaries for such period, to the extent that such Fixed Charges were deducted in computing such Consolidated Net Income; plus
(4)the Transaction Costs for such period, to the extent that such Transaction Costs were deducted in computing such Consolidated Net Income; plus
(5)any foreign currency translation losses (including losses related to currency remeasurements of Indebtedness) of such Person and its Restricted Subsidiaries for such period, to the extent that such losses were taken into account in computing such Consolidated Net Income; plus
(6)depreciation, amortization (including amortization of goodwill and other intangibles but excluding amortization of prepaid cash expenses that were paid in a prior period) and other non-cash charges or expenses, including any write-off or write-down, reducing Consolidated Net Income for such period (excluding (x) any amortization of a prepaid cash expense that was paid in a prior period and expenses (including non-cash expenses associated with the granting of stock options or other equity compensation, but excluding(y) any such non-cash charge or expense to the extentcharges and expenses that it representsresult in an accrual of or reserve for cash charges or expenses in any future period on or amortizationprior to the final Stated Maturity of a prepaid cash charge or expensethe Notes and that was paidsuch Person elects not to add back in a priorthe current period) of such Person and its Restricted Subsidiaries for such period;provided that if any such non-cash charges or expenses represent an accrual of a reserve for potential cash items in any future period, the cash payment in respect thereof in such future period shall be subtracted from Consolidated EBITDA to the extent such Person elected to previously add back such amounts to Consolidated EBITDA;
(5) any Pre-Opening Expenses;
(6) the amount of any restructuring charges or reserve (including those relating to severance, relocation costs and one-time compensation charges), costs incurred in connection with any non-recurring strategic initiatives, other business optimization expense (including incentive costs and expenses relating to business optimization programs and signing, retention and completion bonuses) and any unusual or non-recurring charges or items of loss or expense (including losses on asset sales (other than asset sales in the ordinary course of business));
(7) the amount of any expense consisting of Restricted Subsidiary income attributable to non-controlling interests of third parties in any Restricted Subsidiary that is not a Wholly-Owned Restricted Subsidiary except to the extent of any cash distributions in respect thereof;
(8) the amount of insurance proceeds received during such period or after such period and on or prior to the date the calculation is made with respect to such period, attributable to any property which has been closed or had operations curtailed for any period;provided that such amount of insurance proceeds shall only be included pursuant to this clause (8) to the extent that such depreciation,amount of insurance proceeds plus Consolidated EBITDA attributable to such property for such period (without giving effect to this clause (8)) does not exceed Consolidated EBITDA attributable to such property during the most recently completed four fiscal quarter period for which financial results are available that such property was fully operational (or if such property has not been fully operational for four consecutive fiscal quarters for which financial results are available prior to such closure or curtailment, the Consolidated EBITDA attributable to such property during the period prior to such closure or curtailment (for which financial results are available) annualized over four fiscal quarters);
(9) any losses resulting from mark-to-market accounting of Hedging Obligations or other derivative instruments;
(10) any charges, fees and expenses (or any amortization thereof) (including, without limitation, all legal, accounting, advisory or other transaction-related fees, charges, costs and otherexpenses and any bonuses or success fee payments) related to any acquisition, Investment or disposition not prohibited by the Indenture (or any such proposed acquisition, Investment or disposition) (including amortization or write offs of debt issuance or deferred financing costs, premiums and prepayment penalties), in each case, whether or not successful, and in each case not already excluded from Consolidated Net Income pursuant to clause (10) of the definition thereof; and
(11) cash receipts (or any netting arrangements resulting in reduced cash expenditures) not representing Consolidated EBITDA or Consolidated Net Income in any period to the extent non-cash charges or expenses
gains relating to such income were deducted in computingthe calculation of Consolidated EBITDA for any previous period and not added back;
(12) the amount of any restructuring, rebranding or similar charge or reserve in such period, including costs incurred in connection with (A) any acquisition, disposition, Investment or similar transaction occurring after the Issue Date or (B) severance and the consolidation or closing of any facilities after the Issue Date (or are reasonably expected to be initiated within twelve (12) months of the closing date of the applicable transaction);
(b) minus (without duplication) in each case to the extent included in calculating such Consolidated Net Income; plusIncome:
(7)pre-opening expenses; plus
(8)(1) non-cash items increasing such Consolidated Net Income for such period, other than the accrual of revenue in the ordinary course of business, and other than any prepayment premiums associated withitems which represent the prepaymentreversal of any Indebtedness,accrual of, or cash reserve for, anticipated cash charges for any prior period subsequent to the Issue Date, which was not added back to Consolidated EBITDA when accrued;
(2) the amount of non-cash gains resulting from mark-to-market accounting of Hedging Obligations or other derivative instruments; and
(3) any unusual or non-recurring items of income or gain (including, without limitation, gains on asset sales (other than asset sales in eachthe ordinary course of business)) to the extent increasing Consolidated Net Income for such Period.
Consolidated EBITDA for any period shall be further adjusted as follows:
(A) acquisitions of any Person, property, business, operations or asset (including a management agreement or similar agreement) or investments that have been made by the specified Person 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, and the change in Consolidated EBITDA resulting therefrom, will be given pro forma effect as if they had occurred on the first day of the four-quarter reference period, and Consolidated EBITDA for such reference period shall include the Consolidated EBITDA of the acquired Person (or attributable to the acquired property, business, operations or asset) or applicable to such investments, and related transactions, and subject to clause (C) below shall otherwise be calculated on a pro forma basis in accordance with Regulation S-X under the Securities Act;
(B) any Person, property, business, operations or asset (including a management agreement or similar agreement) or investments that have been disposed of by the specified Person or any of its Restricted Subsidiaries during the four-quarter reference period or subsequent to such reference period and on or prior to the Calculation Date, and the change in Consolidated EBITDA resulting therefrom, and any discontinued operations (as determined in accordance with GAAP), will be given pro forma effect as if they had occurred on the first day of the four-quarter reference period, and Consolidated EBITDA for such reference period shall exclude the Consolidated EBITDA of the disposed of Person (or attributable to the disposed of property, business, operations or asset or discontinued operations) or applicable to such disposed of investments and subject to clause (C) below shall otherwise be calculated on a pro forma basis in accordance with Regulation S-X under the Securities Act;
(C) Pro Forma Cost Savings shall be given effect;
(D) (a) any Person that is a Restricted Subsidiary on the Calculation Date will be deemed to have been a Restricted Subsidiary at all times during the applicable four-quarter reference period, and (b) any Person that is not a Restricted Subsidiary on the Calculation Date will be deemed not to have been a Restricted Subsidiary at any time during the applicable four-quarter reference period; and
(E) in any fiscal quarter during which a purchase of property that prior to such purchase was subject to any operating lease that will be terminated in connection with such purchase shall occur and during the
three following fiscal quarters, there shall be added to Consolidated EBITDA an amount equal to the quarterly payment in respect of such lease (as if such purchase did not occur) times (a) 4 (in the case of the quarter in which such purchase occurs), (b) 3 (in the case of the quarter following such purchase), (c) 2 (in the case of the second quarter following such purchase) and (d) 1 (in the case of the third quarter following such purchase), all as determined on a consolidated basis for the Companysuch Person and its Restricted SubsidiariesSubsidiaries.
“Consolidated Leverage Ratio” means, with respect to any Person, as of any date of determination, the ratio of (x) (i) Consolidated Total Indebtedness of such Person as of such date of determination (the “Calculation Date”), after giving effect to all transactions to occur on the Calculation Date, including, without limitation, giving pro forma effect to any transactions with respect to Indebtedness consistent with clause (1) of the definition of “Fixed Charge Coverage Ratio,”minus (ii) cash and determinedCash Equivalents (in each case, free and clear of Liens other than Permitted Liens) in an amount not to exceed $100.0 million (but excluding cage cash) as of such date that would be required to be reflected on a consolidated balance sheet in accordance with GAAP.GAAP to (y) Consolidated EBITDA of such Person for the most recently ended four full fiscal quarters for which internal financial statements are available (the “reference period”) immediately preceding the Calculation Date. For the avoidance of doubt, for purposes of this definition, “Consolidated EBITDA” shall be calculated after giving effect on a pro forma basis, without duplication, to the items in clauses (A) — (E) of the definition thereof.
“Consolidated Net Income” means, with respect to any specified Person for any period, the aggregate of the net income (loss) of the Companysuch Person and its Restricted Subsidiaries (on the applicable date of determination) for such period, on a consolidated basis, for such period taken as a single accounting period determined in accordance with GAAP and without any reduction in respect of preferred stock dividends;provided that, there shall be excluded (i)without duplication:
(1) any gain or loss (together with any related provision for taxes thereon), realized in connection with (a) any Asset Sale (other than asset sales in the net income (loss)ordinary course of business) or (b) any disposition of any Person accrued prior tosecurities (other than dispositions in the date it becomes a Restricted Subsidiaryordinary course of the Company or is merged into or consolidated with the Companybusiness) by such Person or any of its Restricted Subsidiaries, and any extraordinary gain or loss (together with any related provision for taxes thereon) shall be excluded;
(2) the net income (but not loss) of any Person that Person’s assets are acquired(i) is not a Restricted Subsidiary, (ii) is accounted for by the Companyequity method of accounting or any(iii) is an Unrestricted Subsidiary shall be excluded;provided that Consolidated Net Income of such Person and its Restricted Subsidiaries (ii)shall be increased by the amount of dividends or distributions or other payments (including management fees) that are actually paid or payable in cash to such Person or a Restricted Subsidiary thereof in respect of such period (or to the extent converted into cash) (including by any Person referred to in clauses (i)-(iii));
(3) solely for the purpose of determining the amount available for Restricted Payments under clause (c)(3)(a) of “Certain covenants—Restricted payments,” the net income of any Restricted Subsidiary of the Companyshall 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 timedate 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 (iii)or its stockholders unless such restriction with respect to the net income (loss)payment of any Persondividends or similar distributions has been waived; provided that issuch exclusions shall not apply with respect to limitations imposed either (x) pursuant to Acquired Debt which has been irrevocably called for redemption, repurchase or other acquisition or repayment or in respect of which the required steps have been taken to have such Acquired Debt defeased (whether by covenant or legal defeasance) or discharged, or a deposit has been made for such purpose or (y) by Gaming Laws of general applicability within the jurisdiction in which such Restricted Subsidiary exceptoperates or applicable to all Persons operating a business similar to that of such Restricted Subsidiary within such jurisdiction;provided, further, that Consolidated Net Income of such Restricted Subsidiary will be included to the
extent of the amount of management fees and dividends or other distributions or other payments actually paid or permitted to be paid in cash (or to the Company or aextent converted into cash) by such Restricted Subsidiary duringin respect of such period, (other thanto the extent not already included therein;
(4) any goodwill or other asset impairment charges or other asset write-offs or write-downs, including any resulting from the application of Accounting Standards Codification Nos. 350 and 360, and any expenses or charges relating to the amortization of intangibles as a result of the application of Accounting Standards Codification No. 805, shall be excluded;
(5) any non-cash charges or expenses related to the repurchase of stock options to the extent not prohibited by the Indenture, and any non-cash charges or expenses related to the grant, issuance or repricing of, or any amendment or substitution with respect to, stock appreciation or similar rights, stock options, restricted stock, or other Equity Interests or other equity-based awards or rights or equivalent instruments, shall be excluded;
(6) the cumulative effect of a change in accounting principles shall be excluded;
(7) any expenses or reserves for liabilities shall be excluded to the extent that such Person or any of its Restricted Subsidiary is entitled to indemnification therefor under binding agreements;provided, that any such dividendsliabilities for which such Person or distributions madesuch Restricted Subsidiaries is not actually indemnified shall reduce Consolidated Net Income for the purposes of paying any taxes arising from any equity ownership interestsperiod in which it is determined that such Persons)Person or such Restricted Subsidiary will not be indemnified (to the extent such liabilities would otherwise reduce Consolidated Net Income without giving effect to this clause (7));
(8) losses, to the extent covered by insurance and (iv) items classifiedactually reimbursed, or, so long as extraordinary or any non-cash item classified as non-recurring (other than the tax benefitIssuer has made a determination that there exists reasonable evidence that such amount will in fact be reimbursed by the insurer and only to the extent that such amount is (a) not denied by the applicable carrier in writing within 180 days and (b) in fact reimbursed within 365 days of the utilizationfinal settlement of net operating loss carry forwardsthe applicable claim (with a deduction for any amount so added back to the extent not so reimbursed within 365 days), expenses with respect to liability or alternative minimumcasualty events or business interruption shall be excluded;
(9) gains and losses resulting solely from fluctuations in currency values and the related tax credits).effects shall be excluded, and charges relating to Accounting Standards Codification Nos. 815 and 820 shall be excluded; and
(10) any non-recurring charges or expenses of such Person or its Restricted Subsidiaries or of a company or business acquired by such Person or its Restricted Subsidiaries (in each case, including those relating to severance, relocation costs and one time compensation charges and any charges or expenses in connection with conforming accounting policies or reaudited, combining or restating financial information), in each case, incurred in connection with the purchase or acquisition of such acquired company or business by such Person or its Restricted Subsidiaries shall be excluded.
“Consolidated Tangible Assets” of any Person as of any date means the total assets of such Person and its Restricted Subsidiaries as of the most recent fiscal quarter end for which a consolidated balance sheet of such Person and its Restricted Subsidiaries is available, minus total goodwill and other intangible assets of such Person and its Restricted Subsidiaries reflected on such balance sheet, all calculated on a consolidated basis in accordance with GAAP.
“Consolidated Total Indebtedness” means, with respect to any Person as at any date of determination, (a) an amount equal to the aggregate amount of all outstanding Indebtedness of such Person and its Restricted Subsidiaries as of such date determined on a consolidated basis in accordance with GAAP, excluding (i) Indebtedness which has been repaid, discharged, defeased (whether by covenant or legal defeasance), retired, repurchased or redeemed on or prior to such date or which a Person has irrevocably made a deposit to repay, defease (whether by covenant or legal defeasance), discharge, repurchase, retire or redeem or which a Person has called for redemption, defeasance (whether by covenant or legal defeasance), discharge, repurchase
or retirement, on or prior to such date, (ii) Indebtedness of the type described in clause (5) of the definition thereof or any guarantee thereof and Indebtedness constituting banker’s acceptances, letters of credit and Hedging Obligations, and (iii) in the case of Indebtedness of a non-Wholly-Owned Restricted Subsidiary, to the extent Consolidated EBITDA (including through the calculation of Consolidated Net Income or due to non-controlling interests in such Restricted Subsidiary owned by a Person other than the Issuer or any of its Restricted Subsidiaries) did not include all of the net income of such Restricted Subsidiary, an amount of Indebtedness of such Restricted Subsidiary (provided that such Indebtedness is not otherwise guaranteed by the Issuer or another Restricted Subsidiary, if any, that guarantees the notes) directly proportional to the amount of net income of such Restricted Subsidiary not so included in Consolidated EBITDA (including through the calculation of Consolidated Net Income),less (b) cash and Cash Equivalents of such Person and its Restricted Subsidiaries in an amount not to exceed $100.0 million.
“continuing” means, with respect to any Default or Event of Default, that such Default or Event of Default has not been cured or waived.
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“Credit Facility,” or “Credit Facilities” means, one or more debt facilities (including, without limitation, the BankERI Credit Facility), indentures or commercial paper facilities, or indentures, in each case, with banks or other institutional lenders or a trusteeaccredited investors or institutional investors providing for revolving credit loans, term loans, term debt, debt securities, receivables financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables) or letters of credit, or issuances of debt securities, in each case, as amended, restated, modified, renewed, extended, increased, refunded, replaced in any manner (whether upon or after termination or otherwise) or refinanced (including by means of sales of debt securities to institutional investors) in whole or in part from time to time.
“Cripple Creek Land” means the real estate owned or leased by the Company in Cripple Creek, Colorado.
“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.
“Development ServicesDesignated Asset Sales” means the Asset Sales of each of the Lake Charles Gaming Facilities and the Marquette Gaming Facilities.
“Designated Non-Cash Consideration” means the fair market value of non-cash consideration received by the Issuer or any of its Restricted Subsidiaries in connection with respectan Asset Sale that is so designated as Designated Non-Cash Consideration pursuant to any Qualified Facility,an officer’s certificate setting forth the provision (through retained professionalsbasis of such valuation, executed by a financial officer of the Issuer, less the amount of cash or otherwise)Cash Equivalents received in connection with a subsequent sale of development, design or construction services with respect tocollection on such Qualified Facility.Designated Non-Cash Consideration.
“Disqualified Stock” means with respect to any Person, any Capital Stock or other similar ownership or profit interest that, by its terms (or by the terms of any security into which it is convertible, or for which it is exchangeable, in each case, at the option of the holder of the Capital Stock), 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 of the Capital Stock, in whole or in part, on or prior to the date that is 91 days after the date on which the Notes mature. Notwithstanding the preceding sentence, any Capital Stock that would constitute Disqualified Stock solely because the holders of the Capital Stock have the right to require the CompanyIssuer to repurchase such Capital Stock upon the occurrence of a change of control, or an asset sale or an event of loss will not constitute Disqualified Stock if the terms of such Capital Stock provide that the CompanyIssuer may not repurchase or redeem any such Capital Stock pursuant to such provisions unless such repurchase or redemption complies with the covenant described above under the caption “—Certain Covenants — covenants—Restricted Payments.payments.” The amount of Disqualified Stock deemed to be outstanding at any time for purposes of the Indenture will be the maximum amount that the CompanyIssuer and its Restricted Subsidiaries may become obligated to pay upon the maturity of, or pursuant to any mandatory redemption provisions of, such Disqualified Stock, exclusive of accrued dividends. Disqualified Stock shall not include any shares of Capital Stock, which, after the issuance thereof, become subject to mandatory
redemption due to the actions or requirements of any Gaming Authority, to the extent that such issuance was made in compliance with applicable laws and, at the time of such issuance, such Capital Stock did not constitute Disqualified Stock.
“Domestic Subsidiary” means any Restricted Subsidiary of the CompanyIssuer (a) that was formed under the laws of the United States or any state of the United States or the District of Columbia and does not constitute an Immaterial Subsidiary or (b) that directly or indirectly, guarantees, or otherwise provides direct credit support forpledges any property or assets to secure Indebtedness of the Company.incurred under a Credit Facility.
“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).
“Equity Offering” means a public or private sale of Equity Interests of the CompanyIssuer by the CompanyIssuer (other than Disqualified Stock and other than to a Subsidiary of the Company)Issuer).
“Event of Loss” means with respect to any property or asset (tangible or intangible, real or personal) that has a Fair Market Value of $20.0 million or more, any of the following:
(1)any loss, destruction or damage of such property or asset;
(2)any institution of any proceedings for the condemnation or seizure of such property or asset or for the exercise of any right of eminent domain or navigational servitude; or
(3)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.
“Excess LandERI Credit Facility” means the approximately 150 acres of real property owned in fee by the Company or its Restricted Subsidiariesrevolving credit facility and term loan facility under that certain Credit Agreement, dated as of April 17, 2017, by and among Issuer (as successor to Escrow Issuer), the dateseveral lenders from time to time party thereto, JPMorgan Chase Bank, N.A., as administrative agent, swingline lender and issuing lender, and J.P. Morgan Securities LLC, Macquarie Capital (USA) Inc., Credit Suisse Securities (USA) LLC, U.S. Bank National Association, and KeyBank National Association, as joint lead arrangers, joint bookrunners and co-syndication agents, providing for up to $300.0 million of revolving credit borrowings and up to $1,450.0 million of term loan borrowings, including any related notes, guarantees, collateral documents, instruments and agreements executed in connection therewith, and, in each case, as amended, restated, modified, renewed, refunded, replaced in any manner (whether upon or after termination or otherwise) or refinanced (including by means of sales of debt securities to institutional investors) in whole or in part from time to time.
“Exchange Notes” means the Indenture adjacent to the Company’s Casino and Casino Related FacilityNotes issued in Pompano Beach, Florida.this offering.
“Existing Indebtedness” means all Indebtedness of the CompanyIssuer and its Subsidiaries (other than Indebtedness under the Bank Credit Facility)Agreement) in existence on the date of the Indenture, until such amounts are repaid.
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“Fair Market Value” means the value that would be paid by a willing buyer to an unaffiliated willing seller in a transaction not involving distress or necessity of either party, which shall be determined in good faith by the Board of Directors of the Company (unless otherwise provided in the Indenture).Issuer if expected to be greater than $20.0 million.
“FF&E” means furniture, fixtures and equipment used in the ordinary course of business in the operation of a Permitted Business.
“FF&E Financing” means Indebtedness, the proceeds of which will be used solely to finance or refinance the acquisition or lease by the CompanyIssuer or a Restricted Subsidiary of the Issuer of FF&E.
“Fixed Charge Coverage Ratio” means with respect to any specified Person for any period, the ratio of the Consolidated EBITDA of such Person for such period to the Fixed Charges of such Person for such period. In the event that the specified Person or any of its Restricted Subsidiaries incurs, assumes, guarantees, repays, repurchases, redeems, defeases or otherwise discharges any Indebtedness (other than ordinary working capital borrowings) or issues, repurchases or redeems preferred stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated and on or 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 will be calculated giving pro forma effect (in accordance withRegulation S-X under the Securities Act) to such incurrence, assumption, Guarantee, repayment, repurchase, redemption,
defeasance or other discharge of Indebtedness, or such issuance, repurchase or redemption of preferred stock, and the use of the proceeds therefrom, as if the same had occurred at the beginning of the applicablefour-quarter reference period.
In addition, for purposes of calculating the Fixed Charge Coverage Ratio:
(1)acquisitions that have been made by the specified Person or any of its Restricted Subsidiaries, including through mergers or consolidations, or any Person or any of its Restricted Subsidiaries acquired by the specified Person or any of its Restricted Subsidiaries, and including all related financing transactions and including increases in ownership of Restricted Subsidiaries, during thefour-quarter reference period or subsequent to such reference period and on or prior to the Calculation Date, or that are to be made on the Calculation Date, will be given pro forma effect (in accordance withRegulation S-X under the Securities Act) as if they had occurred on the first day of thefour-quarter reference period;
(2)any Asset Sale the Consolidated EBITDA attributable to discontinued operations, as determined in accordance with GAAP, and operations or Eventbusinesses (and ownership interests therein) disposed of Loss occurring during the four-quarter reference period or subsequent to such reference period and on or prior to the Calculation Date, will be given pro forma effect (inexcluded;
(3) the Fixed Charges attributable to discontinued operations, as determined in accordance with Regulation S-X underGAAP, and operations or businesses (and ownership interests therein) disposed of prior to the Securities Act) as if they had occurred onCalculation Date, will be excluded, but only to the first dayextent that the obligations giving rise to such Fixed Charges will not be obligations of the four-quarter reference period;specified Person or any of its Restricted Subsidiaries following the Calculation Date;
(3)(4) any Person that is a Restricted Subsidiary on the Calculation Date will be deemed to have been a Restricted Subsidiary at all times during suchfour-quarter period;
(4)(5) any Person that is not a Restricted Subsidiary on the Calculation Date will be deemed not to have been a Restricted Subsidiary at any time during suchfour-quarter period; and
(5)(6) if any Indebtedness bears a floating rate of interest, the interest expense on such Indebtedness will be calculated as if the rate in effect on the Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligation applicable to such Indebtedness if such Hedging Obligation has a remaining term as at the Calculation Date in excess of 12 months).
“Fixed Charges” means, with respect to any specified Person for any period, the sum, without duplication, of:
(1)the consolidated interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued, including, without limitation, amortization of debt issuance costs and original issue discount or premium, non-cash interest payments (but excluding any non-cash interest expense attributable to the movement in the mark-to-market valuation of Hedging Obligations or other derivative instruments pursuant to Accounting Standards Codification Nos. 815 and 820), 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 of the effect of all payments made or received pursuant to Hedging Obligations in respect of interest rates; rates but excluding any amortization or write-off of deferred financing costs or debt issuance costs and excluding commitment fees, underwriting fees, assignment fees, debt issuance costs or fees, redemption or prepayment premiums, and other transaction expenses or costs or fees consisting of Transaction Activities associated with undertaking, or proposing to undertake, any Transaction Activity;plus
(2)the consolidated interest expense of such Person and its Restricted Subsidiaries that was capitalized during such period;plus
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(3)any interest expense on Indebtedness of another Person that is guaranteed by such Person or one of its Restricted Subsidiaries or secured by a Lien on assets of such Person or one of its Restricted Subsidiaries, whether or not such Guarantee or Lien is called upon (excluding any Completion Guarantee and Keep-Well Agreement, but including any interest expense or interest component of any comparable debt service payments with respect to any Completion Guarantee/Keep-Well Indebtedness to the extent such Completion Guarantee/Keep-Well Indebtedness is actually being serviced by such Person or any Restricted Subsidiary of such Person); upon;plus
(4)the product of (a) all dividends, whether paid or accrued and whether or not in cash, on any series of Disqualified Stockpreferred stock of such Person or any of its Restricted Subsidiaries, other than dividends on Equity Interests payable solely in Equity Interests of the CompanyIssuer (other than Disqualified Stock) or to the CompanyIssuer or a Restricted Subsidiary of the Company, Issuer,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 determined on a consolidated basis in accordance with GAAP.
“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 from time to time.on the date of the Indenture.
“Gaming AuthorityAuthorities” means, in any jurisdiction in which the Issuer or any of its Subsidiaries manages or conducts any racing, riverboat and/or casino gaming operations or activities, the applicable gaming board, commission or other governmental authority responsible for interpreting, administering and enforcing Gaming Laws, including, but not limited to, the Colorado Limited Gaming Control Commission, the Florida Dept. of Business and Prof. Regulation, Division of Pari-Mutuel Wagering, Iowa Racing and Gaming Commission, the Nevada Gaming Commission, the Nevada Gaming Control Board, the Louisiana Gaming Control Board, the Mississippi Gaming Commission, the Missouri Gaming Commission, the Pennsylvania Gaming Control Board, the Pennsylvania State Horse Racing Commission, the Pennsylvania Liquor Control Board, the Ohio Lottery Commission, the Ohio State Racing Commission, the West Virginia Lottery Commission, and the West Virginia Racing Commission.
“Gaming Facility” means any agency, authority, board, bureau, commission, department, officegaming or instrumentality ofpari-mutuel wagering establishment and other Property or assets directly ancillary thereto or used in connection therewith, including any nature whatsoever of the United States federalbuilding, restaurant, hotel, theater, parking facilities, retail shops, spa, land, golf courses and other recreation and entertainment facilities, vessel, barge, ship, equipment, kennels or any foreign government, any state, province or any city or other political subdivision or otherwise and whether now or hereafter in existence, or any officer or official thereof, with authority to regulate any gaming operation (or proposed gaming operation)stables owned managed, or operated by the CompanyIssuer or any of its Subsidiaries.
“Gaming Laws” means all laws, rules, regulations, orders, resolutions and other enactments applicable provisions of all:
(1)constitutions, treaties, statutes to racing, riverboat and/or laws governingcasino gaming operations (including without limitation card club casinosor activities, as in effect from time to time, including the policies, interpretations and pari-mutuel race tracks)administration thereof by the applicable Gaming Authorities, the Colorado Limited Gaming Act of 1991 (C.R.S. 12-47.1-101 et. seq.), the Florida Pari-mutuel Wagering Act (§ 550-551, Fla. Stat.), the Iowa Code Chapters 99D and 99F, the Nevada Gaming Control Act (codified at Chapter 463 of the Nev. Rev. Statutes), the Louisiana Gaming Control Law (codified at La. R.S. 27:1, et seq.), the Mississippi Gaming Control Act (codified at Miss. Code Ann. Section 75-76-1 et seq.), the Ohio Racing Law (codified at Chapter 3769 of the Ohio Revised Code and Chapter 3769 of the Ohio Administrative Code), the Ohio Lottery Law (codified at Chapter 3770 of the Ohio Revised Code and Chapters 3770:1 and 3770:2 of the Ohio Administrative Code), the Pennsylvania Race Horse Development and Gaming Act, the West Virginia Lottery Racetrack Table Games Act, the West Virginia Racetrack Video Lottery Act and Chapter 19, Article 23 (Horse and Dog Racing) of the West Virginia Code, in each case, together with any rules or regulations and ordinances of any Gaming Authority;promulgated thereunder or related thereto.
(2)governmental approvals, licenses, permits, registrations, qualifications or findings of suitability relating to any gaming business, operation or enterprise; and
(3)orders, decisions, judgments, awards and decrees of any Gaming Authority.
“Government Securities” means securities that are marketable direct obligations issued or unconditionally guaranteed byof the United States of America or issued by any agency or instrumentality thereof for the timely payment of which its full faith and credit areis pledged.
“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, by way of a pledge
of assets or through letters of credit or reimbursement agreements in respect thereof, of all or any part of any Indebtedness (whether arising by virtue of partnership arrangements, or by agreements tokeep-well, to purchase assets, goods, securities or services, to take or pay or to maintain financial statement conditions or otherwise).
“Guarantors” means any Subsidiary of the CompanyIssuer that executes a Note Guarantee in accordance with the provisions of the Indenture, and itstheir respective successors and assigns, in each case, until the Note Guarantee of such Person has been released in accordance with the provisions of the Indenture.
“Hedging Obligations” means, with respect toof any specified Person means the obligations of such Person under:
pursuant to (1) any interest rate swap agreements (whether from fixed to floating or from floating to fixed),agreement, interest rate cap agreements andagreement, interest rate collar agreements;
(2)agreement or other agreementssimilar agreement or arrangementsarrangement designed to manageprotect such Person against fluctuations in interest rates, or interest rate risk; and
(3)other(2) agreements or arrangements designed to protect such Person against fluctuations in foreign currency exchange rates in the conduct of its operations, or (3) any forward contract, commodity prices.swap agreement, commodity option agreement or other similar agreement or arrangement designed to protect such Person against fluctuations in commodity prices, in each case entered into in the ordinary course of business for bona fide hedging purposes and not for purposes of speculation.
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“HolderImmaterial Subsidiary” means a Personany Restricted Subsidiary that is designated by the Issuer as an “Immaterial Subsidiary” if and for so long as such Restricted Subsidiary has (i) total assets at such time (x) individually, not exceeding $10.0 million and (y) together with all other Immaterial Subsidiaries, 5.0% of the Issuer’s consolidated assets as of the last day of the most recently ended fiscal quarter for which internal financial statements are available and (ii) total revenues and operating income (x) individually, not exceeding $10.0 million and (y) together with all other Immaterial Subsidiaries, 5.0% of the Issuer’s consolidated revenues and operating income, in whose name a Note is registered.each case, as of the most recently ended fiscal quarter for which internal financial statements are available;provided that such Restricted Subsidiary will be deemed to be an Immaterial Subsidiary only to the extent that, and for so long as, all of the above requirements are satisfied.
“Indebtedness” means, with respect to any specified Person, any indebtedness of such Person (excluding accrued expenses and trade payables), whether or not contingent:
(1)in respect of borrowed money;
(2)evidenced by bonds, notes,Notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof); other than obligations with respect to letters of credit to the extent such letters of credit have not been drawn upon or, if and to the extent drawn upon, are reimbursed no later than the third business day following receipt by such Person of a demand for reimbursement following payment on such letter of credit;
(3)in respect of banker’s acceptances;
(4)representing Capital Lease Obligations or Attributable Debt in respect of sale and leaseback transactions;
(5) representing the balance of the deferred and unpaid of the purchase price of any property or services except any such balance that constitutes an accrued expense(other than accounts payable or trade payablepayables and other than obligations relating to an operating leaseaccrued liabilities arising in the ordinary course of hotel roomsbusiness); or similar lodging facilities entered into for the principal purpose of providing lodging at or near the site of a Casino, which facilities are reasonably expected to be beneficial to the Company’s operating results;
(5)(6) representing any Hedging Obligations; andObligations,
(6)representing the maximum fixed redemption or repurchase price of Disqualified Stock of such Person,
if and to the extent any of the preceding items (other than letters of credit, Attributable Debt and Hedging Obligations) would appear as a liability upon a balance sheet of the specified Person prepared in accordance with GAAP. In addition, the term “Indebtedness” includes all Indebtedness of others secured by a Lien, other than a Permitted Lien described in clause (27) of the definition thereof, on any asset of the specified Personprovided that, so long as
(whether or not such Indebtedness is Non-Recourse Debt as toassumed by the specified Person (other than to the assets securing such Indebtedness), the amount of such Indebtedness shall be equal to the lesser of (i) the amount of such Indebtedness or (ii) the Fair Market Value of the assets securing such Indebtedness on the date of determinationPerson) and, to the extent not otherwise included, the Guarantee by the specified Person of any Indebtedness of any other Person. Indebtedness shall be calculated without giving effect to the effects of Statement of Financial Accounting Standards Codification Topic 815No. 133 and related interpretations, as amended from time to time, to the extent such effects would otherwise increase or decrease an amount of Indebtedness for any purpose under the Indenture as a result of accounting for any embedded derivatives created by the terms of such Indebtedness.
“insolvency or liquidation proceeding” means:
Notwithstanding(1) any case commenced by or against any Issuer or any Guarantor under Title 11, U.S. Code or any similar federal or state law for the foregoing, (i) a Completion Guaranteerelief of debtors, any other proceeding for the reorganization, recapitalization or adjustment or marshalling of the assets or liabilities of the Issuer or any other grantor, any receivership or assignment for the benefit of creditors relating to the Issuer or any other grantor or any similar case or proceeding relative to the Issuer or any other grantor or its creditors, as such, in each case whether or not voluntary;
(2) any liquidation, dissolution, marshalling of assets or liabilities or other winding up of or relating to the Issuer or any other grantor, in each case whether or not voluntary and Keep-Well Agreement shallwhether or not constitute Indebtedness,involving bankruptcy or insolvency; or
(3) any other proceeding of any type or nature in which substantially all claims of creditors of the Issuer or any other grantor are determined and (ii) Completion Guarantee/Keep-Well Agreement Indebtedness shall constitute Indebtedness.any payment or distribution is or may be made on account of such claims.
“IndentureInternal Revenue Code” means the indenture governing the Notes datedInternal Revenue Code of 1986, as of the date the Notes are originally issued, as amended or supplemented from time to time.amended.
“Initial Purchasers” means (i) with respect to the existing notes, Wells Fargo Securities, LLC, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., U.S. Bancorp Investments, Inc. and Capital One Southcoast, Inc., and (ii) with respect to the old notes, Wells Fargo Securities, LLC, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., U.S. Bancorp Investments, Inc. and Capital One Securities, Inc.
“Investments” means, with respect to any Person, (1) all direct or indirect investments by such Person in other Persons (including Affiliates) in the forms of loans (including Guarantees or other obligations), advances or capital contributions (excluding commission, travel and similar advances to officers and employees made in the ordinary course of business), (2) purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities, (3) the making by such Person or any Subsidiary of such Person of any payment pursuant to any Completion Guarantee and Keep-Well Agreement (but not the entering into any Completion Guarantee and Keep-Well Agreement) or in respect of any Completion Guarantee/Keep-Well Indebtedness and (4)together with all other items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP. If the CompanyIssuer or any Restricted Subsidiary of the CompanyIssuer sells or otherwise disposes of any Equity Interests of any direct or indirect Restricted Subsidiary of the CompanyIssuer such that, after giving effect to any such sale or disposition, such Person is no longer a Restricted Subsidiary of the Company,Issuer, the CompanyIssuer will be deemed to have made an Investment on the date of any such sale or disposition equal to the Fair Market Value of the Company’sIssuer’s Investments in such Restricted Subsidiary that were not sold or disposed of in an amount determined as provided in the finalpenultimate paragraph of the covenant described above under the caption “—Certain Covenants — covenants—Restricted Payments.payments.” The acquisition by the CompanyIssuer or any Restricted Subsidiary of the CompanyIssuer of a Person that holds an Investment in a third
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Person will be deemed to be an Investment by the CompanyIssuer or such Restricted Subsidiary in such third Person in an amount equal to the Fair Market Value of the Investments held by the acquired Person in such third Person in an amount determined as provided in the finalpenultimate paragraph of the covenant described above under the caption “—Certain Covenants — covenants—Restricted Payments.payments.” Except as otherwise provided in the Indenture, the amount of an Investment will be determined at the timeoriginal cost of such Investment, plus the cost of all additions thereto and minus the amount of any portion of such Investment is made andrepaid to the Person making such Investment in cash as a repayment of principal or return of capital, as the case may be, but without giving effect to subsequent changes in value.
“Issue Date” means March 29, 2017.
“Lake Charles Gaming Facilities” means the Gaming Facilities owned, leased, operated or used by the Company or its Restricted Subsidiaries in Westlake (near Lake Charles), Louisiana, including the vessel Grand Palais having Official No. 1028318.
“Lien” means, with respect to any asset, any mortgage, lien, (statutory or other), 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, or any lease in the nature thereof,thereof.
“Limited Condition Acquisition” means any optionacquisition or other Investment, including by way of merger, amalgamation or consolidation or similar transaction, by the Issuer or one or more of its Restricted Subsidiaries, with respect to which the Issuer or any such Restricted Subsidiaries have entered into an agreement or is otherwise contractually committed to sell or give a security interest inconsummate and any filingthe consummation of which is not expressly conditioned upon the availability of, or agreement to give any financing statement underon obtaining, third party financing.
“Marquette Gaming Facilities” means the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.Gaming Facilities in Marquette, Iowa, including the vessel Miss Marquette having Official No. 950558.
“Moody’s” means Moody’s Investors Service, Inc.
“Net Loss Proceeds” means the aggregate cash proceeds and Cash Equivalents received by the Company or any of its Restricted Subsidiaries in respect of any Event of Loss (including, without limitation, insurance proceeds from condemnation awards or damages awarded by any judgment), net of:
(1)the direct costs in recovery of such Net Loss Proceeds, including, without limitation, legal, accounting, appraisal and insurance adjuster fees and any relocation expenses incurred as a result thereof;
(2)amounts required to be applied to the repayment of Indebtedness, other than intercompany Indebtedness, secured by a Lien on the asset or assets that were the subject of such Event of Loss;
(3)any taxes paid or payable as a result of the receipt of such cash proceeds, in each case taking into account any available tax credits or deductions and any tax sharing arrangements; and
(4)any reserve against any liabilities or indemnification obligation associated with such Event of Loss established in accordance with GAAP.
“Net Proceeds” means the aggregate cash proceeds and Cash Equivalents received by the CompanyIssuer or any of its Restricted Subsidiaries in respect of any Asset Sale (including, without limitation, any cash or Cash Equivalents received upon the sale or other disposition of any non-cash consideration received in any Asset Sale), net of:
(1)of (i) the direct costs relating to such Asset Sale, including, without limitation, legal, accounting and investment banking fees, and sales commissions, and any relocation expenses incurred as a result of the Asset Sale;
(2)amounts required to be applied to the repayment of Indebtedness, other than intercompany Indebtedness, secured by a Lien on the asset or assets that were the subject of such Asset Sale;
(3)Sale, (ii) taxes paid or payable as a result of the Asset Sale, in each case, after taking into account any available tax credits or deductions and any tax sharing arrangements; and
(4)arrangements, (iii) amounts required to be applied to the repayment of Indebtedness, other than Indebtedness under a Credit Facility, secured by a Lien on the asset or assets that were the subject of such Asset Sale, (iv) all distributions to other holders of Equity Interests in Restricted Subsidiaries contractually required to be made as a result of such Asset Sale, (v) any reserve for adjustment or indemnification obligations in respect of the sale price of such asset or assets established in accordance with GAAP.GAAP and (vi) amounts reserved, in accordance with GAAP, against any liabilities associated with the Asset Sale and related thereto, including pension and other retirement benefit liabilities, purchase price adjustments, liabilities related to environmental matters and liabilities under any indemnification obligations associated with such Asset Sale;provided that Net Proceeds shall include any cash payments received upon the reversal (without the satisfaction of any applicable liabilities in cash in a corresponding amount) of any reserve described in clause (vi) or, if such liabilities have not been satisfied in cash and such reserve is not reversed within eighteen (18) months after such Asset Sale, the amount of such reserve.
“Non-Core Land” means each of the following parcels of land, each of which is immaterial to the Issuer’s gaming operations and as to which the Issuer has no intention to develop:
(1) the 244.69 acre parcel of land known as the “Quarry Parcel” in Hancock, West Virginia;
(2) the 162.79 acre parcel of land known as the “Woodview Golf Course” in Hancock, West Virginia;
(3) the 387.12 acre portion of the land known as the “Original Mountaineer Parcel” which is located to the east of State Route 2 site in Hancock, West Virginia;
(4) the 97.706 acre parcel of land known as the “Coldwell Parcel” in Hancock, West Virginia;
(5) the 37.85 acre parcel of land known as the “Hazel Parcel” in Hancock, West Virginia;
(6) the 1.755 acre parcel of land known as the “Glover/Daily Double Parcel” in Hancock, West Virginia;
(7) the 5.78 acre parcel of land known as the “J&T Parcel” in Hancock, West Virginia;
(8) the 109.01 acre parcel of land known as the “LSW Sanitation Parcel” in Hancock, West Virginia;
(9) the 0.92 acre parcel of land known as the “Craig/Smith Parcel” in Hancock, West Virginia;
(10) the 70.213 acre parcel of land known as the “Watson Parcel” site in Hancock, West Virginia;
(11) the 6.65 acre parcel of land known as the “Phillips Parcel” in Hancock, West Virginia;
(12) the approximately 0.955 acre parcel of land known as the “Jefferson School Parcel” in Hancock, West Virginia;
(13) the 234.99 acre parcel of land known as the “Logan/Realm Parcel” in Hancock, West Virginia;
(14) the 38.017 acre parcel of land known as the “BOC Gas Parcel” in Hancock, West Virginia;
(15) the 37.11 acre parcel of land known as the “Mara Parcel” in Franklin County, Ohio;
(16) 5.596 acres in Summit Township, Erie County, Pennsylvania;
(17) the 272 acre parcel in Summit Township, Erie County, Pennsylvania;
(18) the 213.35 acre parcel of land located in McKean Township, Pennsylvania;
(19) the following parcels of undeveloped land in the Cripple Creek, County of Teller, Colorado:
(a) 4005.134110080; 4005.134110090; 4005.134110220; 4005.134080230; 4005.134080240; and 4005.134090180;
(20) the following parcels of undeveloped land in Kimmswick, Jefferson County, Missouri:
(a) 19-7.0-25.0-001.02; 19-7.0-36.0-001.01; 20-9.0-31.0-004.02; and 20-9.0-31.0-005;
(21) the parcel of undeveloped land located at the address 1600 Lady Luck Parkway, Bettendorf, Iowa;
(22) the parcel of undeveloped land located at the address 100 Miner Street, Central City, Colorado.
“Non-Recourse Debt” means Indebtedness:
(1)Indebtedness as to which neither the CompanyIssuer nor any of its Restricted Subsidiaries (a) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness) or (b) is directly or indirectly liable as a guarantor or otherwise;otherwise. Notwithstanding the foregoing, the Issuer and
(2)as to which the lenders have been notified in writing that they will not have any recourse to the stock or assets of the Company or any of its Restricted Subsidiaries (other thanmay enter into customary “completion guaranties” or “support agreements” in respect of construction projects undertaken by Unrestricted Subsidiaries so long as such “completion guaranties” or “support agreements”: (i) are unsecured or secured only by cash deposits; (ii) are subject to a fixed liability cap stated in United States dollars; and (iii) the Equity Interestsaggregate amount of an Unrestricted Subsidiary).
The foregoing notwithstanding, if the Companycapped liability of such “completion guaranties” or a Restricted Subsidiary (x) makes a loan to an Unrestricted Subsidiary that is permitted under the covenant described under the caption “— Certain covenants — Restricted Payments” or is a Permitted Investment and is otherwise permitted to be incurred under the Indenture or (y) executes a Completion
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Guarantee and Keep-Well Agreement for the benefit of an Unrestricted Subsidiary for the purpose of developing, constructing, opening and operating a new Casino, Casino Hotel or Casino Related Facility or Completion Guarantee/Keep-Well Indebtedness, such actions referred to in the foregoing clauses (x) and (y)“support agreements” shall not preventexceed $100.0 million at any one time outstanding. For avoidance of doubt, any such “completion guaranties” or “support agreements” that satisfy the Indebtednessrequirements of an Unrestricted Subsidiary to which such actions relate from being considered Non-Recourse Debt.the preceding sentence shall constitute “Non-Recourse Debt” for purposes of the definition of “Unrestricted Subsidiary.”
“Note Guarantee” means the Guarantee by each Guarantor of the Company’sIssuer’s obligations under the Indenture and the Notes, executed pursuant to the provisions of the Indenture.
“Notes” means the additional 5.875% Senior Notes due 2021 issued by the Company on April 14, 2015, the $350.0 million aggregate principal amount of 5.875% Senior Notes due 2021 originally issued on March 5, 2013, and any additionalExisting Notes and following the Registered Exchange Offer, any Exchange Notes issued in accordance with the Registration Rights Agreements.Notes.
“Obligations” means any principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness.Indebtedness (including, without limitation, interest accruing at the then applicable rate provided in such documentation after the maturity of such Indebtedness and interest accruing at the then applicable rate provided in such documentation after the filing of a petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to any debtor under such documentation, whether or not a claim forpost-filing orpost-petition interest is allowed in such proceeding).
“Permitted BusinessOfficer” means, with respect to any Person, the Chairman of the Board, the Chief Executive Officer, the President, the Chief Operating Officer, the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary, any Senior Vice President, any Vice President or any Assistant Vice President of such Person.
“Officer’s Certificate” means a certificate signed on behalf of the Issuer by an Officer of the Issuer.
“Paid-Up Oil and Gas Leases” means those certainPaid-Up Oil and Gas Leases entered into as of May 10, 2011 by and among Mountaineer Park, Inc. and Chesapeake Appalachian, L.L.C, as the same may be amended, supplemented, modified, extended, replaced, renewed or restated from time to time.
“Pari Passu Debt” means any Indebtedness of the Issuer or any Guarantor that ranks equally in right of payment with the Notes or the Note Guarantee of such Guarantor, as applicable (without giving effect to collateral arrangements).
“Permitted Business” means any business that is the same as, or reasonably related, ancillary or complementary to, any of the businesses in which the Issuer and its Restricted Subsidiaries are engaged on the date of the Indenture, including any casino gaming business and other business or pari-mutuel wagering business of such Person or any businessactivity that is incidental, related to, ancillary to or supportive of, connected with or arising out of the casino gaming or pari-mutuel wagering business of such Person (including,complementary thereto, including without limitation developing and operating lodging, dining, amusement, sportsany related hotel, hospitality, food, beverage, entertainment or entertainment facilities, transportation services or other related activities or enterprises and any additions or improvements thereto).activities.
“Permitted Equity Holders” means the lineal descendants of Bernard Goldstein and Irene Goldstein (including adopted children and their lineal descendants) and any entity a majority of the Equity Interests of which are owned by such persons or which was established for the exclusive benefit of, or the estate of, any of the foregoing.
“Permitted Investments” means:
(1)any Investment in the CompanyIssuer or in a Restricted Subsidiary of the Company;Issuer;
(2)any Investment in Cash Equivalents;
(3)any Investment by the CompanyIssuer or any Restricted Subsidiary of the CompanyIssuer in a Person, if as a result of such Investment:
(a)such Person becomes a Restricted Subsidiary of the Company;Issuer; or
(b)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 CompanyIssuer or a Restricted Subsidiary of the Company;Issuer;
(4)any Investment made as a result of the receipt ofnon-cash consideration from an Asset Sale or an Event of Loss Offer that was made pursuant to and in compliance with the covenantscovenant described above under the captionscaption “—Repurchase at the Optionoption of Holders — holders—Asset Sales” and “— Repurchase at the Option of Holders — Events of Loss,” respectively;sales”;
(5)any Investment made solely in exchange for, or outthe payment of or with the net cash proceeds of a substantially concurrent sale (other than to a Subsidiary of the Company)which consists of Equity Interests (other than Disqualified Stock) of the Company; Issuer or proceeds from the sale of such Equity Interests;provided that such net cash proceeds from such sale of Equity Interest are excluded fromInterests will not increase the amount available for Investments under clause (c)(2) of the firstsecond paragraph ofunder the covenant described above underin “Certain covenants—Restricted payments;”
(6) receivables owing to the caption “— Certain Covenants —Issuer or its Restricted Payments;”Subsidiaries, if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary trade terms, including without limitation credit extended to customers;
(6)(7) any Investments received in compromise or resolution of (A) obligations of trade creditors or customers that were incurred in the ordinary course of business of the CompanyIssuer or any of its Restricted Subsidiaries, including pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of any trade creditor or customer; or (B) litigation, arbitration or other disputes;
(7)(8) Investments represented by Hedging Obligations;
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(8)(9) loans orand advances to officers, directors and employees for payroll, business-related travel expenses, moving or relocation expenses, drawing accounts and other similar expenses, in each case, made in the ordinary course of business of the Companybusiness;
(10) other loans or any Restricted Subsidiary of the Companyadvances to officers, directors and employees in an aggregate principal amount not to exceed $250,000 in any fiscal year of the Company and $1.0 million in the aggregate$600,000 at any one time outstanding;
(9)(11) repurchases of the Notes;
(10)(12) any guarantee of Indebtedness permitted to be incurred by the covenant entitled “—Certain Covenants — covenants—Incurrence of Indebtednessindebtedness and Issuanceissuance of Preferred Stock”preferred stock” other than a guarantee of Indebtedness of an Affiliate of the CompanyIssuer that is not a Restricted Subsidiary of the Company;Issuer;
(11)(13) any Investment existing on, or made pursuant to binding commitments existing on, the date of the Indenture and any Investment consisting of an extension, modification or renewal of any Investment existing on, or made pursuant to a binding commitment existing on, the date of the Indenture;provided that the amount of any such Investment may be increased (a) as required by the terms of such Investment as in existence on the date of the Indenture or (b) as otherwise permitted under the Indenture;
(12)(14) Investments acquired after the date of the Indenture as a result of the acquisition by the CompanyIssuer or any Restricted Subsidiary of the CompanyIssuer of another Person, including by way of a merger, amalgamation or consolidation with or into the CompanyIssuer or any of its Restricted Subsidiaries in a transaction that is not prohibited by the covenant described above under the caption “—Certain Covenants — Merger, Consolidationcovenants —Merger, consolidation or Salesale of Assets”assets” after the date of the Indenture to the extent that such Investments were not made in contemplation of such acquisition, merger, amalgamation or consolidation and were in existence on the date of such acquisition, merger, amalgamation or consolidation;
(15) Investments resulting from the acquisition of a Restricted Subsidiary that was otherwise permitted by the Indenture, which Investments were held by such Restricted Subsidiary at the time of such acquisition and were not acquired in contemplation of such acquisition;
(13)(16) Investments consisting of the licensing or contribution of intellectual property pursuant to joint marketing arrangements with other Persons in the ordinary course of business;
(17) Investments required by a Gaming Authority or made in lieu of payment of a tax or in consideration of a reduction in tax;
(18) Investments in Capri Insurance Corporation;
(14)Qualified Equity Investments (i)sales of Non-Core Land by the Issuer or any of its Restricted Subsidiaries in an aggregate principal amount not to exceed $80.0(x) $10.0 million and (y) Designated Non-Cash Consideration received under clause (2)(c) under the caption “Repurchase at the option of holders—Asset sales”;
(19) Investments in joint ventures formed for the purpose of developing hotels or (ii)other facilities that constitute Permitted Businesses that are adjacent to or ancillary to any casino or gaming facility owned by the Issuer or a Restricted Subsidiary of the Issuer in an aggregate principal amount greater than $80.0 million, provided that the following conditions are satisfied:not to exceed $5.0 million;
(a)the primary purpose for which such Investment was made was to finance or otherwise facilitate the development, construction or acquisition of a facility that (A) is located in a jurisdiction in which the conduct of gaming using electronic gaming devices is permitted pursuant to applicable law and (B) conducts or, following such development, construction or acquisition, will conduct gaming utilizing electronic gaming devices or that is related to, ancillary or supportive of, connected with or arising out of such gaming business;
(b)the pro forma Fixed Charge Coverage Ratio of the Company on the date of the Investment would have been greater than 2.50 to 1.00;
(c)none of the Permitted Equity Holders or any Affiliate of such Persons, other than the Company or its Subsidiaries, is a direct or indirect obligor, contingently or otherwise, of any Indebtedness of such entity or a direct or indirect holder of any Capital Stock of such entity, other than through their respective ownership interests in the Company; and
(d)at the time of the Investment, the Notes shall be rated at least “B2” by Moody’s and “B” by S&P or their respective successors (or, if either such entity or both shall not make a rating of the Notes publicly available, a nationally recognized securities rating agency or agencies, as the case may be, selected by the Company);
(15)other(20) Investments in any Person having an aggregate fair market valueFair Market Value (measured on the date each such Investment was made and without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this clause (15)(20) that are at the time outstanding not to exceed $50.0 million.$300.0 million;provided, however, that if an Investment made pursuant to this clause (20) is made in any Person that is not a Restricted Subsidiary as of the date of the making of such Investment and such Person becomes a Restricted Subsidiary after such date, such Investment shall thereafter be deemed to have been made pursuant to clause (1) above and shall cease to have been made pursuant to this clause (20) for so long as such Person continues to be a Restricted Subsidiary; and
(21) any Investment so long as, at the time the Investment is made and after giving effect thereto, (i) no Event of Default has occurred and is continuing and (y) the Consolidated Leverage Ratio of the Issuer is less than or equal to 4.0 to 1.0 on a pro forma basis.
“Permitted Liens” means:
(1)Liens on assets of the Company or any of its Restricted Subsidiaries securing Indebtedness and other Obligations under Credit Facilities that were permitted by the terms of the Indenture to bePermitted Debt incurred pursuant to and outstanding under clause (1) of the second paragraph of the covenant described above under the caption “—Certain Covenants — covenants—Incurrence of Indebtednessindebtedness and Issuanceissuance of Preferred Stock” or by Section 2.1.A of the Bank Credit Facility and/or securing Hedging Obligations related thereto and/or securing Obligations with regard to Treasury Management Arrangements;preferred stock”;
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(2)Liens in favor of the Company or the Guarantors;
(3)Liens on property of a Person existing at the time such Person becomes a Restricted Subsidiary of the Company or is merged with or into or consolidated with the Company or any Restricted Subsidiary of the Company; provided that such Liens were in existence prior to the contemplation of such Person becoming a Restricted Subsidiary of the Company or such merger or consolidation and do not extend to any assets other than those of the Person that becomes a Restricted Subsidiary of the Company or is merged with or into or consolidated with the Company or any Restricted Subsidiary of the Company;
(4)Liens on property (including Capital Stock) existing at the time of acquisition of the property by the Company or any Subsidiary of the Company; provided that such Liens were in existence prior to such acquisition and not incurred in contemplation of such acquisition;
(5) (a) Liens to secure the performance of statutory obligations, insurance, surety or appeal bonds, workers compensation obligations, unemployment insurance or other type of social security, performance bonds or other obligations of a like nature incurred in the ordinary course of business; (b) Liens incurred or deposits made in the ordinary course of business (includingin connection with workers’ compensation, unemployment insurance and other types of insurance or social security or premiums with respect thereto (and Liens on proceeds of related policies); (c) Liens imposed by Gaming Laws or Gaming Authorities, and Liens on deposits made to secure gaming license applications or to secure the performance of surety or other bonds; and (d) Liens securing obligations with respect to letters of credit issued in connection with any of the items referred to assure paymentin this clause (2);
(3) Liens in favor of the Issuer or the Guarantors;
(4) Liens on property or assets (including Capital Stock) of a Person (or its Subsidiaries) existing at the time such Person is merged with or into or consolidated with the Issuer or any Subsidiary of the Issuer or otherwise becomes a Subsidiary of the Issuer and amendments or modifications thereto and replacements or refinancings thereof;provided that such Liens were not granted in connection with, or in anticipation of, such obligations);merger or consolidation or acquisition (except for Liens securing Indebtedness incurred pursuant to clause (15) of the second paragraph of the covenant entitled “—Certain covenants—Incurrence of indebtedness and issuance of preferred stock”) and do not extend to any assets other than those of such Person (and its Subsidiaries) merged into or consolidated with the Issuer or the Subsidiary or which becomes a Subsidiary of the Issuer;
(5) Liens (including extensions, renewals or replacements thereof) on property existing at the time of acquisition of the property by the Issuer or any Subsidiary of the Issuer;provided that (except for Liens securing Indebtedness incurred pursuant to clause (15) of the second paragraph of the covenant entitled “—Certain covenants—Incurrence of indebtedness and issuance of preferred stock”) such Liens were in existence prior to, or not incurred in contemplation of, such acquisition;
(6)Liens to secure Indebtedness (including Capital Lease Obligations and FF&E Financing) permitted by clause (4) of the second paragraph of the covenant entitled “—Certain Covenants — covenants—Incurrence of Indebtednessindebtedness and Issuanceissuance of Preferred Stock”preferred stock” covering only the assets acquired with or financed by such Indebtedness;Indebtedness (and directly related assets, including proceeds (including insurance proceeds) and replacements thereof or assets which were financed with Indebtedness permitted by such clause that has been refinanced (including successive refinancings));
(7)Liens existing on the date of the Indenture;
(8)Liens for taxes, assessments or governmental charges, levies or claims that are not yet due and payable or delinquent or that are being contested in good faith by appropriate proceedings promptly instituted and diligently concluded; proceedings;provided that any reserve or other appropriate provision as is required in conformity with GAAP has been made therefor;
(9)Liens imposed by law, such as carriers’, warehousemen’s, landlord’s and mechanics’ Liens,liens, in each case, incurred in the ordinary course of business;
(10)survey exceptions, easements, encroachments, subdivisions or reservations of, or rights of others for, licenses, rights-of-way, navigational servitudes, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning or other restrictions as to the use of real property that were not incurred in connection with Indebtedness and that do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation of the business of such Person;
(11)Liens created for the benefit of (or to secure) the Notes (or the Note Guarantees);
(12)Liens to secure any Permitted Refinancing Indebtedness permitted to be incurred under the Indenture; (and customary obligations related thereto);provided,, however, that:
(a)that the new Lien is limited to all or part of the same property and assets that secured or, under the written agreements pursuant to which the original Lien arose, could secure the original Lien (plus improvements and accessions to, such property or proceeds or distributions thereof); and
(b)the Indebtedness secured by the new Lien is not increased to any amount greater than the sum of (x) the outstanding principal amount, or, if greater, committed amount, of the Indebtedness renewed, refunded, refinanced, replaced, defeased or discharged with such Permitted Refinancing Indebtedness and (y) an amount necessary to pay any fees and expenses, including interest and premiums, related to such renewal, refunding, refinancing, replacement, defeasance or discharge;
(13)Liens on insurance policies and proceeds thereof, or other deposits, to secure insurance premium financings;
(14)any interest or title of a lessor in property subject to any Capital Lease Obligations or an operating lease or leases or subleases granted to others not interfering in any material respect with the business of the Company or any Restricted Subsidiary;
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(15) �� Liens arising from filing of Uniform Commercial Code financing statements as a precautionary measure in connection with operating leases;
(16)(15) bankers’ Liens, rights of setoff, Liens arising out of judgments or awards not constituting an Event of Default and notices oflis pendens and associated rights related to litigation being contested in good faith by appropriate proceedings and for which adequate reserves have been made;
(17)(16) Liens on cash, Cash Equivalents or other property arising in connection with the defeasance, discharge or redemption of Indebtedness;
(18)(17) Liens on specific items of inventory or other goods (and the proceeds thereof) of any Person securing such Person’s obligations in respect of bankers’ acceptances issued or created in the ordinary course of business for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;
(19)(18) grants of software and other technology licenses in the ordinary course of business;
(20)any charter of a Vessel, provided that (a) in the good faith judgment of the Board of Directors of the Company such Vessel is not necessary for the conduct of the business of the Company or any of its Restricted Subsidiaries as conducted immediately prior thereto, (b) the terms of the charter are commercially reasonable and represent the Fair Market Value of the charter, and (c) the Person chartering the assets agrees to maintain the Vessel and evidences such agreement by delivering such an undertaking to the trustee;
(21)(19) Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into in the ordinary course of business;
(20) other Liens incidental to the conduct of the business of the Issuer and its Subsidiaries or the ownership of their Properties which were not created in connection with the incurrence of Indebtedness and do not in the aggregate materially detract from the value of such Properties or materially impair the use thereof, including without limitation leases, subleases, licenses and sublicenses and Liens imposed pursuant to the Paid-Up Oil and Gas Leases;
(21) Liens securing obligations to the trustee pursuant to the compensation and indemnity provisions of the Indenture and Liens owing to an Indenture trustee in respect of any other Indebtedness permitted to be incurred under the covenant entitled “—Certain covenants —Incurrence of indebtedness and issuance of preferred stock”;
(22) pledges or deposits made in connection with any letter of intent or purchase agreement;
(23) Liens to secure Indebtedness permitted by clause (12) of the second paragraph of the covenant entitled “—Certain covenants—Incurrence of indebtedness and issuance of preferred stock”;
(24) Liens securing Hedging Obligations that are incurred in the ordinary course of business (and not for speculative purposes);
(25) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the Company or any Restricted Subsidiaryimportation of the Company with respect to Indebtedness or obligations that do not exceed $40.0 million at any one time outstanding;
(23)Liens (including extensions and renewals thereof) upon real or tangible personal property acquired by any Person after the date of the Indenture; provided that
(a)any such Lien is created solely for the purpose of securing Indebtedness representing, or incurred to finance, refinance or refund, all costs (including the cost of construction, installation or improvement) of the item of property subject thereto,
(b)the principal amount of the Indebtedness secured by that Lien does not exceed 100% of that cost,
(c)that Lien does not extend to or cover any other property other than that item of property and any improvements on that item, and
(d)the incurrence of that Indebtedness is permitted by the covenant described above under the caption “— Certain Covenants — Incurrence of Indebtedness and Issuance of Preferred Stock;”
(24)Liens encumbering property or assets of that Person under construction arising from progress or partial payments by that Person or one of its Subsidiaries relating to that property or assets;
(25)Liens encumbering customary initial deposits and margin accounts, and other Liens incurredgoods in the ordinary course of business and which are withinbusiness;
(26) Liens securing customary cash management obligations not otherwise prohibited by the general parameters customaryIndenture;
(27) Liens solely on any cash earnest money deposits made by the Issuer or any of its Restricted Subsidiaries in connection with any letter of intent or purchase agreement permitted under the gaming industry; andIndenture;
(28) Liens on Equity Interests in an Unrestricted Subsidiary to the extent that such Liens secure Non-Recourse Debt or other Indebtedness of an Unrestricted Subsidiary or joint venture;
(26)(29) Permitted Vessel Liens.Liens; and
(30) Liens securing Indebtedness;provided, that the principal amount of such Indebtedness secured pursuant to this clause (30) together with all other Indebtedness then outstanding and incurred under this clause (30) does not to exceed the greater of (i) $75.0 million and (ii) 4.5% of Consolidated Tangible Assets.
“Permitted Refinancing Indebtedness” means any Indebtedness of the CompanyIssuer or any of its Restricted Subsidiaries issued in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge other Indebtedness, Disqualified Stock or preferred stock of the CompanyIssuer or any of its Restricted Subsidiaries (other than intercompany Indebtedness);provided that:
(1)the principal amount (or accreted value, if applicable) of such Permitted Refinancing Indebtedness does not exceed the principal amount (or accreted value, if applicable) (or, if greater, the committed amount (only to the extent the committed amount could have been incurred or issued on the date of initial incurrence or issuance and was deemed incurred or issued at such time for the purposes of the covenant under the caption “—Certain covenants—Incurrence of indebtedness and issuance of preferred stock”)) of the Indebtedness, Disqualified Stock or preferred stock renewed, refunded, refinanced, replaced,
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defeased or discharged (plus all accrued interest on the Indebtedness, all accrued or accumulated dividends on the Disqualified Stock or preferred stock, and the amount of all penalties, fees, and expenses, includingcosts, discounts and premiums incurred in connection therewith)therewith and any original issue discount or debt issuance costs with respect thereto);
(2) other than in connection with a refinancing of the Notes (including any redemption or repurchase) that is financed with Indebtedness under a Credit Facility, such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and has a Weighted Average Life to Maturity that is (a) equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness, Disqualified Stock or preferred stock being renewed, refunded, refinanced, replaced, defeased or discharged or (b) more than 90 days after the final maturity date of the Notes;
(3)if to the extent the Permitted Refinancing Indebtedness being renewed, refunded, refinanced, replaced, defeased or discharged constitutes Subordinatedrefinances (a) Indebtedness with respectthat 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, taken as a whole, to the Holders of Notes as those contained in the documentation governing the Indebtedness being renewed, refunded, refinanced replaced, defeased or discharged; and
(4)(b) Disqualified Stock or preferred stock, such Permitted Refinancing Indebtedness is incurred either byDisqualified Stock or preferred stock, as applicable; and
(4) if the Company, a Guarantor or by the Restricted Subsidiary of the Company that was the obligor on the Indebtednessindebtedness being renewed, refunded, refinanced, replaced, defeased or discharged and is guaranteed onlyunsecured, such Permitted Refinancing Indebtedness is unsecured;
provided,however, that, unless otherwise permitted by Persons who were obligors on the Indenture, Permitted Refinancing Indebtedness being renewed, refunded, refinanced, replaced, defeasedshall not include Indebtedness of the Issuer or discharged.any Restricted Subsidiary that refinances debt of a Subsidiary that is not a Guarantor.
“Permitted Vessel Liens” shall meanmeans maritime Liens on ships, barges or other vessels for damages arising out of a maritime tort, wages of a stevedore, when employed directly by a person listed in 46 U.S.C. Section 31341, crew’s wages, salvage and general average, whether now existing or hereafter arising and other maritime Liens which arise by operation of law during normal operations of such ships, barges or other vessels.vessels
“Person” means any individual, corporation, partnership, joint venture, association,joint-stock company, trust, unincorporated organization, limited liability company or government or other entity.
“Qualified Equity InvestmentPre-Opening Expenses” means, an Investment bywith respect to any fiscal period, the Company or anyamount of expenses (including Fixed Charges) incurred with respect to capital projects which are classified as “pre-opening expenses” on the applicable financial statements of the Issuer and its Restricted Subsidiaries for such period, prepared in accordance with GAAP.
“Principals” means (a) Donald L. Carano, Gene R. Carano, Gregg R. Carano, Gary L. Carano, Cindy L. Carano and Glenn T. Carano, (b) their respective spouses, (c) their respective descendants and any member of their respective immediate families, including in each case stepchildren and family members by adoption, (d) their heirs at law and their estates and the beneficiaries thereof, (e) any charitable foundation created by any of them, and (f) any trust, corporation, limited liability company, partnership or other entity, the beneficiaries, stockholders, members, general partners, owners or Persons Beneficially Owning a majority of the interests of which consist of any one or more of the Persons referred to in the formimmediately preceding clauses (a) through (e).
“Pro Forma Cost Savings” means the amount of eithercost savings, operating expense reductions and synergies projected by Issuer in good faith to be realized as a directresult of specified actions taken or with respect to which steps have been initiated (in the good faith determination of Issuer) during the Issuer’s most recently ended four full fiscal quarters for which internal financial statements are available as of the date of determination (or are reasonably expected to be initiated within twelve (12) months of the closing date of such specified transaction), including in connection with any acquisition, disposition, Investment or similar transaction (calculated on a pro forma basis as though such cost savings, operating expense reductions and synergies had been realized during the makingentirety of payments pursuant to any Completion Guarantee and Keep-Well Agreement, in any entity primarily engaged or preparing to engage in a Permitted Business; the Issuer’s most recently ended four full fiscal quarters for which internal financial statements are available as of the date of determination), net of the amount of actual benefits realized during the Issuer’s most recently ended four full fiscal quarters for which internal financial statements are available as of the date of determination from such actions;provided that (i) such actions are to be taken within twelve (12) months after the Company or any of its Restricted Subsidiaries at the timeconsummation of the Investment (a) ownsapplicable transaction, restructuring or implementation of an initiative that is expected to result in such cost savings, expense reductions or synergies, (ii) no cost savings, operating expense reductions and synergies shall be added pursuant to this definition to the extent duplicative of any expenses or charges otherwise added to Consolidated EBITDA, whether through a pro forma adjustment or otherwise, for the Issuer’s most recently ended four full fiscal quarters for which internal financial statements are available as of the date of determination, and (iii) projected amounts (and not yet realized) may no longer be added in calculating Consolidated EBITDA pursuant to this definition to the extent more than twelve (12) months have elapsed after the specified action taken in order to realize such projected cost savings, operating expense reductions and synergies;provided further, that the aggregate at least 35%amount of additions made to Consolidated EBITDA for any during the Issuer’s most recently ended four full fiscal quarters for which internal financial statements are available as of the outstanding Voting Stockdate of such entity, or (b)(i) controls the day-to-day gaming operations of such entitydetermination pursuant to a written agreement andthis definition shall not (i) exceed 15.0% of Consolidated EBITDA for the Issuer’s most recently ended four full fiscal quarters for which internal financial statements are available as of the date of determination (after giving effect to this definition) or (ii) provides or has provided Development Servicesbe duplicative of one another.
“Property” means, with respect to the applicable Qualified Facility.any Person, any interest of such Person in any land, property or asset, whether real, personal or mixed, or tangible or intangible, including, without limitation, Capital Stock in any other Person.
“Qualified Facility” means a facility that (a) is located in a jurisdiction in which the conduct of gaming using electronic gaming devices is permitted pursuant to applicable law and (b) conducts or will conduct a Permitted Business.
“Qualifying Equity Interests” means Equity Interests of the CompanyIssuer other than Disqualified Stock.
“Real Estate Options” means (1) all options held by the Company or its Restricted Subsidiaries, directly or indirectly, as of the date of the Indenture for an amount, in each case not exceeding $1.0 million to purchase or lease land, and (2) all options acquired by the Company, directly or indirectly, after the date of the Indenture for an amount, in each case, not exceeding $2.0 million, to purchase or lease land.
“Registration Rights Agreement” means (i) with respect to the existing notes, that certain Registration Rights Agreementregistration rights agreement among the Company,Issuer, the Guarantors and the Initial Purchasers forother parties named on the existing notes, datedsignature pages thereof, as of the date of the Indenturesuch agreement may be amended, modified or supplemented from time to time and, (ii) with respect to the old notes, that certain Registration Rights Agreementany Additional Notes, one or more registration rights agreements among the Company,Issuer, the Guarantors and the Initial Purchasers forother parties thereto, as such agreement(s) may be amended, modified or supplemented from time to time, relating to rights given by the old notes, dated asIssuer to the purchasers of April 14, 2015.Additional Notes to register such Additional Notes under the Securities Act.
“Related Party” means:
(1) any controlling stockholder, majority owned Subsidiary, or immediate family member, including, without limitation, present, former and future spouses,sons-in-law anddaughters-in-law (in the case of an individual) of any Principal; or
(2) any trust, corporation, partnership, limited liability company or other entity, the beneficiaries, stockholders, partners, members, owners or Persons beneficially holding a majority (and controlling) interest of which consist of any one or more Principals and/or such other Persons referred to in the immediately preceding clause (1).
“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.
“S&P” means Standard & Poor’s Ratings Group.Rating Services, a division of The McGraw-Hill Companies, and its successors.
“Significant Restricted SubsidiarySEC” means any Restricted Subsidiary that is (i) a guarantor of the Company’s Obligations under the Bank Credit Facility or any other Credit FacilityU.S. Securities and (ii) is not prohibited from guaranteeing the Notes under any applicable Gaming Laws or by any Gaming Authority.Exchange Commission.
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“Significant Subsidiary” means any Restricted Subsidiary that would be a “significant subsidiary” as defined in Article 1,Rule 1-02 ofRegulation S-X, promulgated pursuant to the Securities Act, as such Regulation is in effect on the date of the Indenture.
“Special Interest”, as applicable, means the interest payable described above under the heading “— Certain Covenants — Events of Default and Remedies” and has the meaning assigned to that term pursuant to the Registration Rights Agreement.
“Stated Maturity” means, with respect to any installment of interest or principal on any series of Indebtedness, the date on which the payment of interest or principal was scheduled to be paid in the documentation governing such Indebtedness as of the date of the Indenture, and will 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.
“Subordinated Indebtedness” means the 2020 Subordinated Notes and any other Indebtedness that is subordinated in right of payment to the Notes or a Note Guarantee; provided, however, that no Indebtedness will be deemed to be subordinated in right of payment to the Notes or any Note Guarantee solely by virtue of being unsecured or by virtue of being secured on a junior priority basis or by virtue of not having the benefit of any guarantee.
“Subsidiary” means, with respect to any specified Person:
(1) 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 and after giving effect to any voting agreement or stockholders’ agreement that effectively transfers voting power) to vote in the election of directors, managers or trustees of the corporation, association or other business entity is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person (or a combination thereof); and
(2) any partnership or limited liability company of which (a) more than 50% of the capital accounts, distribution rights, total equity and voting interests or general and limited partnership interests, as applicable, are owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof, whether in the form of membership, general, special or limited partnership interests or otherwise, and (b) such Person or any Subsidiary of such Person is a controlling general partner or otherwise controls such entity.
“Transaction CostsActivity” means any of the fees, costs and expenses payable byfollowing (and, in each case, whether or not successful): (a) the Company in connection withactual or attempted incurrence of any Indebtedness or the issuance of any Equity Interests by the Issuer or any Restricted Subsidiary, activities related to any such actual or attempted incurrence or issuance, or the issuance of commitments in respect thereof, (b) amending or modifying, or redeeming, refinancing, tendering for, refunding, defeasing (whether by covenant or legal defeasance), discharging, repaying, retiring or otherwise acquiring for value, any Indebtedness prior to the Stated Maturity thereof or any Equity Interests (including any premium, penalty, commissions or fees), (c) the termination of Indebtednessany Hedging Obligations or other derivative instruments or any fees paid to enter into any Hedging Obligations or other derivative instruments or (d) any acquisition or disposition of any Person, property or assets permitted to be incurred or refinanced pursuant to the covenant described above under the caption “— Certain Covenants — Incurrence of Indebtedness and Issuance of Preferred Stock” or by Section 7.1terms of the Bank Credit Facility.Indenture, including the Isle Acquisition.
“Treasury Management Arrangement” means any agreement or other arrangement governing the provision of treasury or cash management services, including deposit accounts, overdraft, credit or debit card, funds transfer, automated clearinghouse, zero balance accounts, returned check concentration, controlled disbursement, lockbox, account reconciliation and reporting and trade finance services and other cash management services.
“Treasury Rate” means, as of any redemption date, the yield to maturity as of such redemption date of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two business days prior to the redemption date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from the redemption date to March 15, 2016, April 1, 2020,provided,, however, that if the period from the redemption date to March 15, 2016April 1, 2020, is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year will be used.
“Unrestricted Subsidiary” means
(1) as of the date the existing notes were originally issued, the following Subsidiaries of the Company: IOC — Nevada, LLC; ASMI Management, Inc.; Capri Air, Inc.; Capri Insurance Corporation; Casino America, Inc.; IOC Mississippi, Inc.; IOC — Coahoma, Inc.; IOC — PA, L.L.C.; IOC Development Company, LLC; IOC Manufacturing, Inc.; IOC Pittsburgh, Inc.; Isle of Capri Casino Colorado, Inc; Isle of Capri of Jefferson County, Inc.; Isle of Capri of Michigan LLC; JPLA Pelican, LLC; Lady Luck Gaming Corporation; International Marco Polo’s Services, Inc.; Lady Luck Biloxi, Inc.; Lady Luck Central City, Inc.; Lady Luck Gulfport, Inc.; Lady Luck Vicksburg, Inc.; Riverboat Corporation of
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Mississippi — Vicksburg; Pompano Park Holdings, L.L.C.; CSNO, L.L.C.; LRGP Holdings, L.L.C.; Isle of Capri Bahamas Holdings, Inc. and Isle of Capri Bahamas, Ltd.; Isle Philadelphia Manager, LLC; and
(2) any Subsidiary of the CompanyIssuer that is designated by the Board of Directors of the CompanyIssuer as an Unrestricted Subsidiary pursuant to a resolution of the Board of Directors, but only to the extent that as of the time of such Subsidiary:designation:
(a)(1) has no Indebtedness other than Non-Recourse Debt;Debt (other than “completion guaranties” or “support agreements” that constitute Non-Recourse Debt); and
(b) except as permitted by(2) such Subsidiary does not own Capital Stock or Indebtedness of or hold any Lien on any Property of the covenant described above under the caption “— Certain Covenants — Transactions with Affiliates,” is not party to any agreement, contract, arrangement or understanding with the CompanyIssuer 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 RestrictedIssuer that is not a Subsidiary than those that might be obtained at the time from Persons who are not Affiliates of the Company;Subsidiary so designated.
(c) is a Person with respect to which neither the Company nor any of its Restricted Subsidiaries has any direct or indirect obligation (a) to subscribe for additional Equity Interests or (b) 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;
provided, however, that the Company or any of its Guarantors may enter into a Completion Guarantee and Keep-Well Agreement for the benefit of an Unrestricted Subsidiary, or may incur Completion Guarantee/Keep-Well Indebtedness, for the purpose of such Unrestricted Subsidiary developing, constructing, opening and operating a new Casino, Casino Hotel or Casino Related Facility, and the execution and performance (if such performance is permitted under the covenant described under the heading “— Certain Covenants — Restricted Payments”) of such Completion Guarantee and Keep-Well Agreement or Completion Guarantee/Keep-Well Indebtedness shall not prevent a Subsidiary from becoming or remaining an Unrestricted Subsidiary.
Since the original issuance date of the existing notes, the Company has redesignated some Unrestricted Subsidiaries as Restricted Subsidiaries, designated some Restricted Subsidiaries as Unrestricted Subsidiaries, sold or dissolved some Unrestricted Subsidiaries and Restricted Subsidiaries, and acquired or created new Subsidiaries and designated them as Unrestricted Subsidiaries or Restricted Subsidiaries, in accordance with the terms of the Indenture and, as a result, as of the date of this prospectus, the Unrestricted Subsidiaries of the Company include the following Subsidiaries of the Company: IOC — Nevada, LLC; ASMI Management, Inc.; Capri Insurance Corporation; IOC Manufacturing, Inc.; IOC Pittsburgh, Inc.; Lady Luck Gaming Corporation; Lady Luck Central City, Inc.; Lady Luck Vicksburg, Inc.; Pompano Park Holdings, L.L.C.; Isle Philadelphia Manager, LLC; Lady Luck Interactive LLC; IOC Services, LLC and Isle of Capri Bettendorf Marina Corporation.
“Vessel” means any riverboat or barge, whether owned or acquired by the Company or any Restricted Subsidiary on or after the date of the Indenture, useful for gaming, administrative, entertainment or any other purpose whatsoever.
“Voting Stock” of any specified 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:
(1) 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 of the Indebtedness, by (b) the number of years (calculated to the nearestone-twelfth) that will elapse between such date and the making of such payment;by
(2) the then outstanding principal amount of such Indebtedness.
“Wholly-Owned Restricted Subsidiary” of any specified 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) will at the time be owned by such Person or by one or moreWholly-Owned Restricted Subsidiaries of such Person.
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CERTAIN UNITED STATESU.S. FEDERAL INCOME TAX CONSIDERATIONS
General
The following is a summarygeneral discussion based upon present law of certain U.S. federal income tax considerations relatingrelevant to the purchase, ownership and dispositionholders of an exchange note acquiredthe Existing Notes exchanging Existing Notes for Exchange Notes pursuant to the exchange offer. ForThis summary is limited to holders who hold the Existing Notes as capital assets for purposes of thisthe Internal Revenue Code of 1986, as amended (the “Code”). This discussion does not address rules relating to Notes held by special categories of holders, including financial institutions, insurance companies, regulated investment companies, real estate investment trusts,broker-dealers,tax-exempt organizations, traders in securities that elect tomark-to-market, investors liable for the alternative minimum tax, U.S. expatriates, investors that hold notes as part of a straddle, hedging, constructive sale or conversion transaction, and U.S. Holders (as defined below) whose functional currency is not the U.S. dollar. The discussion does not address any state, local or foreign taxes, the Medicare tax on net investment income or the federal alternative minimum tax. Holders should note that no rulings have been, or are expected to be, sought from the U.S. Internal Revenue Service (the “IRS”) with respect to any of the U.S. federal income tax consequences discussed below, and no assurance can be given that the IRS or a court will not take contrary positions.
This summary is not a comprehensive description of all of the U.S. federal tax consequences that may be relevant with respect to the exchange of the Notes. We urge you to consult your own tax advisor regarding your particular circumstances and the U.S. federal income and estate and gift tax consequences to you of exchanging these Notes, as well as any tax consequences arising under the laws of any state, local or foreign tax jurisdiction and the possible effects of changes in U.S. federal or other tax laws.
As used herein, the term “U.S. Holder”holder” means a beneficial owner of an exchange noteNotes (other than a partnership) that for U.S. federal income tax purposes is either:any of the following:
·aan individual citizen or resident alien individual of the United States;U.S.;
·a corporation (including for this purposeor any other entity treated as a corporation for U.S. federal income tax purposes)purposes created or organized in or under the laws of the United States orU.S., any Statestate thereof or the District of Columbia;
·an estate the income of which is subject to U.S. federal income taxation regardless of its source; or
·a trust (i) thatif it (1) is subject to the primary supervision of a court within the United StatesU.S. and under the control of one or more “United States persons” (as defined for U.S. federal income tax purposes),persons have the authority to control all substantial decisions of the trust or (ii) that(2) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a “United StatesU.S. person.”
A non-U.S. Holder“Non-U.S. holder” means a person that is a beneficial owner of an exchange note that, for U.S. federal income tax purposes, is an individual, corporation (including for this purpose anya Note other entity treated as a corporation for U.S. federal income tax purposes), trust or estate that is notthan a U.S. Holder.
This summary is based on provisions of the Internal Revenue Code of 1986, as amended (the “Code”), Treasury regulations issued thereunder, and administrative and judicial interpretations thereof, all as of the date of this prospectus and all of which are subject to change or differing interpretation (perhaps retroactively), and is for general information only. This summary addresses only holders who hold the exchange notes as capital assets within the meaning of Section 1221 of the Code (generally, property held for investment) and does not represent a detailed description of the U.S. federal income tax consequences to holders of the exchange notes in light of their particular circumstances. In addition, it does not represent a detailed description of the U.S. federal income tax consequences applicable to holders of the exchange notes that are subject to special treatment under the U.S. federal income tax laws, including, without limitation, taxpayers subject to the alternative minimum tax, U.S. expatriates, financial institutions, partnerships or other pass-through entities, or investors in such entities, individual retirement and other tax deferred accounts, dealers and traders in securities or currencies, insurance companies, tax-exempt organizations, persons holding the exchange notes as part of a conversion, constructive sale, wash sale or other integrated transaction or a hedge, straddle or synthetic security, persons tendering the 2019 notes pursuant to the related tender offer, regulated investment companies, real estate investment trusts, controlled foreign corporations, passive foreign investment companies, and U.S. Holders whose functional currency is other than the U.S. dollar. This summary also does not address any state, local or non-U.S. tax consequences, non-income tax consequences (such as U.S. federal estate and gift tax consequences) or “Medicare” unearned income tax consequences. We cannot assure you that a change in law will not alter significantly the tax considerations that we describe in this summary.
holder.
If a U.S. or non-U.S. partnership (including for this purpose an entity or arrangement treated as a partnership for U.S. federal income tax purposes)purposes holds the Notes being exchanged in the exchange notes,offer, the U.S. federal income tax treatment of a partner generally will depend upon the status of the partner and the activities of the partnership and certain determinations made ataccordingly, this summary does not apply to partnerships. A partner of a partnership exchanging the partner level. Non-U.S. partnerships also generally are subject to special tax documentation requirements.
We have not and will not seek any rulings or opinions from the Internal Revenue Service (“IRS”) or opinions from counsel regarding the matters discussed below. There can be no assurance that the IRS will not take positions concerning the tax consequences of the acquisition, ownership or disposition of the exchange notes that are different from those discussed below.
YouNotes should consult yourits own tax advisor concerningregarding the particular U.S. federal income tax and other U.S. federal tax (such as estate and gift) consequences to you resulting from your ownership and dispositionthe partner of exchanging Existing Notes for Exchange Notes pursuant to the exchange notes, as well as the consequences to you arising under the laws of any other taxing jurisdiction.
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offer.
The Exchange Offeroffer
The exchange of your old notesExisting Notes for Exchange Notes will not result in a deemed exchange notes pursuant to the terms of the exchange offer shouldNotes for “new” Notes and therefore will not beconstitute a taxable eventexchange for U.S. federal income tax purposes. Consequently, your initial tax basis in an exchange note should be equal to your adjusted tax basis in the old note at the time of the exchange of such old note for the exchange note. In addition, your holding period for an exchange note should include your holding period for the old note exchanged for such exchange note.
Contingent Payments
In certain circumstances (as described in “Description of Notes — Optional Redemption,” “Description of Notes — Repurchase at the Option of Holders — Change of Control” and “Description of Notes — Registration Rights; Special Interest”), we may be obligated to pay you amounts in excess of the stated interest and principal payable on the exchange notes. The obligation to make such payments may implicate the provisions of Treasury regulations relating to “contingent payment debt instruments.” Under applicable Treasury regulations, the possibility of such amounts being paid will not cause the exchange notes to be treated as contingent payment debt instruments if there is onlyAs a remote chance that these contingencies will occur or if such contingencies are considered to be incidental. If the exchange notes were deemed to be contingent payment debt instruments, you might, among other things, be required to treat any gain recognized on the sale or other disposition of an exchange note as ordinary income rather than as capital gain, and the timing and amount of income inclusion may be different from the consequences discussed herein. Although the matter is not free from doubt, we intend to take the position that these contingencies are remote or incidental and therefore the exchange notes are not subject to the rules governing contingent payment debt instruments. Our determination will be binding on you unless you explicitly disclose on a statement attached to your timely filed U.S. federal income tax return for the taxable year that includes the acquisition date of the exchange note that your determination is different. Assuming our position is respected, any amounts paid toresult, (1) a U.S. Holder pursuant to any such redemptionholder or repurchase, as applicable, would be taxable as described below in “— U.S. Holders — Dispositions,” and any payments of Special Interest in the event we do not comply with our obligations under the registration rights agreement should be taxable as additional ordinary income when received or accrued, in accordance with such holder’s regular method of tax accounting for U.S. federal income tax purposes. Any amounts paid to anon-U.S. Holder pursuant to any such redemption or repurchase, as applicable, would be subject to the rules described below in “— Non-U.S. Holders — Dispositions,” and any payments of Special Interest may be treated as interest subject to the rules described below in “— Non-U.S. Holders — Interest” or as other income subject to U.S. federal withholding tax. Non-U.S. Holders that are subject to U.S. federal withholding tax should consult their tax advisors as to whether they can obtain refunds for all or any portion of any amount withheld. It is possible, however, that the IRS may take a contrary position from that described above, in which case the tax consequences to you could differ materially and adversely from those described below. The remainder of this disclosure assumes that the exchange notes will not be treated as contingent payment debt instruments.
U.S. Holders
Interest. The old notes were not issued with original issue discount for U.S. federal income tax purposes. Therefore, except as described below with respect to pre-issuance accrued interest, a U.S. Holder will have ordinary interest income equal to the amount of interest paid or accrued on an exchange note, includable in accordance with the holder’s regular method of tax accounting for U.S. federal income tax purposes.
To the extent a portion of the purchase price paid by a U.S. Holder for an old note is allocable to interest that “accrued” prior to the issuance of the old notes (or “pre-issuance accrued interest”), a portion of the first stated interest payment equal to the amount of pre-issuance accrued interest will be treated as a nontaxable return of such purchase price to the U.S. Holder. Amounts treated as a return of purchase price will reduce such U.S. Holder’s adjusted tax basis in the exchange note by a corresponding amount.
Dispositions. Generally, a sale, exchange (except as discussed above), redemption, retirement or other taxable disposition of an exchange note will result in capital gain or loss equal to the difference, if any, between the amount realized on the disposition (excluding amounts attributable to accrued and unpaid interest (other than pre-issuance accrued interest), which, as described above, will be taxed as ordinary income to the extent not previously included in gross income by the U.S. Holder) and the U.S. Holder’s adjusted tax basis in an exchange note. A U.S. Holder’s adjusted tax basis for determining gain or loss on the disposition of an exchange note generally will equal the purchase price of the old note exchanged for such exchange note, decreased by any amount attributable to pre-issuance accrued interest that has already been paid to such holder and any amortizable bond premium previously amortized. Such gain or loss will be long-term capital gain or loss if the exchange note is held for more than one year as of the time of the disposition. Long-term capital gains recognized by certain non-corporate U.S. Holders, including individuals, will generally be subject to a reduced rate. The deductibility of
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capital losses is subject to limitations. U.S. Holders should consult their tax advisors regarding the treatment of capital gains and losses.
Non-U.S. Holders
Interest. The United States generally imposes a 30% withholding tax on payments of interest to non-U.S. persons. Subject to the discussion of backup withholding and FATCA below, the 30% (or lower applicable treaty rate) U.S. federal withholding tax will not apply to a non-U.S. Holder in respect of any payment of interest on the exchange notes that is not effectively connected with the conduct of a U.S. trade or business provided that such non-U.S. Holder:
·does not actually or constructively own 10% or more of the total combined voting power of all classes of our voting stock within the meaning of the Code and the U.S. Treasury regulations;
·is not a controlled foreign corporation that is related to us actually or constructively through sufficient stock ownership;
·is not a bank whose receipt of interest on the exchange notes is described in section 881(c)(3)(A) of the Code (i.e., interest received by a bank on an extension of credit made pursuant to a loan agreement entered into in the ordinary course of its trade or business); and
·(a) provides identifying information (i.e., name and address) to us or our paying agent on IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable (or successor form), and certifies, under penalty of perjury, that such non-U.S. Holder is not a U.S. person, (b) a financial institution holding the exchange notes on behalf of such non-U.S. Holder certifies, under penalty of perjury, that it has received the applicable IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable (or successor form) from the beneficial owner and provides us or our paying agent with a copy or (c) holds its exchange note directly through a “qualified intermediary” and certain conditions are satisfied.
If a non-U.S. Holder cannot satisfy the requirements described above, payments of interest made to such non-U.S. Holder will be subject to the 30% U.S. federal withholding tax, unless such non-U.S. Holder provides us with a properly executed (i) IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable (or successor form) claiming an exemption from or reduction in withholding under the benefit of an income tax treaty or (ii) IRS Form W-8ECI (or successor form) stating that interest paid on the exchange note is not subject to withholding tax because it is effectively connected with such non-U.S. Holder’s conduct of a trade or business in the United States.
If a non-U.S. Holder is engaged in a trade or business in the United States and interest on the exchange notes is effectively connected with the conduct of that trade or business (and, if required by an applicable income tax treaty, is attributable to a permanent establishment in the United States maintained by such non-U.S. Holder), such non-U.S. Holder, although exempt from the 30% withholding tax (provided the non-U.S. Holder supplies appropriate certification), generally will be subject to U.S. federal income tax on that interest on a net income basis in the same manner as if such non-U.S. Holder were a “United States person” as defined under the Code. In addition, if a non-U.S. Holder is a non-U.S. corporation, it may be subject to a branch profits tax equal to 30% (or lower applicable treaty rate) of its earnings and profits for the taxable year, subject to adjustments, that are effectively connected with the conduct by it of a trade or business in the United States. For this purpose, effectively connected interest on the exchange notes will be included in earnings and profits.
Dispositions. Subject to the discussion of backup withholding and FATCA below, any gain realized on the disposition of an exchange note by a non-U.S. Holder (other than any amount allocable to accrued and unpaid interest, which is taxable as interest and may be subject to the rules described above under “— Interest”) generally will not be subject to U.S. federal income or withholding tax unless (i) that gain is effectively connected with the non-U.S. Holder’s conduct of a trade or business in the United States (and, if required by an income tax treaty, is attributable to a U.S. permanent establishment maintained by such non-U.S. Holder), or (ii) such non- U.S. Holder is an individual who is present in the United States for 183 days or more in the taxable year of that disposition and certain other conditions are met.
If a non-U.S. Holder’s gain is effectively connected with such non-U.S. Holder’s U.S. trade or business (and, if required by an applicable income tax treaty, is attributable to a U.S. permanent establishment maintained by such non-U.S. Holder), such non-U.S. Holder generally will be required to pay U.S. federal income tax on the net gain derived from the sale in the same manner as if it were a “United States person” as defined under the Code. If such a non-U.S. Holder is a corporation, such non-U.S. Holder may also, under certain circumstances, be subject to a branch profits tax at a 30% rate (or lower applicable treaty rate). If a non-U.S. Holder is subject to the 183-day rule described above, such non-U.S. Holder generally will be subject to U.S. federal income tax at a flat rate of 30% (or a reduced rate under an applicable treaty) on the amount by which capital gains allocable to U.S. sources (including gains from the sale, exchange, redemption, retirement or
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other taxable disposition of the exchange note) exceed capital losses allocable to U.S. sources, even though the non-U.S. Holder is not considered a resident alien under the Code.
Information Reporting and Backup Withholding
In general, information reporting requirements apply to interest paid to, and to the proceeds of a sale or other disposition (including a redemption) of an exchange note by, certain U.S. Holders. In addition, backup withholding (currently at a rate of 28%) may apply to a U.S. Holder unless such holder provides a correct taxpayer identification number and otherwise complies with applicable requirements of the backup withholding rules. Backup withholding generally does not apply to payments made to certain exempt U.S. persons.
In general, a non-U.S. Holder will not be subject to backup withholding and information reporting with respect to payments of interest that we make to such holder provided that we have received from such holder the certification described above under “— Non-U.S. Holders — Interest” and neither we nor our paying agent has actual knowledgerecognize any taxable gain or reason to know that you are a United States person. However, we or our paying agent may be required to report to the IRS and the non-U.S. Holder payments of interest on the exchange notes and the amount of tax, if any, withheld with respect to those payments. Copies of the information returns reporting such interest payments and any withholding may also be made available to the tax authorities in the country in which the non-U.S. Holder resides under the provisions of a treaty or agreement.
Payments of the proceeds of a sale or other disposition (including a redemption) of the exchange notes made to or through a non-U.S. office of non-U.S. financial intermediaries that do not have certain enumerated connections with the United States generally will not be subject to information reporting or backup withholding. In addition, a non-U.S. Holder will not be subject to backup withholding or information reporting with respect to the proceeds of the sale or other disposition of an exchange note within the United States or conducted through non-U.S. financial intermediaries with certain enumerated connections with the United States, if the payor receives the certification described above under “— Non-U.S. Holders — Interest” or such holder otherwise establishes an exemption, provided that the payor does not have actual knowledge or reason to know that the non-U.S. Holder is a United States person or the conditions of any other exemption are not, in fact, satisfied.
Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules will be allowed as a refund or credit against a holder’s U.S. federal income tax liability provided the required information is furnished by such holder to the IRS in a timely manner.
FATCA
Sections 1471 through 1474 of the Code and the Treasury regulations thereunder (commonly referred to as “FATCA”), generally impose a withholding tax of 30% on payments of interest on debt instruments of U.S. issuers and, beginning January 1, 2017, on payments of gross proceeds in a disposition of such debt instruments to a “foreign financial institution” (as defined under FATCA, including as the beneficial owner or as an intermediary for the beneficial owner), unless such foreign financial institution enters into an agreement with the U.S. government to collect and provide to the U.S. tax authorities substantial information regarding certain U.S. account holders of such institution (which would include certain account holders that are foreign entities with U.S. owners), is subject to and complies with the terms of an applicable intergovernmental agreement implementing FATCA (and/or with any rules implementing such agreement) or is otherwise deemed complaint under FATCA. FATCA also generally imposes a withholding tax of 30% on payments of interest on debt instruments of U.S. issuers and, beginning January 1, 2017, on payments of gross proceeds in a disposition of such debt instruments to a non- financial foreign entity in certain cases (as the beneficial owner or as an intermediary for the beneficial owner) unless such entity provides the withholding agent with certain certification or information relating to U.S. ownership of the entity. Under certain circumstances, such foreign persons might be eligible for refunds or credits of such taxes.
A debt instrument issued prior to July 1, 2014 (including any debt obligation issued on or after July 1, 2014 in a qualified reopening of an existing debt obligations issued prior to such date) is exempt from the withholding under FATCA, unless significantly modified on or after such date. Since the exchange of old notes for exchange notes should not be a taxable event, and assuming the old notes were treated as issued in a qualified reopening of the issuance of the existing notes which issuance was prior to July 1, 2014, the exchange notes, the old notes and the existing notes should be grandfathered from withholding under FATCA. However, in the event that the old notes were not treated as issued pursuant to a qualified reopening for U.S. federal income tax purposes, the old notes and the exchange notes may be subject to FATCA withholding and would not be fungible with the existing notes.
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If FATCA withholding were to apply to the notes, neither we nor any paying agent nor any other person would be required to pay additional amountsloss as a result of exchanging such holder’s Existing Notes pursuant to the deduction or withholding. As a result, investors may receive less interest or principal than expected. Holders should consult their ownexchange offer; (2) the holding period of the
Exchange Notes will include the holding period of the Existing Notes exchanged therefor; and (3) the adjusted tax advisors regardingbasis of the possible implicationsExchange Notes will be the same as the adjusted tax basis of this legislation in their particular circumstances.the Existing Notes exchanged therefor immediately before such exchange.
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PLAN OF DISTRIBUTION
Eachbroker-dealer that receives exchange notesExchange Notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of such exchange notes.Exchange Notes. This prospectus, as it may be amended or supplemented from time to time, may be used by abroker-dealer in connection with resales of exchange notesExchange Notes received in exchange for old notesExisting Notes where such old notesExisting Notes were acquired as a result ofmarket-making activities or other trading activities. We have agreed that, for a period of 180 days after the expiration timedate of thethis exchange offer, we will make this prospectus, as amended or supplemented, available to anybroker-dealer for use in connection with any such resale. In addition, until , 2015, all dealers effecting transactions in the exchange notesExchange Notes may be required to deliver a prospectus.
We will not receive any proceeds from any sale of exchange notesExchange Notes bybroker-dealers. Exchange notesNotes received bybroker-dealers for their own account pursuant to the exchange offer may be sold from time to time in one or more transactions in theover-the-counter market, in negotiated transactions, through the writing of options on the exchange notesNotes or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or at negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any suchbroker-dealer or the purchasers of any such exchange notes.Notes. Anybroker-dealer that resells exchange notesNotes that were received by it for its own account pursuant to the exchange offer and any broker or dealer that participates in a distribution of such exchange notesNotes may be deemed to be an “underwriter” within the meaning of the Securities Act and any profit on any such resale of exchange notesNotes and any commission or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The letter of transmittal states that, by acknowledging that it will deliver and by delivering a prospectus, abroker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act.
For a period of 180 days after the expiration time of the exchange offerdate, we will promptly send additional copies of this prospectus and any amendment or supplement to this prospectus to anybroker-dealer that requests such documents in the letter of transmittal. We have agreed to pay all expenses incident to the exchange offer (including the expenses of one counsel for the holders of the outstanding notes) other than commissions or concessions of any brokers or dealers and will indemnify the holders of the notesoutstanding Notes (including anybroker-dealers) against certain liabilities, including liabilities under the Securities Act.
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LEGAL MATTERS
Mayer Brown LLP, Chicago, Illinois, will pass upon certainCertain legal matters relatingwith respect to the exchange offer.
Notes will be passed upon for the Company by Milbank, Tweed, Hadley & McCloy LLP and McDonald Carano LLP.
EXPERTS
EXPERTS
The consolidated financial statements of Isle of Capri Casinos,Eldorado Resorts, Inc. appearing in Isle of Capri Casinos,Eldorado Resorts Inc.’s Annual Report (Form 10-K)on Form 10-K for the year ended April 27, 2014December 31, 2016 (including the schedule appearing therein), and the effectiveness of Isle of Capri Casinos,Eldorado Resorts Inc.’s internal control over financial reporting as of April 27, 2014,December 31, 2016 have been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their reports thereon, included therein, and incorporated herein by reference. Such consolidated financial statements have beenare incorporated herein by reference in reliance upon such reports given on the authority of such firm as experts in accounting and auditing.
The consolidated financial statements of Isle of Capri Casinos, Inc. appearing in Isle of Capri Casinos, Inc.’s Current Report on Form 8-K filed on December 21, 2016 for the year ended April 24, 2016 (including schedule appearing therein), and the effectiveness of Isle of Capri Casinos, Inc.’s internal control over financial reporting as of April 24, 2016 have been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their reports thereon, included therein, and incorporated herein by reference. Such consolidated financial statements are incorporated herein by reference in reliance upon such reports given on the authority of such firm as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other information with the Commission. You may read and copy the reports, statements and other information at the Commission’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. You can request copies of these documents by writing to the Commission but must pay photocopying fees. Please call the Commission at 1-800-SEC-0330 for further information on the operation of the public reference rooms. Our Commission filings are also available to the public on the Commission’s internet website (http://www.sec.gov).
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Eldorado Resorts, Inc.
OFFER TO EXCHANGE ANY AND ALL OUTSTANDING
6% SENIOR NOTES DUE 2025 (THE “EXISTING NOTES”)
($375,000,000 IN AGGREGATE PRINCIPAL AMOUNT OUTSTANDING)
FOR
6% SENIOR NOTES DUE 2025 (THE “EXCHANGE NOTES”)
AND
GUARANTEES OF THE EXCHANGE NOTES BY THE GUARANTORS NAMED HEREIN
PROSPECTUS
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, 2017
OFFER TO EXCHANGE
All outstanding $150,000,000 principal amount of
5.875% Senior Notes due 2021 issued April 14, 2015
for
$150,000,000 principal amount of
5.875% Senior Notes due 2021, which have been
registered under the Securities Act of 1933, as amended
Prospectus
, 2015
Until , 2015, all dealers that effect transactions in the exchange notes, whether or not participating in this exchange offer, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.
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PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 20. Indemnification of Directors and Officers.Officers
(a)Section 14578.7502(1) of the Delaware General Corporation Law; Section 18-108NRS generally provides that a corporation may indemnify any person who is or was a party to, or is threatened to be made a party to, any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, except derivative suits, by reason of the Delaware Limited Liability Company Act; Section 83fact that such person is or was a director, officer, employee or agent of the Louisiana Business Corporation Law; Section 12:1315(A)(2)corporation, or is or was serving at the request of the Louisiana Limited Liability Company Law; Article 8, Subarticle Ecorporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys’ fees, judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with the action, suit or proceeding, if such person acted in good faith and in a manner which he reasonably believed to be in, or not opposed to, the best interests of the Mississippi Business Corporation Act;corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful.
In the case of a derivative suit, Section 79-14-10878.7502(2) of the Mississippi Limited Partnership Act; Article 109NRS provides that a corporation may indemnify any person who is a party to, or is threatened to be made a party to, any threatened, pending or completed action or suit by or in the right of the Colorado Business Corporation Act; Section 407corporation to procure a judgment in its favor by reason of the Colorado Limited Liability Company Act; Division VIII, Part Efact that the person is or was a director, officer, employee or agent of the Iowa Business Corporation Act; Section 490A.202(17)corporation, or is or was serving at the request of the Iowa Limited Liability Company Act; Section 78.751corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses, including amounts paid in settlement and attorneys’ fees actually and reasonably incurred by such person in connection with the defense or settlement of the Nevada Business Corporation Act; Section 351.355action or suit, if such person acted in good faith and in a manner in which he reasonably believed to be in, or not opposed to, the best interests of the Generalcorporation, except that indemnification may not be made in the case of a derivative suit in respect of any claim, issue or matter as to which such person has been adjudged by a court of competent jurisdiction, after exhaustion of all appeals, to be liable to the corporation or for amounts paid in settlement to the corporation, unless and Business Corporation Lawonly to the extent it is determined by the court that such person is fairly and reasonably entitled to indemnity for such expenses as the court deems proper.
Section 78.7502(3) of the StateNRS provides generally that a corporation shall indemnify a director, officer, employee or agent of Missouri; Section 347.088(1) of the Missouri Limited Liability Company Act; and Section 607.0850 of the Florida Business Corporation Act: as applicable, (1) give entities organized in those states broad powers to indemnify their present and former directors, officers, members, managers, partners, or the equivalent thereof (together, the “Indemnified Parties”), and those of affiliated entitiesa corporation against expenses, including attorneys’ fees actually and reasonably incurred, to the extent that such person has been successful on the merits or otherwise in the defense of any lawsuitof the actions, suits or proceedings described above.
Section 78.751(2) of the NRS provides that the articles of incorporation, the bylaws or a separate agreement made by the corporation may provide that the expenses of officers and directors incurred in defending a civil or criminal action, suit or proceeding must be paid by the corporation as they are incurred and in advance of the final disposition, upon receipt of an undertaking by or on behalf of the officer or director to repay the amount if it is ultimately determined by a court of competent jurisdiction that such person is not entitled to be indemnified by the corporation.
Section 78.751(3) of the NRS provides that any indemnification or advancement of expenses authorized in or ordered by a court pursuant to any of the Sections set forth above, does not exclude any other rights to which they aresuch person seeking indemnification or advancement of expenses may be entitled under the articles of incorporation or any bylaw, agreement, vote of stockholders or disinterested directors, if any, or otherwise, for either an action in the person’s official capacity or an action in another capacity while holding office, except that indemnification, unless ordered by a court pursuant to Section 78.7502, set forth above, or for the advancement of expenses made partiespursuant to Section 78.751(2), set forth above, may not be made to or on behalf of any director or officer if a final adjudication establishes that the director’s or officer’s acts or omissions involved intentional misconduct, fraud or a knowing violation of the law and was material to the
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cause of action. In addition, the statute provides that such indemnification continues for any such person who has ceased to be a director, officer, employee or agent and inures to the benefit of the heirs, executors and administrators of such a person.
Section 78.752(1) of the NRS provides that a corporation may purchase and maintain insurance or make other financial arrangements on behalf of any person who is or was a director, officer, employee or agent of a corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, for any liability asserted against him and liability and expenses incurred by him in such capacity, or arising out of his status as such, whether or not the corporation has the authority to indemnify him against such liability and expenses.
Section 78.752(4) of the NRS provides that in the absence of fraud the decision of the board of directors as to the propriety of the terms and conditions of any insurance or other financial arrangement made pursuant to Section 78.752, set forth above, and the choice of the person to provide the insurance or other financial arrangement is conclusive and such insurance or other financial arrangement is not void or voidable and does not subject any director approving it to personal liability for the approval, even if a director approving the insurance or other financial arrangement is a beneficiary of the insurance or other financial arrangement.
Finally, Section 78.747 of the NRS generally provides that, unless otherwise provided by specific statute, no stockholder, director or officer of a corporation is individually liable for the debts or liabilities of the corporation, unless the stockholder, director or officer acts as the alter ego of the corporation.
ERI’s Amended and Restated Bylaws provide that ERI will indemnify any person in a threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of ERI) by reason of beingthe fact that such person is or having beenwas a director, officer, employee or agent of ERI or is or was serving at the request of ERI as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, or other enterprise, against expenses (including amounts paid in settlement and attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such directors, officers, members, managers, partners,person in connection with such action, suit or proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the equivalent thereof, subjectbest interests of ERI, and, with respect to specified conditions and exclusions, (2) give an Indemnified Party who successfully defendsany criminal action or proceeding, such person had no reasonable cause to believe his or her conduct was unlawful. In connection with an action brought by or in the right of ERI, ERI shall only indemnify such person if such person acted in good faith and in a manner he or she reasonably believed to be so indemnified, subjectin, or not opposed to, specified conditions and exclusions, and (3) authorize or permit entities to buy liability insurance for the Indemnified Parties.best interests of ERI.
(b)Article 8 of Isle of Capri’sERI’s Amended and Restated CertificateArticles of Incorporation providesprovide that no director or officer will be personally liable to ERI or any of its stockholders for indemnificationdamages for breach of fiduciary duty as a director or officer, except for acts of omission which involve intentional misconduct, fraud, or a knowing violation of law or the payment of dividends in violation of Section 78.300 of the NRS. If the NRS is amended hereafter to authorize the further elimination or limitation of the liability of directors andor officers, then the liability of a director or officer of ERI will be eliminated or limited to the fullest extent permittedauthorized by law.
In accordance with Section 102(b)(7)the NRS, as so amended. No repeal or modification of this provision of the Delaware General Corporation Law, Islearticles of Capri’s Amended and Restated Certificateincorporation will apply to or have any effect on the liability or alleged liability of Incorporation provides that directors shall not be personally liableany director or officer of the corporation for monetary damages for breaches of their fiduciary duty as directors except for (1) breaches of their duty of loyaltyor with respect to the registrant or its stockholders, (2)any acts or omissions notof such director or officer occurring prior to such repeal or modification.
In addition, ERI has entered into indemnification agreements with certain of its executive officers and directors pursuant to which ERI has agreed to indemnify such executive officers and directors against liability incurred by them by reason of their services as an executive officer or director to the fullest extent allowable under applicable law. ERI also provides liability insurance for each director and officer for certain losses arising from claims or charges made against them while acting in good faiththeir capacities as directors or that involve intentional misconduct or knowing violations ofofficers.
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The law (3) unlawful payment of dividends as prohibited by Section 174 of the Delaware General Corporation Lawstate of incorporation or (4) transactions from which a director derives an improper personal benefit.
Variousformation, as applicable, and/or the provisions containedof the certificates of incorporation, certificates of formation, or certificates of limited partnership, as applicable, the bylaws, the limited liability company agreements, or the agreements of limited partnership, as applicable, of all of the subsidiaries listed in the Certificates“Table of Incorporation, By-laws Additional Registrants” included in the Registration Statement, provide for the limitation of liability and/or other organizational documentsindemnification of officers, directors, managers, general partners and persons performing similar functions, as applicable, of the other co-registrants provide for indemnification of the Indemnified Parties ofsubsidiaries similar to those co-registrants and, in some cases, limit or eliminate the personal liability of the Indemnified Parties of those co-registrants in accordance with the laws of the states in which those co-registrants are organized.described above.
Item 21. Exhibits and Financial Statement Schedules.
A list of exhibits filed with this registration statement is contained in theThe attached exhibit index to exhibits, which is incorporated by reference.reference herein.
Item 22. Undertakings.Undertakings.
(a) Each of the undersigned registrants hereby undertakes:
(1)To to file, during any period in which offers or sales are being made, apost-effective amendment to this registration statement:
(i)to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;Act;
(ii)to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recentpost-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percenta 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and
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(iii)to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.statement;
(2)That, that, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.thereof;
(3)To to remove from registration by means of apost-effective amendment any of the securities being registered which remain unsold at the termination of the offering.offering;
(4)That, that, for purposesthe purpose of determining liability under the Securities Act of 1933 to any purchaser:
(i)If the registrants are relying on Rule 430B:
(A)Each prospectus filed by the registrants pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and
(B)Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser, with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date; or
(ii)Ifif the registrants are subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. effectiveness;Provided, provided,however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.use;
(5)That, that, for the purpose of determining liability of the registrantsregistrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, each of thesecurities: The undersigned registrantsregistrant undertakes that in a
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primary offering of securities of suchthe undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, suchthe undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i)Any any preliminary prospectus or prospectus of suchthe undersigned registrantregistrants relating to the offering required to be filed pursuant to Rule 424;
(ii)Any any free writing prospectus relating to the offering prepared by or on behalf of suchthe undersigned registrantregistrants or used or referred to by suchthe undersigned registrant;registrants;
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(iii)The the portion of any other free writing prospectus relating to the offering containing material information about suchthe undersigned registrantregistrants or itstheir securities provided by or on behalf of suchthe undersigned registrant;registrants; and
(iv)Any any other communication that is an offer in the offering made by suchthe undersigned registrants to the purchaser.
(b) Each undersigned registrant to the purchaser.
(6)That,hereby undertakes that, for purposes of determining any liability under the Securities Act, of 1933, each filing of the registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of any employee benefit plan’s annual report pursuant to Section 15(d) of the Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of any registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
(7)To(d) Each of the undersigned registrants hereby undertakes to respond to requests for information that is incorporated by reference into the prospectusProspectus pursuant to Items 4, 10(b), 11 or 13 of this Form S-4 promulgated by the SEC, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request.
(8)To(e) Each of the undersigned registrants hereby undertakes to supply by means of apost-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective.
(9)Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers, and controlling persons of the registrants pursuant to the foregoing provisions, or otherwise, the registrants have been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrants of expenses incurred or paid by a director, officer or controlling person of such registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer, or controlling person in connection with the securities being registered, the registrants will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.II-4
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, each of the registrantsRegistrant has duly caused this registration statementRegistration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Creve Coeur,Reno, State of Missouri,Nevada on May 4, 2015.June 16, 2017.
| ISLE OF CAPRI CASINOS, INC.
| |
| ELDORADO RESORTS, INC. |
| |
| By: | By:
| /s/ Virginia M. McDowell Gary L. Carano |
| | Virginia M. McDowell
Gary L. Carano |
| | Chief Executive Officer, President and Director
|
| | (Principal Executive Officer)
|
| |
| BLACK HAWK HOLDINGS, L.L.C.;
|
| CCSC/BLACKHAWK, INC.;
|
| IC HOLDINGS COLORADO, INC.;
|
| IOC BLACK HAWK COUNTY, INC.;
|
| IOC-BOONVILLE, INC.;
|
| IOC-CAPE GIRARDEAU LLC;
|
| IOC-CARUTHERSVILLE, LLC;
|
| IOC HOLDINGS, L.L.C.;
|
| IOC-KANSAS CITY, INC.;
|
| IOC-LULA, INC.;
|
| IOC-NATCHEZ, INC.;
|
| IOC-VICKSBURG, INC.;
|
| IOC-VICKSBURG, L.L.C.;
|
| ISLE OF CAPRI BETTENDORF, L.C.;
|
| ISLE OF CAPRI BLACK HAWK, L.L.C.;
|
| ISLE OF CAPRI MARQUETTE, INC.;
|
| PPI, INC.;
|
| RAINBOW CASINO-VICKSBURG PARTNERSHIP, L.P.;
|
| ST. CHARLES GAMING COMPANY, L.L.C.
|
| |
| IOC-BLACK HAWK DISTRIBUTION COMPANY, LLC;
|
| BY:
| ISLE OF CAPRI BLACK HAWK, L.L.C., ITS SOLE MEMBER
|
| |
| |
| By:
| /s/ Virginia M. McDowell
|
| | Virginia M. McDowell
|
| | Chief Executive Officer and President |
| | (Principal Executive Officer)
Chairman of the Board |
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POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Virginia M. McDowell, EricGary L. HauslerCarano, Thomas R. Reeg, Anthony L. Carano and Edmund L. Quatmann, Jr., and each of them, with full power to act without the other, theas his or her true and lawful attorneys-in-factattorney-in-fact and agents of the undersigned,agent, with full power of substitution and resubstitution, for him or her and in thehis or her name, place and stead, of the undersigned, in any and all capacities, to sign any and all amendments (includingpost-effective amendments) to this registration statement and any and all additional registration statements pursuant to Rule 462(b) of the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and any and all other documents in connection therewith, with the U.S. Securities and Exchange Commission, or with any other regulatory authority,granting unto saidattorney-in-fact and hereby grants unto said attorneys-in-fact and agents, and each of them,agent full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-factattorney-in-fact and agents,agent or either of them, or his or their substitute or substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed on June 16, 2017 by the following persons in the capacities indicated on May 4, 2015.indicated.
| | |
Signature |
| Title |
| | |
| | Chief Executive Officer, President and Director
|
/s/ Virginia M. McDowellGary L. Carano Gary L. Carano | | (Principal Executive Officer)
|
Virginia M. McDowell
| | —ISLE OF CAPRI CASINOS, INC.
|
| | |
| | Chief Executive Officer President and Director Chairman of the Board (Principal Executive Officer) |
| | (Principal Executive Officer)
|
| | —CCSC/BLACKHAWK, INC.;
|
| | IC HOLDINGS COLORADO, INC.;
|
| | IOC BLACK HAWK COUNTY, INC.;
|
| | IOC-BOONVILLE, INC.;
|
| | IOC-KANSAS CITY, INC.;
|
| | IOC-LULA, INC.;
|
| | IOC-NATCHEZ, INC.;
|
| | IOC-VICKSBURG, INC.;
|
| | ISLE OF CAPRI MARQUETTE, INC.;
|
| | PPI, INC.
|
| | |
| | Chief Executive Officer, President and Manager
|
| | (Principal Executive Officer)
|
| | —BLACK HAWK HOLDINGS, L.L.C.;
|
| | IOC-CAPE GIRARDEAU LLC;
|
| | IOC-CARUTHERSVILLE, LLC;
|
| | IOC HOLDINGS, L.L.C.;
|
| | IOC-VICKSBURG, L.L.C.;
|
| | ISLE OF CAPRI BETTENDORF, L.C.;
|
| | ISLE OF CAPRI BLACK HAWK, L.L.C.;
|
| | ISLE OF CAPRI BLACK HAWK, L.L.C., as sole member of
|
| | IOC-BLACK HAWK DISTRIBUTION COMPANY, LLC;
|
| | ST. CHARLES GAMING COMPANY, L.L.C.
|
| | |
| | Chief Executive Officer, President and Officer
|
| | (Principal Executive Officer)
|
| | —RAINBOW CASINO-VICKSBURG PARTNERSHIP, L.P.
|
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Signature
|
| Title
|
| | |
/s/ Eric L. HauslerThomas R. Reeg Thomas R. Reeg | | Chief Financial Officer
|
Eric L. Hausler
| | (Principal Financial and Accounting Officer)
|
| | —ISLE OF CAPRI CASINOS, INC.
|
| | |
| | President, Chief Financial Officer and Director (Principal Financial Officer) |
| | (Principal Financial and Accounting Officer)
|
| | —CCSC/BLACKHAWK, INC.;
|
| | IC HOLDINGS COLORADO, INC.;
|
| | IOC BLACK HAWK COUNTY, INC.;
|
| | IOC-BOONVILLE, INC.;
|
| | IOC-KANSAS CITY, INC.;
|
| | IOC-LULA, INC.;
|
| | IOC-NATCHEZ, INC.;
|
| | IOC-VICKSBURG, INC.;
|
| | ISLE OF CAPRI MARQUETTE, INC.;
|
| | PPI, INC.
|
| | |
| | Chief Financial Officer and Manager
|
| | (Principal Financial and Accounting Officer)
|
| | —BLACK HAWK HOLDINGS, L.L.C.;
|
| | IOC-CAPE GIRARDEAU LLC;
|
| | IOC-CARUTHERSVILLE, LLC;
|
| | IOC HOLDINGS, L.L.C.;
|
| | IOC-VICKSBURG, L.L.C.;
|
| | ISLE OF CAPRI BETTENDORF, L.C.;
|
| | ISLE OF CAPRI BLACK HAWK, L.L.C.;
|
| | ISLE OF CAPRI BLACK HAWK, L.L.C., as sole member of
|
| | IOC-BLACK HAWK DISTRIBUTION COMPANY, LLC;
|
| | ST. CHARLES GAMING COMPANY, L.LC.
|
| | |
| | Chief Financial Officer and Officer
|
| | (Principal Financial and Accounting Officer)
|
| | —RAINBOW CASINO-VICKSBURG PARTNERSHIP, L.P.
|
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Signature
|
| Title
|
| | |
/s/ Robert S. GoldsteinStephanie Lepori Stephanie Lepori | | Chief Accounting Officer (Principal Accounting Officer) |
| |
/s/ David P. Tomick David P. Tomick | | Director |
| |
Chairman of the Board—Isle of Capri Casinos, Inc./s/ Frank J. Fahrenkopf Jr.
Frank J. Fahrenkopf Jr. | | Director |
| |
/s/ James B. Hawkins James B. Hawkins | | Director |
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| | |
Signature | | Title |
Robert S. Goldstein
| | |
/s/ Michael E. Pegram Michael E. Pegram | | Director |
| |
/s/ Roger P. Wagner Roger P. Wagner | | Director |
| |
/s/ Bonnie Biumi | | Director—Isle of Capri Casinos, Inc.
|
Bonnie Biumi | | Director |
| | |
/s/ Alan J. Glazer
| | Director—Isle of Capri Casinos, Inc.
|
Alan J. Glazer
| | |
| | |
/s/ Jeffrey D. Goldstein
| | Director—Isle of Capri Casinos, Inc.
|
Jeffrey D. Goldstein
| | |
| | |
/s/ Richard A. Goldstein
| | Director—Isle of Capri Casinos, Inc.
|
Richard A. Goldstein
| | |
| | |
/s/ Gregory J. Kozicz Gregory J. Kozicz | | Director |
II-6
GUARANTOR REGISTRANT SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, each Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Reno, State of Nevada on June 16, 2017.
| | |
ELDORADO HOLDCO LLC ISLE OF CAPRI CASINOS LLC CC-RENO LLC |
| |
| By: | | /s/ Gary L. Carano |
| | Gary L. Carano, |
| | Chief Executive Officer |
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Gary L. Carano, Thomas R. Reeg, Anthony L. Carano and Edmund L. Quatmann, Jr., and each of them, as his or her true and lawfulattorney-in-fact and agent, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (includingpost-effective amendments) to this registration statement and any and all additional registration statements pursuant to Rule 462(b) of the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto saidattorney-in-fact and agent full power and authority to do and perform each and every act in person, hereby ratifying and confirming all that saidattorney-in-fact and agent or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed on June 16, 2017 by the following persons in the capacities indicated.
| | |
Signature | | Title |
| Eldorado Resorts, Inc. | | Sole and Managing Member** |
| | | | |
| |
| By: | | /s/ Gary L. Carano |
| | Name: | | Gary L. Carano |
| | Title: | | Chief Executive Officer and Chairman of the Board |
| ** | Registrant has no directors or managers |
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GUARANTOR REGISTRANT SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, each Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Reno, State of Nevada on June 16, 2017.
| | |
| ELDORADO RESORTS LLC |
| |
| By: | | /s/ Gary L. Carano |
| | Gary L. Carano, |
| | Chief Executive Officer |
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Gary L. Carano, Thomas R. Reeg, Anthony L. Carano and Edmund L. Quatmann, Jr., and each of them, as his or her true and lawfulattorney-in-fact and agent, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (includingpost-effective amendments) to this registration statement and any and all additional registration statements pursuant to Rule 462(b) of the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto saidattorney-in-fact and agent full power and authority to do and perform each and every act in person, hereby ratifying and confirming all that saidattorney-in-fact and agent or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed on June 16, 2017 by the following persons in the capacities indicated.
| | |
Signature | | Director—Title
|
| Eldorado Holdco LLC | | Sole and Managing Member** |
| | | | |
| |
| By: | | /s/ Gary L. Carano |
| | Name: | | Gary L. Carano |
| | Title: | | Chief Executive Officer |
| ** | Registrant has no directors or managers |
II-8
GUARANTOR REGISTRANT SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, each Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Reno, State of Nevada on June 16, 2017.
| | |
ELDORADO SHREVEPORT #1, LLC ELDORADO SHREVEPORT #2, LLC BLACK HAWK HOLDINGS, L.L.C. ISLE OF CAPRI BLACK HAWK, L.L.C. POMPANO PARK HOLDINGS, L.L.C. IOC—CARUTHERSVILLE, LLC |
| |
| By: | | /s/ Gary L. Carano |
| | Gary L. Carano |
| | Manager |
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Gary L. Carano, Thomas R. Reeg, Anthony L. Carano and Edmund L. Quatmann, Jr., and each of them, as his or her true and lawfulattorney-in-fact and agent, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (includingpost-effective amendments) to this registration statement and any and all additional registration statements pursuant to Rule 462(b) of the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto saidattorney-in-fact and agent full power and authority to do and perform each and every act in person, hereby ratifying and confirming all that saidattorney-in-fact and agent or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed on June 16, 2017 by the following persons in the capacities indicated.
| | |
Signature | | Title |
| |
/s/ Gary L. Carano Gary L. Carano | | Manager |
| |
/s/ Thomas R. Reeg Thomas R. Reeg | | President and Chief Financial Officer |
II-9
GUARANTOR REGISTRANT SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, each Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Reno, State of Nevada on June 16, 2017.
| | |
| ELDORADO CASINO SHREVEPORT JOINT VENTURE |
| |
| By: | | /s/ Gary L. Carano |
| | Gary L. Carano |
| | Chief Executive Officer |
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Gary L. Carano, Thomas R. Reeg, Anthony L. Carano and Edmund L. Quatmann, Jr., and each of them, as his or her true and lawfulattorney-in-fact and agent, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (includingpost-effective amendments) to this registration statement and any and all additional registration statements pursuant to Rule 462(b) of the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto saidattorney-in-fact and agent full power and authority to do and perform each and every act in person, hereby ratifying and confirming all that saidattorney-in-fact and agent or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed on June 16, 2017 by the following persons in the capacities indicated.
| | | | |
Signature | | Title |
| Eldorado Shreveport #1, LLC | | Managing Partner** |
| | |
| |
| By: | | /s/ Gary L. Carano |
| Name: | | Gary L. Carano |
| Title: | | Manager |
| ** | Registrant has no directors or managers |
II-10
GUARANTOR REGISTRANT SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, each Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Reno, State of Nevada on June 16, 2017.
| | |
MTR GAMING GROUP,
INC. MOUNTAINEER PARK,
INC. PRESQUE ISLE DOWNS, INC.
SCIOTO DOWNS, INC. IOC—BOONVILLE, INC. IOC—KANSAS CITY, INC. IOC—LULA, INC. IOC BLACK HAWK COUNTY, INC. PPI, INC. IC HOLDINGS COLORADO, INC. CCSC/BLACKHAWK, INC. IOC—VICKSBURG, INC. |
| |
| By: | | /s/ Gary L. Carano |
| | Gary L. Carano |
| | Chief Executive Officer |
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Gary L. Carano, Thomas R. Reeg, Anthony L. Carano and Edmund L. Quatmann, Jr., and each of them, as his or her true and lawfulattorney-in-fact and agent, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (includingpost-effective amendments) to this registration statement and any and all additional registration statements pursuant to Rule 462(b) of the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto saidattorney-in-fact and agent full power and authority to do and perform each and every act in person, hereby ratifying and confirming all that saidattorney-in-fact and agent or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed on June 16, 2017 by the following persons in the capacities indicated.
| | |
Signature | | Title |
| |
/s/ Gary L. Carano Gary L. Carano | | Chief Executive Officer and Director |
| |
/s/ Thomas R. Reeg Thomas R. Reeg | | President, Chief Financial Officer and Director |
| |
/s/ Anthony L. Carano Anthony L. Carano | | Executive Vice President, Chief Operating Officer and Director |
II-11
GUARANTOR REGISTRANT SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, each Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Reno, State of Nevada on June 16, 2017.
| | |
IOC HOLDINGS, L.L.C. IOC—VICKSBURG, L.L.C. |
| |
| By: | | /s/ Gary L. Carano |
| | Gary L. Carano |
| | Chief Executive Officer |
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Gary L. Carano, Thomas R. Reeg, Anthony L. Carano and Edmund L. Quatmann, Jr., and each of them, as his or her true and lawfulattorney-in-fact and agent, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (includingpost-effective amendments) to this registration statement and any and all additional registration statements pursuant to Rule 462(b) of the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto saidattorney-in-fact and agent full power and authority to do and perform each and every act in person, hereby ratifying and confirming all that saidattorney-in-fact and agent or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed on June 16, 2017 by the following persons in the capacities indicated.
| | |
Signature | | Title |
| |
/s/ Gary L. Carano Gary L. Carano | | Chief Executive Officer and Manager |
| |
/s/ Thomas R. Reeg Thomas R. Reeg | | President, Chief Financial Officer and Manager |
| |
/s/ Anthony L. Carano Anthony L. Carano | | Executive Vice President, Chief Operating Officer and Manager |
II-12
GUARANTOR REGISTRANT SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, each Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Reno, State of Nevada on June 16, 2017.
| | |
| CCR NEWCO, LLC |
| |
| By: | | /s/ Gary L. Carano |
| | Gary L. Carano |
| | Chief Executive Officer |
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Gary L. Carano, Thomas R. Reeg, Anthony L. Carano and Edmund L. Quatmann, Jr., and each of them, as his or her true and lawfulattorney-in-fact and agent, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (includingpost-effective amendments) to this registration statement and any and all additional registration statements pursuant to Rule 462(b) of the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto saidattorney-in-fact and agent full power and authority to do and perform each and every act in person, hereby ratifying and confirming all that saidattorney-in-fact and agent or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed on June 16, 2017 by the following persons in the capacities indicated.
| | |
Signature | | Title |
| |
| CC-RENO LLC | | Sole and Managing Member** |
| | | | |
| |
| By: | | /s/ Gary L. Carano |
| | Name: | | Gary L. Carano |
| | Title: | | Chief Executive Officer |
| ** | Registrant has no directors or managers |
II-13
GUARANTOR REGISTRANT SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, each Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Reno, State of Nevada on June 16, 2017.
| | |
| ELDORADO LIMITED LIABILITY COMPANY |
| |
| By: | | /s/ Gary L. Carano |
| | Gary L. Carano |
| | Chief Executive Officer |
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Gary L. Carano, Thomas R. Reeg, Anthony L. Carano and Edmund L. Quatmann, Jr., and each of them, as his or her true and lawfulattorney-in-fact and agent, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (includingpost-effective amendments) to this registration statement and any and all additional registration statements pursuant to Rule 462(b) of the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto saidattorney-in-fact and agent full power and authority to do and perform each and every act in person, hereby ratifying and confirming all that saidattorney-in-fact and agent or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed on June 16, 2017 by the following persons in the capacities indicated.
| | |
Signature | | Title |
| Eldorado Resorts LLC | | Sole and Managing Member** |
| | | | |
| |
| By: | | /s/ Gary L. Carano |
| | Name: | | Gary L. Carano |
| | Title: | | Chief Executive Officer |
| ** | Registrant has no directors or managers |
II-14
GUARANTOR REGISTRANT SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, each Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Reno, State of Nevada on June 16, 2017.
| | |
| CIRCUS AND ELDORADO JOINT VENTURE, LLC |
| |
| By: | | /s/ Gary L. Carano |
| | Gary L. Carano |
| | Chief Executive Officer |
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Gary L. Carano, Thomas R. Reeg, Anthony L. Carano and Edmund L. Quatmann, Jr., and each of them, as his or her true and lawfulattorney-in-fact and agent, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (includingpost-effective amendments) to this registration statement and any and all additional registration statements pursuant to Rule 462(b) of the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto saidattorney-in-fact and agent full power and authority to do and perform each and every act in person, hereby ratifying and confirming all that saidattorney-in-fact and agent or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed on June 16, 2017 by the following persons in the capacities indicated.
| | |
Signature | | Title |
| Eldorado Limited Liability Company | | Sole and Managing Member** |
| | | | |
| |
| By: | | /s/ Gary L. Carano |
| | Name: | | Gary L. Carano |
| | Title: | | Chief Executive Officer |
| ** | Registrant has no directors or managers |
II-15
GUARANTOR REGISTRANT SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, each Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Reno, State of Nevada on June 16, 2017.
| | |
| IOC BLACK HAWK DISTRIBUTION COMPANY, LLC |
| |
| By: | | /s/ Gary L. Carano |
| | Gary L. Carano |
| | Chief Executive Officer |
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Gary L. Carano, Thomas R. Reeg, Anthony L. Carano and Edmund L. Quatmann, Jr., and each of them, as his or her true and lawfulattorney-in-fact and agent, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (includingpost-effective amendments) to this registration statement and any and all additional registration statements pursuant to Rule 462(b) of the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto saidattorney-in-fact and agent full power and authority to do and perform each and every act in person, hereby ratifying and confirming all that saidattorney-in-fact and agent or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed on June 16, 2017 by the following persons in the capacities indicated.
| | |
Signature | | Title |
| Isle of Capri Black Hawk, L.L.C. | | Sole and Managing Member** |
| | | | |
| |
| By: | | /s/ Gary L. Carano |
| | Name: | | Gary L. Carano |
| | Title: | | Chief Executive Officer |
| ** | Registrant has no directors or managers |
II-16
GUARANTOR REGISTRANT SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, each Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Reno, State of Nevada on June 16, 2017.
| | |
| ST. CHARLES GAMING COMPANY, L.L.C. |
| |
| By: | | /s/ Thomas R. Reeg |
| | Thomas R. Reeg |
| | President and Chief Financial Officer |
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Gary L. Carano, Thomas R. Reeg, Anthony L. Carano and Edmund L. Quatmann, Jr., and each of them, as his or her true and lawfulattorney-in-fact and agent, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (includingpost-effective amendments) to this registration statement and any and all additional registration statements pursuant to Rule 462(b) of the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto saidattorney-in-fact and agent full power and authority to do and perform each and every act in person, hereby ratifying and confirming all that saidattorney-in-fact and agent or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed on June 16, 2017 by the following persons in the capacities indicated.
| | |
Signature | | Title |
| |
/s/ Anthony L. Carano Anthony L. Carano | | Executive Vice President, Chief Operating Officer and Manager |
| |
/s/ Thomas R. Reeg Thomas R. Reeg | | President, Chief Financial Officer and Manager (Principal Financial and Accounting Officer) |
II-17
GUARANTOR REGISTRANT SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, each Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Reno, State of Nevada on June 16, 2017.
| | |
ISLE OF CAPRI BETTENDORF, L.C. IOC—CAPE GIRARDEAU, LLC |
| |
| By: | | /s/ Gary L. Carano |
| | Gary L. Carano |
| | Chief Executive Officer |
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Gary L. Carano, Thomas R. Reeg, Anthony L. Carano and Edmund L. Quatmann, Jr., and each of them, as his or her true and lawfulattorney-in-fact and agent, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (includingpost-effective amendments) to this registration statement and any and all additional registration statements pursuant to Rule 462(b) of the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto saidattorney-in-fact and agent full power and authority to do and perform each and every act in person, hereby ratifying and confirming all that saidattorney-in-fact and agent or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed on June 16, 2017 by the following persons in the capacities indicated.
| | |
Signature | | Title |
| Isle of Capri Casinos LLC | | Sole and Managing Member** |
| | | | |
| |
| By: | | /s/ Gary L. Carano |
| | Name: | | Gary L. Carano |
| | Title: | | Chief Executive Officer |
| ** | Registrant has no directors or managers |
II-18
GUARANTOR REGISTRANT SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, each Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Reno, State of Nevada on June 16, 2017.
| | |
| RAINBOW CASINO—VICKSBURG PARTNERSHIP, L.P. |
| |
| By: | | /s/ Gary L. Carano |
| | Gary L. Carano |
| | Chief Executive Officer |
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Gary L. Carano, Thomas R. Reeg, Anthony L. Carano and Edmund L. Quatmann, Jr., and each of them, as his or her true and lawfulattorney-in-fact and agent, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (includingpost-effective amendments) to this registration statement and any and all additional registration statements pursuant to Rule 462(b) of the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto saidattorney-in-fact and agent full power and authority to do and perform each and every act in person, hereby ratifying and confirming all that saidattorney-in-fact and agent or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed on June 16, 2017 by the following persons in the capacities indicated.
| | |
Signature | | Title |
| IOC—Vicksburg, Inc. | | General Partner |
| | | | |
| |
| By: | | /s/ Gary L. Carano |
| | Name: | | Gary L. Carano |
| | Title: | | Chief Executive Officer |
II-19
Exhibit Index
| | |
Exhibit no. | | Item title |
| |
| 2.1 | | Agreement and Plan of Merger, dated as of September 19, 2016, by and among Isle of Capri Casinos, Inc. |
Gregory J. Kozicz
| | |
| | |
/s/ Lee S. Wielansky
| | Director—, Eldorado Resorts, Inc., Eagle I Acquisition Corp. and Isle of Capri Casinos LLC (f/k/a Eagle II Acquisition Company LLC) (incorporated by reference to Exhibit 2.1 to Eldorado Resorts Inc.
’s Current Report on Form 8-K filed on September 22, 2016). |
Lee S. Wielansky
| | |
vii
Table of Contents
INDEX TO EXHIBITS
Exhibit
Number
|
| Description
|
| 4.1 | | Registration Rights Agreement, dated May 1, 2017, by and between Eldorado Resorts, Inc., Recreational Enterprises, Inc. and GFIL Holdings, LLC (incorporated by reference to Exhibit 4.5 to Eldorado Resorts, Inc.’s Current Report on Form 8-K filed on May 1, 2017). |
3.1
| | Articles of Organization of St. Charles Gaming Company, L.L.C.
|
3.2
4.2 | | Operating Agreement of St. Charles Gaming Company, L.L.C.
|
4.1
| | Indenture dated as of March 5, 2013,June 23, 2015, by and among the Company,Eldorado Resorts, Inc. the guarantors named thereinparty thereto and U.S. Bank National Association, as trusteeTrustee, and Capital One, N.A., as Collateral Trustee, and Form of Note (incorporated by reference to Eldorado Resorts, Inc.’s Current Report on Form8-K filed on July 23, 2015). |
| |
| 4.3 | | First Supplemental Indenture, dated as of December 16, 2015, by and among Eldorado Resorts, Inc., the guarantors party thereto and U.S. Bank National Association, as Trustee, under the 2023 Notes Indenture (incorporated by reference to Exhibit 4.2 to Eldorado Resorts, Inc.’s Registration Statement on Form S-4 filed on January 14, 2016). |
| |
| 4.4* | | Second Supplemental Indenture, dated as of May 26, 2016, by and among Eldorado Resorts, Inc., the guarantors party thereto, and U.S. Bank National Association, as Trustee, under the 2023 Notes Indenture. |
| |
| 4.5 | | Third Supplemental Indenture, dated as of March 16, 2017, by and among Eldorado Resorts, Inc., the guarantors party thereto and U.S. Bank National Association, as Trustee, under the 2023 Notes Indenture (incorporated by reference to Exhibit 4.1 to the Company’s reportEldorado Resorts, Inc.’s Current Report on Form 8-K filed on March 6, 2013)22, 2017). |
4.2
| |
| 4.6 | | Fourth Supplemental Indenture, dated as of April 19, 2013,May 1, 2017, by and among the Company,Eldorado Resorts, Inc., the guarantors named thereinparty thereto and U.S. Bank National Association, as trusteeTrustee, under the 2023 Notes Indenture (incorporated by reference to Exhibit 4.2 to Eldorado Resorts, Inc.’s Current Report on Form 8-K filed on May 1, 2017). |
| |
| 4.7 | | Indenture, dated as of March 29, 2017, by and among Isle of Capri Casinos LLC (f/k/a Eagle II Acquisition Company LLC) and U.S. Bank National Association (incorporated by reference to Eldorado Resorts, Inc.’s Current Report onForm 8-K filed on March 29, 2017). |
| |
| 4.8 | | Supplemental Indenture, dated as of May 1, 2017, by and among Eldorado Resorts, Inc. and the guarantors party thereto and U.S. Bank National Association (incorporated by reference to Eldorado Resorts, Inc.’s Current Report onForm 8-K filed on May 1, 2017). |
| |
| 4.9 | | Credit Agreement, dated as of April 17, 2017, by and among Isle of Capri Casinos LLC (f/k/a Eagle II Acquisition Company LLC), a Delaware limited liability company, the Lenders party thereto, and JPMorgan Chase Bank, N.A., as administrative agent (incorporated by reference to Exhibit 10.1 to Eldorado Resorts, Inc.’s Current Report onForm 8-K filed on April 17, 2017). |
| |
| 4.10 | | Borrower Joinder and Assumption Agreement, dated as of May 1, 2017, by and among Eldorado Resorts, Inc., Isle of Capri Casinos LLC and JPMorgan Chase Bank, N.A. (incorporated by reference to Exhibit 4.3 to the Company’s reportEldorado Resorts, Inc.’s Current Report onForm 8-K filed on April 24, 2013)May 1, 2017). |
4.3
| |
| 4.11 | Second Supplemental Indenture,
| Guaranty Agreement, dated as of April 14, 2015,May 1, 2017, by and among the Company, the guarantors named thereinparty thereto and U.S.JPMorgan Chase Bank, National Association, as trusteeN.A. (incorporated by reference to Exhibit 4.14.4 to the Company’s reportEldorado Resorts, Inc.’s Current Report onForm 8-K filed on April 14, 2015)May 1, 2017). |
II-20
| | |
Exhibit no. | | Item title |
4.4
| | Registration Rights Agreement, dated April 14, 2015 among the Company, the guarantors named therein and Wells Fargo Securities, LLC, Credit Suisse Securities (USA) LLC and Deutsche Bank Securities Inc., as representatives of the several initial purchasers named therein (incorporated by reference to Exhibit 4.2 to the Company’s report on Form 8-K filed on April 14, 2015)
|
4.5
5.1* | | FormOpinion of 5.875% Senior Notes due 2021 (contained in Exhibit 4.1)
McDonald Carano LLP. |
5.1*
| |
| 5.2* | | Opinion of Mayer Brown LLP as to the legality of the securities being registeredMilbank Tweed Hadley & McCloy LLP. |
12.1
| |
| 12.1* | | Statement Regarding the Computation of ratioRatio of earningsEarnings (Loss) to fixed chargesFixed Charges for the Period from January 1, 2017 through March 31, 2017, and the Years Ended December 31, 2016, 2015, 2014, 2013 and 2012. |
23.1
| |
| 23.1* | | Consent of Ernst & Young LLP with respect to Eldorado Resorts, Inc. |
23.2*
| |
| 23.2* | | Consent of Mayer BrownErnst & Young LLP (containedwith respect to Isle of Capri Casinos, Inc. |
| |
| 23.3 | | Consent of McDonald Carano LLP (included in Exhibit 5.1). |
24.1
| |
| 23.4 | | Consent of Milbank Tweed Hadley & McCloy LLP (included in Exhibit 5.2). |
| |
| 24.1 | | Powers of attorney (containedAttorney (included on the signature page to this registration statement)hereto). |
25.1*
| |
| 25.1* | Form T-1
| Statement of Eligibility under the Trust Indenture Act of 1939 of U.S. Bank National Association(Form T-1). |
99.1
| |
| 99.1* | | Form of Letter of Transmittal |
99.2
| | Form of Notice of Guaranteed Delivery
Transmittal. |
* To be filed by amendment
II-21
